# Co-Living at Life Itself
This document was last updated in 2018. It may now be out of date. For the latest information on the hubs at Life Itself, please see lifeitself.us/hubs (opens new window)
# What is co-living?
Co-living for us means to live in a community. It means to live, work, practice, and create together. It is both a way for us to concretely practice our values and vision and it is a material exemplar of this vision – i.e. a demonstration that we can live more wisely an well. Co-living is a path to strengthening our community and transforming ourselves and our society through the fostering of a shared culture. It helps us maintain and live our values and transmit them in our daily life. It is a way to demonstrate that a different path is possible.
# What is our interest in co-living?
Co-living is part of Life Itself’s mission because it is a vessel and reification of our big vision.
We believe that co-living is essential for sustaining our community both philosophically and materially. Living / working with people with whom we share vision, values and mission nourishes our humanity and stimulates our creativity. Connection to the meaning of life and to other human beings is a deep good. Although there are challenges in co-living with others, we believe that it is also how we develop the most as human beings as it will often require us to overcome our ego and fears. Our vision of co-living will also involve profound commitment to something bigger than ourselves and fostering courage, love, trust and vulnerability as part of this commitment.
Finally, co-living allows for economies of scale. As a co-living community, we can create shared spaces that breathe beauty and wellness, and create a lifestyle that otherwise would often be unaffordable.
# What have we done to address this situation?
Co-living at Life Itself is developed using three complementary models:
- Co-ownership and Co-op – for permanent communities where Life Itself is the primary creator and developer of the space
- Residency – where community members (and others) stay in spaces on a shorter-term basis (e.g. 2 days to 1 year)
- Co-governance – for permanent communities at locations where Life Itself is living alongside and as part of an existing community in an existing space
# Fig 1: Communities as Lakes and Streams.
Permanent Hubs (“Lakes”) are connected, expanded, and enriched by Residency “Streams”.
The motivation behind the co-ownership and co-governance model is to provide a more permanent sense of home, security and agency to residents, owners and investors so that the Life Itself community can flourish both philosophically and materially.
The motivation behind the residency model is to allow community members to travel, to have access to urban and rural nodes, and to stay in places that are not their permanent address while feeling a sense of home.
To use the metaphor of a river and a lake, we want a lake to allow for stability and growth but we also want a river passing through the lake so that the community does not become insular, and is continuously being revitalised and energised.
# Fig 2: Co-ownership + Co-op model
# Co-ownership and Co-ops
Below is a fuller description of a co-living & investment model. Some key features are:
- There is a separation between the owners of capital and the residential community members. Owners of capital organize through an “Ltd” and residents through “Co-op”.
- The Ltd will legally own the space and the residential community will have long-term certainty of tenure via long-term leases.
- Residents can purchase shares in the Ltd if they wish.
- Shareholders in the Ltd may buy and sell shares at approx market prices.
- In overall value terms (not just money), rent should track market rents. In other words, less than market rates in dollar terms can be sustained through time invested in the community.
These features support the overall intentions:
To live in community with social and economic security
- But without this leading to stagnation and dependence and unnecessary loss of flexibility. We want to provide safety and security for the residents but for security to not be the main reason people join or remain in the community. We want “people to be free more than comfortable” (“people to be attracted by freedom rather than comfort”) as maximizing comfort can lead to stagnation. This will also be helped by selecting carefully those who join the community.
- The community acting through a cooperative entity, retains the autonomy to decide who joins, leaves, how rent is allocated, how the community is managed etc.
- Community members may acquire equity in the property over time and/or have security of rental including rental insurance (basically, the equivalent economic security you get from owning somewhere).
To raise capital
- The Real Estate Ltd is an attractive financial investment so it can get loans and generate capital.
- Life Itself can scale and create amazing spaces that are attractive to existing and new members.
- The residents of the Co-op can gain a large satisfactory space to live in a community which would otherwise be capital / loan heavy for them to generate.
# The Real Estate Ltd
Below is a description of the responsibilities and rights of the Real Estate Ltd:
Investors will own shares in Real Estate Ltd.
Real Estate Ltd will own the title to the space and buildings.
Real Estate Ltd will provide a long term lease to the Co-ops which are renewable (eg: 20-100 years)
Real Estate Ltd would receive rent from the property.
If an investor from Real Estate Ltd want to sell their interest they can do so. Residents of the the Co-Op have first refusal, other investors from the Real Estate Ltd have second refusal, and lastly he/she can then sell outside.
Real Estate Ltd is responsible for major repairs of the building.
Investors are required to sell up to 10% of their original shareholding every 4 years at market rate to residents of the Co-op only (but never compelled to sell at a loss, market rent is defined by the rate of the area over the past 3 years to avoid speculative behavior).
