Cohousing-L Mailing List: co-op

[MikeJoTodd (MikeJoTodd]

Monterey Cohousing in Minneapolis is a mixed model, half co-op and half
condo. We did our development as a co-op, because it enabled us to have
a legal structure that worked both for the residents who had already
moved in to the main building (the co-op units) and also for all of us
as a group to be able to get the bank loan we needed for construction of
the new-built condo units. Every state's laws are different, so I don't
know if it would work that way elsewhere. The units in our main
building, a rehabbed 1926 brick "mansion" are just too funky to be able
to easily do the plat work to "condo-ize" them. It would have been
extremely expensive, and would have locked us in to a particular
configuration of rooms for each unit that we didn't want to be locked
into. We could forsee people swapping rooms in the future, taking down
walls or putting up walls in new places just as we did in the original
rehab process. The Co-op model allows us to do that much more easily.
Plus we had a great local bank to work with, that "only" required we put
in 40% cash to buy the place. They also helped us with the construction
loan, and were willing to use the value of the existing building and
property as collateral so we didn't have to put in any more cash for the
construction phase.  We did in fact get a bit of assistance from the
National Co-op Bank. They asked our local bank if they could participate
in the  construction loan -- I think so they could actually say they had
funded some CoHousing, which they'd been saying in their materials for
years but which hadn't actually been true up to the time they went in
with our local bank, providing $100,000 of the $700,000+ construction
loan.
I'd be happy to talk off-line about the other reasons the co-op model
works well for us in the older, rehabbed building.  Builders are very
used to lending money for Senior co-ops here, so aren't as adverse as
they might be in other parts of the country. But we still pay commercial
rates for that loan. We now have another resource, the Northcountry
Cooperative Development Fund, that is getting into developing co-op
housing and hopes to be able to make loans to co-ops at similar rates to
condos, so that the finances won't have to drive the decision.
Joelyn Malone
Monterey Cohousing Community, Minneapolis
952-926-8554

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