Cohousing-L Mailing List: Re: Affordability - Retention

[Sharon Villines (sharon]

> On Feb 15, 2023, at 7:54 PM, Margaret Porter <margaret.porter [at] 
> mindspring.com> wrote:

> Our cohousing community was established as a condominium community in which 
> the market-rate units are all larger, usually much larger, than the 
> permanently-affordable units, and with significantly more amenities. In my 
> view, this structure unnecessarily exacerbates our economic differences. The 
> city’s restrictions on apartment amenities and resale of permanently 
> affordable homes further highlight these economic differences.

Thank you for taking the time to write a detailed message on the dynamics of a 
hybrid community. It is hard to obtain this much detail and I have been long 
curious about how this model of market-rate and permanently-affordable units is 
working.

After researching the field of affordable housing, considering models for 
affordable cohousing, and studying the economics of equality and housing, I 
have come to the conclusion that in an ownership society, like the US, that the 
only path to equality is ownership. Along with ownership comes market rates. 
Permanently affordable doesn’t give the homeowner the most important economic 
advantages of homeownership — the ability to increase wealth and to keep up 
with the market. 

One reason condominiums must keep healthy reserves and do regular maintenance 
is that they need to preserve the value of the home-owners capital — their 
invested cash. Maintaining the units means keeping them up to the market rate. 
When the unit is sold it should be in like-new condition and comparable in 
price to similar housing. 

Support for housing is best in the form of grants, interest rate cuts, or 
downpayment subsidies which are one-time grants to give a household a step up 
in the economy. Once that step up is complete, there should be no strings 
attached. If there are strings, the household is still in custody — still 
dependent. There may be some strings that are worth that but pretending that 
permanently affordable housing is helping people move into the mainstream 
economy is furthering the inequity. And it isn’t fixing housing. It’s temporary 
relief for some people for a limited period of time.

Better to build housing that can be built at the levels people can afford and 
owned on the same basis as other housing is built and owned now. And it is 
possible to build the $100,000 house. The only thing preventing it is zoning 
specifically designed to prevent it and builders and financial institutions who 
want to make more money than they can make on $100,000 houses.

I also question how far the range of houses can go in a community and still 
have a sense of equality in a community. Having a range of sizes of houses is 
nice because it allows people of a wider range of incomes to choose more or 
less space. We have a 625 SF one-bedroom with a den up to a four-story 
townhouse with a full basement. A very wide range. The range in sales price is 
not as great as the square footage. One of our larger units just sold @$447SF. 
The last smaller unit sold @$545 SF. Smaller units cost more per SF for a 
variety of reasons. 

I haven’t done the statistics but generally, there is little correlation 
between the number of people living in large units vs small units. One large 
unit has 2 adults and 3 children but others have 1 or 2. More small units have 
1 person but some have consistently had 2-3. 

We also have a wide range of income levels. Several are living on trust funds 
or investments and others are living on social security or are underemployed. 
Some have chosen to live on as little as possible in order to be activists. But 
everyone pays the same rates in condo fees. Households with more income are 
more likely to make donations in cash or goods but that isn’t something that 
happens regularly or that we are dependent on.

I would not say that those who live in small units are economically less 
well-off than those who live in large units either. Smaller units are more 
likely to have 1 income and one person living in them but there isn’t a sense 
that those people don’t have enough money to purchase more space if they wanted 
it. 

But, we were also built with about half our residents receiving grants from a 
city program that encouraged first-time home ownership in the city. The aid 
ranged from paying the downpayment to low-interest mortgages or a combination. 
The only requirement was that the owner lived in the house for 5 years (or paid 
a fine). Tax exemptions went along with some of those also. (I may have some of 
the details switched around but basically, that was the idea.)

The advantage to those who were able to work all that out is that they were 
able to purchase homes without a downpayment and/or pay lower property taxes 
for at least 5 years. And were able to sell at market rate and move if they 
preferred. Everyone owned their homes on the same basis. As the first people 
moved out, the homes sold at market prices.

The advantage was that all the homeowners increased their wealth at the same 
rate with no limitations. And function as equals financially. 

Changing zoning is a big deal and has to be done one neighborhood at a time, 
unfortunately.

And people would have to become comfortable with homes that are smaller than 
the average American home of 2400 SF  but still 2-3 times larger than homes in 
the UK or Sweden. 

Sharon
----
Sharon Villines
Takoma Village Cohousing, Washington DC
http://www.takomavillage.org