Cohousing-L Mailing List: Re: Has anyone run into this in their cohousing development?

[Sharon Villines (sharon]

On May 15, 2008, at 10:21 PM, heimann [at] TheWorld.com wrote:

> discusses the collateral damage to owners of condo units, in terms of
> unexpected assessments, unpaid condo fees, and finances-induced
> property deterioration, in developments where a significant fraction
> of units have been foreclosed.

I don't know of any problems in cohousing but wanted to share this bit  
of information about the differences between condos and coops. Coops  
can control how much one's mortgage is. Before you buy a coop  
apartment the board can ask for a full disclosure of your finances to  
be sure you can afford the apartment and are not likely to default.

In Manhattan, some buildings don't allow mortgages at all. Others have  
a set limit -- you can  only have a mortgage up to 60% or 40% or  
whatever. It is MUCH lower than the recent 10% and no % down. Some of  
it is snobbism but some is just plain financial good sense.

When my husband and I bought our first house, an old money financial  
advisor told us never to buy a house with a larger than 60% mortgage.  
"You lose money on that kind of deal." Does that mean you can't buy a  
house? No, it means you buy a smaller one.

Some people are aghast when I say that if someone can't pay their  
condo fee, we can put a lien on their unit and get it back when the  
unit is sold. They want to just forgive the money as if then just  
comes out of the sky. Many of us can't afford to pay other people's  
bills.

I know some communities have rainy day funds to help people, but those  
are much lower amounts than paying people's mortgages for months  
because they have been borrowing more than they could afford to pay  
back. That amount could easily be $1500 a month including their  
mortgage payment and condo fee. If they skip town, that's what we  
would pay until we could sell the unit or have it foreclosed. And  
selling it could take time because there would be legal hassles to  
clear up.

In a private email to another cohousing person yesterday I realized as  
I was writing:

> A lot of people moved into cohousing thinking it would be magic and  
> cheaper somehow, but all those extra facilities have to be paid for,  
> forever. I think cohousing people should stop marketing it as  
> cheaper. It is _socially_ richer but not financially cheaper.
>
> A single mother here recently said that because of cohousing, if she  
> were suddenly sick or in an accident, there are 12 homes where her  
> children would be perfectly comfortable and happy to be for at least  
> 24 hours. This is an amazing thing. Most parents are lucky to have  
> one unless they have family in the area.

Sharon
----
Sharon Villines in Washington DC
Where all roads lead to Casablanca