Despite slumping real estate market, Madison's newest cohousing project nearly full

Mike Ivey  —  12/02/2008 4:47 pm

Amid the toughest real estate market in a generation, a group of self-described amateurs has pulled off something of a miracle: selling all but three units in the 40-unit Arboretum Cohousing project.

Long popular in Scandinavia but relatively new in this country, co-housing aims to create a community where residents share some facilities, make joint decisions with their neighbors and work together to live in a more sustainable manner.

"Ninety percent of being green is just living in a smaller space," said project chairwoman Janet Kelly, who moved out of an older Victorian home in the Vilas neighborhood into a new two-bedroom unit at "Arbco."

The just-completed project weaves a pair of new multifamily buildings with several existing older homes and a duplex built by Habitat for Humanity. The 1-acre site wraps around the northwest corner of Erin Street and South Orchard Street near Lake Wingra, St. Mary's Hospital and the Vilas Park Zoo.

"I think it's been a great addition to that neighborhood," said Ed Kinney, vice president at Anchor Bank, which provided lead financing for the $9.3-million project. "We had to bend some of the rules a bit to fit them but overall it's been a very successful project."

Cohousing has been catching on in California and in spots on the coasts. Madison now counts three cohousing projects, the only ones in Wisconsin, according to the Cohousing Association of the United States based in Bothell, Wash.

Village Cohousing with 18 units at the corner of Mills and Mound streets near the UW-Madison campus was the first local cohousing neighborhood to open in 1999. That was followed by Troy Gardens Cohousing on the North Side, a 30-unit project which opened in 2006.

But Arbco is the largest venture of its kind to date in Madison.

Planning started in 2003 when a small group of devoted people began meeting after St. Mary's Hospital agreed to sell off some of its properties as part of its expansion. The group continued to meet on a regular basis, sharing meals and looking for investors.

"It was all potluck marketing. We never had a Realtor," said Ann Bell, who paid $223,000 for a 840-square foot, one-bedroom condo she shares with her husband, Bill Setharis.

In addition to owning their homes, Arboretum Cohousing members get use of an outdoor garden space and a 6,000-square-foot common area with a large kitchen and dining room, children's play area and meeting space. Parking is provided underground, with one space per unit.

Actually, the selling of the units in the project wasn't the biggest problem. Only two new apartments remain, including a three-bedroom inclusionary zoning or "IZ" unit priced at $145,000 for qualified buyers.

A bigger issue has been selling the existing homes of eight current Arbco residents who have moved in but still need to sell their other property.

For example, Kelly has been trying desperately to find a buyer for her three-bedroom, 1,900-square-foot home at 1808 Madison St.

"We've had people look at it but haven't had any offers," said Kelly, an attorney with Wheeler, Van Sickle & Anderson.

Janet Murphy had better success. She managed to sell her former home near Hoyt Park in time to move into a new unit at Arbco.

"I was lucky to sell it before the market got really bad," said Murphy, a nurse.

The financial obstacles did force a few changes. Little money was left over after outfitting the common area with sustainable bamboo flooring. So most of the furniture is donated, including a Mason & Hamlin upright piano.

"It's the Stone Soup approach to furnishing," joked Kelly.

Like other cohousing projects, Arbco has proven popular with empty nesters and seniors looking to downsize their lives. But there are some younger people on the scene as well.

Carolyn U'ren and her husband live at Arbco with their two young children. All told, a dozen kids from infants to teenagers reside in the complex.

"Having other kids in the development was a big factor in us coming here," said U'ren, whose family moved from the village of Brooklyn.

Another resident, Carey Dachik, 31, got in on the ground floor after coming back to Madison after serving in the Peace Corp. He said cohousing has been a great fit for his single lifestyle.

"I was researching different housing options and saw an article in The Capital Times about cohousing," he said. "After that I was hooked on the concept."

The location near St. Mary's and Meriter Hospital has been nice, too, since Dachik works as a freelance Spanish language interpreter with patients.

The project got an early boost from Sue and Art Lloyd, who were also a driving force behind the Village Cohousing project a few blocks away on Mills Street. The Lloyds provided some badly needed initial financial backing for Arboretum Cohousing.

"They basically wrote a line of credit to a bunch of amateurs," said Bell, who serves as owner representative, one of two paid staff positions at Arbco.

For that reason, the common meeting room inside Arbco's main building is going by the name "Lloyd Lounge."

Sue Lloyd has downplayed their involvement, however, saying the recognition belongs to those who devoted countless volunteer hours to the project.

"Developing real estate is a full-time job for those trying to make a profit," she said. "Here you had people who were doing all this on their own time, in addition to living their own lives."

But the project isn't out of woods completely. The buyers who still have houses to sell were allowed to move in under a land contract arrangement, where Arbco still holds title but the residents help pay the bills. That will expire in August, 2009, however.

"The good news is there is still some time before we have to refinance anything," said Bell.

Mike Ivey  —  12/02/2008 4:47 pm