Senior Living Business: Cohousing: Another Option for Seniors--
Seniors Built ElderSpirit Community to Support Each Other
When Dene Peterson, a former Roman Catholic nun, was looking for somewhere to retire, she couldn’t find exactly what she wanted. “So I decided to make it myself,” she says. “In 1997, a bunch of my friends [three other former Glenmary sisters] and I started with the really simple idea of being able to die at home, among people we knew, and taking care of each other.” The group fleshed out the idea and came up with a vision for what eventually became the ElderSpirit Community — a 29-unit cohousing community in Appalachia.
Cohousing communities are defined as small-scale neighborhoods that are created with the active involvement of future residents who continue to work closely together after moving in. Individual homes are privately owned or rented. Residents share the land and amenities such as a common house, where they get together socially, participate in activities, and share some meals, work areas, and guest accommodations.
In 1999, ElderSpirit purchased 3.7 acres in Abington, Virginia. Town officials allowed the project to be registered as a Planned Unit Development so the design wouldn’t be limited by government restrictions affecting subdivisions. Ultimately, the $3.5 million ElderSpirit project had 10 different sources of funding, including $1.4 million from the sale of homes. Occupancy in ElderSpirit Community began in spring 2005.
An Idea Imported from Denmark
Architect Charles Durrett is credited with introducing cohousing to the United States in the first book that he and his architect wife and partner, Kathryn McCamant, wrote on the subject in 1988. Durrett grew up in Downieville, California, a tiny community of about 300 people. When McCamant took him “kicking and screaming” to live in San Francisco, Durrett missed the sense of community in his small hometown. “That’s when I decided to create a housing arrangement very similar to the one where I grew up,” he says.
The first cohousing community was built in Denmark in 1972 and originally designed to make life easier, more practical, and more economical for families. “The Danes would say that they didn’t do anything new,” Durrett says. “They just created consciously what used to be more natural.” Senior cohousing came on the scene in Denmark in 1985; in fact, the last 20 out of 25 cohousing projects built in Denmark have been for seniors.
As principals of The Cohousing Company, an architectural firm that facilitates the development of cohousing, McCamant and Durrett have finished three senior cohousing projects in the United States, with another half-dozen on the drawing board. Durrett expects the big growth market in the United States will also be for seniors, as explained in his most recent book: Senior Cohousing, A Community Approach to Independent Living (Habitat Press/Ten Speed Press, 2005).
Durrett and his wife currently live in (and work out of) a 34-unit cohousing community in Nevada City, California, which has 22 seniors and 37 kids. “It’s a very connected experience,” he says.
Making long-lasting connections
Cohousing communities are tailored to bring interested people together in a stimulating, supportive environment. Prospective residents play a central role in the organization, marketing, and design of the effort — and, once complete, in actually running the community. “In the course of those efforts, people become very close to each other” says Durrett. “Our goal is to create a functioning community before the people actually move in.”
Durrett has also completed 37 cohousing projects for folks who weren’t part of an existing coherent community. “Whether intergenerational or only for seniors,” he says, “cohousing communities are for people who may not have been connected before but, you could argue, will have a higher quality of life once they are connected.”
Along those lines, ElderSpirit’s Peterson recommends having both an architect for construction and an architect for community. “You must build both simultaneously,” she says. “Creating a common bond before residents move in makes a huge difference in the community’s success.” At ElderSpirit, for example, the connection is spirituality.
Financing cohousing communities
Financing for cohousing developments is usually easier than for other types of projects, because bankers like nothing better than pre-sold units. “In September 2007, we started a $12 million project for seniors in Fresno, California,” says Durrett. “We had 21 of the 28 houses sold prior to going to the bank and about $1 million in equity, including workshop fees, home-sale deposits, and additional monies from other investors. As a result, the bank gave us a $9.25 million loan almost immediately.”
The financing for all Durrett’s senior cohousing projects has all been through regular bank loans. “We try to avoid government financing,” he says, “because the average project receiving government grants takes seven years. That isn’t very attractive to seniors.”
