Choosing a Development Model: Lessons from Self-Developed Communities 2015 Cohousing conference presentation

1. Choosing a Development Model
Lessons from Self-Developed Communities

2. Why Consider Self
Development? Potential cost savings
 Member-designed, unique homes and
eclectic neighborhood
 Full 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

3. Methodology
 Source of communities: Cohousing
Website
 Sorted 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

4. Participating Communities
Arcadia Iowa City Coho
Ashland Coho Legacy Farms
Burlington Coho Manzanita Village
Durham Central Park Coho Mariposa Grove
Elderberry Coho Milagro
Meadow Wood Coho Peninsula Park
Capital City Urban Coho Rocky Corner
Echo Hills SIskiyou
Charlotte Coho Sunward Coho
Elderberry Coho Tamarak Knoll
Elderspirit Turtle Farm
Gainsville Coho Valverde Commons
Greensward Hamlet Woodard Lake Coho
Hundredfold Farm

5. 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 communities
 Collective households
 Size of communities ranged from 5 - 40 households
 Project costs ranged from $1.5 – 10 million
 Mix of urban, suburban, small town and rural

6. The Most Challenging Issues
 The right skills
 The condo monster
 Financing
 Decision making
 Zoning and permitting
 Budgeting
 Relationships
Let’s look at lessons learned and creative
ideas for each of these…

7. The Right Skills: Lessons
Learned
You 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

8. The Right Skills: Creative
Ideas
 Pay 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

9. The Condo Monster:
Lessons Learned
 The 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.

10. 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!)

11. Financing: Lessons Learned
 Members 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 receptive
 Generally must own land outright to use
as collateral
 For mortgage companies, finding
comparable homes (comps) is often an
issue
 Banks don’t value the Common House

12. Financing: Creative Ideas
 Hire someone who knows how to
secure public funds/grants
 Find private investors with good
standing in the community
 Build spec or model homes to show
capability and create comps
 Partner 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

13. Financing: More Creative
Ideas
 Create an equity pool (can be anonymous)
 Involve all members in Money $hadow
workshop
 Find 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

14. Decision Making: Lessons
Learned
 There 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

15. Decision Making: Many
Models
 Traditional consensus (right to block;
some type of voting process if impasse; 3
meeting rule)
 Sociocracy/dynamic governance
 Consensus minus two
 Quaker consensus (find unity)
 Majority rule or 2/3 majority
 3 round process (listen, respond,
resolution)
 Only equity members in decision process

16. Zoning and Permitting
 Likely to take much longer than expected;
common for first zoning submission to fail
 Start 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

17. 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

18. Budgeting: Lessons Learned
 Home 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

19. 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 code
 Utilities, easements and parking
requirements
 Legal fees (more consultation needed
than expected; esp for condos)

20. 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

21. Relationships: Training
General 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

22. Relationships: Creative Ideas
 Spend one weekend together every
month at a rented cabin
 Every 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

23. 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

24. 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

25. Quotes from the Interviews:
What it Takes to Self-Develop
 Takes big courage and a lot of
compassion
 Development is not for sissies
 Be prepared for a spiritual journey
 If you want to build fast, hire a developer
 Requires relentlessness of spirit
 So much work, so much stress, so much
personal growth
 Just plod through
 Remember what you are enjoying while
dealing with all the shit

26. For More Information
This presentation can be found at
http://www.cohousing.org/2015/docs
Or contact Mary Bennett at
mbkbennett@gmail.com
Thank you!!