Residents of the Co-op who acquire a number of shares more than is required to offset their rent of the unit that they reside in through dividends (i.e. resident investors) are required to sell up to 6% of the historical maximum of this “excess interest” every 4 years so long as an excess interest is maintained (but never compelled to sell at a loss, market rent is defined by the rate of the area over the past 3 years to avoid speculative behavior)
If overall demand for purchase of interest by the community does not meet the legal obligation for total supply, investors shall be required to sell their interest before residents.
Right to purchase the shares available will be allocated between residents so that each resident who does not have excess interest may purchase in each year an equal interest as any other up the point of offsetting their rent through dividends.
The price of the rent to the Co-op is to be reviewed and adjusted every 6 years according to market rate index (E.g., if you started at 5% below market rate then you continue with 5%, or at the value of the building [sic].)
If Co-op does not pay debts or rent then investment body can terminate the lease after 6 months (to be discussed).
# The Co-op
Below is a description of the responsibilities and rights of the Co-op:
- The Co-op has a long terms tenancy (Eg: 20-100 years) with the Real Estate Ltd.
- The Co-op is responsible for paying bills and for the daily maintenance of the property.
- The Co-op is free to choose it’s residents without consulting the Real Estate Ltd.
- The Co-op is responsible for managing the residents.
- The Co-op is governed and managed by the residents.
- The Co-op will pay a deposit of 6 months equivalent of rent to the Real Estate Ltd (this can be accumulated over a period of several years).
# The Residents
Below is a description of the responsibilities and rights of residents:
- The resident needs to go through a trial period of 1+ year before being able to apply to the long term tenancy with the Co-ops. (This period may not be of fixed term but is up to the Co-Op members cf Plum Village acceptance).
- The resident will pay a deposit when joining the Co-ops.
- The residents will pay the rent every month +5-10% extra up to a maximum of 8 months rent (which will act as a insurance in case they have a period of time unable to pay their rent to the Co-Op).
- If the resident fall short after X months, the Co-ops can terminate the tenure with the resident and ask them to leave.
- The residents have the opportunity every 4 years to buy shares of the space from the Real Estate Ltd at market rate.
# Next steps for Co-ownership
This is a long term plan. We would take the time to find more people who would like to join the Life Itself co-living community and then find a place to do a first pilot of Co-ownership + Co-ops.
- Create MVP and look for properties in the UK, France or elsewhere
- 1 hour from a capital by train or car
- 1h30-45min from a local airport
- Create budget and know who has capital to deploy and how much
- Have a list of Life Itself people and friends who would be interested and ready to take action within a year (as renters or investors)
# Residency model
The Residency model is a complementary “stream” to the “lake” of the permanent co-living approaches above. It has two specific purposes:
- It enables community members to stay in other places that are not their permanent residence while feeling a sense of home, and, in particular that the Community has access to both rural and urban spaces (urban environments to access work, ideas and culture, rural nodes for more permanent establishment, reflection, etc).
- It provides a “stream” that enriches the permanent co-living communities, create an exchange between the different spaces and any one of them from becoming too insular.
The residency model should be:
- Simple to manage for the host communities and Life Itself central
- Cover its costs which is: base cost (as if it was rented permanently) + 30% for management etc.
- Harmonious with the community already occupying the space. there
# Management and structure
Each space can designate a subpart of its space for use under the residency approach.
Each space maintains a book sheeting and a contact point for booking.
# The Co-governance model
The co-governance model is relevant when Life Itself community is residing in a space owned by another party or community. It is a way for the Life Itself community to have security and agency in an area they are already investing their time and emotion in while creating synergies between that community and Life Itself, so that the spaces are co-optimised by both the long-time inhabitants of the existing community and Life Itself community members and all lifestyles are nourished by a deep collaboration between all the parties.
In setting up a co-governance model, we propose that:
- Life Itself members who live permanently will like to have a tenancy agreement between Life Itself and the exixsting community over the spaces Life Itself uses. Over these spaces, Life Itself and its members will decide over who uses it and how, subject to consultation and veto by the Godefroy family.
- Life Itself members who live permanently in the community are consulted first when the existing community are making decisions or investments involving:
- A new resident coming to live in the existing community
- A new space available in the existing community
- A plan to renovate an existing space (eg: how to design the rooms for the new wedding room so it can also be used by Life Itself during the low season and so that the rooms can be potentially repurposed in the long term for other use of the community).
- Life Itself would also like the ability to rent spaces that are not used/not yet renovated and to be able to invest in these spaces, meaning that there would be a preferential/ deducted rent over a defined period of time. Of course, the existing community will have a say and veto over how the space is designed and done and what type of activity will take place.
- [New]: Life Itself would have the right of first refusal should the existing community wish to sell.
