Why Consider Self Development?Potential cost savings Member-designed, unique homes and
eclectic neighborhoodFull control: ability to choose the design,
pace, approach and professionals for the project
Greater opportunity for creativity throughout the process (unique approaches, changes in mid-course, etc.)
Strong ownership among those who work to make it happen; value in overcoming obstacles together
Naivete can sometimes be a benefit (can do)
MethodologySource of communities:
Cohousing WebsiteSorted based on when developed
(past 10 years) and stage of development
Phone interviews with 29 communities; 27 complete or succeeding and 2 (un-named) that failed
Participating CommunitiesArcadia Iowa City CohoAshland Coho Legacy FarmsBurlington Coho Manzanita VillageDurham Central Park Coho Mariposa GroveElderberry Coho MilagroMeadow Wood Coho Peninsula ParkCapital City Urban Coho Rocky CornerEcho Hills SIskiyouCharlotte Coho Sunward CohoElderberry Coho Tamarak KnollElderspirit Turtle Farm Gainsville Coho Valverde CommonsGreensward Hamlet Woodard Lake CohoHundredfold Farm
Types of Self-Developed Communities
Fully planned development with single build-out
Fully planned development with phased build-out
Site development: lots sold and homes either centrally designed or member-designed
Re-purposing of existing buildings (homes, apartments, retrofits); condo conversions
Communities built on owned land, member land, leased land, donated land, land trust or combinations of these
Rental communitiesCollective householdsSize of communities ranged from 5 - 40
householdsProject costs ranged from $1.5 – 10 millionMix of urban, suburban, small town and rural
The Most Challenging IssuesThe right skillsThe condo monsterFinancingDecision makingZoning and permittingBudgetingRelationships
Let’s look at lessons learned and creative ideas for each of these…
The Right Skills: Lessons LearnedYou must have or hire the most critical skills and experience
◦Development consultant, housing consultant, or experienced builder with commercial experience
◦Project Manager (10-50 hours per week) Burnout is a huge issue due to time
requirements and strain on relationships
◦Facilitation and skills in relationship-building and decision-making
The Right Skills: Creative IdeasPay for specific tasks (creation of
business plan and budget, zoning and planning efforts, bank negotiations, etc.)
Get training in project management (university, state program, coho experts)
Ensure all consultants and partners have “skin in the game”: some portion of payment due on successful completion of project or phase
The Condo Monster: Lessons LearnedThe legalities of condos are
onerous and often takes much more time and money than expected.
There are differing views among attorneys as to the best way to legally collect equity (escrow, separate investment, private offerings). Explore options before deciding; draw on experience of Coho experts.
The Condo Monster: Creative Ideas Rent instead of buy: LLC builds and members pay
rent to LLC:◦ Avoids condo issues◦ Allows swapping of units◦ Prevents the need for large down payment◦ Allows ability to keep payments low
Use town home structure◦ Similar to condos but home/land owned◦ Avoids all condo legalities◦ Not doable in every state/county
Use Housing Cooperative structure◦ Members purchase a share in LLC for right to
occupy (can be ownership model or non-ownership)
Buy or build homes under a non-condo model and do a condo conversion later (budget for this ahead!)
