Housing cooperative
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A housing co-operative is a legal form of real estate ownership where residents own shares in the legal entity which owns an entire group of homes, usually one or more apartment buildings. Each shareholder typically has a lease agreement between the person and the co-op, and the co-op's rules typically provide tenure for its residents, and expulsion usually requires a substantial majority vote of members.
Each resident or resident household has membership in the co-operative association. Members have occupancy rights to a specific suite within the housing co-operative as outlined in their "occupancy agreement", which is essentially a lease.
In essence, a co-operative is neither full home-ownership nor full rental, but rather a separate and distinct type of housing on the spectrum that includes these other types of home ownership. Co-operative ownership is quite distinct from condominiums where people own individual units. Because of this, most jurisdictions have developed separate legislation, similar to laws that regulate companies, to regulate how co-ops are operated and the rights and obligations of shareholders.
In most cases, a key factor in the way a co-op works is that each shareholder has only one vote, compared with, for example, strata-title ownership, where the number of votes an owner has is tied to the number of shares owned by the person. This one-person, one-vote concept makes a significant difference because owners literally have to co-operate with each other, and convince a majority of them, to accomplish tasks or give political direction through policies. Although politics vary from co-op to co-op, depending entirely on its mix of members, it isn't usually too difficult to do achieve specific decisions on the way a housing co-op operates. Most housing issues have pragmatic solutions, and the differences between factions are often one of emphasis, rather than divergence.
A co-op typically elects its board of directors from amongst the shareholders at a general meeting, usually the annual general meeting, and the board typically elects its own table officers, such as a president, vice-president and so on. Usually, the directors are volunteers, or are paid an honourarium. The board then establishes standing committees from among the shareholders, who usually also volunteer their time, to handle the business affairs of the co-op, such as its finance, membership and maintenance of its housing units.
The co-op is a legal entity similar to a company. It can contract with other companies or hire individuals to provide it with services, such as a maintenance contractor or a building manager. It can also hire employees, such as a manager or a caretaker, to deal with specific things that volunteers may prefer not to do or may not be good at doing, such as doing electrical maintenance.
A housing co-op is non-profit, by definition, since usually most of its income comes from the rents paid by its residents, who are invariably its members. There is no point in creating a deliberate surplus -- except for operational requirements such as setting aside funds for replacement of assets -- since that simply means that the rents paid by members are set higher than the expenses. (Note, however, that it's quite possible for a housing co-op to own other revenue-generating assets, such as a subsidary business which could produce surplus income to offset the cost of the housing, but in those cases the housing rents are usually reduced to compensate for the additional revenue.)
Co-ops need not be populated by low-income people, or those whose politics are left of centre. There are housing co-ops of the rich and famous - John Lennon of the Beatles, for instance, lived in a housing co-operative. However, housing co-ops tend to attract those with strong collective or co-operative social skills and values.
It is relatively difficult to start a housing co-op because if the idea is, for instance, to build a building or group of buildings to house the members, this usually takes a significant mortgage for which a financial institution will want assurances of responsibility. It will also take a year or more for the members to organize the design and construction, as well as time and some expertise to establish even basic organizational policies. It is rare that these kinds of skills of organization are available in a random group of people who, often, have pressures on their existing housing. And, all the time this is occuring, the members must find a way to stay together and organized for that duration.
It can be somewhat easier to organize a group of closely related housing units, such as an existing apartment building whose owner is thinking about selling it on the market and the residents are worried about their tenancy, but this usually takes one or more activists who have a fairly good idea of what they're trying to accomplish and how to go about it.
The federal and provincial governments in Canada solved this problem for many years by developing, in the 1970s, specific legislatiion that aided the lending part of the equation through high-ratio, low down-payment mortgages via an agency called the Canadian Mortgage and Housing Corporation (CMHC), and similtaneously encouraging the development of non-profit agencies to develop the social structure of housing co-ops by finding suitable members, educating and organizing them, and installing them, much like the plumbing, into turnkey buildings independly constructed or organized, and these organiztions often help in forming initial policies and holding the organization together while all the necessary work was done.
The federal government tied this to requirements that such housing co-ops provide a percentage of their units, usually at least 15% to 20%, for what are termed income-tested residents. These people voluntarily provide information to the co-op on a confidential basis about their gross income, and their rent is calculated according to a formula. If the calculated rent is less than the market rent of the units, then the federal government, through another formula, would provide funding to those units to bring their unit revenue up to the market rate. This produced mixed-income co-op housing, in which relatively well-off people lived side-by-side with relatively low-income people and worked with them on committees. This often had the ripple effect of improving the financial health of those less well-off. (It's interesting to note that, depending on your political point of view, such government payments for offsetting the rent could be considered subsidy of the low-income people, or a contractural business arrangement between the government and the co-op which helps to stabilize revenue to the co-op in exchange for accomplishing a social goal for the government for a specific period. This dichotomy is typical of the fact that a housing co-op is somewhere between a corporation and a social agency, and where one places it depends on one's viewpoint -- and the collective viewpoint of each housing co-op.)
Political will dissipated in Canada in the 1990s, however, as other issues occupied politicans and financial belt-tightening by the governments reduced the funds available for the mortgages. In 2004 and 2005, however, the political winds shifted back towards the idea of developing more low-income housing.
In Canada, there are associations of housing co-operatives. The major one is the Co-operative Housing Federation of Canada (CHF-Canada). Most provinces have similar organizations for their area, but many are stand-alone members of the CHF-Canada, as opposed to being branches of it. Each such organization charges its member co-operatives a fee based on the number of housing units in the co-op to pay for staff to do its work. This includes lobbying governments, setting up self-help funding and the like.
A co-operative housing project can resemble a traditional apartment building, or it can be the basis of an intentional community.
Student-owned and -operated housing co-operatives exist to provide low-cost housing to university students. Examples of such cooperatives exist in Ann Arbor, Michigan, Austin, Texas, and Madison, Wisconsin.
"Building co-operatives" are formed by members who cooperate to build their homes but own their houses on completion. Building co-ops were extremely popular across Canada from the 1930s to the 1960s.