Cooperative Housing

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Cooperative housing is composed of a single building or a group of buildings, usually owned by a nonprofit corporation, in which residents become partial owners or “shareholders” or “members” of the nonprofit. This building contains a number of self-contained, private units and residents pay a modest share and monthly housing fees to cover the cost of housing. There are often shared amenities such as common rooms and kitchens for social gatherings, guest suites and yard / garden space. Co-ops help make urban housing more affordable using a variety of means, including restrictions on profit from resale, self-management, nonprofit status, shared facilities, and subsidies.

Cohousing is a type of cooperative housing that has seen increased interest in recent decades. Cohousing is an intentional community of private homes clustered around shared space. Each attached or single family home has traditional amenities, including a private kitchen. Shared spaces typically feature a common house, which may include a large kitchen and dining area, laundry, and recreational spaces. (Source)

Cooperative housing can be kept permanently affordable through legal restrictions on financial gain from the future sale of shares when cooperatives operate as a non-profit Limited Equity Housing Corporations (LEHC). Existing building stock can be be converted to cooperatively owned housing through tenant buyouts of existing buildings. New developments are also an option for developing cooperative housing. (Source)

Co-op housing emphasizes democratic process and consensus building to make decisions and members often share material resources, cooking responsibilities, and household chores, allowing residents increased amounts of free time to pursue personal interests and hobbies. (Source)

Value Proposition for Sustainable Consumption

According to the Sustainable Economies Law Center’s Policies for Shareable Cities:

Studies show that housing cooperatives provide other benefits like greater social support, smaller carbon footprints, reduced crime, increased civic engagement, better maintenance, and resident stability. They can also reduce foreclosures by offering large savings and spreading the financial burden over numerous people. Housing cooperatives have a long history of success and currently serve over 1.5 million U.S. households.

Cooperative housing specifically promotes sustainable consumption in several ways:

  • Smaller-sized units require fewer materials to build and lower consumption of public utilities like water, gas, and electricity than traditional single-family homes or condominiums; (Source)

  • Smaller-sized units create a cap on the amount of material goods that residents can fit into their homes, requiring tenants to live more simply, acquire fewer possessions and share tools, equipment and other material goods; and

  • Because of the organizational nature of cooperative housing, arrangements such as car-sharing and food gardening are more feasible. (Source)

  • Shared housing extends the energy and materials use through more intensive use of buildings. (Source)

  • When located in highly walkable areas, cooperative housing can reduce car ownership and single occupant vehicle trips. When located in suburban or rural areas, they may also produce substantial amounts of food. (Source)

Potential City Roles

  • Make policy adjustments—density bonuses and increases in allowable density, and fee waivers, waive burdensome development standards such as minimum parking requirements, waive administrative hurdles required of typical subdivisions. Ensure broad demographics in co-housing communities by allocating that a substantial portion of below-market units are allocated for households that earn below the median income.

  • Promote—share information about financial instruments that permit co-ownership among unrelated adults. (Source)

  • Support—offer City-owned land for long-term ground leases, create City programs to give legal, financial and technical support to housing cooperatives.

  • Fund—provide financial support for formation of urban land trusts needed. Purchase small sites for resale at below-market costs for housing cooperatives and land trusts.  

  • Lobby to higher levels of government—advocate for legislation that makes it easier for cooperatives to get mortgages, exempt coops from costly public reporting requirements, and make governance more flexible. An excellent example is California’s AB 569 passed in September 2014. (Source)

  • Incentive—offer subsidies and accessible financing.

  • Monitor—track the progress and behaviors of cooperative housing to ensure that they meet sustainability goals such as energy conservation, higher-density living, and reductions in material consumption levels of residents. (Source)

Implementation Challenges and Potential Solutions

  • Financing—Because residents tend to have lower incomes than single family home owners, the burden of maintaining a building or property can be intimidating or even prohibitive. However, when co-op members form an LEC, taking out low-interest mortgages and loans becomes possible, relieving some immediate cost burdens. Cities can also develop programs to acquire sites and buildings that they make available to co-ops and community land trusts at low costs and low interest rates. (Source)

  • Occupancy Limits & Zoning Restrictions—Many cities’ municipal codes include a limit on the number of unrelated occupants allowed to reside on a property. The limit is often set at between 3–5 unrelated residents (Source). One solution is to perform a code scan and propose code changes or amendments to eliminate rules that limit the number of unrelated residents allowed on a property. Another step could be to include a strategic priority for cooperative housing in your community’s comprehensive plan update.

Further Resources