Friday, June 17, 2011

Tübingen's Development Story: part 3

If you haven't already read part 1 or part 2 of Tübingen's Development Story, better read them first...

You and your group have just decided on a general design for you building: like most in Tübingen, it will be narrow, fairly deep, and fairly high - five stories, in your case. It will have buildings right next to it on either side, so the windows will all be either in the front or the back. The dentist's office will be on the ground floor and his family apartment will occupy one of the floors above; the retired couple and the professor's family will each have a floor too. You get to share the top floor with the two students.Französisches Viertel (French Quarter Project, completed 1993)

But you really don't have the money for putting up a five-story building! The retired couple have some savings squirreled away, but the two working families have none to spare. The students? You? Don't even ask!

So the group will have to try to get a bank loan. Sounds pretty unlikely for a motley crew like yours to get a loan, doesn't it? Well, at first it was. When the city of Tübingen first started this system, cooperative groups had a hard time. But now, it's really no problem. According to Herr Soehlke, the banks discovered an interesting fact: cooperative groups were more reliable than developers. Here's why: if a development doesn't work out and the development company goes out of business, the borrower legally ceases to exists, so the loan becomes a write-off for the bank. But the cooperative group is treated as a collection of individuals. Each one receives a loan for a portion of the building costs. If an individual defaults on their part of the loan, they normally have heirs or next-of-kin who inherit the liability and the legal responsibility to repay the loan. So the banks have found it's actually preferable to lend to these cooperative groups than to development companies!

The City has invited representatives of the banks to come to City Hall on the fifth of July to conduct loan interviews with co-op groups interested in putting up buildings in the Alte Weberei project. That way, the co-ops can get terms from several banks and make their own decision on which they want, rather than leaving it up to a bank to decide on them. You've talked it over among ourselves, and decided that the two families and the retired couple will be permanent members of the cooperative and secure the loan. You and the two students will rent your apartments from the cooperative, since the three of you aren't in a position to make a long-term commitment to a bank.

The three families who form the core of the coop will decide on an architect, but all of you will have input on the floor plans for your floor. You and the two students sit down together one evening in a coffee shop in Tübingen to talk about design ideas. After a lot of ideas are batted around and you're all laughing together, several rough sketches grace the napkins at your table. During the next couple of weeks, each of the families goes through a similar exciting exercise, and before long you're all ready to meet with the architect.Französisches Viertel (French Quarter Project)

Of course no plans can be finalized until the actual building site has been assigned. That process takes place Monday, July 11 (for real!). A committee from the City Planning Department sits down at a big table and sorts all the applications by size and by preferred location. Then the hard part begins: discussing the relative community benefits of each application. At the moment, we don't know how many applicants there will be compared to the number of lots available. In the past, there have been more applicants than space, meaning that some have to be turned down, or at least put on a wait list.

Assuming your coop actually gets into the project, it will be 18-24 months before your building is ready for occupancy. Meanwhile, you'll have to rent a room somewhere in town, or perhaps in an outlying town where you can take the train in to Tübingen every day. Either way, it won't be inexpensive...but I guess you knew that Germany isn't cheap before you came, right?

Well, good luck! I sure hope your co-op gets in - if so, I'll be jealous of you!

To learn more (and in case your German is rusty, here's Google Translate)

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