Weighing the price of the units

Hi @reef-finance

@reef-building got the weighing criteria from the architects, with their priority in relation to each other.
There are 6 criteria in total.
The file can be found here.

Some extra info the architects gave during our meeting:

  • they also considered to add ‘distance to the common spaces’ , but left it out as they judge that it has both a positive (not having to go far to reach the commons) and a negative (noise, more passage,…)
  • the factor ‘light’ is not a seperate criteria, as it is ‘hidden’ in sunlight/floor
  • a lot of the criteria are linked, their goal is also - when looking at an apartment- not just apply this criteria but to see the whole of these criteria in relation to the apartment in question. They also indicated that while doing the exercise of weighing each apartment, they still adapt these criteria or priority because they notice that ‘in reality’ that it’s not logic/balanced.
  • they indicated it will be a complex exercise (even though they have done it before). The goal is that the sum of the prices of all the units = m2 of the private units * average price/m2
  • we also indicated that an extra criteria for us is, to stay within this +/- 10% in relation to the average price. The architects indicated that their goal in first instance is to rate the different apartments according to the market price, which might result in some apartments being more expensive than this +10% or others being less expensive than -10%… They mentioned that in Brutopia (more compact site, building with 5 floors high) the most expensive apartment was + 30% and least expensive was -30%. This price fork differs from project to project. It will be up to us to agree on this price fork (or not), but maybe already sth to raise to the group now: What do we prefer : ‘have a price setting that reflects the market price’ or ‘staying within this +/- 10%’.
  • the options won’t be taking into account for the price setting (as they will be chosen later). E.g. an apartment with a terrace will probably have a higher market value than the exact same apartment without one. (and it might not just only be the diffence in cost of the terrace)

@Sophie_B @joannes : don’t know if you want to add something or if you interpreted things in a different way…

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Els, this is indeed what was discussed.

May I ask for the rationale of the +/- 10% range?

i think - like you said in the meeting with the architects: follow a bit the market price + allow people with lesser budgets to be able to afford to live in a cohousing.
@lee?

Just to be clear: I’m all in favour of dropping the price fork and going for market price, but I do want to insist on process here, because it’s my favourite strategy to keep conflict at bay.

The current situation is that we took a decision by consensus (level 5) on 26 March 2023, where the group decided on a price fork of +/- 10%. The proposal can be found in Team Reef > Proposals, or also here: publicly accessible link.

Our governance document (point 5.2.3) says that decisions like this can only be re-opened when there is a 50% majority who wants to do so, and the condition is that “new information” has shown up, which of course one could argue is the case here.

I personally don’t expect however that the result of the architects’ weighting exercise will go beyond +/- 10%, so I have a preference for 1) not raising stress levels until we have more information, and 2) leave the journey to this final decision in the delicate hands of @reef-finance. Would that work?

Finally, a small note on the the story on Brutopia’s price fork as it is reported above, which the way I understand is clearly not the one we have been told by Mark. What we have been told is that at some point it turned out that some financially weaker households would have had to leave the group with a +/-10% price fork, and that there was a quick and voluntary agreement from the financially stronger household(s) to stretch their price fork, or “l’accordéon” as they call it. I wasn’t there, so I can’t know, but I do know that @RichardB and I did quite some research on immo sites to inspire the proposal we gave consensus to in 2023, and that 10% seemed to be a reasonable range.

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So nice to have everything well documented. Thanks.

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My takeaway from the meeting was that anything under +/- 10% would be unfair as it wouldn’t reflect the market reality and that it was up to the group to decide on a larger price fork for solidarity reasons.

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@reef-finance

The architects have send the result of the weighing. I put the file in the ‘weighing of the private units’ folder under the ‘price setting’ folder under Team finance (feel free to move if needed).

It might be interesting to listen to the recording of Team Buildings last bi-weekly meeting with the architects. The first topic was a little explanation of this file (the values might have changed in the meantime though). This is the link to the recording.

Highlights of what i remembered on this topic:

  • they added an extra criteria in comparison to the file they’ve sent us a while ago (see first post of this topic). They wanted to lower the price of the units that have only one side linked to the outside (and not a wall)

  • We mentioned the +/-10% in relation to the average price, that we agreed upon. Nevertheless the architects purely did the weighing in relation to the market value, so not taking into account this minimums/maximums of +/-10%. This is off course possible in a later step. I understand that some people in the group want to have a discussion on this topic: market price vs previous level 5 decision on the +/- 10% (see post of lee in the topic).

  • A detail for the weighing result but maybe interesting info concerning the size of the units: the architects ‘calculated’ a netto surface of each unit. Up till now we applied a factor of 1,25 to go from net to brut. Here it is a concrete netto surface calculation for each unit. (column ‘Surface nette casco’). They used this netto surface for the weighing, but convert it in a later step to the brut surface.

