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.