Do You Want To Live In A Baugruppe?

[MaggieoftheOwls]

Um. How do we find that out. And are you sure you meant to say two-digit, that seems...low.

[Alicorn]

Yes, it's more for commitment effects than to buy actual housebits, it's like "give that guy fifty bucks and he will note in a spreadsheet that you did it and it will be a housebit discount and you will be less likely to wander off without contributing". You can call or email a broker and they will ask you things. Tamien should appear in this thread at some point to be less clueless.

[MaggieoftheOwls]

You said NOW NOW NOW how much should I be freaking out about this? Who should I be giving fifty dollars, if I'm giving someone fifty dollars?

[Unbitwise]

The ballpark figure of how much we need total is on the order of nineteen million dollars across everybody and we need most of it to happen before there is a place to move into and there is risk of place not happening. We are at a very preliminary stage now.

Nineteen million dollars split across how many people?

[Alicorn]

Don't freak out! I can put you in touch with someone to give fifty dollars if you wish. Personally I have not even given him fifty dollars because I count as one person jointly with my spouse. I think it's going to pay a cohousing project consultant or something.

However many people live in the however many houses, it's a very very very very estimate based on a different cohousing project.

[Tamien]

Hi, I am on the steering committee! Here is a Long Post that hopefully answers some questions people have!

No one will be expected to put up their entire purchase price up front. However, we would need people to be able to contribute financially over the course of the project. We'll need to be able to pay for things like hiring various professionals, paying for permits and fees, doing site studies, buying land, convincing banks we're committed enough to give us a loan, construction, and so on. People who give in money to help cover those costs will get some percentage of that money back in the form of a discount on the purchase price of their unit. Earlier investors get back a greater percentage, because greater risk. My notes from the workshop say that you should expect to put in about 20% of the purchase price before construction.

From the cohousing book/workshop, banks will usually want to see committed buyers for at least half the units (probably more like three-quarters), and between 15 and 40 percent of the project's cost invested in equity before they'll approve a construction loan. To quote the book, "This equity is amassed from a number of sources: money already spent on land purchase, project approvals, and site studies; cash from investors, both resident and nonresident; and any amount the landower is willing to carry until the completion of the project." Like Alicorn mentioned, we're expecting the project could be in the range of $20mil total (though there are certainly cheaper locations than Berkeley under consideration - our estimate for Richmond, for example is more like $14mil), so that could be up to $8mil (but also as little as $2mil, maybe?) that we'd need to collectively put in before we could get a construction loan. You can check out our preliminary budget for details on what all the money would be going to. Roughly: 5-25% for land costs, 40-60% for construction costs, 20-35% for "soft costs" (various fees, paying consultants/managers/lawyers/etc, and so on), and 10-15% profit margin/developer fee.

As for when that money would need to come, here's a general cohousing timeline I cobbled together from my notes on the workshop and the book. I've put ($) next to things that we need money for.

1. Getting Started (as long as it takes us to get our shit together)
   • Explore interest through books, tours, talking with friends, and attending cohousing group meetings
     
   • Get the word out to find others interested in creating a cohousing community in your area
     
   • Establish an organizing group, set up its working structure
     
   • Explore shared values, work on group process skills
     
   • Agree on general goals, location, and financial expectations, including a vision statement
     
   • Assess financial capability, learn what you can afford (have a mortgage broker pre-qualify members)
     
   • Select a professional team - developer or project manager, architect, attorney, etc
2. Site Acquisition (3-10mo)
   • Identify site criteria such as number of units, density, region or neighborhood, and target home pricing
     
   • Site search (work with consultants and real estate broker) ($)
     
   • Identify potential sites, get a site under contract with specific price and terms
     
   • Site Evaluation: work with consultants to negotiate land purchase contract and do preliminary feasibility studies ($)
     
   • Formulate development strategy: define residents' and developer's roles
     
   • Develop feasibility budget
     
   • Establish project timeline
     
   • Develop a design program
     
   • Draw up legal agreements for partnership or joint venture arrangement
     
   • Core group coalesces (expect 3/4 of initial group to drop out when you get property)
3. Land development; Design and Construction Document (3-12 months, possibly more)
   • Participatory pre-design programming: meet with architect to identify goals, priorities, design criteria (2-4mo) ($)
     
   • Develop schematic design proposal (group work with architect) (2mo)
     
   • Obtain planning approvals
     
   • Close escrow on site ($)
     
   • Complete design development (6mo)
     
   • Secure construction financing ($)
     
   • Complete construction drawings and building specifications
     
   • Obtain building permits (2-4mo)
     
   • Solicit and negotiate construction bids
     
   • Select contractor
     
   • Finalize construction contract, loan, and schedule ($)
4. Construction (8-14mo)
   • Monitor construction work
     
   • Secure mortgage loans for buyers ($)
5. Move in

[Tamien]

Re: pre-qualification, this is how we assess financial feasibility of this whole endeavor.

Call or email a mortgage broker (I can put you in touch with one if you don't want to find one on your own). Tell them you are interested in purchasing a townhouse or condo sometime in the next several years, but you don't have anything particular in mind yet. Ask them what size of loan you pre-qualify for, so that you can determine what purchase prices it makes sense for you to consider. They will not charge you money to get pre-qualification info from them, because they are hoping that you will use that info to find a house you want to buy and come back to them for help with (that they will then charge you for). In order to pre-qualify you, they will want to know (at the very least) your monthly income and any recurring monthly debt. They might also want to know about your credit score, or other relevant financial info, but they should be able to work with just your monthly income and debt. If you give them that information, they will let you know what you pre-qualify for - ie, how much money the bank is willing to even consider giving you to buy a house with. Once we have those numbers back from all the people who potentially want to purchase a house, we can use that to inform a budget and decide whether this thing can get off the ground.

[DanielH]

Are there other useful documents to look at, like this budget? I have been seeing references to this for a while but haven’t looked too deeply before, and even if I could dig the information up it would probably be useful to link it here.

[Unbitwise]

Could there be some kind of Meet The Steering Committee And Already Committed People social event(s) for evaluating is-this-the-community-one-wants? (Because “other internet people assure you they are cool” isn't quite all of the information.)

Like, Alicorn's dinner party, which seems like a good approximation of that thing, has been a “someday that would be fun” thing for me and then it's been on hiatus recently. But there could be more things with different people?

[Tamien]

@DanielH: We have a FAQ here and you can see our research into zoning here. Our notes from the workshop are mostly in paper format, so not easily shareable. Unless you have specific questions, I think those are our most informative documents?

@Unbitwise: Those sort of social events is part of what the Friendship and Ponies committee is for! We're having our first one in a park this coming Monday.