Transcription
Last year, we took an extensive tour of the Ecovillage at Ithaca with its co-founder, Liz Walker. Liz graciously took us through the founding of the Ecovillage, how it's structured, and what day-to-day life is like there.
The video generated more questions from you, our audience, particularly those of you who are interested in co-living and co-housing structures. So, we took a good portion of your queries and asked some of the residents at the Ecovillage to spend some time answering them.
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So, Bill, just give me a little bit of your background because we've chatted with you, yeah, graciously. And what's your background and what's your relationship with the Ithaca Ecovillage?
Well, my background is, I was an attorney for many years. I'm now retired, but I came here to Ecovillage first about 20 years ago to check it out when I was thinking about moving to Ithaca from Buffalo. I grew up outside of Syracuse. I lived and practiced in Buffalo for many years, but when I wanted to move back to Central New York, come to the Finger Lakes area, I had known about Ecovillage for a number of years back in the '90s when they were creating it and starting the first neighborhood, Frog. So, I came here to check it out, and I was really captured by the beauty and the concept and the vision of the place. So, I got involved in the second neighborhood, Song, which was developing at that time. And so then I started to get involved in helping out with some of the legal work. We had other council, other attorneys in Ithaca working for Song as well, but I helped out with that. And so I got to know a lot about the the legal structures here. And then helped Tree too, when Tree was forming. And then just a year ago, I moved from my unit in Song over to Tree. So I now live in the third neighborhood here.
And when you started to learn about, like, kind of the legal structures here, was it something that you were familiar with before that you can navigate just because you're in law, or is it something that you had to really orient yourself to?
Um, it wasn't something that I was familiar about before because it's quite a unique legal setup here. Um, and because of our, you know, organizational structures as a cooperative corporation. Um, I had done house closings before, so I had just done, you know, general, fairly simple, um, real estate transactions for folks who are buying a house. But here, we own shares in the cooperative corporation. So we don't actually own our houses. By owning shares, we get what's called the proprietary lease, which is a long-term lease to give us the right to inhabit our unit. So that, that's a very different type of structure, especially here in Upstate New York. Um, co-ops, of course, are very common in New York City, but, uh, but I'd never had experience with them before, but just sort of learned as I went along, um, working on the development of Song.
So this is set up as a co-op, then? Yes. How does that interrelate with the, um, the non-profit part of this? The non-profit component of this?
Um, yeah, so this gets into, um, what some, some folks, and one friend of mine who helped to develop Song used to say, "The path to voluntary simplicity leads through involuntary complexity," because of trying to deal with all we have to in terms of interfacing with the rest of the world and all the, you know, legal and insurance and and financing structures. We at first, um, created, uh, the not-for-profit here, which bought the land. And then the not-for-profit, uh, turned over land in little chunks to each neighborhood. Each neighborhood has its own separate corporation. Um, so Frog, when it got, uh, started, um, incorporated as a cooperative corporation, which is a special type of corporation under New York State law. And then once we were developing Song, and we created a separate cooperative corporation for Song, then we realized we needed even another entity to deal with things such as the road, Rachel Carson Way, which is infrastructure that's shared by two separate neighborhoods, or, or now all three neighborhoods. And so we created, um, another not-for-profit called the Village Association, the Ecovillage at Ithaca Village Association. And, um, so all of us who live here, we're all shareholders. Um, all of us who, who own our units, or own our units as opposed to the, um, renters, we're shareholders in the corporation. Plus, we're members of the Village Association. And so the Village Association also deals with our water system, our pump house, which you may have seen. We have our own a private pump house next to the town's water tank. So we actually have five different corporations up here, including the three, Tree, Song, and, yes, including the three neighborhoods.
Okay, I guess that makes sense. So if you were to ever do another neighborhood, that would be another? Yes, it's a cooperative corporation, right? Yeah. And as I know Liz mentioned in, in your interview with Liz, you know, one of the reasons for that is to protect people from liability. So that if something, um, happens, there's some accident or some lawsuit against one entity, it doesn't involve everyone, and everyone's assets are not at risk, right? But we try and, and maintain smaller, um, you know, activity groupings to insulate us from different risks.
