Money

How 6 Friends Who Bought a $1.3M Toronto Home Make It Work Together

Talking everything out, so much scheduling, and not going into debt to reno the basement.
January 23, 2020, 4:25pm
How Six Friends Pooled their money and bought a house
Five of the six co-owners. (Back row, left to right): Alexandra Stokes, Mandy Sherman. (Front row, left to right): Karim Rizkallah, Sabrina Bowman, Valery Navarrete. Photo supplied by Karim Rizkallah.

A year ago, VICE wrote a story on six people who pooled their money to buy a $1.3 million house together in downtown Toronto. What made their situation unique is that they’re all just friends and acquaintances—there are no couples, no siblings, no family.

A year later, all the original housemates—whose ages range from 29 to 39—still live together and remain committed to their five-year joint ownership mortgage. Normal housemate annoyances like juggling everyone’s food and decor preferences have been “pretty smooth,” says housemate Valery Navarrete.

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They even managed to solve one of the greatest co-living questions of our time: whether the toaster should sit permanently on the counter, or be put away (for the record, it needs to stay on the counter for easy access).

Getting to this point hasn’t been easy. With ownership stakes ranging from 2 percent to 38 percent, they moved into a newly renovated seven-bedroom house in August 2018. The first few months of living together was heavy on administrative stuff. But the past year has been all about managing relationships and figuring out how six individuals and their partners, friends, and one part-time puppy, can co-exist harmoniously. It involves tons of communication, organization, and in-depth financial transparency. And even with all that, there are still disagreements over money and kitchen clutter.

Canada doesn’t specifically track the existence of co-ownership mortgages (there are stats on the number of ownership arrangements between multiple people but no indication of what the relationship between them is). But there is anecdotal evidence that these kinds of arrangements are becoming more common.

Services such as weOwn, match prospective buyers with potential co-owners. And in December the Ontario government issued a guide to co-owning a home. According to the document, “fresh approaches will give people more options and access to housing that is affordable.”

The provincial guide came up at one of the housemates' weekly dinners. They were glad that the issue has gotten big enough for policymakers to pay attention to, but according to housemate Alexandra Stokes, the document’s approach was simplistic and “kind of funny.” It presented a one-size-fits-all approach to issues that come up with co-owners, when in their household’s experience, problems are “unique to whatever the context and the situation is.”

Talk it out

The housemates say the key to the success of their “community-living” project is communication—they’ve all had one-day sociocracy training, which is defined as a system that seeks to achieve solutions that create harmonious social environments. Over the course of our one-hour chat, the word “intentionality” comes up seven times and “respect” five.

Clearly, a lot of thought has gone into how they resolve conflicts as a group. One strategy they use is called “rounds.” When disputes arise, most often around money, the people who don’t see eye-to-eye are given a set amount of time at the monthly house meeting, usually a minute or so, to share their opinion with the group. This goes on until they can come to some kind of consensus, as opposed to a majority, so they can decide collectively.

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The housemates say they rarely need more than a couple of rounds to solve an issue—meaning things can be settled in less than half an hour. They’ve used this strategy to figure out how to let the group know about visitors (by group chat for long-term guests) as well as whether or not to host monthly dance events (yes, and they’ve been dubbed “Wonder Wednesdays”).

According to Navarrete, managing the natural ebbs and flows of the house has been a real learning experience. “We can have 20 people in our house on a weekday for movie night and even if I’m not watching the movie, it reverberates and feels like it’s shaking with the movie soundtrack. It’s this nice, cool feeling of a full house,” she said. As a group, they talk a lot about what is the right mix of “quiet and activated times” to ensure they don’t push anyone past their limit.

The purpose of this co-ownership arrangement isn’t just to get into a prohibitively expensive housing market, says Navarrete. It’s also a social statement about the importance of human interaction in a culture that can promote loneliness and isolation.

According to Canada’s latest census data, more people live alone than ever before, and the number of single-person households has more than doubled in the past 35 years.

Money

Money comes up often at the housemates’ meetings. But they planned ahead for this by having everyone share and discuss their finances in detail even before they took ownership of the house. “We not only shared our financial history with each other, but our relationship to money. We tried to build empathy,” said Navarrete.

Personal history shapes how some of her housemates feel about spending as a household. The ones who had debt, including student loans, have been reluctant to take on more debt. This came up during a meeting about renovations. The housemates needed to decide whether or not to finish the basement, which would have cost between $10,000 and $15,000, and if they should borrow money to do it.

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Navarrete says some people were dead set against borrowing money for renos and in the end, they didn’t have to. They got the basement done within budget.

“Every time I’ve had the thought that a conversation is going to be really hard and dreaded it, I’ve had it and it hasn’t been,” said Stokes. She credits “listening actively” and “taking care of their emotions” for allowing her and her housemates to resolve things and “feel connected.”

Another sociocracy tool is their “house code” which lays out their collective values, culture, and provides a framework for anything household-related such as chores and food. For instance, they buy groceries as a group and people can make individual requests.

"Life happens"

One topic that came up recently at a meeting was trust, and how their household depends on it. “The immediate reaction you get from people when you talk about our home is ‘Oh, I could never do that! I’d have to enter into all these agreements with other people that I may or may not have an existing relationship with,’” said Stokes. “But we have an incredibly high level of trust among our group.”

According to Canadian Mortgage Brokers Association spokesperson Brendan Munro, “co-ownership might work in a rare case where close friends or relatives share a high degree of trust, solid financing, and a workable exit strategy, but for more would-be homebuyers, the co-owner solution presents too many complicating factors.” He recommends trying to find a relative or parent to help out instead.

The housemates say they’re living proof that co-ownership can work well for young people. But they know that because of their age, the chances of one or more housemates deciding to leave is high. So they’ve created an exit plan that allows people to break the agreement with no hard feelings. Remaining housemates would get first dibs on the ownership stake that becomes available, which would be offered to others based on a collective agreement.

“From the get-go we had this joke called ‘The Dream Job in Copenhagen Situation.’ We’ve always operated around the understanding that life happens and that the chances that six people, especially in the life stages that we are, all being able to stay until the end of an initial five-year term was unlikely,” said Navarrete.

“When I read comments on the first VICE article, there were always people who said we wouldn’t last a year,” said Stokes. The housemates say they’re proving that this kind of arrangement can last—but it takes a lot of work, and…“intentionality.”

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