Cohousing has long been associated with ‘alternative lifestyles’. But, as Mark Jennings writes, the model could increase the supply of affordable, high-quality homes in a housing market in crisis  |  Content partnership

Almost no one disputes we are stuck in a housing crisis. There aren’t enough houses and many of the ones we do have are unaffordable or poor quality. Often they are both.

Understandably, the Government’s attempts to ease the supply side problem are now focused on providing housing for those on the lowest incomes. For many middle-income earners, with an aspiration to buy an ‘affordable’ home, the picture remains bleak.

Last month, residents began moving into two new community-driven developments – one in Grey Lynn, Auckland and one in Mornington, Dunedin – that could be models for increasing the supply of affordable, high quality houses.  

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The cohousing concept is an idea that has been slow to take on in New Zealand but its time seems to have arrived. As the Auckland and Dunedin developments welcome residents, more cohousing projects are underway in places like Whangarei, New Plymouth, Whanganui, Hawkes Bay, Masterton, Wellington and Christchurch.

“I think the increased interest is definitely there,” says Mark Southcombe, associate professor at Victoria University of Wellington School of Architecture.

According to Southcombe, a specialist in collective housing design, New Zealand has been slow to embrace a global trend, because cohousing has been associated with “alternative lifestyle”.

“Cohousing is mainstream in every major country in the world. I believe it has the potential to make up 10 percent of the housing sector in New Zealand.

“At our coho hui in Wellington in late June we had 240 people from all over the country come – part of it is to do with a large group of people who now feel disenfranchised from the housing scene,” says Southcombe.

“There are societal changes too. Individualism that comes from the quarter acre pavlova paradise can be isolating, especially if you are living alone in the suburbs, it can affect your health.”

The High Street Cohousing project is NZ’s first Passive House multi-unit housing development. Photo: Architype, Dunedin

What is cohousing? In it simplest form, a group of people getting together to build a boutique housing community, usually independent of a property developer. Residents then live in a collaborative situation where some facilities are shared (laundries, workshops and now, electric vehicle charging points, are common) but everyone has their own individual dwelling.

In cities like Berlin, cohousing groups have reduced the cost of new apartments by 30 percent by cutting out the developer’s margin and any marketing costs.

The idea gained its initial foothold in Denmark 40 years ago and 50,000 Danes – 1 percent of the population – now live in cohousing.

There is a connection between the early Danish communities and New Zealand’s first cohousing development in 1975, the Whanganui Quaker settlement. The project’s architect, Michael Payne, travelled to Denmark and visited the world’s first cohousing community, Saettedammen, near Copenhagen.

According to Southcombe, the Quaker settlement set a benchmark for local cohousing.

“They are an early example of New Zealand low-energy, solar, and environmentally-sustainable design. Importantly they have been socially sustainable in operation for over 40 years.”

Better known, and often thought of as the first local cohousing development, is Earthsong in the West Auckland suburb of Ranui. 

Earthsong was developed in 1995 and its founder, Robin Allison, has inspired a wave of interest from other groups.

The people behind Dunedin’s recently-completed Toiora cohousing development came together at a workshop run by Allison.

“I went to a public meeting eight years ago where Robin was talking. About 40 people attended and a group of people gathered at the end and we said ‘Let’s look for a site’,” says Alex King, a founding shareholder in Toiora.

King, and the others, looked first at a site occupied by an old war veterans’ home called Monticello in the suburb of Mornington but lost out to a developer.

A short time later, a school surplus to Ministry of Education requirements came on the market. It was passing to Ngāi Tahu, but the iwi was keen to sell. 

“We had to find the money in a few weeks, we had only been together as a group for a few months, but we had a whip round and managed to buy it for $930,000,” says King.

The group of eight shareholders had purchased a unique Dunedin property. The old High Street primary school is close to town but high up on one of the city’s steep historic streets. The school dated back to 1864 and was one of Dunedin’s largest primary schools with a roll of more than 500. It closed in 2011 when the number of pupils dropped to 21.

“We got resource consent and have 21 new build units and three units in one of the old school buildings. The new builds are ‘passive houses’ with triple glazed windows. The temperature inside is a constant 20 degrees without any need for heating.”

Residents share a common outdoor courtyard area, plus laundry and workshop facilities.
Photo: Architype, Dunedin

The school and grounds were purchased in 2013, but the path to completion was long and winding. Planning and getting resource consent took five years and construction, another two years.
The $11 million private development is now home to 47 residents. Prices ranged from $800,000 for a four-bedroom dwelling to $300,000 for a one-bedroom studio apartment.

“The amount I was happy to pay more than doubled, some people couldn’t afford it and because it took seven years to develop, people’s lives and jobs change but more than half of those involved at the start are still there,” says King.

“We met every fortnight for seven years, sometimes weekly. We had a fixed price with our builder but that didn’t mean there wasn’t all kinds of wriggle room for costs to increase.”