So let's simplify this. Say, uh, I'm interested. There's, there's an opening in Tree, since we're standing in Tree, and I want to purchase a home. How does it work? Just take me through.
Yeah, so we have, um, here we have folks generally sell their shares on their own. So real estate agents don't get involved in the sale process. In the past, there have been one or two times when people have tried to use real estate agents, and they don't really understand Ecovillage, and so it never has worked out. So people will list their their shares for sale first internally through the village, and then after a certain, uh, seven-day waiting period, then they can advertise, um, you know, online. And so generally, people advertise on our website, on the Ecovillage website. And so then folks who are interested in purchasing those shares will contact the seller, the owner directly. And then they have to go through a membership process because we are set up as a cooperative corporation. Any transfer of the shares has to get approval from the board of directors of the corporation. And so that's what makes us a lot different than a condo, condo association, or condo community, right? And so because, um, you have to get approval from the board of directors, and we all want to make sure that somebody who's buying into the neighborhood, because we do live so closely together and work so closely together, we want to make sure people really understand what they're getting into. You have to go through a membership process. So the membership committee has certain steps you need to do in order to learn about the place, and you have to complete all those steps before you can actually make an offer on purchasing somebody's shares.
So is it like a quiz, or do you have to, like, you know, go through a bunch of hoops?
Yeah, and it's not, not a quiz in the sense that you're, you're ever actually tested, but there are, there's a checklist. Yeah. So one of the things is, you have to attend a certain number of meetings because at least here in, in Tree, we, we use dynamic governance, sociocracy. And then in other neighborhoods that use consensus, you have to attend a certain number of meetings to see how decision-making is done. And then you have to read some materials about co-housing because each neighborhood is set up as a co-housing neighborhood. And then you have to, um, come for a tour. We have, uh, you know, volunteer tour guides who will give you a tour and explain things about the history of the place. And then you have to, um, if you're able to, of course, with COVID and the pandemic, it hasn't always always worked out this way, but if you're able to, you're supposed to spend a certain number of nights here. And we have guest rooms in the common house, or there are little, um, folks who rent out rooms in their houses as B&Bs for people to stay in. And then you have to participate in a work party because one of the, the aspects of a co-housing community is everybody, we rely upon, you know, volunteer efforts from everybody to contribute to community work. And so as a potential, um, purchaser, you have to participate in a work party so you can get to learn about our volunteer work system.
Yeah, I mean, you're trying it on for size, essentially, to see whether it's the right kind of fit. And I feel like, you know, when I, uh, went to Cornell, there's something called the, the Big Red Carpet Society, and you get to stay overnight with students, and you get to go to class, and you get to try it on, and you're like, "Okay, before I actually commit to this, does it actually feel right to me?" Yeah. And, you know, does the culture, you know, fit with me too? Because that was a question that people had, you know, "How do you know before making the commitment whether it is a right fit?" It seems like you actually have to go through this membership process in order to kind of realize that. We generally say that, you know, here, we let people self-select. We give them as much information as we can so they can learn about us and then decide if this actually is the right place for them or not, because it's not for everybody. Yeah. And, but we hope that through the membership process, they can, you know, come to some realization if they really do want to live here or not. Yeah.
So it's almost like, you said, self-selecting. It's not necessarily a vetting process, per se?
It is and it isn't, but it's more like a self-selecting for that person to see if it's right for him or her, and not for necessarily like whether you're scrutinizing, like, "You're not right for this." And then in that way, we're actually different than many co-ops in New York. So I've had some, you know, contact and then some friends live in co-ops in New York City where they're more common, and there, their process is all about finances. And you have to submit, you know, two years' worth of tax returns and two years' worth of your bank and brokerage statements to the board of directors because they want to be sure that you're able to pay your maintenance fees to the co-op. Yeah. And so that's what their vetting process is. So, you know, we've got a totally different vetting process. You know, of course, we do want to make sure that people can, you know, maintain their, uh, maintenance bills every month. Yeah, but we don't put as much emphasis on the financial vetting that, that a traditional co-op in New York City would do.
