Cohousing Costs After You Move In: Part I, Intro to Our Investigation

“Cost of living” refers to all the expenses sustained by a household in the ordinary course of life. It includes, not just the cost of housing, but also the cost of food and clothing, furniture, transportation, medical and child care, and so on. Traditionally, “cost of housing” has referred to the specific shelter expenses of mortgage or rent, property taxes and insurance, and utilities. More recently, condo fees and Homeowner Association (HOA) dues have been added to the mix of shelter costs. This series of articles focuses on these fees and dues in cohousing communities, and how communal costs interact with the more traditional shelter expenses.

Purpose of the Inquiry. We want to imagine that cohousing is an intrinsically economical way to live. But is it true? In cohousing communities as well as in “regular” condominiums and HOAs, one may often hear complaints that the annual fees and dues of the community are “too high”. But is it true? Too high … compared to what?

At this point in the evolution of cohousing in the U.S., we’ve accumulated substantial expertise and information about the formation and development of cohousing communities, including how much time and money will be required for a successful development project. Less well understood, however, is what it costs to live in cohousing, and to keep the community running, after development is done and the construction loan is paid off. To help fill this gap in our understanding, Coho/US and CRN (the Cohousing Research Network) have joined to implement an investigation of the actual annual budgets of established cohousing communities. This series of articles presents the investigation highlights as recently presented in the Nashville National Cohousing Conference of May 2017.

Methodology and Response. Knowing that everyone detests following intricate instructions for filling numbers into forms (think: tax returns), we kept things simple for our respondents. We did not design a survey. Instead, we broadcast a request to all cohousing communities on our lists, asking them to send us their most recent annual budget documents — meaning, the tables, re-ports and narratives generated for, and presented as, the budget proposal for consensus. To further encourage participation, we promised confidentiality, such that identity and particulars of the responding communities would not become public.

From October 2016 through through January 2017, we eventually accumulated responses from twenty communities — about 1/8th of all US cohousing communities currently known to be occupied and operating. Community size ranged from 20 to 41 units, totaling 611 units in all. Most communities were intergenerational, and some were senior. We saw a good mix of urban (multi-family), suburban and rural designs. Regional representation was decent, as was community age distribution. The sample set of volunteers, in our judgment, is adequate to represent the range and variety of cohousing experience, and to pull out some informative averages. But it is not sufficiently large or representative to permit an analysis of subcategories, such as a meaningful comparison of budgets between urban and rural communities.

Thinking about Money. Since we asked each community to send us its “raw” data — its specific and singular budgeting materials — we were not surprised that the packages we got were hugely diverse: long versus short; textual vs numeric; broad-brushed versus detailed, and so on. Of greater significance, the foundational concepts for organizing money management were often wildly different: Many communities organized their money by committee (“Interior”, “Exterior”, “Community Life”); some organized by function (“Misc Admin”, “Routine Services”, “Mgt Company Fee”); and some organized by zone or district of the physical plant (“Common House”, “Out-buildings”, “Forest and Trails”). A few divided their budgets into a “fixed” category, with costs allocated proportional to the formulas declared in the covenants or master deed — and then had a separate “discretionary” budget, with costs apportioned by some other system, like bidding or voluntary pledging.

In order to facilitate a consistent analysis and comparisons, we had to restructure this disparate budget data into categories of our own. The categories we chose aren’t meant to be “better” than the categories we were given — but they are intended to conveniently aggregate a very wide range of line items. These categories are …
• Property administration and maintenance;
• Insurance and utilities;
• Savings for future or unexpected needs; and
• Cohousing and betterments (activities and expenditures unique to communal life).

These unifying budget categories, and the range of per-unit magnitude of expenditures, will be detailed further in next month’s Part 2 of this series.

Philip Dowds, an off-the-clock architect, is a ten-year resident of Cornerstone Cohousing in Cambridge, MA, and the current Board Treasurer of Coho/US.

Footnote: In its purest form, an HOA consists of single family homes on private parcels that have affiliated to co-own and co-manage common amenities, like a pool with a clubhouse. Apart from this limited co-ownership, each house and yard remains “stand-alone,” responsible for its own maintenance, utilities, insurance, and household budget. In condominium ownership, row houses or multi-family structures will include roofs and walls, stairs and elevators, boilers and/or landscaped yards owned and maintained by all the households of the property. Privately owned construction is limited to “drywall-in” space of the dwelling unit interior. Condos, in other words, tend to share more real estate than HOAs.