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What is a housing co-op?​

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A housing cooperative is a corporation formed for the purpose of providing housing to its members on a continuing basis. It is owned and controlled by its members. A cooperative is distinguished from other housing associations by its ownership structure and its commitment to cooperative principles.

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Housing co-ops have a long history of providing quality, affordable housing.

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Is a housing co-op right for me?​

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Living in a co-op calls for commitment, mutual respect and a collaborative approach. It is good for people who want a sense of community and shared control, and who are able to contribute productively and respectfully.​

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Benefits of Joining a Co-op

 

• Affordable Access: Low initial buy-in and modest monthly fees make housing available to people with lower income and less accumulated wealth.

• Stable Tenure: Members stay in their homes for as long as they wish (so long as they follow the rules), and are protected from arbitrary rent hikes or evictions by speculative landlords.

• Democratic Control: Members participate at various levels in how the operation is run, and have an equal say in electing the governing board and other major decisions.

• Community & Security: Living in a shared place fosters opportunities to interact with people from different backgrounds and life experiences. Knowing your neighbors typically leads to lower crime rates and more sense of security.

 

Challenges of Joining a Co-op

 

• Mutual Accountability: All members are expected to contribute while they live there.

• Responsibility: Members decide major legal and financial issues, as well as take responsibility for some of the upkeep and operations of the co-op.

• Social Intensity: Problems and conflict can feel more intense in the co-op context.

• Time Commitment: Making informed group decisions, serving on teams and committees, and doing the work needed all take time.

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What do residents actually own?

 

Though residents may live in individual dwellings, what they own is a membership share in a cooperative corporation that owns or leases all real estate. As part of your membership in the co-op, you have the exclusive right to occupy a specific dwelling for as long as you want, provided that you follow the co-ops policies and pay a monthly carrying charge. You also have a vote in how the co-op is governed and how your housing is managed.

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In a Market-Rate Co-op you can buy or sell a membership share at whatever price the market will bear. Purchase prices and equity accumulation are very similar to condominium or single-family ownership.

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In a Limited-Equity Co-op the proceeds members can get from selling their shares is limited by the pre-determined formula stated in the bylaws. This keeps the cost of shares low and preserves affordability for future members. 

 

In a Leasehold Co-op the co-op leases the property from an outside entity, often a non-profit organization. While members do not have financial ownership of the property, they can benefit from greater stability, control, and affordablity when compared to rental housing. A primary reason for this arrangement is if public subsidies used to fund the development do not allow for resident ownership.

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What is a carrying charge?

 

A carrying charge is the monthly payment that each member makes to

the co-op that covers all of the co-op’s expenses, including debt service, insurance, maintenance, replacement reserves, utilities, and other operating expenses.

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