  • The weighing factor (last green column) is to be applied on the casco price.

  • The casco price that was taken into account here (3500 euro/m2) is the one of the most recent price calculation (the one linked to proposition 1 we recently consented to , to send for weighing)

PS: The plans of proposition 1 and the linked price calculation can be found under the ‘plans proposition 1 (06-12-2024)’ folder under the ‘Site(jet-14)’ folder under ‘Scouting exercise’ of Team building.

PS2: I started on a new ‘jet-14 simulation’ file where you select one of the units (instead of giving your prefered surface), with the aim to get a final price of the unit. I already foresaw to take into account these weighing factors, so I just need to introduce them to get to a final price (finishing included and possible markup). I will share this as soon as I have update the m2 of the units and the weighing factors.

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Hello @reef-finance,

I looked at the table in detail, and it seems rather sensible to me.

Noting that we are a bit in a hurry, I wanted to check with you how you would feel about discussing this ahead of this Sunday’s plenary. If that would be possible - no problem if not - then I would aim for the following:

  1. Explanation of the table and the reasoning (shared understanding)
  2. Process: see whether there is a 50% majority who would like to re-open the +/- 10% decision, in favour of just going with the architects’ proposal without changing it

The key factors to throw in the balance here are making progress as fast as possilbe vs your wellbeing (don’t kill yourself over it) and just as importantly, keeping the harmony over a possibly very touchy issue.

Happy to get your thoughts, here or in a quick chat over the phone.

hi @Lee , i leave it for the rest of team finance to decide whether to put this on the agenda of sunday.

Looking at the overview of topics to discuss per plenary (Planning of topics during the avant-projet stage - #3 by Lee), this topic is scheduled for the plenary of the 16th, not of this Sunday (or i might miss sth)

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Confirm @els . This is planned for the plenary of the 16th. The idea is to prepare a proposal to the plenary, rather than just drop a document onto it.

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I also looked at the table, but it’s a PDF. Can I have it as a spreadsheet? Being able to see the formulae allows for better understanding. Paging @reef-building .

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question asked…

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A few more questions (some might be answered by accessing the Excel file):

  1. Why do S&F use a baseline price of 3,500 per m2?
  2. Is the estimated total of 6,741,700 enough to cover the entire Reef’s construction, excluding options and finishings, but including the site, the notary, the architects’ fees etc. etc.?
  3. What is the meaning of the écart mentioned in red at the bottom?

Just a suggestion: now that Els has left Team Finance, maybe it’s an idea to appoint a keyholder in Team Finance, so that you can have a direct line of communication?

I don’t think we will need it often. I would also need to ask the same questions as a member of the group.

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It’s the casco price. So far the prices/m2 we received were allways including a finishing of 750 euro/m2. (I calculated it because the casco price is not mentioned in their FS as such, I arrived at a casco of 3503,91 euro/m2 based on the FS linked with the latest plans => it’s in the file i’ve send you if you would be interested)

The calculations are based on the FS delivered with the latest plans. They include all costs except for the cost mentioned in the post under the ‘unforeseen costs topic’

If you want the high level answer about ‘excluding options’: the answer if yes.

If you want the correct answer: it’s what i referred to in a post under the topic ‘setting the price of the options’

In their calculations they

  • first calculate all costs, including a certain amount of options (cellars, terrasses,…).

  • As a second step they calculate VAT, fees on this (and on all the other costs)

  • As a third step they subtract the selling cost of these options, but when doing this they use amounts that don’t cover the building cost + fees/vat, so these options are not full neutralised

the architects mentionned they will try to answer the questions asked tomorrow. If the excel doesn’t make it clear, i will ask

@alberto , reaction from the architects on the question if we can have the excel:

Est-il possible d'envoyer le ficher avec la pondération en format xls?

Nous avons l’habitude de ne pas communiquer ce fichier précieux.
Est-ce qu’on peut vous aider ? C’était pourquoi ?

You say it’s for a better understanding. Can you specify what you don’t understand . You mention the ‘écart in red at the bottom’. Anything else?

Hmm.

I want to open up the formulae, so as to understand what drives the numbers. Apart from anything else, I would say we are paying for this material. By default, I feel entitled to getting all materials in raw (editable) form. So, I would turn the question around: what is the rationale for not sharing this one in particular?

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In defense of the architects, this is a “method” (or whatever the correct intellectual property (IP) term is) that they spent a lot of time developing across projects.

We are not paying for the method, only for its use.

In other words, they do not want to put the method into the public domain because they believe it is a way for them to offer a better price/quality ratio than their competitors. If my assumptions are correct, they should not mind one of us looking into the file, as long they can be reassured that it will not end up in the open.

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This is also the agreement on drawings: we ask before publishing.