N Street: Making it All Work

[This is the fourth of a series of four articles on N Street, a retrofit cohousing community in Davis, CA. I visited there on October 1, 2007. The other three articles are: N Street: An Introduction to Cohousing and ‘Retrofit’ Cohousing, N Street: Kids’ Lives, and N Street: Where Everyone Knows Your Name.]

Many of you who have read the other N Street articles may be impressed with what they’ve created, but you’re skeptical that the N Street model can be replicated. In this article I’ll describe some of the nuts and bolts that make the community work to give some guidance on how you might implement parts of what N Street has created.

First Steps: Hold Common Dinners and Tear Down Fences

Recall from the first article in this series, N Street: An Introduction to Cohousing and “Retrofit” Cohousing, that N Street cofounder Kevin Wolf identified two key steps that he and his neighbors took to get the community going: 1) holding regular common dinners and 2) tearing down fences between houses.

These are two steps that pretty much anyone can take with their neighbors at any time. Kevin gave me a key tip for each of these. For common dinners, have the cooking duties rotate among households rather than holding potlucks. Rotating cooking duties ends up feeling like less work than eating alone, so that’s an added incentive to do common dinners.

Regarding tearing down fences, Kevin told me that carefully dismantling and saving the old fence’s wood can allay neighbors’ anxiety about the possible downside. If things don’t work out, either neighbor can easily put the fence back up.

Real Estate Sales

The N Street organization has options to buy and first rights of refusal on most houses in its community. It has these because the owners of all houses in the community have come to recognize that being a part of N Street increases the property value of their houses.

What this means is that N Street acts like a real estate broker for houses in its community. In the history of N Street cohousing, dating back to the late 1980s, 12 out of 13 sales in the community have been arranged by N Street to N Street affiliates. These “N Street affiliates” include renters in the community who would like to buy and personal contacts of community members who would like to live there.

Thus, these sales are made without real estate agents, saving the seller 6% in commissions. N Street’s goal is to keep the sale prices in line with what comparable houses are sold for in the area, in community or not. So, the proposition to the seller is that he or she can get about 3-6% more from selling a house through N Street than putting it on the open market.

I speculate that, if N Street really marketed itself and its houses, its houses would sell for quite a premium over comparable non-community houses. However, because N Street started as a mostly renter-occupied community, most sales have been from non-community member landlords, often to community-member tenants. Thus, sale price containment has been the goal.

Note that N Street also uses its clout in the real estate market to expand, by trying to make a deal with owners of houses on its immediate outskirts.

Recruiting Families With Kids

Currently, the community is considering using its real estate broker role to increase the number of children there. N Street started with mostly families with children, and it had 19 children at the peak a few years ago. Now, though, it has 12 children, and if no children move in, that number will drop to five in a few years.

The idea is as follows:

  1. Recruit families with kids to join the community, regardless of where the families live.
  2. Charge the families 1/2 the rate of members who live at N Street. (Currently, the charge is $22/adult/month + a nominal fee for kids.)
  3. Use the list of non-resident community members as a queue of potential buyers of homes as they come up for sale.

Real Estate Rentals

In much the same way that the N Street community finds buyers for houses in its community, it also finds renters for houses and for rooms in houses for non-resident landlords. In this way, it is able to sustain itself.

It should be noted that these two roles of rental broker and sales broker can merge, when the community has a potential buyer for a house in which some or all tenants are vacating.

Common House Usage and Finances

The key asset of N Street is its common house. It’s interesting to see how N Street utilizes this asset to both maximize the enjoyment of members and minimize the cost to members.

In addition to the large kitchen and dining room, the community shares a TV room and an area with a foosball table on one end of the dining room. Also, there are two apartments that are rented out, which will be discussed again later.

As for finances, the house is not actually owned by the community. It is owned by N Street cofounder Kevin Wolf and his wife. So, while legally Wolf has total control of the house, he cedes practical control to the community. Like all cohousing communities, N Street makes all decisions by consensus. The mechanism by which they do this is beyond the scope of this article (would any cohousing residents like to explain in comments?).

While Wolf and his wife have made quite a sacrifice to purchase the common house and turn it over to the N Street community, they do have revenue streams that compensate them for this. They are as follows:

  1. Dues from members, which are $22/adult/month + a nominal fee per child per month
  2. Rent for a four-bedroom apartment upstairs in the common house
  3. Rent for a one-bedroom, wheelchair accessible studio in the front of the common house

These three items add up to about $4,600 per month, based on 50 adults, 12 kids, and rental income of about $3,500/month. Depending on real estate values, this may or may not be adequate return for a house.

Of course, in a more expensive area than Davis, dues could be higher and rents could be higher. Also, some cohousing communities have rented out rooms for offices for members.

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