Cohousing-L Mailing List: Re: Steve Welzer's Challenge to the cohousing 'system'

[John Pustell (jpustell]

For example re real costs here is how we financed things at Bay State Commons 
(Just moved in in November 2022 after 9 years!) -

** All initial funds for search and design came from ourselves - about $400,000 
(very risky investment)

** Our land cost $2.2 million dollars - we raised 1/2 internally from our 
members and 1/2 from a land loan. 

** Our preconstruction design, engineering, permiting, etc cost another $1 
million raised from ourselves. (now up to $2.5 million from ourselves - but 
risk drastically reduced).

** The construction loan provided another $11.5 million (net) - but they 
required we raise another $2 million internally right then and show the means 
to provide another $2.5 million ourselves later (The amount needed to fully 
finance the project.) (A piece of that extra $2.5 mill was the 10% we'd get 
from gaining new members until we were fully subscribed - at start of 
construction we still had 8 units not spoken for.)

Once we had land and a design, we required that every member invest at least 
10% of their estimated purchase price.  Those that could invest more were 
provided with discounts to their purchase price based on how much extra they 
put in and for how long.

All funds were at risk until the building was finished and we all bought our 
units (the sale event).  No one who left could get any funds back until that 
sale event.

My take away is a brand new co-housing project built in a major metropolitan 
area in the US is not cheap housing and can only be financed by those who can 
afford to risk those funds and who really believe in the concept.  (We believed 
that if we needed too we could shut the project down, sell the land and get 
back a fair percentage of what we invested. AND, when COVID happened we did 
think about it. ... but I am glad we did not have to put that to the test.)

Other forms of financing - or other cheaper means of creating the units (and 
maybe ways to accelerate the time frame) will be needed to make it an 
"affordable Housing" thing.

John Pustell

-----Original Message-----
From: Cohousing-L [mailto:cohousing-l-bounces+jpustell=verizon.net [at] 
cohousing.org] On Behalf Of Steve Welzer
Sent: Tuesday, March 14, 2023 6:42 PM
To: Cohousing-L [at] cohousing.org
Subject: Re: [C-L]_ Steve Welzer's Challenge to the cohousing 'system'

Katie McCamant wrote:
> all new projects that have successfully launched are by people who 
> fronted their own funds to find land and pay for all the development 
> costs until they could get to a construction loan . And yes, that is a 
> big lift!

Well, I believe that the restoration of ecological and social sanity depends 
upon people getting back to living in an eco-communitarian way.
That's the way human beings lived sustainably and satisfactorily for 99% of our 
species history prior to the modern-era withering of community life.

So we just must find ways to scale up and generalize what we, in our movement, 
know to be "best practices."

Steve Welzer
Altair EcoVillage project participant
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