A proposal to reward contributions to purchase the site when the group is still incomplete

The Reef
1

The problem

Early full members of The Reef are putting in months, or even years, of work more than the latecomers; deal with more uncertainty; and need to front some money to finance the option for the site. This entitles them to some kind of reward.

How Brutopia did it: supplements on the Casco price

In Brutopia, they chose as a reward a discount on the apartments. If p was the indicative price per m2r in Brutopia:

  • Full members that signed the compromis (and fronted the advance for the site) paid p per m2 on their unit (Casco)
  • Full members that joined after the compromis, but before the permit was granted, paid p + 2%
  • Full members that joined after the permit was granted paid p + 4%.

On top of that, Brutopia added another 2% for full members that had not put in 400 hours of work.

Notice that, if p is the average cost of construction Casco, this formula means that there will be some extra money in the societé simple. I guess Brutopia used it as a buffer against unforeseen expenses.

Another way: loans to the société simple

Another way to do it is to treat the fronting of money for the Reef as a loan to the société simple. It could work like this: we set a fair (net of inflation) interest rate. Imagine we decide that this rate is 4%, and we predict inflation to also be 4%. Imagine Alice, a well-off Reefling, contributes 100,000 EUR to paying for the option on the site, and that it then takes one year for the deed to be signed by the group, which at that point will be complete. At the end of this year, when everyone pays the full amount for the site, Alice receives a discount of 108,000 on her part: that’s the 100K she put in, plus 4% of that to compensate against inflation, plus another 4% to reward the risk she took. These 8K are a discount for Alice, but a cost to the whole group. They becomes their own line in the final budget and are carried by the whole group.

By comparison, Casco prices could be in the range 3,300 EUR per m2. Consider now another Reefling, Bob, also well-off enought to buy a 100 m2 apartment. Bob joined after the permit had been granted, so he needs to pay 4% more than Alice. This would be 0.04 x 3,300 x 100 = 13,200 EUR more than Alice. These 13,200 stay in the budget as a contingency fund; they mean that Bob’s money will be used to compensate unforeseen expenses.

Any thoughts, @reef-finance

2 Likes
2

Hello Alberto,
on the plenary of 26 March 23 we consented for Reeflings who join after the compromis is signed, to pay between 2-4% more per m² which will be paid into a contingency fund. The concrete percentage would be decided on a plenary after we have signed the compromis: Nextcloud
In my understanding this adresses the greater part of the problem you are mentioning. That being said, I think the idea of loans to the SocSim is interesting, perhaps worth checking what is legally feasible and then informally consult the wider group to see if there is support?

3

You are correct.

I guess then the issue is to contain unit cost at all costs, because if you start charging for one square meter 4,500 EUR + 4% you hit 4,700, and I am afraid that will be out of a normal price range.

The loans have the advantage that they reward the amounts fronted, rather than the size of one’s apartment. But it’s not a major point, if we already have consented to the Brutopia system let’s stay with it.

Is anyone in @reef-finance taking care of estimating the limit price people are prepared to pay?

4

Is this Brutopia or l’Echappée? Because in the manual by l’Echappée it says that they opted for a system in which 100 hours of work (per year) equalled 1% of the price of your unit.

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Brutopia. Mark sent me a document in a recent email.

6

I can’t find it in the mailbox or on Nextcloud. If it’s not in the mailbox, can you please forward a copy?

7

We actually don’t & we should.

8

I believe this is something we can look into after we had the question session with the architects as there are a number of open points on the size of appartments, which is important for Reeflings in order to assess their max price limit, see thread here and questions here

1 Like
9

hello @reef-finance , to tackle the question of price limits, I’d propose to create a simple poll for full members where they can submit the uppermost €/m² they feel comfortable with, so we’ll end up with effectively one single question. I imagine a poll where we can chosse to answer anonymously or by adding names, I think on Google or Doodle we should have that option. Please press like if you think that makes sense or comment if you have another idea.

2 Likes
10

I think anonymity is not really possible whitin so small a group, but OK.

11

should this be anonymous in the first place?

1 Like
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@ugne I was initially not sure whether everyone feels comfortable to share that type of info, however given your and Alberto’s comments I see this is less of a worry - will proceed accordingly

2 Likes
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@reef-finance , please find here below the poll I suggest to post, to be answered by full members on a voluntary basis and behind the Reef’s safe content wall. Do let me know if you have any objections - otherwise I’ll post tonight :slight_smile:

Test

Dear full members,
please consider taking part in this poll with the aim of getting a feeling for the price range that we can consider for the Reef going forward. One response per unit is sufficient, note that answering is not anonymous and if you prefer to not answer to this question, then that’s absolutely fine. The option you choosing is considered as mere price indication which can increase, decrease in the future depending on the choices and the financial situation of a Reefling.

How to? To provide your maximum acceptable price you should divide your total budget by the gross square meters you had indicated in Le programme. Please also include any extras (balcony, parking) as well as your personal safety margin (10-15%) in this excercise.

Example: A total budget of 430k would reduce to 400k if a balcony is desired. For a 90m2 apartment this would then translate to 4444€ per m2. If the unit owner has a safety margin of 10% then we end up at 4040€ per m/2.

€/m2
  • <4000
  • 4000
  • 4100
  • 4200
  • 4300
  • 4400
  • 4500
  • more than 4500
0 voters

End of Test

3 Likes
14

very clear, love it. and Thank you! Perhaps just adding a deadline till when we would like this to be answered. Could we give a week?

1 Like
15

That, and a link to the relevant spreadsheet for calculating the budget.

1 Like
16

Looks great Richard. Just one thought: given that we are going through this exercise because we are looking for information on the breaking point for people with tight budgets, are you sure you want to give up on granularity on the <4000? Can it be an option to offer all options per 100 euro down from the 4100 price fork?

2 Likes