Financing: Lessons LearnedMembers must have significant money to
invest; banks unwilling to take a lot of risk on inexperienced developers
Initial equity investment from members should be significant
Local banks generally more receptiveGenerally must own land outright to use
as collateralFor mortgage companies, finding
comparable homes (comps) is often an issue
Banks don’t value the Common House
Financing: Creative IdeasHire someone who knows how to
secure public funds/grantsFind private investors with good
standing in the communityBuild spec or model homes to show
capability and create compsPartner with the city (city buys land in
exchange for affordable housing; also some states and the Dept of Housing subsidize affordable housing)
Hire a mortgage broker to find financing
Financing: More Creative Ideas
Create an equity pool (can be anonymous)Involve all members in Money $hadow
workshopFind alternatives to funding Common
House ◦Use one of the homes as CH until later in
project◦Build CH first with member funds◦Build CH to be sellable as a single family home
in case of failure◦Buy property with building that can be
converted
Decision Making: Lessons LearnedThere are hundreds of decisions
to be made, many of them urgent; large-group consensus can bog down the process
Having a small, empowered teams works; must have delegation and trust
Key developers (often the founders) should have clear decision-making authority; clarify this early on in the process; evolve as appropriate
Decision Making: Many Models
Traditional consensus (right to block; some type of voting process if impasse; 3 meeting rule)
Sociocracy/dynamic governanceConsensus minus twoQuaker consensus (find unity)Majority rule or 2/3 majority3 round process (listen, respond,
resolution)Only equity members in decision
processNon-members pay to attend meetings
Zoning and PermittingLikely to take much longer than expected;
common for first zoning submission to failStart this process before any other (when
you are thinking about creating a community)◦Gives time to create relationships in
community and with county officials◦Allows time to pass new ordinances, e.g.,
cluster ordinance (can take years; will benefit others as well)
Know your county ordinances better than your county planner does
Zoning and Permitting: Creative Ideas
Hire a community organizer to educate the community about cohousing
Hire professionals who are known and respected by county officials
Volunteer for county government/boards during initial planning stage; become a known and trusted member of community
Hire a reputable local developer or attorney to assist with submission and boost credibility
Meet individually with neighbors; involve them in planning exterior designs that will be visible to them
Budgeting: Lessons LearnedHome prices nearly always more than
originally planned (common reason for loss of members)
5-10% contingency not enough; 15-20% much more realistic
Input from developer or builder is critical in planning the project budget
Make sure members know that home prices are not fixed and completion dates cannot be guaranteed
Budgeting: Most Common Over-runs
Site and engineering challenges; soil, topography, storm water management, erosion control plans
New regulations and codes; know what is being considered
Increasing building costs (labor and materials)
Common House; commercial codeUtilities, easements and parking
requirementsLegal fees (more consultation needed
than expected; esp for condos)
Relationships: Lessons Learned
Creating a culture of respect, appreciation and honest communication is crucial
Clear vision, mission and values must drive the process
Conflict and challenges can build a stronger community, but only if handled and addressed in a productive way
Integrate new members well – almost no community does this well enough!
Train, train train – very early and often in the process; re-train for new members
Relationships: TrainingGeneral training:◦Consensus, sociocracy or other decision-making process
◦Conflict resolution◦Facilitation
Recommended programs:◦Non-Violent Communication◦Money $hadow◦Blueprint of WE◦Crucial Conversations and Confrontations
Relationships: Creative IdeasSpend one weekend together
every month at a rented cabinEvery other meeting only social;
creating strong social bonds is as important as managing tasks
Establish a facilitator team and provide training for them
Plan a yearly getaway to have fun, renew vision and values
Sooo – Should You Self Develop?
Maybe, if:You have, or are willing to hire, the critical skills
(otherwise you may spend as much as it would cost to hire a developer)
You have a couple of key people who are willing to work 10-40 hours per week, possibly for years, to make it work; or hire a skilled project leader
You live in an area where there are not significant challenges in terms of state and county regulations
You are building on pretty straight-forward building site (topography, soil structure, access to utilities, other engineering challenges)
You can find a way to raise significant capital for the project outside of traditional banks
Would You Do It Again???
Of the 27 communities interviewed:
3 said they would hire a professional developer if they were doing it again
24 said they would self-develop if doing it again, but would learn from their mistakes
Quotes from the Interviews:What it Takes to Self-Develop
Takes big courage and a lot of compassionDevelopment is not for sissiesBe prepared for a spiritual journeyIf you want to build fast, hire a developerRequires relentlessness of spiritSo much work, so much stress, so much
personal growthJust plod throughRemember what you are enjoying while
dealing with all the shitAlways have a bottle of wine near at hand
For More Information
This presentation can be found athttp://www.cohousing.org/2015/docs
Or contact Mary Bennett at [email protected]
Thank you!!