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Cooperative Housing: Providing Community and Affordability Where You Live

I have a passion for all types of cooperatives as a way to provide a better quality of life, this includes housing co-ops.


In today's world, many feel alienated and isolated in our society. People lack any sense of community and are disconnected from others. We don't know who our neighbors in our own neighborhood are beyond possibly their name. Such disconnection can lead to feelings of loneliness and even depression. People don't know what to do. Our technology such as smartphones and social media only contribute to the alienation rather than bring us together.

Another problem is trying to find more affordable housing options as housing prices continue to soar. Our homes may become an investment for some but have started to price many out of the market. Rents are also continuing to rise.

One solution to both problems might be cooperative housing. Housing Co-ops have provided a more affordable housing choice for millions while helping to connect people together to create a better quality of life. In this article, we will look at what is cooperative housing; the different types of housing cooperative; and finally, the advantages of cooperative housing.

What is a Housing Cooperative?

A housing cooperative is where a group of people collectively own an entire residential building or complex together. No one owns a specific apartment, condo, or house. Each co-owner within the co-op is issued stock and is entitled to live in one space within the building or complex. Thus, each person or family would be given a condo or house. Members jointly manage and make decisions for the co-op and its property. Often, the members will elect a board to make day to day decisions. There might be a mortgage on the property itself, and owners pay a proportionate share of the loan payments, maintenance, taxes, and other fees. Everyone shares the responsibility, the rewards, and, at times, the burdens that come with the building or complex.

Types of Housing Co-ops

There are two basic types of housing cooperatives, market rate, and limited equity. Market rate co-ops will allow its members to sell its stock at market rate, much like a traditional home or condo sale. A limited-equity co-op will cap or set what stock can be set at if a member decides to move. The limited equity obviously reduces the investment value but at least lets its member recoup money paid in and possibly a bit more. The main reason for a limited equity co-op is to provide a more affordable housing alternative for people. Limited equity co-ops in many cases, may receive grants or government subsidies to make it easier to start and give aid to low-income people seeking affordable housing.

A third housing co-op is a renter’s cooperative where the property is not owned by the renters but it collectively managed by them. This could take many forms, one could have a traditional landlord that sets up a cooperative for its renters to manage. This may offer tax savings for the landlord and may be easier to hold. It may also offer tenants a greater voice in where they live. Tenants could also go together to collectively lease a building and then cooperatively manage it. A church or nonprofit entity could set up a renter’s cooperative to offer more affordable housing to people. Most of this article is focused on limited equity housing co-ops owned by its members, but a renter’s cooperative may be a great option for people who are not ready to buy but want many of the advantages of a housing co-op. In some cases, it may be possible for a renter’s cooperative to buy the property from a nonprofit organization already leasing to them so that it can be turned into a limited-equity housing cooperative. This will allow renters the opportunity to become property owners.

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Advantages of a housing co-op

One clear advantage of Cooperative housing is that it can offer a sense of community to the members that live there. The community is intentional and people consciously choose to join. Neighbors are there to help and support each other, and this is generally a tenant within the co-op. People have the chance as past generations did, of forming close-knit communities. It may even function much like an extended family. Neighbors can provide added security to one another as well as a chance for social networking. Shared activities such as cooking and community gardening are also possible which increases civic engagement.

Another advantage is that a housing co-op is run by the members, usually a direct democracy but in some cases, they will elect a board to make day to day decisions. Participation is key within the cooperative. Everyone’s voice is to be heard, not just with formal votes but anything going on such as planned activities. When a person joins a co-op, this is usually explained to them within educational instruction that goes on for new members. With a greater voice for everyone, there can be greater social cohesion. This often can lead to better quality and maintenance of housing for sustainability.

A third advantage and probably one of the most important is that with a limited-equity co-op, it strives to make housing a more affordable option. Quite often, a buy-in would be half or less of what you would pay for a home on the market. This is important in many very pricey city markets within the United States but even for more modest housing markets. Many younger, lower, and middle-income people are simply being priced out of the market. Subsidies may also make a housing cooperative more affordable as would lower operating costs and shared spacing. For renter’s co-ops, the profit motive for the landlord may also be gone.

Finally, there may be tax advantages to living in a housing co-op depending on how it is legally structured. If the co-op is set up as a nonprofit entity, then there will most likely be savings on both property taxes as well as money paid to the co-op which can be deducted from income taxes.

Closing thoughts

As we have seen, housing cooperatives can offer a more affordable housing option as well as one that allows people to connect to their neighbors, something which has been lost for millions of people today. Housing cooperatives can take many forms and offer people a voice within the community that they live in. It can offer the dream of ownership for people who otherwise may not have that opportunity.

Here is a short video that shows exactly what a housing cooperative is like to live in firsthand.

© 2019 Jay Spillers

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