Co-op Housing

A housing cooperative is a form of homeownership where members live in and manage the property. They take on responsibilities like organizing social activities, handling maintenance, managing finances, and maintaining the grounds. Members set the bylaws and elect a board of directors to oversee operations and ensure adherence to the cooperative’s rules. The board organizes at least one annual meeting and hires staff to manage day-to-day operations.

A housing cooperative is created when individuals join forces to collectively own and manage the buildings they live in. They form a cooperative corporation, pay monthly fees to cover expenses, and buy shares in the cooperative, which owns the land, buildings, and shared spaces.

• Market rate cooperatives sell shares at full market value, allowing prices to fluctuate based on the market, leading to potential equity gain or loss
• Limited equity cooperatives cap the sale price to ensure long-term affordability, with benefits lasting indefinitely.
• Leasehold cooperatives lease the property from an investor, sometimes with the option to buy, but members don’t own the cooperative itself.
• Senior housing cooperatives can be market rate or limited equity, designed for seniors.
• Mutual housing associations are non-profits that develop and manage housing, with residents in control of the association.

Members own shares in the cooperative, which owns the land, building, and common areas. Each member’s right to occupy a specific unit is governed by an occupancy agreement or proprietary lease.

Members own shares in the cooperative, which gives them an ownership interest in the corporation and the exclusive right to occupy a particular unit, governed by an occupancy agreement or proprietary lease.

The cooperative’s board of directors must approve the sale of units to ensure that new members adhere to the cooperative’s rules. Selling a unit usually comes with lower closing costs, and the new member takes on the seller’s financial responsibilities.

Cooperatives are governed by a democratically elected board of directors, with each member having one vote.

In smaller cooperatives (under 20 units), members often manage the property and perform maintenance tasks. Larger cooperatives may hire external management, but members are still responsible for policies on screening, eviction, and foreclosure.

A new member purchases shares in the cooperative, granting them the right to occupy a unit. They also agree to pay monthly fees for operating expenses and can borrow part or all the share price, with the loan secured by the cooperative shares.

Cooperative members can deduct their share of mortgage interest and real estate taxes, as well as any interest paid on a share loan, similar to single-family homeowners.

In a cooperative, members own shares in the corporation that owns the building and have the right to live in a specific unit. In contrast, condominium owners hold title to their unit’s airspace and share ownership of the common areas.

Cooperatives provide lower monthly costs, tax benefits, equity growth, limited liability, and overall savings through shared purchasing and cost-sharing. They also foster a sense of community and offer greater housing stability.

Housing cooperatives can apply to different property types, including high-rise apartments, garden-style apartments, townhouses, single-family homes, senior housing complexes, and manufactured home parks. In manufactured home parks, the cooperative usually owns the land and shared facilities, while members own their individual homes.

Cooperatives foster social and civic engagement, helping neighbors form beneficial enterprises like block clubs and childcare cooperatives. Studies show that cooperatives contribute to higher civic participation and lower crime rates in neighborhoods.