For ElderSpirit, Federation of Communities in Service, Inc. (FOCIS), a not-for-profit group that has worked in Appalachia since 1967, is the “parent group” that initially helped Peterson get a three-year planning grant from Retirement Research Foundation, based in Chicago, prior to forming a development corporation for the project.
Construction of the 29 homes (including 16 rental units) and common buildings was financed primarily through bank loans. “We just put together a number of sources that others have put together before and that are available in every state,” says Peterson. “And we didn’t use tax credits for our rental units, which is unusual.” They were financed through low-interest loans from HUD and the Virginia Housing Development Authority (VHDA). ElderSpirit also received an Affordable Housing Program (AHP) grant from Federal Home Loan Bank of Atlanta and donations from individuals and private foundations.
Elderspirit now has a second community underway, and FOCIS helped the group win additional grants to facilitate the replication of the concept in six locations in Florida, Kansas, Virginia, Illinois, and two in North Carolina. According to FOCIS, some are contracting with established developers, one is building upon a naturally occurring retirement community, one is forming a housing cooperative to buy several neighborhood homes where individuals will contribute either through rent or owner equity, and another is exploring the formation of a trust to hold the land in common and build owner-financed homes.
Buying into the community
Many cohousing groups focus on making the project affordable. When ElderSpirit was beginning the development, building so residents could live on a budget was one of the criteria. Now that it’s complete, each household pays just $150 a month in common fees.
“We’re a mixed-income community,” says Peterson, “so we built 13 market-rate houses and 16 low-income rentals. And we were also careful to sell only the footprint of land under each house. All the land around the houses belongs to the community.”
The plan was to sell the two-bedroom houses for $112,300 and one-bedroom houses for $90,200, but the project ran short of funds to complete the construction of the interior of the common house. On their own, the new owners agreed to add $10,000 to the cost of each house for that purpose. And if that’s not a sense of community, what is?
The 16 rental units rent for $300 to $485 each per month, depending on the size of the home. The renters must qualify for low-income housing; i.e., earn 60% of area median income. The rent monies (less $150 per household per month contributed to the maintenance budget) are put toward repayment of the bank loans.
Owned houses may be left to heirs or sold to anyone who qualifies — namely, age 55 or older and willing to live the lifestyle of an intentional community; but when sold, one-half of the appreciation reverts to the community.
Once the cohousing developer is out of the picture, a housing association owns and operates the public spaces, while residents manage the day-to-day operations of the community. At ElderSpirit, the Owners Association is incorporated, but the Residents Association, which receives and manages the monthly common fees and makes community decisions, is unincorporated.
The Residents Association includes a landscape committee, a property management committee, and an architectural review committee. “Those activities also become ways to build community,” says Peterson.
“The idea that people are asked to give something back – what the intergenerational folks call sweat equity and what we call community service — makes it work. So everybody contributes in one way or another.”
Who moves in?
Perhaps the biggest misconception about senior cohousing is that it’s only for healthy individuals. Rather, residents who become ill can remain at home and get assistance from either their neighbors or hired help.
“At ElderSpirit, we hope — but don’t promise — that people will be able to die at home,” notes Peterson. “So it’s independent living, but you don’t have to move out just because you become dependent.”
Residents of a cohousing community expect and are willing to help when their neighbors become dependent. People who need regular assistance, however, can arrange for home health care and/or housekeeping services, for which they pay individually. Of course, if a medical situation becomes acute, the individual must go to an appropriate institution.
Most communities, in fact, do hire resident health aides to help people with needs. In that case, the caregiver gets to know community residents when they’re healthy, vibrant people, not just when they need care. That also helps facilitate better care, according to Durrett.
Many people become involved in the senior cohousing style of independent living when they’re around 55 and young enough to build relationships with the people in the community. You can’t just walk into a situation and expect your neighbors to take care of you!
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