Steven Mentor is living in a dream world that happens to be real.

He has a custom-built house just a few blocks from a university campus in that famously funky beach town, Santa Cruz. He can gaze out his windows onto a beautiful green. His 4-year-old son has a true cadre of playmates within shouting distance. And if Mentor's wife is working late and he feels like company, there are bound to be some friends gathered within a minute's stroll.

What Mentor and his family have is co-housing, a combination of private and shared space that has been fashionable in northern Europe for decades and is now rapidly gaining ground in the United States.

Although most co-housing developments have taken easier root in parts of the country where land is less expensive, the San Francisco Bay area has become a spiritual center for the movement, and is home to some of the earliest examples of this housing form.

Ultimately, what co-housing offers is "old-fashioned ideas about neighborhood adapted for this crazy 21st-century lifestyle we live," said Kathryn McCamant, who co-wrote what's considered one of the bibles of the movement, "Co-housing: A Contemporary Approach to Housing Ourselves."

That idea--building on the strength of a coherent community within the framework of individual living space--is what keeps the Peninsula Region Co-Housing group alive, said one of its founders, Stanford University network engineer Sunia Yang.

"Land and time are really scarce. Co-housing gives you the opportunity to have aspects of that by sharing," Yang said. "Instead of everyone in a town house complex with their yard that's 8-by-8, it's so much better to pool that all together. It's the perfect compromise."

In general, a core group forms to look for land, or an architect or a developer. Although some developers may see pre-sold clients as a boon, other aspects may be less so, McCamant said. In co-housing, residents play a role in the design and the development of a project, just as Mentor and his friends did.

They came together somewhat haphazardly--one friend introducing another until there were eight people who "bemoaned that even if you moved into a nice neighborhood or got your place in the country, it didn't really meet the need of having a sense that you knew other people around you well enough to trust them raising your kids and creating an environment of community," Mentor said.

They held together through a series of professional and personal moves and "knew that the sooner we did it, the better," he said. "Everybody really had to take a risk, wondering if it would work out. . . . It was a big deal."

Finding a developer was a key step, Mentor said. "We were looking for someone who'd completed projects in Santa Cruz and who seemed to be interested in [this kind] of project." They found Rich Kelley of Woodside. He and the project manger they hired had to learn to work with a group used to consensus decision making. This group grew from eight to 30, Mentor said. "But right away they saw we were practical and had a ton of experience and skills."

The group ended up with a three-acre lot with two buildable acres that now includes 10 single-family homes, six duplexes and a common house. Parking is kept outside the houses and the common green. About three dozen adults and two dozen children share the project. The private living spaces range in size from 1,200 to 2,600 square feet.

Yes, there was a process for residents who were added to the original group, Mentor said, "but it wasn't a process of deciding whether you could be on our kickball team."

Other bay area co-housing projects have been around long enough to mature beyond their first group of residents. Ken Norwood has lived at the Parker Street Cooperative in Berkeley for more than a decade and now, as a dedicated planner, gives regular van tours to show off the different types of co-housing that can be found in a day's journey.

The Parker Street project is an example of housing converted to the cause. In this case, it was apartment buildings modified to include garden strips, roof decks and a common room. There is a waiting list, Norwood said, but "it keeps collapsing because nobody moves," he said. That's a bit of an exaggeration, he admits--about half a dozen people have come and gone in the 24 units in 10 years.

The touring process is what gave the planners of another new project, in Contra Costa County's Pleasant Hill, their perspective on what kind of development they wanted, said one of its founders, Ted Lynch.

He and his wife, both Silicon Valley technology professionals, are headed toward retirement and wanted to scale back. After looking at co-housing projects in Seattle; Portland, Ore.; and Davis and Chico, Calif., they decided to stick it out for a site near home.

After several years of searching, their group found a 2.2-acre site. It's a perfect setting: Along one edge of the property is a bike path to a BART station. Fifteen households are planning 32 homes and a 4,000-square-foot common house that is one of the significant necessities in any co-housing project.

Initially, they will end up paying a bit more for their town house-style homes, Lynch said, "but the exciting part is we get to design what we're going to live in--and this will serve as a model."

The group looked at 20 locations before it found one it liked. It's putting final details on its planning application now.

Colorado-based developer Jim Leach and his company, Wonderland Hill Development Co., will be a part of the project. With several similar projects to his credit, he's now convinced that this is a kind of housing that is not going away.

"There's no question that it's more challenging," he said. "You're working with your customers from the time the project starts, but it has significant advantages because you're introducing the seed of a community."

More information about co-housing and links to other Web sites can be found at McCamant's site (www.cohousingco.com).