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

[John Pustell (jpustell]

Kathleen -

We are a 30 unit condo and cost almost $19 million to do. (We are 400 feet from 
a Boston Subway system stop so land was pricey and small.)

Part of the reason our costs were so high were:

** delays due to COVID (adding to financing costs and increasing constructions 
costs), and 

** delays due to getting City approvals - the boards were not so friendly to us 
(Zoning and Historical) but the City council was very supportive and did a lot 
for us - but which took time.)

** Need to have 50 parking spaces (1 per bedroom per zoning rules that were not 
waived for us) which required a full underground garage for 39 cars.

By the time we finalized on the land - we were about 12-15 members

By the time we finalized the design and began negotiating with builders we were 
about 22 (A lot came when we were able to say we had a specific piece of land 
to build on.)

By the time we started construction - we were 26 members

We added our last 2 members in 2022 (the year of move in.)

Along the way we lost 6 members we had to replace because we just took too 
long.  (Don't stop recruiting even when you are full! - someone is bound to 
lose their job or have to move on for some reason even just before the sales 
event.

John



-----Original Message-----
From: Cohousing-L [mailto:cohousing-l-bounces+jpustell=verizon.net [at] 
cohousing.org] On Behalf Of Kathleen Lowry
Sent: Wednesday, March 15, 2023 11:52 AM
To: cohousing-l [at] cohousing.org
Subject: Re: [C-L]_ Steve Welzer's Challenge to the cohousing 'system'

Thank you John! Very helpful. In order to give us a bit clearer picture of the 
necessary resources could you please say how many members were involved in each 
stage of the financing? Kathleen

> On Mar 15, 2023, at 10:23 AM, John Pustell via Cohousing-L <cohousing-l [at] 
> cohousing.org> wrote:
> 
> ?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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