Co-operative Sections – Now there is an Idea

Co-operative SectionsGeoff Butcher spoke at the last Viva Networking Meeting about his efforts to cut back on the price of housing by focusing on development costs, and working co-operatively to develop a piece of land.  Visit his Website

Sections cost too much,  and many subdivisions are poorly designed and boring because of the limitations put on building design.

The issues for people in Christchurch:

  •  They will receive a payout on their Red Zone section which is insufficient to buy a new section. OR
  •  They will receive a payout on their house and section which gives them insufficient equity to buy another property. OR
  • They just can’t afford a section OR
  • They want to be more involved in the building of their new home and community OR
  • They find  the covenants are too restrictive OR
  • They just want to try to develop and build quality homes in a different way.

The Solution:

co-ops workCo-operate with a group of people to get a section at a 30% discount to typical current market prices.  More detail

One project is Underway – the Hikuwai 

HikuwaiAll the initial blocks were taken up by cooperative members, with the last one being sold in Dec 2013.  However, the central block (originally lot 16) is to be further subdivided. Houses have been designed in this innovative precinct and they are looking for buyers. Interested in buying? More information here

Geoff Butcher Economist 1 Cooperative Developments from Christchurch Voices on Vimeo.

Viva! Affordability paper

One of the core tenets of The Viva! Project is housing affordability.  With housing availability and house prices reaching crisis point, especially in Christchurch, there is a need for systemic changes in the way we build and renew our housing stock. A wide swathe of issues need to be researched and discussed, encompassing strategies to reduce costs of land, financing, development overheads, construction, household operation and maintenance.

See our overview of the issues in our new Affordability Paper (also available under the Resources heading above).

We will continue to investigate the issue of building costs and use this resource as a knowledge repository.  We’ll keep you posted on updates.

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Hat-trick for LILAC – cheap, green, co-living

LILAC is an inspirational affordable co-housing development in Leeds in the UK.  LILAC stands for Low-Impact Living Affordable Community and it combines low-impact eco housing with affordability and co-housing, possibly one of the first in the world to encompass all of those aspects at the same time.

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See more on their website:  http://www.lilac.coop/

Paul Chatterton from the School of Geography at the University of Leeds presented their story in this TEDx talk.  The story of dogged determination and persistence is very similar to that of the Earthsong co-housing development in Auckland.

Paul describes an ownership model proportional to income which would have a major impact on housing affordability and social housing.

The buildings are built with high levels of insulation and air-tightness along with proper mechanical ventilation with heat recovery (similar to the Passive House approach) resulting in very high thermal efficiency.

Insulation is provided by straw bales, using ModCell‘s innovative modular system.  The system has the advantage of low-, or negative-, carbon construction, yet forms very linear walls indistinguishable from any other modern construction method.

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Affordability a critical issue for VIVA

One of the core tenets of The Viva! Project is affordability.

With housing availability and house prices reaching crisis point, especially in Christchurch, there is a need for systemic changes in the way we build and renew our housing stock.

PROVIDING AFFORDABLE HOUSING:
SOME ISSUES AND ALTERNATIVE APPROACHES

1.     CONSTRUCTION COST REDUCTIONS

1.1  Minimising the size of units.  Shared community/commercial laundry, visitor accommodation (i.e. shared “spare bedroom”); garden shed, workshop; optional leasable storage, car-parking and maybe freezer storage.

1.2  Units are single level with “only” one bathroom and one toilet (separate)

1.3  Lower cost foundation systems

1.4  Modular

1.5  Prefabricated (factory-produced and assembled on-site by workers with only basic training and skills)

1.6  Low-cost manufacturer

1.7  Sweat-equity

1.8  Units finished to varying levels (à la Toronto’s Grow Homes: core living areas finished – or not.  Other rooms could be just the unlined shell.)  Purchasers finish and fit-out to their standard using their own resources and to their own timetable (i.e. another opportunity for more “sweat equity”, in the case of private buyers)

1.9  Functional rather than fashion hardware, whiteware, furnishings and finishings

1.10  Building materials “alternatively” sourced (i.e. not from NZ monopolistic Fletchers Group)

 

2.     DEVELOPMENT COST REDUCTIONS

2.1  Co-operative multi-owner-managed development (no “developer” margin/profit)

2.1  Employ draughts-people not architects

2.2  As many buyers as possible purchase pre-build, off the plans (including retail/commercial premises, and especially to Social Housing providers: CCC, Housing NZ, Latimer Community Housing Association, Anglican Care, etc. [MBIE Social Housing Fund provides capital in advance of construction]).  e.g. community-compatible ‘religious’ organization pre-purchases residential units and the community meeting house.

2.3  Stage the project

2.4  Negotiate reduced Development Contribution, based on low demand placed on civic infrastructure and on provision of on-site green and recreational space and community services.  Negotiate for payment to be delayed and spread over time.

Non-replicable strategies specifically for first and/or CCC-supported development:

2.5  Negotiating a discount on land price. Payment for land to be at conclusion of development and then as homes are sold.

2.6  Gaining sponsorships from technology suppliers (leading edge publicity; live on-line monitoring of performance)

2.7  Supply of e-cars and charging stations by retail electricity supplier (as for Auckland/Wellington apartment block by Bosco Connect www.bosco.co.nz )

 

3.     IMPROVING FINANCIAL ACCESSIBILITY – PURCHASE

3.1  Long-term lease of the land, rather than owning it (Owned by a Charitable Trust or CCC or by some of wealthier owner-occupiers or by investors)

3.2  Dwellings available to rent (Initially the market will be stronger for rental, until more people realize the desirability of the lifestyle and the investment value of units in the development) (Owned by social housing provider[s] or options as for land)

3.3  Mortgagors, recognizing that reduced costs of operation and maintenance enables borrowers to more comfortably service mortgages, agree to higher loan limits and other favourable treatment (e.g. KiwiBank – already providing subsidies for energy saving installations)

3.4  Rent-to-buy

3.5  NZ Housing Foundation (http://www.nzhf.org) or similar investor equity stake, possibly 30%.

3.6  NZ Housing Foundation or similar “Affordable Rental” scheme.

3.7  Cross-subsidies (development margin is higher on larger, more expensive dwellings/apartments to allow for a lower margin on smaller, low cost ones).

4.     IMPROVING FINANCIAL ACCESSIBILITY – HOLDING COSTS

4.1  Reduced costs of operation and maintenance (especially energy costs, use of active and public transport and avoidance/reduction of vehicle costs, and on-site food production.  CCC provides adjacent bus stop shelter.  Also contributions / support from Social Housing providers for running facilities and maintaining common areas.  Where use of a car is necessary, shared-car arrangements are the least expensive; a commercial scheme is www.cityhop.co.nz)

4.2  Minimizing financial costs (interest) by establishing a JAK-type fund 1

4.3  Village Community Association supports residents to use timebanking (www.lyttelton.net.nz/timebank) and local exchange and trading systems (LETS http://en.wikipedia.org/wiki/Local_exchange_trading_system e.g. PegX www.pegx.co.nz) to reduce expenditure of scarce dollars.

 

1    JAK cooperative bank, Sweden (www.jak.se ), NZ$230M under management, operates on borrower/lender reciprocity, without charging or paying interest, thus massively reducing the cost of finance over the lifetime of a loan.

     Sustainable Urban Village (SUV) supporters with cash invest in the fund.  Individual borrowers and the SUV Development Company repay the debt/”obligation” over time, and the simultaneously banked matching savings, operating cash and maintenance/development reserves contribute to borrowings by the original depositors or their beneficiaries and by further SUV developments, etc.