The difficulty of finding a bank to fund the development nearly brought the project undone. 

“We went to quite a few different banks and they turned us down as we didn’t have a corporate developer … we were really pleased when Kiwibank agreed. I think this is something where the Government could get involved and make it easier. Some countries, like Denmark, have legal structures for cohousing.”

“Kiwibank put in a lot of time and energy to go through things with us to make sure everything we did was right. They insisted that we had good amount of contingency and it was really good they did as we needed it in the end.”

The bank point of view

Stephen Edge, senior manager in property finance at Kiwibank, worked on the Toiora project from start to finish.

“I got a call from one of the group, they expressed frustration that other banks weren’t interested,” says Edge. 

“There were half a dozen things that were different (to a normal commercial development), but we found a way around them. Cohousing is new in New Zealand but not in other parts of the world.

“The biggest difference was that there was no experienced developer putting it together and therefore no profit margin to act as a buffer if costs increased.”

Edge says quantifying the costs was key in the bank funding Toiora. 

“There were skilled people within the group, including architects and draughtspeople, but our assessment was that an independent project manager was needed and that they needed to employ one.”

Edge says the Dunedin project has given Kiwibank added confidence in cohousing.

“We would do another deal tomorrow if one came along. It really comes down to three things – good people, right project and right location. If you have that then the lender just needs to have an open mind.”

A cross-section of the Toiora cohousing project. Image: Architype, Dunedin

Edge took a “hands-on” approach to the project.

“I went down initially to meet them. It is the first thing you do when you lend money, you meet the people. They were all there sitting around the table. I wanted to kick the tyres to make sure it smelt right, looked right.

“I made six or seven trips down to Dunedin during the construction phase, but it ran very smoothly.”

Reducing the barriers

Mark Southcombe says Kiwibank’s Dunedin experience shows that big banks have little to fear from cohousing projects.

“In many ways it is less risky for banks in that nothing has to be sold – everything is already sold. Usually the houses are of higher quality and more sustainable design as the money has gone into these things instead of a property developer’s margin.”

Rather than finance, Southcombe thinks ‘know-how’ is a bigger barrier to cohousing projects.

“I think there needs to be some sort of partnerships between local authorities and cohousing groups to bridge the gap between having the idea and realising it. These projects are very hard to get off the ground despite interest being very high.

“There needs to be a readily available resource archive for groups when they are forming up.

“In the UK they found there was a need for group facilitation so the government funded an education training process for people who can be facilitators. In Australia the Nightingale Housing project figured out all the roadblocks in the Australian system and are now franchising their know-how.

“There is real potential for partnerships between cohousing groups and government and local councils. This would introduce mixed tenure (rentals) where all people get advantage from community facility. If the Government finances a number of units in a cohousing development it is a win-win.”

Toiora’s Alex King says 22 units were pre-sold and two were bought by friends to be on-sold later.

“We have had one on-sell already and we have so much interest from people wanting to move in. It is an idea whose time has come.”

One of the available units was snapped up by Aucklanders Anthony Doesburg and Anna Maxwell.

The couple previously owned a house in fashionable Auckland suburb, Westmere.

“The difference in price between a full-sized vila in Auckland and a two-bedroom unit in Dunedin is big, so it was a very advantageous thing to do financially but that is not what drove us,” says Doesburg.

“We were both students in Dunedin, like a lot of other people, and it made a lasting impact on us. I was born in Dunedin and grew up in Winton, Southland, so I had a passport to get into town.

“It is great be reacquainted with this spectacular part of the country. Dunedin is a very attractive place to live. There is the physical attraction – we are close to Central Otago – and the university ensures plenty of cultural life plus it’s only a walk away, that’s the glory of it.”

Yes, but what about the climate?

“I was never in fear of the climate, but the buildings are all passive houses: it’s about 20 degrees inside all the time so we are utterly oblivious to how cold it is outside …. and the energy cost is astonishingly low. Our last monthly power bill was $90.”

Passive houses (Passivhaus) are popular in Germany and Austria, where there is a movement in housing design that takes energy efficient design to a new level through a combination of super insulation, solar design, draught-proofing and heat recovery ventilation systems.

“It (passive housing) adds about 10 percent onto the standard building costs, it seems a small price to pay for incredible comfort,” says Doesburg.

Less efficient, but with a nod towards the social aspect, Toiora has an open fire in its shared common room. The cost of the firewood is shared among the 24 families.

Doesburg says residents can be as social or private as they like and Toiora has a mix of demographics.

“You’d think there would be a preponderance of people in their 50s and 60s but the average age is 40. There are young families and families with teenagers. We have shared meals two or three times a fortnight so that works out that once every six weeks you have to cook,” he says.

Kiwibank is a foundation supporter of Newsroom

Mark Jennings is co-editor of Newsroom.

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