Cohousing-L Mailing List: Re: achieving income and other diversity goals

[patjavcc (patjavcc]

 Hello,
 
Providing ways to get economic diversity in cohousing was one of our biggest 
goals here in Boston's JPCohousing, (one year move in this June.)
 
Of our 30 units, we have 15 very low, low, and mod income households (based on 
the HUD guidelines for affordability).  The other 15 households are considered 
'high' income by these guidelines.
 
There are some important things to do at the onset:
 
1) Make an absolutely no customizations rule.  Once your design committee comes 
up with the basic plans and materials, even if you have a household who will 
pay cash in advance, they should not be permitted to get special cabinets, 
fixtures, etc. until after they move in.  One of the keys to keeping the 
overall costs down, is to not allow the delays that happen because of 
customizations.
 
2) Allow qualifying households to pay a lessor percent to become an equity 
member, and allow those households to make payments toward this goal, instead 
of requiring full cash deposits.  (At JPC, equity costs were 7% of estimated 
unit purchase price, 5% for low income - payment plan available.)  To make up 
the cash shortful that may occur, provide interest incentives to members who 
can pay more than 7%.
 
3) Build an affordability fund into your budget.  Ours was a straight 50K line 
item.  How you use this money doesn't need to be decided right away.  We have 
in our condo docs that this fund will be administered by a sub group.  Ideas 
for usage: assist a low income family temporarily with condo fees, assist if a 
household loses income because of illness, job loss, etc.  Low and mod income 
families will be attracted to a project that has thought ahead to create such a 
fund.  After one year, we have not tapped this fund yet.
 
4) At JPC we created a co-purchase option.  Households were given the option to 
invest into a fund.  The fund then co-purchased, (second or third position 
behind the traditional mortgage) a qualifying household's unit.  The fund 
receives a return when the house sells, sharing in the profit of the sale based 
on what % the fund 'owns' of the unit.  This program was very effective in 
allowing at least 4 households to buy units.  Without this co-purchase plan, 
the households would have been only 10K-30K short of being able to move in.  
Write me off line if you'd like more info on this program.  
 
5) Finally, try to be as inviting as possible.  Tell everyone when they start 
to attend meetings, "Don't let money issues get in the way of you joining at 
this early stage.  So many things can change in the next few years, including 
the unit prices."  If you can attract and keep your lower income members 
involved during development, you will be amazed at the 'magic' that happens 
when wealthier neighbors begin to help their lower income development partners. 
 This is something that you can't 'sell' at an orientation, but try very hard 
to keep the low income households interested in the beginning.
 
We do not have the problem of low income families not participating.  We also 
do not have the problem of low income families causing problem with HOA monthly 
costs and decision.  I think the key reason is that many of these households 
worked with us for years on this project before move in.  They understand the 
needs of their wealthier neighbors and respect those needs too.
 
This is one of my favorite subjects!  
Patti
JPCohousing, Boston
 
 
-----Original Message-----
From: phyfisher [at] earthlink.net
To: cohousing-l [at] cohousing.org
Sent: Sat, 29 Jul 2006 5:33 PM
Subject: [C-L]_ achieving income and other diversity goals


I am a member of a developing cohousing community. Because one of our values is 
income diversity, some of us were disappointed to learn from a member who 
attended the recent North Carolina cohousing conference that other communities 
have experienced difficulty both with implementing affordability programs and 
with low-income members. Here is a quote from the report. 

 

“Special financing (federal or other) to low income families] was discussed at 
some length at the conference in North Carolina.  There is very little money 
for 
middle-income housing.  Only for lower income….

 

There were other problems in some projects where some units were reserved for 
lower-income groups:  

--Lower income families were so desperate to get into decent subsidized housing 
that they pretended to be interested in community participation until they 
could 
move in, but then tended not to be very involved and dropped out of community 
participation.

--Having really lower income people made adopting annual budgets and setting 
the 
monthly homeowners fees much more difficult."

 

We would like to learn more about the experience of groups with relatively wide 
income diversity among members – how you achieved such diversity, what 
difficulties you encountered in implementation, and what the benefits and 
drawbacks are to the community.

 

Also, we'd like to know if any groups have approached the whole issue of 
diversity by reserving units for any class of member other than those with low 
income.  We've been told that such an approach is illegal.



Thanks,

Phyllis Fisher

 
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