HOUSING CO-OPS AND OTHER HOUSING ALTERNATIVES
Current Economic & Demographic Trends
...are making it increasingly difficult for many individuals, especially in rural areas, to find safe, affordable housing. These trends include:
For many people, this combination of factors has resulted in a high level of dissatisfaction in their living situation, and has motivated them to look beyond the traditional nuclear family home.
A variety of alternatives are described here, ranging from cooperative
housing to examples of housing alternatives that offer some of the same
advantages of community that co-ops do.
1. Housing Cooperatives
Housing cooperatives are a form of multi- family homeowner-ship. Tenants can join together to form a cooperative corporation which owns the building(s) in which they live.
Residents buy a share (membership) in the co-op, but the cooperative owns the building(s), land, and any common areas. Residents are entitled to live in a housing unit as part of their membership benefits. Members pay a fixed amount each month that covers basic expenses, including mortgage, property taxes, maintenance, insurance, utilities, and reserves. As owners, members exercise control over their housing situation by electing a board of directors made up of other residents.
Note that this is very different from a condominium, where residents each own their individual housing units.
Some people have the misconception that hous-ing co-ops are like communes, where residents all share meals together and have no privacy. In fact, each member/resident of a co-op has his or her own private housing unit. Cooperatives by their nature tend to promote a balance of privacy on the one hand and community on the other.
Upon joining, members sign an occupancy agreement, which specifies in
contract form the member’s rights and responsibilities. These generally
include the member’s right to occupy a dwelling unit and participate in
the governance of the co-op. These are granted in return for his
or her financial support in the co-op and taking part in its operation.
Members cite a variety of personal advantages to living in a housing cooperative. We list only some of these.
Democratic Control and Participatory Decision-making
Predictable Monthly Costs
Social and Cultural Advantages
2. Cooperative Housing for Seniors
Several of the trends in housing discussed above have hit rural areas particularly hard. These include the overall aging of the population, the increasing number of senior citizens, and the dominance of rural single- family housing stock by older people.
As the population has aged, developers have rushed to build assisted living housing complexes for seniors throughout the country. These units, however, are geared toward seniors with moderate to high incomes. Yet according to the National Cooperative Bank Development Corporation, about two-thirds of the nation’s seniors cannot afford such assisted living housing. Cooperatives and other cooperative-like housing options are seen by many as affordable and replicable models of senior housing that focus on rural communities.
Although the nation is aging, people tend to be healthier and live longer. Thus, many seniors do not want or need to live in a nursing home. They may not need assisted living, but do want something easier than a large family-size home. They are healthy and active and want a housing situation that meets their needs.
Cooperative housing for seniors offers one answer, providing homes designed for seniors who wish to remain independent in their local community. This strategy also serves to free up single-family homes for younger families in the community.
Homestead Housing Center (HHC), based in St. Paul, Minnesota, has been a leader in developing housing cooperatives for seniors. HHC is a non-profit organization started by the Cooperative Development Foundation and several Midwestern regional agricultural cooperatives. Homestead, with its rural emphasis, has started 12 new senior housing co-ops in the upper midwest, often in towns with less than 10,000 people.
Cooperative housing is quickly becoming popular among seniors. Co-ops allow seniors to retain the advantages of home ownership (income tax deductions and equity accumulation); as well as enable seniors to retain complete control over their housing - including the operating budget and monthly living costs.
Homestead provides development, design, and organizational services, but puts special emphasis on partnering with local sponsors to spearhead the housing development and provide matching funds. HHC’s philosophy includes stepping aside after the housing units have been planned and built. Then the senior owners take over, planning the annual operating budget, charting policies and overseeing building improvements.
Thus, Homestead has helped hundreds of seniors to continue to live their
lives independently yet in a community, and have control over their living
situation. Housing cooperatives allow seniors to retain their freedom
while having access to a built-in community.
Co-housing has some similarities to housing cooperatives, but also has some important distinctions that make it an interesting option. It is a type of housing development that attempts to address residents’ needs for both private and community life.
As noted above, a number of demographic changes have taken place in this country during the last 30 years. The available housing, however, has not changed to accommodate those trends. Thus we have an increasingly diverse population living in housing which no longer fits the needs of most people.
Most people in America don’t live near people of different ages and races; they have to drive somewhere in order to be in a social situation; they often don’t know their neighbors; they are isolated within their homes. Co-housing grew directly out of peoples’ dissatisfaction with these issues and their existing housing choices.
Co-housing is not a new idea. Throughout history most people lived in small villages where everyone knew each other and all were linked socially and economically. Co-housing is an attempt to recreate this sense of community, yet be responsive to contemporary needs for greater freedom, independence, and diversity.