I see. And so, you know, you had mentioned that this is a cooperative corporation, and you also mentioned, like, a condo association, homeowners association. Yeah. What are the different, you know, structures you can do for a co-housing community if it's not a cooperative corporation?
Well, most that I know about, and I should say, you know, there aren't a lot in New York State, um, and, and I have, you know, been in touch with some of them in the past, and then I've read about others in other states. And, of course, you know, the co-op law that I'm familiar with is New York State law, so I'm not sure how that works in every state. It's always different. But most that I know of are actually set up as condos. Condo associations. And so in there, you actually get a deed to your house. So you actually, it's considered you own the real estate for the interior of your structure, interior of your unit. And, um, that, that is is a lot different because there still is a corporation. The, the condo association is a corporation. And so it does have a board of directors, um, but it doesn't have quite as much control over the transfer of units. And also, it doesn't, and, and, you know, doesn't have as much control over, um, sort of the, the social interactions among the members. So in a traditional co-housing community, community, you know, they, they try and foster that, uh, interaction, uh, because of their, uh, design and their intentions. But in terms of the legal structure, the legal structure doesn't force them to have as much connection as a cooperative corporation.
I see. What forces them to have? Okay. And then you could probably do things like an LLC as well?
Yeah. And so in terms of, um, Ecovillages, there, there are probably some Ecovillages that are, are set up as LLCs. Um, and I don't know of many co-housing neighborhoods that would be set up that way, just because of the complications that you get into when you have an LLC of having individual mortgages on units. Because in an LLC, people are members of an LLC, but it would be difficult for most banks, I think, to be able to lend money to a particular individual to buy a membership share in an LLC, right? Whereas they are set up because, because, you know, condos and cooperative corporations are, are, you know, creatures of state law, um, the banks and financing institutions are set up to loan people money in order to buy their either their deed and their condo or the shares in their cooperative. So they, it is, people can get a loan in order to buy there.
And the non-profit element of Ecovillage could have been set up sort of like a community land trust, per se?
Yeah, actually, um, in a sense, we do have an element of a community land trust here. A lot of folks here, um, you know, might not be, it's not at the top of their mind because most folks don't pay as much attention to the legal details as I do. But Song, the second neighborhood, actually, um, did not, uh, get title to the land it sits on from the EVI Inc. not-for-profit. It got a 99-year lease, which is renewable. So at the end of 99 years, they can renew it for another 99 years. So in that sense, the EVI Inc. not-for-profit actually still owns the land that Song is sitting on. I see. Um, it's not that case with Frog and Tree. Um, the not-for-profit actually transferred title to the land that those two neighborhoods sit on. But because of some of the way we're doing the initial financing of Song construction, and we had gotten some loan from a community land trust foundation that promotes community land trusts, we set up Song in that way. So in that sense, we do have a land trust model here at Ecovillage.
And what are the things that you could, you know, you have to, you think if somebody's setting something up, whether it's a co-housing or cooperative association, whatever it might be, what are some of the things that you, you feel like, especially coming from your legal background, that you must do right from the beginning? And what are the things that you could skimp on and say, "I could handle that later"? Because, and the reason why I ask that is because we have gotten a lot of folks reach out to us and kind of say, "Oh, we don't know what kind of structure we want to do yet," and they want to kind of put the cart before the horse, so to speak. So what are the things that you would advise, you know, coming from your legal background?
Yeah, I would advise that you create some structure at least. And, and this is actually, um, how we've done things here at Ecovillage in the past. And during the development stage, you should at least have, well, when we were doing, uh, Song development, we created what we call a joint venture, which is like a kind of like a partnership, a specialized type of partnership. So everybody signs an agreement, you have a joint venture agreement that governs how decisions are made and how finances are handled, which are, you know, two of the key things you want to make sure you get clear about. And everybody signs the joint venture agreement, so they all become partners in this development entity. Then, in, in Tree, we had the joint venture, but then also at some point, created an LLC for Tree. And so that serves basically as the legal entity that, that is responsible and can interface with the outside world in terms of the development process. And that, that gives some protection to people and some, you know, oversight about how their monies are being handled that, that they put into the venture. So, so I definitely recommend creating some type of structure. And then you can, you can do activities with that entity until you figure out whether you're going to be a condo or a co-op or not-for-profit or some other type of long-term entity.
