Financing Cohousing

appropriate advice, which financing route is right for them. for right is route financing which advice, appropriate likely that members will know at an early stage, with the the with stage, early an at know will members that likely of considerations will fall into typical patterns, and it is is it and patterns, typical into fall will considerations of Financing Structure Mutual Home Ownership considered. As more cohousing projects develop in Ireland these types types these Ireland in develop projects cohousing more As so alternative options will normally have to be be to have normally will options alternative so Options Society (MHOS) (or mortgage) to a newly minted housing group, group, housing minted newly a to mortgage) (or banks are unlikely to provide a long term loan loan term long a provide to unlikely are banks support funding? support unlocking the viability of a project. High street street High project. a of viability the unlocking which may allow it to leverage specific specific leverage to it allow may which 5. the focus of this pamphlet, as it is essential to to essential is it as pamphlet, this of focus the Will the project cater to any particular group group particular any to cater project the Will The following is a summary of some of the financial models This a model developed by the New Economics Foundation and finance . It is this long term finance which is is which finance term long this is It . which have been used in cohousing projects in recent years, pioneered at the LILAC housing project in Leeds, UK. It aims to construction loan is paid-off using long term term long using paid-off is loan construction sustainability? and which may suit the particular needs of an Irish group: combine affordability with the opportunity to accrue an asset the the costs. Once construction is complete complete is construction Once costs. to build to a particularly high standard of of standard high particularly a to build to over time. bank loan is required to pay for construction construction for pay to required is loan bank spaces for work, community spaces, or or spaces, community work, for spaces 3. construcction 3. Normally a specialised type of commercial commercial of type specialised a Normally beyond their own housing, such as providing providing as such housing, own their beyond rental This model is suitable for those with limited The model is described as a shared equity co-op. Members 4. Does the group wish to achieve any goals goals any achieve to wish group the Does co-op equity. Under this model members form a co-op must deposit equity equivalent to 10% of the value of their new trusts (CLTs). trusts and may be able to avail of cooperative funding, home. With this money the co-op sources financing to carry out various structures such as community land land community as such structures various those who live there in the future) the in there live who those ethical finance or social housing assistance if construction. Purchase: SOA pamphlet. Site cost may be reduced using using reduced be may cost Site pamphlet. SOA that the homes are affordable in perpetuity (for (for perpetuity in affordable are homes the that their incomes meet the requirement. Rental 2. Site Site 2. 3. 3. This topic is dealt with in detail in a separate separate a in detail in with dealt is topic This Should the ownership model be structured so so structured be model ownership the Should co-ops may allow members to own some equity Once members move in, they pay a maximum of 35% of their in the form of shares, which they can sell if they net income into the co-op each month. They continue to do this are normally the first costs encountered. costs first the normally are homes outright? homes leave, or may be fully mutual, meaning members until their portion of the construction loan has been paid off, costs: matters, including a planning application. These These application. planning a including matters, monthly rent, or will members own their own own their own members will or rent, monthly own the co-op but do not own any personal after which time they pay a small monthly fee. 1. professional professional 1. Those associated with design, finance and legal legal and finance design, with associated Those the project and to which they pay an affordable affordable an pay they which to and project the equity. At the La Borda cooperative in Barcelona desired? Will the group form a coop which owns owns which coop a form group the Will desired? members invest some personal savings in the As a member pays off their portion of the loan they are accruing 2. 2. What sort of final ownership arrangement is is arrangement ownership final of sort What When Is Finance Required? Finance Is When project and may withdraw equity when they equity shares in the co-op, and should they decide to move on leave. An example of a fully mutual cooperative they can sell these shares to a new resident. The sale value of equally? available in Ireland. in available is the Kindling Housing Cooperative in Oxford, these shares is controlled in order to maintain affordability for means, or should all members contribute contribute members all should or means, desirable and necessary to broaden the spectrum of housing housing of spectrum the broaden to necessary and desirable where no member investment was required. future residents, but members have the benefit of knowing that for members to contribute according to their their to according contribute to members for tested systems tested , and we believe that similar systems are both both are systems similar that believe we and , their monthly payments are contributing to the value of an asset expected to contribute? Will the group allow allow group the Will contribute? to expected other European countries have tried and and tried have countries European other This is an area where where area an is This building group This model is typical in Germany in situations which they own. 1. How much equity should members be be members should equity much How at 4 projects in particular in terms of how they were financed. financed. were they how of terms in particular in projects 4 at (german baugruppe where co-op members have sufficient equity sources of finance that have been used elsewhere, and looks looks and elsewhere, used been have that finance of sources model) to carry out the building project using loans This is the model currently being pursued by Common Ground community-led housing projects, summarises some of the the of some summarises projects, housing community-led indication as to how to proceed: to how to as indication from sources such as the state investment bank CoHousing in Bray, Co. Wicklow, which aims to realise the first explains some of the basic concepts involved in financing financing in involved concepts basic the of some explains structure of the completed development will give an an give will development completed the of structure and commercial banks, and members typically example of this model in Ireland. need to attain sufficient financial backing financial sufficient attain to need a housing group from the outset the from group housing a . This pamphlet pamphlet This . the , and the desired financial financial desired the and , end up owning their own homes. Whereas this financial delivery of a project should be considered by by considered be should project a of delivery financial Central to the realisation of a self-organised housing project is is project housing self-organised a of realisation the to Central The The option may seem out of reach for many people in Ireland at the moment, if similar state investment bank financing became possible here, and if Start leasehold purchases of sites were facilitated, then this type of arrangement would become How to to How Introduction much more affordable. A recent example of this type of project is Ritterstrasse 50 in Berlin. Who We Are and How You Existing Sources Of Finance Further Can Get Involved Financing In Ireland Information Although there is currently no established financial support If you’re interested in finding out more, the following websites SOA is a collective with the simple goal of improving the CoHousing structure for community-led housing projects in Ireland, there and books are worth a look: quality of living environments in Ireland by making new are a number of existing financing structures which could be forms of housing available. leveraged for their potential benefit: website brickstarter.org Our members and supporters represent a growing diversity cooperativecity.org of skills and expertise, and we are always open to new hbfi: (home building This is a company set up by the Department neweconomics.org contributions and ideas. finance ireland) of Finance to provide construction finance for cds.coop “commercially viable residential developments” communitylandtrusts.org.uk If you would like to get involved, either to contribute time where small and medium-sized builders cohousing.org.uk or expertise, or to join a group of people planning to create experience difficulty securing finance from www.theruss.org their own homes, please get in touch, or pop along to one commercial banks. ecology.co.uk of our workshops, Cohousing Cafes, or other public events. www.triodos.com rebuilding ireland This is a government scheme designed to help radicalroutes.org.uk home loan first-time buyers. Although aimed at individual owch.org.uk buyers, it is possible that this financial support commongroundbray.com could be used by members of a housing group to boost their potential to use mortgage finance books Cohousing Cultures for investment in a cohousing project.

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