Your post is interesting but rather unclear in its description of what exactly you are suggesting. Are you proposing that everyone is pooling their money, in equal or unequal shares? How precisely is this "No Maintenance" achieved? I have yet to encounter a larger home, especially the classic older buildings, that did not require a great deal of expensive maintenance. How do you propose to handle increasing physical disability, especially for those who cannot, either temporarily or permanently, handle stairs? Very few large old homes include universal design principles. Even using a walker can be a tremendous problem with narrow hallways and small bathrooms (ask me how I know that, LOL).
Most importantly, how would people financially disengage from such communal living once full-time 24-hr care is needed and they must leave the group? There are significant reasons why housing options such as Tenants-in-Common, for example, have not worked financially well at all in the San Francisco Bay Area. People who bought into such residences have found with the downturn in the RE market they are stuck with virtually unsaleable properties, with banks increasingly unwilling to loan to new sellers. In fact, how would you handle titling property with multiple owners to begin with? A land trust? Mortgage interest and insurance would be considerably higher than SFH or condos, of course, along with ongoing legal fees to handle issues as they arise.
I have yet to see any evidence that Boomers are more adept at compromise as they age. If anything, we are even less willing to compromise on lifestyle than our parents are. My DH and I recently returned from an Exploritas trip and it was interesting that you could have differentiated the Boomers from their parents just by reading a list of what they did in their free time. It was a clear schism; the Boomers opted for expensive, indulgent activities whereas all the older travelers either shopped or went to museums, then ate cheap dinners. We spend our money very differently, on average.
I think your idea is good, I just don't see enough details to be able to analyze the true pros/cons. There are certainly people who would be interested in the idea - it's just a question of whether you could actually produce a good business plan to pull it off. Because it IS a business, make no mistake about it. You may not be in it to make money, but nobody is going to be willing to lose most of what they put in. There has to be more of an upside than the vague goals of 'comfort' and 'compatibility'.
Perhaps we can share information and ideas. I found a good article about a shared housing project in Brooklyn. I will send the link. (can't right now)
Let's stay in touch. This is definitely do-able. I believe we are on the cusp of a new movement, as well. This will not be a radical concept in a few years' time. I am involved in the lives of my aging parents (now in their late 80s) so I am also looking into the future to the declining years. It seems to me that rather than the seniors going to the services, the services could come to the seniors. In a cooperative arrangement, people could pool resources and hire light housekeeping help, nurse's aides, and the like. Assisted living is so alienating and expensive. As an individual loses independence, he/she would find it necessary to move to a facilty offering a different level of care, but one can remain independent and in one's home longer in a shared housing setting.
I promised to share this link about co-housing in Brooklyn. It shares their decision-making process.
Check on the financing co-housing in this economy link for details of how these people are managing purchasing their property.
I just joined this forum and am interested in the concept you describe. One of the keys to success would be living with compatible people. Imagine having a chronic complainer in the house! You'd have to have some kind of screening process in place (would that be legal?) because you'd be living with that person for years. I like the idea of sustainability too - can we live in a way that reduces our consumption of natural resources? Use geothermal heating/cooling? Grow our own food? Use native plans in the landscape, etc.? Check out Prairie Crossings in northern Illinois. I like a lot of what they do (except for the costly homes and high taxes).
FYI, this is not a blog. A blog is a personal website set up in narrative form by the blogger. Only the blogger can post new items; others can only read. This is a limited public discussion forum (limited to TIAA-CREF members; anyone can post after becoming a participant).
We have started to investigate some of the many senior living options available in our metropolitan area. Although we are young retirees, my 82-yr old MIL lives with us so it is never too early to find out what's available for various levels of senior housing.
To me group housing has the same attractions but same pitfalls as commune living. You will never get a perfect group of people who all have the same likes and dislikes. Even if you did manage it, simply with age and disability the group will fracture eventually.
The biggest obstacles are legal and financial. How would people buy in? How would group expenses - liability insurance, maintenance, etc. - be split? If someone wants to leave, how do they recoup their investment? If they die, how do the heirs determine the worth and saleability of the deceased's estate? If the group has to defend itself against a lawsuit, are the individuals ready and able to pay a heavy assessment amount if the judgment goes against the group? - if anyone is unable to pay, their portion would have to be paid by the others; there is no escaping a legal judgment with "oh, John Smith couldn't pay his portion, but we paid ours so that's all you get!" Nope, doesn't work that way, sorry.
