Cohousing-L Mailing List: Re: Rental policies

[Richart Keller (richart.keller]

Hi Kay

Thanks--that is very helpful.  

Rick


Richart Keller, AICP
120 Pulpit Hill Road #25
Amherst, MA 01002
413-835-0011
401 486-2677 (cell)



-----Original Message-----
From: Kay Argyle [mailto:Kay.Argyle [at] utah.edu] 
Sent: Tuesday, April 26, 2011 7:21 PM
To: 'Cohousing-L'
Subject: Re: [C-L]_ Rental policies



for Wasatch Commons, Salt Lake City, Utah:

"1) How are the rental units owned? ..."

Five units are owned by an LLC, which is owned (if I remember correctly) 99%
by banks and 1% by the condominium association (which is the managing
partner), which is owned by the home owners.

Of twenty-one individually owned units, currently six are rented. This is
about average for us. The owners are one resident and several ex-residents.

"2)  What policies do you have with regard to renters?"

Renters are expected to participate. They hold the proxy for the unit for
community decisions. In most regards they are no different than owners.

"3)  What, if any, specific reasons or goals do you have for providing
rental houses?"

The units owned by the community (so to speak) were built under an
affordable housing program (called CROWN), with two mortgages. At the end of
fifteen years (three years from now), the bank that holds one mortgage will
write it off for tax credits, and the units will be purchasable by the
tenant for the original amount of the other mortgage. Tenants must be
income-qualified at move-in, but it's okay (encouraged) if their income goes
up after that. 

Individually owned units sometimes become a rental when a new buyer isn't
found quickly. The first time this happened there was some hand-wringing.
Now it's seen as a perfectly ordinary transition. 

One occasion on which the subject of the number of rentals tends to come up
is at the Annual Meeting, primarily because we need more victims -- er,
candidates -- for Management. Our CC&R requires that the five "official"
members of Management be home owners (we expanded Management with two
"advisory" roles, Renters Representative and Crown Representative).

"4)  Any advice for communities who are considering offering or allowing
rentals?"

Reasons to Have Rentals:
- You will have an easier time attracting young families if rentals are
available.
- Rentals allow greater income diversity in the community.
- Better to have a happy renter resident than an unhappy owner who wants out
but can't find a buyer.
- Even if someone has the finances to buy, renting first lets them find out
if cohousing (and your particular community) is a good fit before making a
heavy financial commitment. If a household is unhappy, better they can
easily move on and a new household move in.

What to Worry about:
- Before you go looking for diversity, in resident age or income, remember
diversity brings its own challenges.
- Mortgage guidelines sometimes penalize condo projects that have lots of
rentals.

What Not to Worry about:
- The perceived instability of renters is due largely to a younger average
age. Renters are more likely to be young than owners are; young residents,
whether owners or renters, tend to be less settled than older residents,
whether owners or renters. We've had lower turnover in our low-income rental
units than in owner-occupied units.
- Some renters will be less than ideal. That's equally true of owners.
Suboptimal renters are more easily persuaded to move on than suboptimal
owners.

How To Find Tenants Who Will Be Good for the Community:
- Active enthusiastic tenant-members are found through the same sort of
networking as active enthusiastic owner-members. 
- Your Welcoming/Recruiting committee should keep a list of prospective
renters as well as of prospective buyers, to be contacted when a unit is
available. 
- Heavily encourage landlords (as well as sellers) to work with your
Welcoming committee to orient prospective tenants (as well as buyers), so
they understand community expectations such as participation.

Kay
Wasatch Commons
 

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