Got it. Yeah. Then going back to the shares. Say you have a space, you own the shares. Somebody unfortunately passes away. Can you have bequeathed those shares to somebody within your family? And then how does that family member, do they just own the shares? And what if they don't fulfill the membership?
So, yeah, yeah. So that's, that's the, um, the interesting thing about the cooperative model that we've chosen here. And I think that's probably one of the reasons that was originally chosen. I wasn't, I haven't been around since the very creation. I got involved as a, 20 years ago, so I wasn't around 30 years ago when they started everything here. But, but with a cooperative model, then the shares are an asset of your estate. So your, your heirs, your, your beneficiaries can get, uh, benefit of them. But because of our, our rules about who can move in, they can't necessarily move in until they complete the membership process. So usually, unless, you know, unless the heirs really wanted to to live here and go through the membership process, they would, the estate would probably put the shares on the market to sell them. I see. And then the estate would get the funds and then distribute that to the beneficiaries. Okay. But, but if, yeah, if somebody's there, you know, their child or something did want to move in, they would have to go through the membership process before they could move in. Okay.
And then what are the, the fees of actually moving into the different villages? Do the different villages have different fees? And are you paying into the fees for, make sure there's snow removal on Rachel Carson Way, for instance?
Yeah, so the, the basic fees that we pay are a monthly maintenance fee. And so there's, we get one monthly invoice each month, but there are a number of sets of fees. So some are related to your particular neighborhood. And so those are the fees for maintaining all the structures in the neighborhood. It might include capital reserves for saving up money to make repairs in the future on the structures. And a big portion of it is your share of the real estate taxes because everything is owned by a co-op, we get one real estate tax bill for the entire neighborhood. Oh, I see. And then we split that up amongst everybody based upon the number of shares they have, which is roughly related to the size of their unit. So larger, larger units would pay a greater proportion, smaller units would pay a smaller share. So that's a big, um, that and also the insurance that the co-op has on the structures is a big portion of your monthly bill. Then also, there's monthly charges from the Village Association, I mentioned before, the, the corporation we created to deal with common infrastructure. So anything related to Rachel Carson Way, our private road, or our pump house and our water system, those are all village expenses. And so we split those up amongst everybody, all 100 units that are here. And those appear on your monthly maintenance bill as well. And so those can vary from, um, uh, like I have one of the smaller units here, I have a studio unit, and so the monthly maintenance on that is about $450 a month. And then the largest units in some of the neighborhoods might go up to about, uh, a little over $900 a month for their monthly maintenance costs.
Now, last time we spoke, and you have to share this, but last time we spoke, you were thinking about doing, you know, kind of a, a little co-housing unit with nine of your friends. Did that ever pan out?
Yes, yeah. I wouldn't, I wouldn't quite call it co-housing, um, but I'm actually going up there, uh, later today on vacation. Yeah, it's, um, so there's, there's actually now a ton of us. We, we've admitted another, um, friend in, uh, last summer. And, uh, we now have, uh, three platform tents set up. So I'm actually going to spend a night up there in my platform tent tonight. That's my little camping wood stove. And then...
And how did you structure it? Was it, so that's an LLC?
That's an LLC. Okay. And that's because we don't, uh, we're never going to be getting any loans or mortgages on that. Yeah. You know, we're just paying cash to put up our little, uh, platform tents. And of course, we couldn't get a loan on a platform tent anyway. And also, like, what is this? Yeah. And also when we, um, you know, at some point in the future, when we decide we're getting too old or we're not going to use it anymore, we're probably going to donate it to some, something like the Finger Lakes Land Trust or some, some land conservancy organization. So we're never going to be selling it.
Stay tuned for more of your questions answered in some future episodes, and we'll see you in the next video.