Cohousing-L Mailing List: Re: New construction - cost allocation

[Jim Snyder-Grant (jimsg]

JACOB DYE asked about house pricing models.

Here's an alternate model, used (in a more complicated way, since we
stumbled in to it a bit backwards) at New View Cohousing in Acton MA,
in the early 90s (!) when we were setting house prices.

1) Hire an appraiser. In Colorado, you might even be able to find one
that has experience with cohousing. At least find one that has
experience with home-owner associations such as condos.

2) Have them walk the site & look at the site & house  plans & then
have him do his or her magic and suggest what the various houses would
sell for on the open market in your area.

2a) If some or all of your houses will have still-to-be determined
customizations on top of a base, have the appraiser just appraise the
base house.

3) Add up all the appraisals. If they magically equal your total
development/construction costs, you are done!  If you are close, you
are almost done - just divide or share the overage or underage
equally, since it will be small & thus not so important.

4) If the gap is larger, distribute it according to square footage -
that's close enough to fair. Skip the stuff about number of people in
house price - that changes over time, and can be hard to define
(renters/boarders/college-age kids who visit a lot/significant others
who sort of live there and sort of don't/etc.)

5) And remember that customization thing? If your total appraisals
don't add up to total development costs, be sure to charge plenty for
customizations (cost plus 50%?). That can make up for a big gap.
That's what made the difference at New View between a total no-go
financially and merely an "oh-shit-can-I-really-afford-this" decision
for many households - the customizers partially subsidized the
stay-with-the-base folks.

If you decide this has potential for you, feel free to write to me and
ask me for more details (I don't monitor this list very often)

-Jim

On Thu, Aug 28, 2008 at 11:35 AM, JACOB DYE <jacobdye [at] msn.com> wrote:
>
> Hello,
>
> This is an inquiry for folks who have experience with distributing land 
> development and common house constuction costs among the individual home 
> owners...and ethics.
>
> We have two possible cost distribution scenarios and are open to more. The 
> cost of individual homes would of course be covered by the individual home 
> owner, the remaining costs would be distributed.
>
> The first way is where 25% of the total costs (common house, land purchase, 
> development & rezoning) is divided equally by the number of residences. The 
> remaining 75% of total costs would be distributed according to the square 
> footage.
>
> The second is similar but using 50/50, where 50% of the total cost is 
> distributed evenly to the individual home owners and the remaining 50% of 
> total costs would be divided according to the square footage of the homes.
>
> For the site we are looking at, the monetary difference between the first and 
> second scenario is about $25,000 for the smallest and largest homes. So a 600 
> ft^2 home is $25K more in the 50/50 than in the 25/75.
>
> This may come down to the impact/benefit to the community of a multi-person 
> household vs. the single person household. The multi-person household has 
> more impact to the community but possibly has greater benefit than the 
> individual.
>
> Is $25,000 an acceptable investment to a single person household for the 
> benefits of a larger community? or
> Should the cost distribution be divided solely on the home sqaure footage?
>
> Thanks,
>
> Jacob
> Stillpoint, CO
> _________________________________________________________________
>
-- 
Jim Snyder-Grant
18 Half Moon Hill
Acton MA 01720
978 266-9409