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.
- 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
- 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)
- 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 ($)
- Complete construction drawings and building specifications
- Obtain building permits (2-4mo)
- Solicit and negotiate construction bids
- Select contractor
- Finalize construction contract, loan, and schedule ($)
- Construction (8-14mo)
- Monitor construction work
- Secure mortgage loans for buyers ($)
- Move in