Re: All-Rental Community

Sharon Villines

On Jun 29, 2020, at 7:05 PM, David Oesper via <oesper@...> wrote:

First, I posted a message this morning before I read this one so it isn’t in response.

The renters are the owners. The organization that operates Mirador would be a cooperative. Instead of paying your rent to a landlord, you would pay your rent to the community. The renter-owners would not be building equity for themselves but rather equity for the community. All proceeds would be invested directly back into the community. As long as you are a renter, you are a part-owner of the community.

One of the issues in our currently underprivileged populations is that they are not building a sense of ownership in addition to not building equity. They have no control. City councils don’t listen to renters even if the renters feel forward enough to go to city council meetings. The landlords can allow the buildings to decay while taking huge tax abatements on the property. The make money even if they don’t improve their buildings.

In a cooperative, such as the cooperative buildings in Manhattan, where cooperatives began, the owners own shares in the organization/corporation, usually in some relationship to the size of the apartments they occupy. They have the right to occupy a certain apartment because they are joint-owners in the whole venture. When they move they sell their shares. And the cooperative must approve the owners.

So the it is both a cooperative with everyone having a more or less equal say in how it functions (if they choose to), owners of stock are building equity based on how well their building is maintained and improved. The cooperatives I know are actually very rich, but it is a good model for low cost housing as well. The owners of shares then profit from their labor and have control over their lives and how the building is run. Maintaining property is a responsibility that has to be grown into. 

It would be very difficult to get and maintain buy-in when residents are both paying money and providing labor to develop the community. It could be a non-profit charity organization, much like Zen communities that also run bakeries, soup kitchens, etc. But in those communities the residents who work don’t pay rent. The ones who pay rent are people who work outside the community. They do chores to help out and defray costs. But when their money and work increases the value of the community, all the advantages stay in the community—and their rent goes up as well.

Otherwise you have an organization that rents living units to support itself.

You could find out how many people are willing to live in such places — no equity, pay rent. I suspect it is a temporary situation for people who have enough money to live elsewhere. There will probably be more people who are willing to work instead of paying rent.

How would decisions get made about how the money gets spent, etc.? Some form of consensus or perhaps sociocracy would be used.

The models in sociocracy are businesses that own themselves (there are no external owners) and everyone receives a salary from working in the business.  The business has a governance structure that specifies how the organization works. Who decides what. There can’t be an hostile takeovers.

In cohousing, the community is owned by all the participants. There is a tension sometimes between those who live there as renters and those who are owners. Should a renter participate in decisions that obligate owners to pay more money or take more risk than the renters do?

Income from the RV park, tourism, education, etc. would also be reinvested back into the community.

This makes sense as these services are for people’s partial needs — not their whole living situation. They are intended to be temporary for learning and experiencing the environment.

Raising the capital needed to purchase land would require issuing shares. Those shares would make you a community founder. Some future residents of Mirador will have money to invest in shares prior to living at Mirador, and others would not be able to pay anything until they begin renting. Some shareholders may not plan to live at Mirador but will want to support the project. We might consider some form of crowdfunding.

The sociocratic model is the only one I know that specifies the earnings and rights of the investors or shareholders. They have rights and a representative who participates decisions, but they do not own the organization and participate in decisions but have no control over them the way corporate shareholders do.

My sense of crowd funding — based on no research — is that it works when a project is dear to someone’s heart and they receive something in return. Start ups, for example, are “selling” preorders of their product. Perhaps selling 2 weeks vacation in Mirador.

Otherwise you are facing the same things non-profit organizations face— foundations don’t fund operations. They fund special programs, sometimes special facilities. People who donate money are hard to convince to donate money for operations.

Since Mirador will have an RV park, a sharehouse, apartments, and a cohousing community, where will people be able to live on-site until the community raises enough funds from rental and business income to build their permanent homes? We might find some land with an existing house on it that could be used right away as the sharehouse, and others could live in the RV park until their apartments or homes are built.

There would have to be some upfront investment in setting up all the connections the RVs need and probably converting the existing building to part living spaces and part group facilities. Studying the way people operate boat docks might be helpful. Some boats stay for years and others dock a few months of the year. One I know in Annapolis has facilities on shore — a pool, recreational center, and apts for people who don’t live on their boats but dock there.

Some amount of conventional financing seems likely so the community gets developed faster than at a snail's pace...

I may have told you this before but I’m sure there is someone out there who didn’t see it so I will repeat it. The usual way that cohousing communities start is that 70-75 % of the units have to have purchase contracts with down payments before the bank will loan construction funds. We had a developer who started the project so he had money to pay for the underground stuff and the permits. But we all had to sign contracts with checks for 5% of the purchase price. That meant the bank was only financing units that had already been sold. Not much risk. And they knew the developer so that helped a lot.

Is there a city around the area you are interested in? How remote is it?


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