Three's company: A look at co-housing

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Morgen Wilbourne in the house she co-owns with four other adults. Photo credit: Devin Boone.

What do you do if you really, really want to buy a house -- but it’s just too expensive for you alone or in a couple?

Well, how about co-housing? As in buying and adapting a property, and then living in it, as a group?

DnA hears about two families and a single friend who bought a triplex, split the costs, raised the children together, and nine years later are still going strong... despite a few challenges.

These include fallings out over design details, says co-owner Morgen Wilbourne -- like when she bought and installed outdoor lights from Target that the rest of the group didn’t approve and “it hurt their feelings. It felt to them like I was just saying, ‘oh the front yard is mine’.”  She adds, “suddenly it's like my house and my life all around it belongs to five people.”

The biggest hurdle, of course, is the financing.

Co-housing -- not co-living as renters -- is an ownership model that exists overseas, perhaps most commonly in Berlin, Germany.

Residents of R50 Baugruppe in Berlin gather for a topping out ceremony in the community space in the basement of the building, designed collectively by Berlin architectural firms Heide & Von Beckerath and ifau with Jesko Fezer. Photo credit: Andrew Alberts.

Such developments are called Baugruppen and can range from a small collective of households to over 100. They differ from a group of people renting a house, or co-living, and from an intentional community of privately owned homes around shared amenities.

The approach was in part initiated, says Berlin-based architecture and design writer Andreas Tölke, by “gay people coming together and trying to build up their home for when they get older.” He adds, “there’s a feeling that it’s “our project, we all feel responsible for it.”

But this development model is not common in LA. Reporter Devin Boone tells DnA that Morgen Wilbourne and her group “went to two loan officers who refused them and said ‘that idea is absolutely crazy and we can't help you’. And finally they found a third loan officer that says ‘OK, I think I can make this work.’”

The loan officer helped them work up a Tenancy In Common, or TIC, agreement.

All five owners are on the deed and they came up with an equity-sharing arrangement called the Hannah Plan, named after the woman who lives above the garage, that outlines tiers of equity. Both of the families paid 37.5 percent, while Hannah has the last 25 percent.

The five households are further intertwined by their work and faith. They all belong to a Presbyterian church and three of the five of them work there; one is a pastor, another the director of music or worship; a third is the church bookkeeper and accountant.

Morgen Wilbourne says that when she first moved into her co-owned house, “making decisions collectively… was a big challenge… But it's also really worth it. And it's been wonderful.” Photo credit: Devin Boone.

Wilbourne says that over the years they have shared dinners, laughs and watched their children grow up together. It’s been a mostly wonderful experience, she says, as long as you maintain “a deep sense of trust” and “what we call a repentant heart.” When Morgen bought solar-powered outdoor lights on sale at Target without checking with the group first, the annoyed co-owners were able to talk about it and move on.

So why is this avenue to home ownership so tricky?

John Perfitt is a nonprofit developer with Restore Neighborhoods Los Angeles and explains that in LA “there's not a proven marketplace; the scale is small, it's going to probably take a niche lender that's willing to go in and make these type of loans and willing to encounter the risk of the unknown.”

But he says that real estate financing could use some disruption, such as crowdfunding or more experimentation with co-ownership arrangements like TICs.

It is imperative, he says, because real estate is the number one asset in terms of value for homeowners in Southern California. So if people even in a multi-family apartment building can get a piece of that ownership, “that's going to create wealth. So if we can find ways to do that in the context of cohousing or multi-family apartment living then that's really a big step forward, I think.”