Cohousing-L Mailing List: Re: dues and other expenses

[R Philip Dowds (rphilipdowds]

One theory is that square footage of a unit is a reasonable proxy for household 
income and wealth … so a condo fee proportionate to unit size (or assessed 
value?) is a reasonable approximation of a “flat” tax.  But fixed fees are 
almost regressive.  For instance, a municipal fixed fee of $50 for a marriage 
license or birth certificate is trivial for a wealthy couple, but possibly a 
significant strain on the budget of a poor couple.

Some communities favor sub-metering of all utilities (gas, electric, water & 
sewer) so that all households get separate bills, and nobody is seen as 
subsidizing anyone else.  But I know of at least one community where 40-some 
units all live off of one electric meter, which reduced construction cost and 
provides access to a lower aggregate electric bill thanks to the “declining 
block rate” model of billing.  Some of my household dues go to maintaining an 
exercise room and a kids’ room — neither of which are directly useful to me.  
Part of my federal taxes pay for bridges I’ll never see or drive on.

At Cornerstone, most dues are based on square footage (more or less), but the 
dues for our single common water meter are proportioned according to the number 
of people living in the unit.  This is not irrational, but it adds to our 
accounting complexity.  Managing a precision pricing system takes time, 
sometimes a lot of time.

You can go nuts trying to figure out what’s a “fair” tax.

———————————
Thanks,
Philip Dowds
Cornerstone Cohousing
Cambridge, MA

> On Mar 4, 2025, at 3:11 PM, Sharon Villines via Cohousing-L <cohousing-l [at] 
> cohousing.org> wrote:
> 
>> Denise Tennen <denisetennen [at] gmail.com>
>> is the author of the message below.  
> 
>> Our units range in size from under 400 sf to approx 1600 sf. 
>> Our dues are charged 25% per household and 75% on square feet
>> 
>> The smaller units end up paying the most per square foot but the
>> optics are that they pay approximately half of what the larger units
>> pay and so this leads some in the larger units to feel like they are
>> subsidizing the smaller units
> 
> But the small units at 400 SF are 1/4 the size of the larger units at 1600 
> SF, so small units should pay 3/4 less.
> 
> Anytime the dues are equal regardless of the size of the unit, the small 
> units will be subsidizing the larger units.
> 
> I have looked and looked for the theoretical foundations of condo fees — What 
> is fair? — but have found nothing.
> 
> I think the clearest basis is to stick to costs related to the operation, 
> maintenance, and repair of the property — buildings and grounds. The greatest 
> portion of your budget will be these costs, not any costs related to 
> “cohousing” activities. Those are too small to bother separating and you 
> don’t want to encourage anyone not to participate in these activities to save 
> money.
> 
> Their portion of the buildings and grounds is what people buy and sell, and 
> what has to be maintained in optimal condition to serve residents in the 
> present and preserve value over time.
> 
> Unless there is something unusual about the design, using square footage is 
> probably the best way to levy proportionate fees. 
> 
> I don’t think there is a way to do it by the number of persons, children vs 
> adults, swimmers vs non-swimmers, if you have a pool, etc.
> 
> If there is a feature that is only used by a few people because it requires 
> expertise — high level workshop machinery, a special workout machine, a beer 
> brewing set up, etc — then a separate fee can be used to pay for those and 
> charged only to those who use it. 
> 
> One example that demonstrated the SF logic to some people here is to envision 
> the costs of replacing the roof. A 2,400 SF unit with 3 floors will have ~ 
> 800 SF roof. 3 flats of ~800 SF will also have 800SF of roof, but three units 
> will be paying for it.
> 
> The same can be done for balconies and decks. It is most cost effective to 
> have all of them maintained or repaired at once by one company. Then you know 
> all of them are being maintained equally well. Unless there is a huge 
> difference in the size of balconies and decks per unit, just dividing the 
> cost equally is probably fair because companies will usually give you an 
> estimate based on the time and costs for the whole job, not charge you for 
> each balcony or deck individually (unless they are all the same).
> 
> Trying to figure all this out over 25 years revealed to me the reason condo 
> buildings are usually cookie cutter with identical one bedrooms in one 
> building, two bedrooms in another, and 3-4 bedrooms in townhouses.  It makes 
> figuring out the fairness much easier. Starting with a basis that is unfair 
> (or unequal) will haunt you forever.
> 
> When possible, using exact measurements for things like water usage, 
> particularly where water is very expensive, is better than assuming that all 
> adults use this much water and all babies use this much water. 
> 
> From my experience at Takoma Village, there is no way to predict that more 
> people will live in a larger unit than a smaller one or that a unit with more 
> people will use the common house more than a unit with a single resident. And 
> large units do not necessarily have nore recycling than small units. 
> 
> Sharon
> ----
> Sharon Villines
> Takoma Village Cohousing, Washington DC
> http://www.takomavillage.org
> 
> 
> 
> 
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