Limiting resale prices for cohousing units ?
From: Joani Blank (joaniswansway.com)
Date: Mon, 15 Jul 2002 03:04:01 -0600 (MDT)
Howard said:

Many times one will hear of cohousing groups which require that a unit be
sold for no more than was paid for it.

This is not true. Only two cohousing communities in the US, I believe, are structured as cooperatives (Ecovillage at Ithaca and Winslow), but I don't believe they are limited equity coops. In a coop, each household owns a "share" as I understand it, and there is one master mortgage on the entire property, and monthly fees collectively pay the mortgage and other expenses of running the shared property. But I think, unless it as limited equity coop, the value of a share can rise as the value of the entire property rises.

Berkeley Cohousing is a "limited equity condominium." This is the only way the City of Berkeley would allow them to condo-ize. In a resale, a household can charge more for their unit than the original price they paid for it, but there is a limit on how much the price can go up. This is good for the buying household, but could be devastating for the household that is leaving, since housing prices are so high in this area, that in all likelihood they couldn't buy anything else in this area with the limited "profit" they'd get from selling, and would have to move far away to find something they could afford.

There may be a few other limited equity condos among cohousing communities in the US, but I'm not aware of any others. Almost all the other cohousing communities are conventional condos, and can be sold for whatever the market will bear, though I know of some situations where individuals have taken a lower price for a unit they were selling because they prefer to sell their house to someone they and the community feel would make a great coho neighbor, rahter than go for top dollar.

Pioneer Valley residents have voluntarily not only agreed that they will not sell for X percentage over purchase price (think it's related to cost of living increase). They've also agreed that they will offer a house for resale in order to persons on their waiting list who have previously been prequalified by a bank, and who've undergone orientation to the community to get on that waiting list.

I expect that if an individual at Pioneer Valley--perhaps one who was really mad at the community--chose to go around this agreement and sell his/her unit to the highest bidder on the open market, the group could not legally stop them from doing so.

I hope that I'm not giving out any wrong info in this email. If I am, I expect someone will straighten me out post haste. Of course I'd welcome that.

Joani
Swan's Market Cohousing
Oakland, CA

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