In other words, co-housing offers the advantages of traditional close-knit communities for late 20th century people. Co-housing residents are simply looking for a stronger sense of community than they found in urban and suburban neighborhoods. Co-housing attempts to overcome the current patterns of segregation by race, income, and education that are so prevalent in American housing and neighborhoods.
The first co-housing development was started in 1972 outside of Copenhagen, Denmark by 27 families who were looking for a greater sense of community than other housing options provided. They sought to create a more practical and social neighborhood, where mutual assistance in day to day chores like laundry, meal preparation, and child care might be available if they wanted to participate. They also wanted a safer, friendlier environment for their children to grow up in.
Co-housing communities are diverse, varying greatly in size, ownership structure, and design in order to fit the needs of the individuals and families that start them.
According to McCamant & Durrett, regardless of the ownership structure, all co-housing communities share these three common characteristics:
4. Self-Help Housing
In the Self Help Housing Program, participants’ labor replaces their financial investment. The average participant is about 30 years of age, married with two children. As a result, they have not had much chance to save the money needed for a down payment. The Self Help Housing Program gives them an opportunity to trade labor on their own and their neighbors’ homes in exchange for a downpayment.
Qualified participants are organized into a formal building association. Participants are expected to exchange labor on one another’s houses, and no one is permitted to move in until all homes are completed and have passed the final inspection. The group effort among five to sixteen households results in building not only homes, but whole neighborhoods.
The labor requirement for participation in a self-help group is 40 hours per week for up to eight months. Because most participants also work full time, in effect they put in 80 hours per week during the construction period. Most of the work gets done on weekends, with spouses and other family and friends splitting the work commitment.
The Self-Help program staff provide instruction and supervision on construction
techniques, and must guarantee that the construction will be completed
within the established time frames and within budget limits. Staff
first carefully screen potential participants, both for their financial
situation as well as their ability to work within a group. The Group
Coordinator of each self-help group also facilitates group dynamics, helping
to ensure a smooth operation despite a
By assisting low and moderate-income families to build decent, affordable
housing, the Self-Help program promotes stable communities. As homeowners,
participants are more likely to be interested in their neighborhoods, protective
of their environment, concerned about schools and recreation facilities,
and more apt to become involved in local government and civic organizations.
TYPES OF HOUSING COMPARED
(1) The Condo Assn. owns the entire project, although individual units are owned by individual investors.
(2) The owner has some control built into the management agreement so as to ensure fiscal responsibility.
(3) Must pay a membership fee in order to become a member of the cooperative.
(4) A cap is established on the transfer value of the member share in order to maintain affordability.
(5) Requires approval of owners.
(6) Owners control management but may be absentee.
(7) Need to find a buyer (or sell to the co-op).
(8) Must find a buyer.
SOURCE: Chicago Mutual Housing Network.
Center for Housing Training: 1120 Rhode Island Ave, NW, Washington, DC 20005; (202) 667-3002. The Center for Housing Training provides training and technical assistance to housing corporations and non-profit developers of housing corporations. The center provides property management computer software for cooperatives and rental properties.
Chicago Mutual Housing Network: 2125 W. North Ave, Chicago, IL 60647; (312) 278-4800. The Chicago Mutual Housing Network is a federation of organizations (co-ops, condominiums, and resident management companies) and their many supporters. It is dedicated to the development of more and better housing for low to moderate-income families in Chicago through the expansion of mutual housing models. The Network offers established mutual housing organizations the advantages of scale, pooled resources and expert information such as start-up advice and legal directions.
Cooperative Housing Foundation: P.O. Box 91280, Washington, DC 20090-1280; (301) 587-4700. The Cooperative Housing Foundation is a non-profit organization dedicated to the development of better housing and related community services for low and moderate income families.
Cooperative Services, Inc (CSI): 25900 Greenfield, No. 326; Oak Park, MI 48237-1267; (248) 967-4000. CSI is a private, non-profit housing cooperative that promotes a model of affordable resident-assisted housing for seniors. CSI has 32 individual co-op apartment builings that house 5,000 independent living senior members.
Homestead Housing Center (HHC): 5500 CENEX Dr., Staion 210; Inver Grove Heights, MN 55077-1733; (612) 451-4930. HHC was created by the Cooperative Development Foundation and twelve midwestern regional cooperatives to develop cooperatively-owned housing alternatives for seniors in rural communities. HHC provides seed money, development expertise, and financing to assist development projects.
National Association of Housing Cooperatives: 1401 New York Avenue NW Suite 1100, Washington DC, 20005-2160; (202) 737-0797. The National Association of Housing Cooperatives is a national federation of housing co-ops, professionals, organizations and individuals, organized to promote the interests of housing cooperative communities.
Urban Homesteading Assistance Board (UHAB): 40 Prince St., 2nd Floor, New York, NY 10012-3499; (212) 479-3300. The UHAB works to make cooperative ownership opportunities available to the lowest income residents of some of America’s most distressed neighborhoods.