Cohousing-L Mailing List: Re: historical examples of coho development in falling market?

[Ann Zabaldo (zabaldo]

Hello all --

I'm not an economist but to my knowledge ... we haven't had a  
"sustained" falling economy since 1983 w/ the exception of some short  
"bear markets" in the early 90's (remember the S&L bailout? Seems like  
a cakewalk compared to this)  and the dot.com bust in the early  
2000's.  All of which we recovered from.  But this situation is very  
different from any of those.  (I'm sure the more knowledgeable among  
us will correct me on my memory of the above "down" markets.)

You are right to raise these concerns early in the development  
process.  Appraisals can be a problem.  When houses here at Takoma  
Village appraised lower than the sales price people did bring more  
cash to the table.  But that was at a time when no money down was  
available and the houses the people were selling were worth more and  
selling for more than the one they were buying in cohousing.

I would suggest getting your take out mortgage money lined up in  
advance.  That's one thing the developer, Don Tucker of Eco Housing  
had in place from the beginning.  At the second orientation for Takoma  
Village waaay back in 1998 he walked in and the lenders walked in  
behind him.  Ditto for Eastern Village.  I worked on both projects and  
what I learned is that building a community in which people can't get  
loans is a sure fired way for the development to fail.  So always have  
the mortgage money lined up.

Work to educate one or two appraisers so that when the time comes they  
know what they are looking at.

As far as marketing and outreach for members ... what are you  
"selling?"  If you are just selling housing then you will be competing  
w/ the surrounding home prices.   If you are selling a sustainable  
community oriented life style and you have a solid vision for your  
community you will have an edge.  The old advertising adage still  
applies:  it ain't the steak ... it's the sizzle!

O ... and while I'm on my soapbox ... a community must be  
economically, socially and environmentally sustainable to be truly  
sustainable.  It's a three-legged stool as one of my biz partners  
continually reminds me.  One of the legs gets longer than the other  
two and over it goes ...

Wishing you the best in brining cohousing to NYC!  It's such a natural!

Best --

Ann Zabaldo
Takoma Village
Washington, DC
Principal, The Cohousing Collaborative
McLean, VA

PH: 703 663 3911
FAX 202 291 8594







On Mar 2, 2009, at 2:53 PM, Kristi Barlow wrote:

> This list is such a great resource, thank you all, and for the first
> time I find myself with a question I cannot answer through the  
> archives.
>
> Here in Brooklyn we are well-poised to take advantage of the changing
> market conditions in terms of purchasing property at a good price (and
> from developers that would otherwise not be interested in selling to a
> cohousing group).
>
> However, at the same time, we are concerned about attracting future
> members to a project whose prices are likely to looking increasingly
> high as the surrounding market declines. Our costs will not drop while
> prices of surrounding new condos (and existing homes) most certainly
> will.
>
> My question for the list today: is there historical precedent for
> successful cohousing development in a sustained falling market? I
> would really appreciate hearing from any who pulled it off (or
> failed), especially regarding building membership under such
> conditions, and what happened when appraisals came in low (did most
> people manage to rustle up the extra cash to make up the difference?
> did many people drop out at the last minute because they couldn't get
> enough of a mortgage? etc).
>
> thank you in advance,
> Kristi Barlow, Member of Brooklyn Cohousing (kristi [at] brooklyncohousing.org
> )
>
>
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