Cohousing-L Mailing List: Re: Maintaining affordability

[M.Studer (mstuder]

----- Original Message ----- 
From: "Sharon Villines" <sharon [at] sharonvillines.com>
To: <cohousing-l [at] cohousing.org>
Sent: Saturday, December 27, 2003 8:37 AM
Subject: Re: [C-L]_Maintaining affordability


> Since most cohousers (If not all) are financially and emotionally
> exhausted from 5 or more years of money and time invested to get
> projects built, the additional requirement that homes cannot appreciate
> at market rate is one that would discourage even further the
> development of cohousing. Who would do it?
>
> The theory behind home ownership is that it is a "leg up" for those who
> are willing to invest the time to care for a home -- a considerable
> commitment in time and labor, and usually limited funds. It is also the
> only investment most people make. With all the hype about investing and
> 401Ks and retirement, one's home remains the only significant
> investment for most people. Without the ability to sell at market rates
> they have nothing except social security and pension funds (that are
> not under their control and thus offer tenuous security).
>
> As one form of social and economic development, cohousing has the
> ability to help low income households build financial security by
> offering them the same supports -- and risks -- of other households.
>
> Before people invest either time or  money in  shelter, they have to
> have occupancy guarantees. Ownership is the best way to do this. Once
> you limit ownership and  the rights and opportunities that go with it,
> you also limit investment of time and  money on the part of the
> occupants.
>
> Experience with various forms of rent control, subsidized housing,
> etc., has not been good. Rather than limiting ownership or trying to
> control markets, the better alternative would seem to be in
>
> 1. developing building materials and methods that allow homes to be
> built inexpensively,
> 2. allowing smaller homes (often a zoning issue)
> 3. focusing developments on less expensive designs such as apartments
> as opposed to lot development with free standing homes.
>
> Sharon
> -----
> Sharon Villines
> Takoma Village Cohousing, Washington DC
> http://www.takomavillage.org
>
----------------------------
All,

I like the alternatives to creating inexpensive homes suggested by Sharon
here.  It seems more sustainable (in the sense that the home sustains its
affordability throughout it's lifetime)  to me to actually make a home
affordable by building it in a less expensive manner rather than
artificially subsidizing affordability.  I would like to throw out the
following  scenario for discussion/dissection to see what feedback I can get
on the feasibility of our group's thoughts:

Our group, NEO-COHO (North East Ohio COHOusing), is in the forming stage.
We have been tossing around this very idea of creating economic diversity in
the community by building various types of housing, rather than creating
subsidies and artificially propping up folks to be able to live in the same
type of house as their wealthy neighbor.  From what I have been reading in
the discussion on the list-serve, it seems that such artifical subsidies do
not last in the long term - is my take accurate on this?
We are considering deviating from what seems to be the typical cohousing
build model in some ways, such as utilizing some as yet undefined level of
self-build and staging construction so that it is a continually evolving
community, rather than a dropped in ready-made - everything is there at the
start.  We are targeting at having just enough of a critical mass of
owners/investors  to be able to finance the land purchase, infrastructure,
and personal homes of the initial investors but expanding farther down the
road.  We are considering using an LLC structure.
Based on what I have learned so far, it seems that it is important to have
some level of infrastructure in place, such as a common house, so usage
patterns are set before individual units are completed. However some
thoughts on individual units were that we could initially self-build some
small cottages/units using low-cost methods that we could stay in while we
are building up our infrastructure and our 'dream' homes.  Once that is
completed, the smaller units could be available to rent out or sell.  The
idea being that since they would be smaller in size and built using low-cost
methods, they would be available to those who either might not be able to
afford a larger home, or might not need one, such as singles, elderly, young
couples/first-time homebuyers.
We would pre-plan the sight to eventually accomadate both single family
homes and multiple family dwellings (townhouses, apartments, etc) of various
sizes.  Possibly either the LLC or a financially secure investor or group of
investors could finance building the additional units beyond the first stage
for resale / rent/ land contract.  This could occur at a gradual pace.  We
would also work with individual potential investors/owners on building their
own homes.
Of course, if we get lucky, we may be able to find a site that has some
infrastructure / buildings/ houses/cabins in place already which would give
us a head start - a former campground or a farm would be nice.
 We recognize this would be a slower process than the typical model.
However for our group it seems to be more feasible in that we want to do
with as much of our own financing as possible and keep it affordable, so we
are not struggling to pay this off the rest of our lives.  We are projecting
about 5 years before we make land aquisition in order to allow us to pay off
debt / save large sums of money to do this (although some are itching to get
under way, we have to face economic realities).
Utilizing a slower "evolutionary" process and some level of self-build it is
expected than we can accomplish our goals to build a lasting community
without killing ourselves financially in the process.
 (Note: My husband both from rural homesteading familes, so we have had a
good bit of exposure to the self-build process, and others in the group have
done some self-build to a lesser extent and have some idea what we are
getting into)

However this way does take lots of patient and will take  aggressive saving,
careful planning, judicious bargain-hunting, and lots of sweat equity!

Are there any other groups out thee who have experience with any of these
methods?

Other Thoughts?  Comments?

as a side note - as an aid in determining what a dollar figure for housing
means for a given area  I found the following website:
http://www.localmarketmonitor.com/Sample/index.htm . It provides a look at
housing factors in 100 major markets in the US, including a graph of how the
housing prices have changed in the area, as compared to the overall US
market, chart of per cap income, avg housing price, etc, and a graph
comparing home sales by price range.  Click on the city and it will take you
to the summary page for it.  we are closest to the Akron, OH market.  a look
at it will show you why mention of $250,000 homes being affordable gives me
a heart attack since I am accustomed to a median of  about $125,000 ;-)  (we
live outside Akron - prices are even cheaper than the median in Akron)
Regards,
Michelle Studer
Canal Fulton, OH
NEO-COHO


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