Housing Cooperative as ERE Living Space

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sky
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Housing Cooperative as ERE Living Space

Post by sky »

A person working towards ERE might consider living in a housing cooperative. There are different kinds of housing cooperatives, but I am thinking of the kind where you rent a room and share a house with others who also rent rooms. There are shared tasks, such as cleaning and washing dishes. In some cases food is provided.

Here is an example of the type of housing cooperative I am discussing: http://kalamazoo.coop/fletcher

These are set up for students, however anyone can apply to live there. With a bicycle, cheap hobbies and a room in the above housing cooperative, one could achieve a 1J lifestyle fairly easily, assuming the food was acceptable. And if it was not acceptable, one could take the role of cook or kitchen help for the cooperative.

I have lived in a housing cooperative as a student, and was generally satisfied with the living arrangement. There were the usual roommate issues of so and so didn't do the dishes, but some of the people I met there became lifelong friends.

Housing cooperatives have a rent price advantage over investor owned rental housing: Once the home is paid off, only the ongoing costs of maintenance, insurance, property tax and utilities need to be covered. What this means is that rent is not driven by the market rate for rent in the neighborhood, but by the actual cost to keep the house in order. Investor owned housing is driven by the profit motive, which means that rents will typically follow the market rate for rentals in the area. (Some housing cooperatives have a goal of growth, which might mean that part of the rent will be used for a down payment on the next housing purchase.)

The single family home owner enjoys a similar status after paying off the mortgage: housing cost is only the ongoing cost of keeping the home in order (maintenance, taxes, insurance, utilities, assessments, etc.), and the home owner is not subject to increases in housing cost due to an increase in housing prices or rents.

As an undead corporation, a housing cooperative enjoys caps on property tax growth similar to a single family home owner, except that its property taxes will remain capped forever since the property will not be transferred, even over several lifetimes. (This only applies to states with caps on property tax, such as Michigan).

As a thought experiment, I am trying to think of ways that a housing cooperative could be created that would be beneficial to the creator and would also serve the needs of the residents.

For example, one could buy a house, rent to roommates, and perhaps with a core group of roommates set up a housing cooperative organization. The original owner could rent on land contract to the housing cooperative, after the contract period, the housing cooperative would own the house. The housing cooperative, with or without the original owner could collect rents and pay the land contract to the owner. The owner pays the mortgage. The land contract would be based on the mortgage amount plus a percentage to cover risk to the owner. The housing cooperative covers all costs related to the house, taxes, insurance, utilities, etc.

I still need to work through a process of creative paranoia to list all kinds of things that could go wrong with this arrangement.

Cost/Benefit to the original owner: the owner can live there as a renter or may leave as he pleases. The owner is out the original down payment plus any mortgage payments before the housing cooperative can be formed. These costs should be included in the land contract payment amount. The owner has no management responsibilities other than participating in the operating committee of the cooperative as a member.

This is a thought experiment. I assume that this will not work or is risky, because if it were easy, it would be common.

Laura Ingalls
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Re: Housing Cooperative as ERE Living Space

Post by Laura Ingalls »

https://www.zillow.com/homedetails/805- ... e=txtshare

I thought this structure would have been well suited to a project such as this. I might remove the link at some point to doxing concerns

sky
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Re: Housing Cooperative as ERE Living Space

Post by sky »

15 bedrooms for 300k, that could be low cost housing.

Laura Ingalls
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Re: Housing Cooperative as ERE Living Space

Post by Laura Ingalls »

Price per square foot is very low for such as solidly (appearing) house. It on a pretty street right by a gorgeous park.

Kriegsspiel
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Re: Housing Cooperative as ERE Living Space

Post by Kriegsspiel »

Laura Ingalls wrote:
Sat Jul 18, 2020 8:47 pm
lnk

I thought this structure would have been well suited to a project such as this. I might remove the link at some point to doxing concerns
"a single family home that contains 7,974 sq ft and was built in 1913. It contains 15 bedrooms and 7 bathrooms."

