CoHousing Houston is “a multigenerational, community-minded group of neighbors who share the values of connection and sustainability… creating an inclusive, diverse, urban village inside the loop in the East End.”

An interesting aspects of this initiative is that it was created in partnership with a developer, David Kelley. After working for a number of years with a real estate development company, David was in a period of transition.  In 2017 he attended the Cohousing Association Conference in Nashville out of curiosity to learn about this type of housing.  Fortuitously, at the conference he met a group of people from Houston who were exploring ways to create cohousing. They have been talking and partnering ever since. 

Since May 2017, a core group of 5 or 6 households started meeting regularly, and in December 2017 they held a workshop with Katie McCamant. Soon after they established a site search committee, comprised of several members including David and an architect who will be living in the community. They identified criteria for their preferred site, and eventually landed on a property within city limits that met their needs.  

In January 2020 a group of 14 households formalized as a legal entity and established Cohousing Houston Development LLC to retain professionals and begin to pay for soft costs. In order to acquire the property, David’s role was instrumental. The month prior, in December 2019, he formed his own LLC and paid in cash $1.8 million for 1.5 acres (he figured if cohousing doesn’t come to fruition, he could still sell the land, since his company is separate from the Cohousing LLC).  

Additionally, David is providing the following services for which he will be paid:

• Project Management: he led the effort in preparing the Request for Proposal to retain an architect, among other development tasks, and will manage the construction process on behalf of Cohousing Houston LLC. Construction and soft costs are estimated at ($— million). He will be paid a flat fee (for his time and staff) in installments once the construction begins in Summer 2021. He is at risk till the construction begins.
• Loan Guarantee: he is applying for the construction loan and personally guaranteeing the bank loan. He will be paid 5% of constructions cost once the project is built and all the units are sold. He is at risk till the project is complete.

With 15 core members, the community has designed a project comprised of 33 units (1 to 4 bedrooms). They settled on this many units in order to reduce the price per unit, as density helps bring the cost down. They are seeking members to join. For those interested, the first step is to attend an informational session; second step is to be an “explorer” and pay $150 fee; and third step is to become a “member” of the LLC and pay a non-refundable $500 to be a voting member and participate in the development of the community, so that members are eventually ready to make a downpayment payment that is 12% of the estimated purchase price of their unit and complete their payments over 4 capital calls through the end of the construction phase. Construction began in January 2022. Interestingly, they chose not to post the project design on their website as they want prospective members to initially focus on the cohousing concept, rather than the details of the design.

As of March 2021, David was waiting on approval of bank loan. Depending on what the bank approves, they may have a gap in funding for construction and may need to seek outside investors to bridge the gap.

The LLC will establish a Condominium Association in which the land is owned on a pro-rata basis by each homeowner, and homeowners can resell their units at their own price and terms, with the expectation that new buyers agree to participate in the vision, values and bylaws established by cohousing community. Each homeowner is responsible for obtaining their own mortgage (paid to Cohousing Houston Development LLC)

In terms of creating some affordable units, they they began to seek opportunities with the city about obtaining some subsidies to make 10% to 20% of the units affordable and establish a land trust for those units. They have a year to secure some subsidies, before the construction is complete.

When seeking to partner with a developer, David suggested that an advantage would be for the cohousing group to share some of the development costs (professional fees and/or land acquisition), with the potential to have some of the cohousers ready to invest, thereby ensuring some unit sales before construction, instead of the developer taking on the full costs up front.

* This information is based on a conversation with David Kelley in March 2021. More about CoHousing Houston.