In exchange, Life Itself will commit to deep collaboration with the existing owners and community, for example:
- Life Itself member residents will learn and contribute to maintaining the shared gardens which are a center of the existing community culture
- Life Itself members and residents will contribute to cleaning of the shared spaces it uses
- Life Itself members and residents will bring life and activities to the space
- Life Itself will create a regular monthly meeting with the owners/community to discuss mutual interests and concerns.
# Appendix: Community space property features
Relevant for both Co-governance and the Co-ownership model
|Co-working, conference room, phone booth||✔️||✔️|
|School (nursery, kindergarten, primary school)||✔️|
|1 Bedroom apartment some with kitchenette||3||3||3|
|2 Bedroom apart some with kitchenette||3||3||8|
|3 Bedrooms some with kitchenette||2|
# Appendix: FAQs of Co-ownership + Co-ops model
Who “legally” owns the space?
There is a LTD company that owns the space legally.
How does space rental get (re)set?
Through an initial agreement between a cooperative entity and the Ltd. Company, reviewed every X years, and set with some relation to average rents.
What options are there for coop members to get long-term economic security and certainty?
They can buy partial ownership in economic sense by buying shares in the LTD. We can also provide a kind of “rent insurance” [3 items: security of tenure; long-term certainty on rent level (rent control); ability to pass this to kids; transferable rents]
Can community members transfer their membership (and rental agreement) to children (or others)?
Yes to their children but not to others [and even for children subject to children agreement with community guidelines and subject to veto by community, if veto children will receive a form of compensation that will not jeopardize the future of the community.
How do community members have a sense of “home” and a sense of security and freedom?
Community members have security within coop (after a certain period) and coop has long-term security of tenure (coop can’t be can kicked out of the space). Rent control exists qv.
How do investors get their money out / sell shares?
Price capped of average market rate for the area over the last 3-5 years. 1st offer to community members; 2nd to other shareholders; 3rd to anyone.
Can the LTD sell the space?
Only if the Community members agree OR the Community members (Coop) is in default for more than X time (2y)
What happens if some community members stop paying rent?
Those people leave the coop [also require deposit] unless other community members cover their rent [via Coop]. The Coop can set a rental insurance for its members in addition to rent.
What happens if the Coop fails to pay rent?
Coop can be mandated to leave property if:
- More than 60% of rent is overdue by 5 months
- More than 75% of rent is overdue by 1 year
- More than 90% of rent is overdue by 2 years
Who pays for utilities and day to day upkeep?
The Coop (i.e. community members)
Who can decide about changes in the space e.g. painting the walls?
Who pays for major repairs?
The LTD (by default) but may be similar to major capital improvements at some point.
Who pays and decides on major capital improvements (e.g. a swimming pool) or new buildings?
The community can decide [by consensus] but investment happens through the LTD and the LTD shareholders have a veto with majority of shareholders [default is that it is ok] (?)
Do we have to have a coop?
No, esp if small number of residents, then could have a direct relationship with LTD.
Can community members also be shareholders in the LTD?
Yes, absolutely. But shareholding does not confer any special status.
# Appendix: SCQH 2018
Situation: There are a core of people committed to coliving within Life Itself and a much broader set of people interested & supportive; there are major reasons that coliving is synergistic and supportive of Life Itself’s vision and mission; there is rapidly growing interest in coliving in broader society.
Complication: We aren’t coliving in a stable way that could grow [it is very ad-hoc] and this instability uses up energy, creates anxiety, limits our wellness (and deep friendships) and limits our ability to pursue the big vision, and we don’t have certainty and security of a space and structure which makes it difficult to commit to colive, to put down roots, to invest energy in a place and in the big vision [people spend a lot of time sorting out basics of living]
Question: What is the ownership model, gating and governance process, location criteria, contribution expectations and immediate next steps so that we can have certainty and clarity to establish a coliving community with at least 3 identified founding members/couples and capacity of at least 6-10 units with security of tenure and where the members are co-resident for at least X time (tbd) and spend at least Y% time there (tbd)?
Question: What ownership model, what gating and governance process, what location criteria, what contribution expectations [what is base culture (values, practices) and connection with the bigger Life Itself vision] and what are the immediate next steps so that we can have certainty and clarity to establish a coliving community with capacity of at least 6-10 units with security of tenure and where the members are co-resident for at least X time (tbd) and spend at least Y% time there (tbd)?
# Issue Tree
A pitfall of traditional housing Co-ops is that over time a) the community ages b) it becomes dominated by those who stay put c) its becomes dominated by people sticking around for low rent. This is because the benefit is lost if members move out (in the proposed model it is possible to sell your economic interest in the property) ↩︎
This and the previous provisions allows community members to purchase the maximum possible interest from investors even when some community members are not interested in ownership, but also assures a tendency towards even reapportionment to all residents over time, given that demand for ownership is present among all residents. ↩︎