Who is going to organize the palliative care and end of life issues? As families have found, eldercare is a maze of county, state, and federal agencies/regulations. Budgets collapse; care levels get cut, turnover is rampant. It takes hours and hours of work, along with constant vigilance, to ensure good quality eldercare. No one should be expected to volunteer for such work; it's a heavy burden even in the best of situations. It's a job that deserves a wage - who is going to pay for it?
I would think such approval would need to be unanimous. But I have never seen any group come to unanimous agreement on a variety of subjects, over time. Expecting people of different backgrounds, interests, and finances to agree upon such issues as debt, liability, taxation, and risk management might be unrealistic. By nature people gravitate to what they are interested in. So you could divide up duties - but what happens if that person makes a really wrong guess, and gets the group into legal or financial difficulties? Is everyone going to just forgive them, and be willing to pay to rectify the mistake?
If someone has allowed their legal documents to become out of date then palliative care can be a nightmare. You'd have to go to court to be appointed agent, and if you're not a blood relative, don't expect such approval to be automatic. It won't matter if you're best friends; family will win out over non-family every time, unless you are willing to spend $$$ for a court fight. Is the group willing to pay someone to assume the duties of a geriatric care manager and legal agent?
In the end, this is a business idea - a non-profit business, but still a business. Any time you are co-joining money, you must consider what the business is going to do if something starts to go wrong with the business founders. I would not personally invest in any business where I could not at least get some of my principal returned upon demand, or at least a guarantee of legal obligation for future services in return for my money. I would not invest in anything where any important legal issues were not addressed in writing.
I like my friends, but they do not have fiduciary duty to me. They are not obligated to act in my best interests, so I should not expect them to act contrary to their own best interests. Financial and estate planning needs to take into consideration not only what you want done, but who you want to do it. Sometimes people select an agent who either is unaware of what the patient really wants, or who is emotionally incapable of fulfilling the patient's wishes.
Either way, such issues have to be planned for. Co-mingling financial and legal assets in a group adds a large element of complexity to such planning, so those who are interested in group housing, need to plan very carefully for a wide variety of scenarios. People do not always approach death consistently; what they say they want, may be very different from what they actually decide to do, when faced with a more imminent Grim Reaper.
>.But I think a cooperative ownership structure might work. Flexible, move in and move out. Young people do this all the time. Why not Boomers? Why not scoop up one of those McMansions in foreclosure to do this? >>
Actually, if you have ever investigated any RE market where co-op housing operates, you will find it is far from flexible. Co-op or Tenant-in-Common housing is not an easy thing to manage, especially long term. Young people 'do this all the time'??? No, they live in dorms owned by a university/college, or they rent from private landlords. When a friend of mine was looking to buy a house or condo, she looked into a TIC. The building was beautiful, but even the RE agent admitted the appreciation was poorer than a SFH or standard condo. Banks do not like to make these kinds of loans any longer; you will pay a much higher mortgage rate.
If you want to be a landlord, that's fine. Be aware that many 'McMansions' happen to be in developments with restrictive HOAs that are not especially rent-friendly. You certainly do not want to put multiple people on the title, as the 'step-up' basis is lost upon death of any person listed, which makes it a very poor investment.
For instance, a McMansion almost always has stairs to the bedrooms. What if someone moves in, then develops mobility problems two years later? Does that mean they automatically get the first floor master suite? What happens to the next person with issues? Who's going to pay $30K plus remodeling fees to install the elevator?
I don't mean to sound so discouraging. But people seem to think this is easy, and it really isn't. There are substantial legal and financial issues needing attention, even if you're not going to consider EOL issues. And if you're not - what do you intend to do if someone in this group housing does face emergency EOL/palliative care issues? Do they have to leave? Who buys them out?
As retirees who are struggling in the wake of market chaos have found, a plan is only worthwhile if you have thought of all the things that can go wrong and probably will. Group housing is a good idea, but it needs a thoughtful, integrated, careful, and thorough amount of planning to make it work. The deck is stacked against it, so to succeed will take hard work and intensive planning. Good luck and success to all of you; nothing is impossible if you are willing to put the effort into it!
WOW- you and I are thinking about exactly the same issues--- I've also recently been reading a set of novels about a similar theme-- 'The Ladies of Covington'. Of course, everything does usually work out in books.
Best of luck-
To alleviate common expenses regarding upkeep, etc. here’s one possibility. Currently I belong to a condo assoc. We pay a condo fee that covers everything external to the condo; possibly, something like this could be arranged that would alleviate issues regarding the home and grounds.
I would definitely like to learn more.
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