<Single Amish Family has entered the chat>

Kriegsspiel
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Re: Housing Cooperative as ERE Living Space

Post by Kriegsspiel »

That's a very cool looking house though. It reminds me of Detroit, where similarly cool houses might be even cheaper.

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Re: Housing Cooperative as ERE Living Space

Post by jacob »

For a half-way similar situation, consider a European student dorm. These are usually NOT on campus but scattered around the city and the students tend to be more independent (have to cook their own food). They come in different varieties. You have to be a student to live there and sometimes, there's also an age limit, like 30.

1) Just an apartment building with a bunch of studio apartments.
2) Room + bathroom but shared kitchen.
3) Room but shared bathrooms and shared kitchen.

I've lived in 2 and 3.

Because of the "kitchencounter problem" 3 only works if there's a professional coming in to clean regularly. Otherwise, it risks that one rotten apple who can't clean up after himself starts a trend where others quickly conclude that they don't have to either. IIRC, the kitchen and bathroom were cleaned daily. The rooms were cleaned once a week. We didn't have a pro cleaner in 2 but we were only 4. This worked fine most of the time, but one still has to agree on "how clean is clean" and "when the music stops during a party" (10pm or 3am?!).

In either situation, it's usually 10% of the people causing 90% of the problems.

I'd pick such a solution for the social reasons. It's awesome when it works because you develop your own tribe. When it doesn't work or it doesn't work for you, it's just crowded. Being discriminating, I think one reason it can fail for the individual or the group as a whole is if people pick the solution because it's the cheapest rather than the most social. IOW, it's an anti-choice rather than a choice. In conclusion, I think it's preferable insofar one wants to live in a very social situation. Being the cheapest should just be a bonus.

Alphaville
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Re: Housing Cooperative as ERE Living Space

Post by Alphaville »

sky wrote:
Sat Jul 18, 2020 8:28 pm

This is a thought experiment. I assume that this will not work or is risky, because if it were easy, it would be common.
it’s actually common in apartment buildings in the new york area.

https://en.m.wikipedia.org/wiki/Housing_cooperative

does not require being overly social and /or sharing quarters or any of that.

student co-ops are a different story, but still.

co-ops are solid, well-established modes of social organization that provide goods and services as alternatives to for-profit markets. e.g., as a credit union member i’m much happier than i was as a former megabank customer. and as a food co-op member i was able to purchase quality food long before walmart began selling organic stuff to the masses.

eta: this article outlines the difference between a housing co-op and a condominium https://www.realtor.com/advice/buy/condo-vs-co-op/

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fiby41
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Re: Housing Cooperative as ERE Living Space

Post by fiby41 »

The intention is to get the association of devotees but "Base" (acronym, just an apartment/flat) is similar to the descriptions provided above. 3 buckets of food are dispatched 2 times a day from the temple's kitchen. A senior devotee needs to vouch for you before being accommodated. From those I know, 2 are students, 1 unemployed, remaining all are employees.

Does China's ant colony/tribe qualify?

Laura Ingalls
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Re: Housing Cooperative as ERE Living Space

Post by Laura Ingalls »

Kriegsspiel wrote:
Sun Jul 19, 2020 6:33 am
"a single family home that contains 7,974 sq ft and was built in 1913. It contains 15 bedrooms and 7 bathrooms."

<Single Amish Family has entered the chat>
No it’s an old sorority house. Someone aspired to make it a BnB at one point. They couldn’t get the zoning

Jason

Re: Housing Cooperative as ERE Living Space

Post by Jason »

Alphaville wrote:
Sun Jul 19, 2020 8:18 am
it’s actually common in apartment buildings in the new york area.
I went to visit a girl I knew in college who grew up in one of these situations in NYC. One of the members from Sha-Na-Na was a resident (it wasn't Bowzer). She intimated that underneath the communal housing structure lurked a whole other world of communion. I remember seeing Sha Na Na on television and seeing the guy and thinking how much he liked being in big groups.

