Cohousing – Below Market Rate?
These comments are in response to a coho-l inquiry:
Wherever US/CA cohousing exists or is built, does it in fact sell *below* market rate relative to comparable residences within the surrounding community? Liz responds:
Because home prices are compared based on similar homes and cost per square foot, I can’t think of anything that would make cohousing homes below market rate. For example, we made smaller homes, so market comparisons essentially compare our 3BR homes to other 2BR homes. We made attached homes, which saves money, but makes us comparable only to attached homes.
You do make choices in building that may cost more or less, but for example choosing energy efficiency (we aimed for “super-insulation”) means additional cost. As Sharon [Villines] said: the home is “richer” rather than cheaper.
AND THEN the thing that matters most is what happens to the market between when you agree with the contractor about the cost to build, and when you sell. If home values soar, voila, you have below market rate homes (and have to be careful to get coho folk, not just folk loving the price.)
If home values drop, voila, your “market rate” homes are now comparatively expensive.
By the time we were done construction our “affordable” homes cost more than the same home nearby that had been foreclosed upon. Our market rate homes were badly “over-priced” meaning only that the amount we’d planned to sell them for was more than other homes of the same SF. Some of our homes sold for half our planned price.
Home prices are one of those truly capitalist things–the home sells for exactly the amount a person is willing to pay for it.
And in response to this coho-l inquiry: And if we move homes/housing out of the _capitalist_ economy and into the _sharing_ economy, what happens then? Liz responds:
I have no great affinity for capitalism. But I can’t see a way to get home sale prices out of capitalism in the foreseeable future.
Remember that home sales are at the intersection of cohousing and the world–almost all sales are to someone who is not yet in cohousing. Many of the people selling are leaving cohousing.
Money’s got to change hands, and the amount needs to match some definition of fair. For the people coming in and for the people going out (that is, the buyers and the sellers), “fair” is determined by what the market will bear.
Those leaving need that money to be able to get their next housing.
Tags: Affordability, affordable housing, cohousing