It Takes A Village To Buy A House

Enter CoHousing Houston, a multimillion-dollar project of the exact nature that “will serve as an interactive livable space for neighbors in a sustainable environment.” It’s no affordable housing project by any means – the average cost of a unit is $550,000 – but households are acquiring more than just square footage. Per Lynn Morstead, another CoHousing Houston member, households are investing in a sense of community and mutual support. A central feature is the 4,200-square-foot “common house” for shared meals and socializing, complemented by amenities such as an edible garden and an indoor courtyard. Morstead also mentions a sustainability element; the housing development will have a geothermal heating and cooling system and a collective composting setup. “It is a grassroots initiative by private citizens who want to live differently in a more connected and sustainable way,” Morstead said. “We are building our own homes, investing in some eco-friendly more sustainable features, such as geothermal heat and cooling exchange.”

Watch it on The Interest: New Housing Endeavors

The feasibility of CoHousing Houston hinges on perspective—it could be seen as a daring move or an opportune choice. Houston, the second-fastest-growing and fourth-most-populous metropolitan area in the nation, according to the U.S Census Bureau, is notorious for its sprawling and car-centric nature. The city resembles a concrete jungle and is seldom lauded for progressive urban planning, all set against the Texan backdrop of wide-open spaces, large homes, and a strong sense of independence. 

However, the residents of Houston are known for their open-mindedness, cultural diversity, and creative inclinations. “Texas gets a reputation for being an uptight, red state, but I’ve come to find that the people I meet here are open-minded,” Springer says.

Strong Interest

So far, Morstead confirmed in early December that 25 of the 33 available units are claimed. But amenities aside, CoHousing Houston poses a unique challenge and opportunity for lenders. Springer says that each household can select their own lender but is presented with a list of preferred lenders. Trish Becker-Hafnor, executive director of the Cohousing Association of America, lived in a cohousing development for three years in Denver, Colorado, leaving right before the COVID-19 pandemic. “I found myself in a house in the suburbs and had a kid on the way. I have a supportive partner, but we couldn’t do it alone. So we moved into cohousing, and it was amazing, it was so helpful … because we had people who would help take care of her,” she explained. “But when we [decided] to move, we were able to pick our own lender and sell it like a condo.” 

Becker-Hafnor says that although there are over 300 cohousing establishments either fully-fledged or in development, some lenders she’s worked with have expressed confusion when dealing with cohousing households and loans. “A common misconception is that cohousing is an affordability strategy,” she said. “It’s the same cost of buying a unit in a cohousing community as it is building a regular home. And because it’s essentially a private home, it’s a private real estate transaction. Different communities have different agreements, so it’s important that a lender and a real estate agent are well-versed in the cohousing development.”

Becker-Hafnor is a cohousing aficionado. She’s delivered TED Talks on the subject, was a partner for her cohousing development Aria Cohousing Community, and is passionate about a concept called “suburban loneliness,” which she says drives many into cohousing living as a new norm. “Interest in cohousing spiked up after the pandemic because so many people were lonely in their homes, and there’s a sharing element and a taking-care-of-each-other element that exists in a living situation like cohousing,” she said. “We are resilient in community.”

Great Expectations

The idea for a cohousing community in Houston started witha small group of friends and acquaintances more than six years ago, mainly ideas percolating over dinner. The group[ then started gauging interest in the idea of a cohousing development through social media posts, Facebook ads, monthly public meetings, and a formal website. Inclusivity is a big theme on the website, with each member sharing a story about why they’re choosing W. The reasons vary: empty-nesting, interest in sustainable living, retirement, loneliness. 

Inclusion also has a role in the loan process. 

“What we were hoping to do was identify one mortgage broker, not necessarily a lender, that the group can work with because the project isn’t exactly a condo, but it’s filed as one,” Springer explained. “Some lenders shy away and have limited products; what may work for one individual may not work with another. CoHousing often involves people with nontraditional incomes, so we want a lender who can work with the non-W2 borrower. The challenge is though that cohousing has more space than regular condominiums, which affects appraisal values.”

Springer, who is on the finance, legal, and development committee, says that the committee has a list of Texas-based lenders on its radar. They’ve been in close contact with Heather Palomo, senior vice president of mortgage lending from Center Bank Houston, about being a preferred lender for the development. “Our commercial division is doing the upfront development and I’m handling the residential mortgages, but everyone in the development still has their right to choose,” Palomo said. “There haven’t been any closings yet, and we’re approaching it like condo-style loans.”

Alvin Johnson IV, the regional loan president for Texas First Bank, says the bank started partnering with CoHousing Houston in July 2022 as the project’s construction lender in a three-way agreement with Center Bank. “We’re locally owned and based in the Houston area, so as a bank, [we need to] explore different opportunities,” Johnson said. “It’s providing Houstonians housing and we want to be associated with that. And it’s a creative solution to the crises we’re seeing between housing inventory and an overall need for community.”