The cost of things

Cost has been at the heart of several recent conversations and it seems like some comment may be useful.

  • We priced our recent co-housing workshop at $250/person, $300/couple. Some people thought this was too expensive and assumed we were trying to make a profit. Not so. It was a two-day workshop, in a rented venue, professionally facilitated, with catered coffee, lunches and a barbecue. We priced it in the hope that it would break even, and it almost did.
  • Similarly, the Associate Member sessions we’re planning now for March, will cost $250/person, $300/couple. That was enough to scare off one intended participant. Again, this is estimated to be cost-recovery. We’ve hired a professional facilitator for these sessions, to ensure that everyone has the opportunity to participate on an equal footing. We’ll also be paying resource people for some sessions to ensure, for example, that the most accurate legal and accounting information is available.
  • Not that we think profit is bad. A younger friend of ours, Kris Stevens at CoLiving Canada, is trying to make a business out of helping people with the ins and outs of cohousing. His recent workshop was similar to ours but priced at (as I recall) about $1200. I saw some comments sniffing about how “sad” it was to see people trying to profit off cohousing. I don’t agree. From what I’ve seen of cohousing activity in Canada at the moment, it’s characterized primarily by well meaning people with no idea what they’re doing, what options are available or what will work (exactly like us, except we’ve been at it long enough to figure a few things out). The only way for it to become scalable and sustainable is for people to learn how to make a decent living at it. We wish Kris and his colleagues every success.
  • Shares in Wine on the Porch, near as we can figure, are going to cost about $750,000, plus applicable taxes. If we wanted to live a couple hours outside Toronto (as many do!) we could do it for a third or less that amount, but we want to be in the city, in a walkable neighbourhood, on the subway, and that’s what it’s gonna cost. We’ve been asked at times how much money the four of us (two shares) are making on the development, and the answer is none. With a total investment so far just shy of $2.4 million (home purchase, land transfer tax, legal, and a few, immediately required maintenance items), each couple has invested approximately $400,000 in the project beyond what we expect our shares to cost at move-in date. We’re treating these investments as shareholder loans to Wine on the Porch Inc, to be repaid from the sale of additional shares. We are charging no interest on these loans, but that’s not because we’re particularly altruistic. We looked at this quite closely. If we charged the corporation interest, we’d also have to pay rent. (We reside in the premises pending renovation.) Looking at it from an after-tax perspective, the extra paper work didn’t seem worth it. Future buyers will be getting a bit of a break, we think, but not a whole lot. But back to the main point: nope, not making any money on it.
  • Finally, we have regular conversations about the nature of this product as a real estate investment. Because you’re buying a share in an equity co-op, your investment is protected to the extent that real estate is sound. You (or your estate) can sell your share and participate in whatever capital gain may have accrued. But, because there is as yet no track record for this type of real estate investment, the purchase is more speculative than most. Another way of saying this is that estimating “market value” is more of a crap shoot than usual. If demand increases for this type of housing, you might expect your share to increase with the market or even better; if there is limited demand, you might sell at a loss. Personally, I’m comfortable with this as an investment in real estate terms, but that’s not how I suggest people should look at it. What you’re acquiring is a share in a co-op, but what you’re buying is community.

Ultimately, then, it’s really not about cost. It’s about value.

One final word. Right below this post, there may be an ad (I don’t know, I never see them). WordPress puts them there in exchange for giving us this free blog. At least one reader was offended by a credit card ad she saw there and wrote to me about it. I have no control over the ads and (contrary to her assumption) derive no revenue from them. I suspect there might be enough people willing to pay $5 or $10 for a subscription so that we could cover the costs of moving this site to a non-free platform and maintaining it there, but it would certainly exclude many others and I’m not sure it’s worth it. Comments welcome.

4 thoughts on “The cost of things”

  1. Doug

    Kris and Coliving Canada were pricing $850 / person and $1450 per couple plus HST for the workshop (so $960.50 or 1,638.50 respectively). They offered a $100 early bird discount initially. For that cost they are bringing in Chuck Durrett and Katie MccCamant in from the US so would likely be paying consulting fees and travelling costs for Chuck and Katie.

    Toronto Event is also listed on McCamant & Durrett Architect’s website but appears that the details are still the Fair Oaks, CA workshop someone copied but forgot to change.
    http://www.cohousingco.com/events/

    2 of the 3 people involved in Coliving Canada attended Chuck Durrett’s seminar in Bainbridge Island / Spokane WA June 2018 which is listed on their website for US$650 although I think I saw a reference to US$595 somewhere else (maybe early bird pricing).

    Durrett does an online facilitated workshop series last few years in the fall for Study Group 1 (SG1 under their resources section) and it is 10 session for US$700. I had looked at it a few times but I had conflicting priorities or conflirting dates.

    Convivum Cohousing in Ottawa brought in Margaret Critchlow of HarboursideApril 2017 for a 2 day workshop and there was a cost to that too. I think some out west may have used Cohousing Development Consultant for workshops and projects.

    I think some of the misconception is that cohousing should be easy and almost same price as other types of housing but it is likely more since cohousing has a lot of common spaces compared with condos, etc. and that costs are spread over a smaller number of people. Wine on the Porch project has a lot of common space versus a couple of coliving projects elsewhere and real estate prices are pretty eye watering in Toronto from conversation with university friends although that seem to be settling a bit recently.

    I have heard that 80 or 90% of cohousing attempts fail (some say 70%) and some tried for years before disbanding. I have heard from successful projects that they had a number of burning souls that put in a lot of work. Working through the issues is a necessary part of the process and I think 3 highest reason for those failures are
    1. Problem getting suitable land / property especially in urban area
    2. Could not get critical mass either to do the work or put up the money
    3. Process and conflict resolution issues since building community is not easy and people are not going to see eye to eye on everything.

    I think our group has gone past the rose colored glasses stage and are going through some of the work needed but I see quite a bit of work that need to be accomplished. One successful project I spoke with said facilities workshops really helped them to come to a group vision to head for.

    Mary Huang
    Member of Concorde Cohousing in Ottawa

    1. Very insightful comments Mary. You’re right that common space adds to the cost, but in our model, since our private spaces are not self-contained, it works out less expensive overall. The average cost of a share in Wine on the Porch will be less than the average cost of a home. That’s true in Toronto and I would expect many other places as well.

  2. My husband and I seriously considered wine on the porch and backed out for financial reasons which I will not expound upon here. However our backing out for finances has NOTHING to do with charges for running a workshop, associate members sessions, cost of a wine on the porch share, etc, etc…

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