Cohousing-L Mailing List: Re: The economic realities of Cohousing development

[Becky Schaller (bschaller]

I wish I had more information about this. But I think it was several years
ago, someone posted a list of cohousing communities in the United States.
On this list, was a group from Chicago's west side.  I talked with one of
the members about a year or two ago because I was wanted to visit.   As it
turned out, I didn't visit, but from our conversation, it seemed they had
created some kind of affordable cohousing.  I think it wasn't exactly pure
cohousing, but I don't remember why.  They did get some kind of financial
help - although I don't know what kind.  And they were part of the cohousing
listing.  I also think they had a Swahilian name.  I know this is scant
little information, but someone who is investigating affordable cohousing
might want to learn more  about this particular community.  I would be
surprised if no one on this list had more specific information.
Becky 


> From: "Rob Sandelin" <floriferous [at] msn.com>
> Reply-To: floriferous [at] msn.com
> Date: Fri, 3 Nov 2000 00:32:29 -0600
> To: Multiple recipients of list <cohousing-l [at] freedom2.mtn.org>
> Subject: The economic realities of Cohousing development
> 
> Here are some more detailed points about why I think affordability will not
> be the definition of cohousing.
> 
> Up to this point, cohousing development in America  has been done by: 1.)
> Middle class people with money to invest upfront or  2.)professional
> developers.
> 
> A group meets and decides to do an affordable cohousing project. Who is
> going to carry the costs for the initial development work? These costs
> include, securing a building site, planning and zoning costs up to working
> permitable drawings, plus legal costs, and some other consulting fee?
> 
> These fees usually add up to several tens of thousands of dollars. Who is
> going to pay these costs? Up to this point in cohousing history either the
> group itself pays these costs out their own pockets or a  real estate
> developer or company has covered these costs. You will not get a dime out of
> a commercial bank until you have an approved project with a developer signed
> on. To get to this state will cost lots of money. And it is very high risk
> capital.
> 
> Back to our affordable cohousing project. They have no resources, that is
> why  they are making an affordable housing project. They approach a local
> affordable housing  group. Oops. Cohousing requires lots of time commitments
> and community building work. Hmmmm. This is undesirable  from the
> non-profits point of view, too much is required.  No thanks, we'll pass on
> this project, since we already have the next  3  years worth of block grants
> targeted.
> 
> Cohousing as it has become established in America is real estate
> development, which is not cheap, nor particularly easy. And so, to do
> cohousing successfully, based on what I know of the built groups in America
> takes a couple things. 1. Money and 2. People with a high level of drive to
> succeed under difficult circumstances.
> 
> Over the years I have the privilege of  visiting a fair number  of cohousing
> communities. From my experiences, Currently, cohousers are people that are
> almost uniformly middle class, college educated, who have good paying jobs.
> 
> Real estate development excludes people that  have no assets, are not
> mortgagable, and have little drive to succeed. That is the reality. New home
> real estate  development does not happen by magic, it takes money and
> commitment.
> 
> And Yes, there are examples where people with money and drive were able to
> include others who did not have money. And this is great.
> 
> However the commonest forms of failure in start up groups are, you can guess
> this: no funds, not enough drive. In my estimation  in my own area, for
> every built cohousing project, there are 3 that have  failed to even secure
> a site. I have seen lots of groups meet for a year or so, then  disband.
> Those that succeeded had: Money enough to cover the initial project costs,
> or a  compelling enough project that a developer partnered with them. But if
> you talk with folks that partnered with developers, guess what? They
> required a vast majority of the units be pre-sold to approved mortgagable
> buyers.
> 
> I do not know of any real estate development companies that provide start up
> funds for affordable housing, carry all the costs, and then find grants and
> funding for people. But I would  love to find one and steer them to a couple
> cohousing projects I know that are struggling.
> 
> And while there is housing money around, it has some strings attached which
> make it difficult  to access for cohousing projects. Not impossible, but
> pretty hard. Vashon cohousing did it.
> 
> So in my opinion, cohousing will not succeed as affordable housing for
> anything but a small minority of units, which currently I estimate to be
> about 10%. Because there is little start up capital to get the project real
> enough to secure a site and permits enough to carry it to bank financing.
> And so far, there is limited  interest from affordable housing organizations
> in cohousing because it is way too demanding.
> 
> Philosophically this sucks, but It's the reality as I see it. And I am not
> personally optimistic that things will get  much better as far as affordable
> housing goes in the US. It certainly does not seem to be talked about much
> by the  politicians in my area and I have little trust or belief in my
> government to do such things.
> 
> 
> Rob
> 
> 
>