BeyondtheWrap
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Re: Housing Cooperative as ERE Living Space

Post by BeyondtheWrap »

I grew up in a housing cooperative. A housing cooperative is when the residents are all shareholders in a corporation that owns the property. You seem to be talking about something different.

Your first situation seems to be just...buying a house and renting out the rooms (possibly as SROs)? AKA Having roommates?

And your thought experiment... The cooperative is renting-to-own from the owner?
No, the cooperative would have bought the property from the original owner. The cooperative would not have a contract with the original owner afterwards; they would have a mortgage with the bank.

Otherwise, yes, owning is usually cheaper than renting. Having roommates is usually cheaper than living alone. Doing both those things is even cheaper.

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Lemur
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Re: Housing Cooperative as ERE Living Space

Post by Lemur »

I've had thoughts every now and then of how cool it would be to have an 'ERE House'.

A 3/4 Bedroom, $200k house with 20% down at 3.5% interest rate with 1% a year in property tax ($2k a year) and $840 in home insurance would be $955 a month payment. Split that up with 3 roommates and everyone pays $238.75 a piece to cover mortgage (including owner). Maybe the owner rounds that up to $300 a roommate as premium for maintenance costs or something.

Everyone gets to benefit from a large low cost in housing/rent......everyone shares a kitchen. Get to be with like-minded folk. Owner retains all dictatorship qualities to make this work?

mooretrees
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Re: Housing Cooperative as ERE Living Space

Post by mooretrees »

Lemur wrote:
Sun Jul 19, 2020 9:05 pm


Everyone gets to benefit from a large low cost in housing/rent......everyone shares a kitchen. Get to be with like-minded folk. Owner retains all dictatorship qualities to make this work?
I think this actually makes it a weak point for a shared living, cooperative style home. When someone is the owner, there is a clear hierarchy that makes the dynamic less egalitarian. Now, if you can find the right owner, and the right roommates, then that dynamic can be less dominant. I know the difference because I used to live in a 'group' house with five others, and now have lived with roommates as an owner. It's a very different vibe. Which doesn't mean it can't work. But, it does likely mean that the owner will 'be in change' all the time. Might be hard for some people to swallow.

This is an interesting thread. I've sorta thought of trying to pursue this, but haven't really figured anything out.

horsewoman
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Re: Housing Cooperative as ERE Living Space

Post by horsewoman »

Our house has 6 bedrooms, but only one very small bathroom and one tiny bathtub/shower, which makes having roommates a challenge. However, it is a constant embarrassment to my ERE sensibilities that we have so much unused room.
Currently we have a houseguest in form of my husbands cousin. Im quite happy with the situation, since another strong guy on the farm means a lot less heavy lifting for me and I'm in general pretty flexible with my notions, so it doesn't bother me much to have him around. Unfortunately my husband is an extreme loner type and does not deal well with an extra person in our house (no reflection on the cousin, he's a great houseguest!).
I hope DH grows with this temporary situation because I'd like to make use of our superfluous bedrooms for having people over that help on the farm. It's such an win-win situation!

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Re: Housing Cooperative as ERE Living Space

Post by Alphaville »

just found this in taleb’s “black swan”:

“If you engage in a Black Swan–dependent activity, it is better to be part of a group.” :mrgreen:

eta: there’s a whole discussion of our animal need for social rewards on chapter 7, “living in the antechamber of hope” (artists, entrepreneurs, scientists, etc)

i think that relates to issues discussed in this whole forum: viewforum.php?f=16

(because i think ere “success” is black swan dependent)

(and i’m not interested in living in an ere co-op because ere is not my prime directive, but rather just a tool in my toolkit. however, living in another type of outsider group? maybe.)

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