Cohousing-L Mailing List: Re: Re: Cohousing appraisals

[Raines Cohen (rc2-coho-L]

On 1/10/03 10:28 AM, Marty Roberts <MartyR [at] sonic.net> wrote:

>It also says to me that cohousing in the Bay area is only for the rich 
>- or those lucky enough to have gotten into the Bay area market years 
>ago.

No, not necessarily - what it means is that there are greater incentives 
to get involved at the beginning and create a new project, where the key 
factor in prices can be construction costs rather than "the market". 
There are also lots of creative approaches people are taking to "get 
beyond the market" in creating oportunities for affordability. A few 
examples that I know of:

- Here at Swan's, original purchase prices were much lower: when we 
bought in 2000, we paid more or less 1999 market rates, in an area that 
has rapidly changed in perception in the past few years, in part as a 
result of our being here. There are several first-time homebuyers here 
who qualified for and received federal tax credits through a city 
program, to help them afford mortgages (the credits phase in over five 
years and get repaid if the owner resells during that time). The group, 
by working with a nonprofit developer creating a mixed-use project with 
city assistance, got some economies of scale and kept construction costs 
down -- at a time when regional construction costs overall were going up 
by as much as 25% in a QUARTER! This process minimized initial membership 
costs; we also built in flex on our capital investment in the project, 
with some members contributing more than 10% of their expected unit 
prices and others less. Today, One member is renting out two rooms in a 
unit in addition to living there, both to offset mortgage costs and to 
help provide housing for those who might not otherwise be able to afford 
it.

- At Mariposa Grove, across town, one member bought several rundown 
buildings cheap and got real "sweat equity" (not just the theoretical 
kind) in having community members who might not otherwise be able to 
afford buying into coho fix up each other's units and increase the 
capacity of the project. They're likely to become a limited-equity co-op, 
rather than condo, because a couple of members have no credit history or 
a recent bankruptcy.

- At Temescal Commons, also in Oakland, a church group developed the 
project with an affordable unit built in. At least one member owns a 
building adjacent to the project and rents out rooms within it to 
participants.

- At Temescal Creek, a retrofit project, several people rent within the 
project; at least one member was able to buy in through a family member's 
credit, while continuing to live a life of "voluntary simplicity".

- East Bay Cohousing core groups (especially an active "Coho with a 
Clubhouse" group recently) are looking at creating a project as part of a 
larger "transit village" development, and integrating a mix of affordable 
and rental units.

- Berkeley Cohousing got a law passed specifically providing communities 
with an alternative to paying for replacement of rental housing they take 
off the market: they are a "limited-equity condo", with prices (for the 
first 30 years) set by formula based on area median income and 
eligibility for purchase determined similarly. There are a few renters of 
units and rooms in units rented out.

Some of these techniques do have drawbacks, including removing not only 
the cost to get in but also the OPPORTUNITY to resell at a profit and 
"move up" to other housing... which, for many Americans, is seen as the 
road for individual/family economic progress. In other cases, by 
abandoning the conventional home purchase/finance structure, we cut out 
access to the low-downpayment easy-credit financing model that goes with 
it. The market is a tool, with particular costs and benefits associated 
with using it... and remember that what goes up, does come down, as Doyle 
Street coho (Emeryville, CA) found during the early-1990s real estate 
bust that hit near its completion and kept it from filling for a while.

So please don't assume that everybody here is rich (at a technology 
tradeshow in SF this week, at least 3/4 of the people I'm talking to are 
out of work), or that Cohousing in any particular place is forever out of 
your reach... to paraphrase Scoop Nisker, "If you don't like Cohousing 
prices, go out and make some of your own!"

Raines

Raines Cohen <my initials,2,dash,coho,dash,L at my first name .com>

  Member, Swan's Market Coho [Oakland, CA] <http://www.swansway.com/>
Where we're assembling new Ikea chairs for the Common House.

  Facilitator, East Bay Cohousing [on hiatus] <http://www.ebcoho.org/>
About to announce the next "Coho with a Clubhouse" meeting.

  Boardmember, The Cohousing Network <http://www.cohousing.org/>
Thanking all the members and contributors in 2002!


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