Cohousing, a unique and innovative residential development model, is gaining traction as a solution to the challenges faced by modern communities. From combating loneliness and social isolation to addressing housing shortages and providing an ideal environment for active seniors to age in place, cohousing aligns with the growing trends in the sharing economy and the diminishing importance of private ownership.
As more people seek a sense of community and shared values, the interest in cohousing continues to rise. Developers who recognize this growing demand and incorporate cohousing into their residential or mixed-use master plans can differentiate themselves in a competitive market and appeal to a broader range of buyers.
So, What is Cohousing?
Cohousing is an intentional community of private homes (typically, 30 to 40) clustered around shared spaces, such as a common house, gardens, and recreational facilities. Residents actively participate in the design and operation of their community, fostering a strong sense of belonging and mutual support. The common house provides a place for the community to gather regularly for shared meals, hobbies, and guest suites. While each home is self-sufficient, the emphasis on shared amenities and communal activities sets cohousing apart from conventional housing developments.
Legally, the private homes are typically owned fee simple through a typical condo ownership structure and can be financed with a conventional mortgage. Common facilities are held in common with an HOA governed by the community members.
Unlike most speculative housing development, a cohousing buyer group is formed from the outset, and they help to spread the word and attract like-minded neighbors to join them. They are participants in planning the community and contribute toward the cost of designing and entitling their community from the beginning.
The Benefits of Incorporating Cohousing in Your Next Development
Cohousing can contribute a range of benefits, complementing the larger overall development. Here are a few to consider:
Diversifying the Buyer Pool
Cohousing attracts a diverse range of buyers who might not otherwise be attracted to the location or type of community under development. This is thanks to the variety of house types it can offer and the appeal of living in an intentional community where neighbors are there to support one another. Active seniors, in particular, are drawn to cohousing as an ideal setting for aging in place. The close-knit community provides an informal support network, helping residents maintain their independence and quality of life as they age. Young families can also benefit from the enhanced safety and support of raising children in a tight-knit community.
By incorporating cohousing into your next residential or mixed-use development, you can tap into the growing market of buyers seeking sustainable retirement living options and create a truly multigenerational neighborhood.
Enhancing Planning Flexibility and Supporting Entitlement
The efficient land use inherent in cohousing, with clustered homes and consolidated parking, offers developers efficiency and greater planning flexibility. This is especially valuable when working with challenging sites or incorporating green spaces and recreational amenities.
Furthermore, planning officials are often receptive to cohousing’s social benefits for the wider community. Cohousing groups can be powerful advocates during the entitlement process, showing up to public meetings to voice their support for the project. This grassroots advocacy has proven instrumental in securing approvals and building positive relationships with local stakeholders.
Place-Making and Community Building
Situating cohousing at the heart of your plans can create a vibrant, invested core that enhances the sense of community throughout the entire development. The shared facilities and activities within the cohousing group may be made accessible to residents in the surrounding area, fostering a wider sense of community and belonging throughout the neighborhood.
Additionally, the compact homes and reduced infrastructure costs associated with cohousing can contribute to a level of natural affordability, making the development more inclusive and attractive to a wider range of buyers.
Mitigating Market Risk
One of the key advantages of incorporating cohousing in your development is the mitigation of market risk. Cohousers demonstrate their commitment to the project by contributing equity early, often incrementally through the predevelopment phase. This early buy-in not only reduces the developer’s financial risk but also provides valuable feedback on design, ensuring that the final product aligns with the target market’s preferences.
Financial Advantages of Cohousing Development
The cohousing model offers financial advantages for developers. With buyers contributing equity during the predevelopment phase, developers can reduce their reliance on outside investors. Lenders have proven receptive to cohousing projects due to the high level of demonstrable buyer commitment translating to higher loan-to-cost ratios.
Cohousing is More Sustainable Too
Cohousing’s alignment with environmental, social, and governance (ESG) best practices is another significant benefit. Sustainable features like reduced parking, walkability, shared gardens, and resource efficiency not only appeal to increasingly eco-conscious buyers but also contribute to the development’s sustainable credentials.
Navigating the Unique Aspects of Cohousing Development
While cohousing presents numerous opportunities, facilitating the unique process of community-driven development requires specialized skills. Yet, real estate professionals’ involvement is crucial for cohousing to flourish, as proven by the significant share of cohousing groups that fail to ever get their projects off the ground.
Successful cohousing integration relies on effective stakeholder engagement and transparent communication. Developers must be prepared to collaborate with the cohousing group, fostering a partnership built on trust, transparency, and shared goals.
To date, there have only been a handful of cohousing professionals supporting the cohousing niche in North America. And only a few of them have initiated and led cohousing projects from start to finish as real estate developers. Township is excited to join and help grow this niche.
Partnering with Township for Successful Cohousing Integration
At Township, we can offer our expertise and experience to develop new cohousing neighborhoods throughout the country. We are eager to share our knowledge and build new partnerships to support this innovative housing model.
Through our national network, we provide access to processes and lessons learned from successful cohousing developments across North America, including those that were integrated within larger master-planned communities. We offer flexible partnership models, tailored to the project’s specific needs and goals, from consulting to joint venture partnerships.
With career experience in institutional real estate, we understand the financial objectives of investment partners and can speak a common language. We can align those objectives with cohousing development. Our collaborative approach ensures that all stakeholders are engaged and informed throughout the process, fostering a transparent and rewarding partnership that yields genuine community and sense of place.
Capitalizing on the Cohousing Trend in Your Next Development
As housing needs and demographic shifts continue to evolve, cohousing emerges as a compelling solution for forward-thinking developers. By incorporating cohousing into your next project, you can enhance your development’s ESG performance, appeal to socially-conscious buyers, and stay ahead of the curve in a rapidly changing real estate market.
Cohousing not only addresses the growing demand for community-oriented living but also offers a range of benefits for developers, from mitigating market risk and diversifying buyer pools to building an authentic reputation for fostering healthy places.
Take the First Step in Building Cohousing
Are you ready to explore the potential of cohousing in your planned development? Take the first step by reaching out. We’re eager to learn about your project, share knowledge, and discuss how our expertise in cohousing real estate development can help you mitigate risks, improve returns, and create a truly unique and sought-after community.
By partnering with Township, you can leverage our experience, knowledge, and network to navigate cohousing development with confidence. Together, we can be part of the growing movement towards more sustainable, community-oriented housing, delivering projects that stand the test of time and exceed the expectations of today’s discerning buyers.
Don’t miss this opportunity to differentiate your development and tap into the growing demand for cohousing. Reach out today to schedule a time to discuss how we can help you bring the benefits of cohousing to your next community you build.
