PolicyLink - Limited Equity Housing Cooperatives -- Resources

Technical Assistance Providers
Additional Reading
The Rochdale Cooperative Principles
Sample Cooperative Bylaws
Operating Budget Considerations
Resale Controls: Examples of Provisions

Technical Assistance Providers

1. National Housing Survey 2000 Census Data
phone: (301) 457-3199
email: ahsm@census.gov

2. Ann Henderson & Andy Reicher
Urban Homesteading Assistance Board (UHAB)
phone: (212) 479-3300
email: reicher@uhab.org

3. U.S. Department of Housing & Urban Development (HUD)
Information Center
phone: (202) 523-4400

4. National Association of Housing Cooperatives
1614 King Street
Alexandria, VA 22314
phone: (703) 549-5201
Terry Lankford - Director of Marketing and Membership
(202) 383-5478 email: terri@coophousing.org

5. Herb Cooper Levy, Executive Director
Robert Pierre Johnson Housing Development Corporation
2666 Military Road
Arlington, VA 22207
Phone: (703) 528-5606x13
Fax: (703) 351-9754
email: Herbcl2@aol.com

6. The Center for Cooperative Housing
1614 King Street
Alexandria, VA 22314
Phone: 703-684-3185
Fax: 703-549-5204

7. Cooperative Housing Coalition
1401 Eye Street, NW
Suite 700
Washington, DC 20005
(202) 336-7750
email: tlewis@coophousingcoalition.org

8. We Own.Net
by Association for Resident Control of Housing -
781-777-1119
email: ta@weown.net

9. CUNY Center for Human Environments
Susan Saegert
212-817-1886
email: susan saegert@aol.com; ssaegert@gc.cuny.edu

note: National Cooperative Bank is the umbrella organization for the NCB Development Corporation and the National Cooperative Business Association

10. National Cooperative Bank
1725 eye Street, NW, Suite 600
Washington, DC 20006
Phone: (800) 955-9622
(202) 336-7700
www.ncb.com

11. National Cooperative Business Association
1401 New York Avenue, NW, Suite 1100
Washington, DC 20005
Phone: (202) 638-6222
Fax: (202) 638-1374
www.ncba.org

12. National Cooperative Bank Development Corporation
1725 Eye Street, NW, Suite 600
Washington, DC 20006
Phone: (202) 336-7680
Fax: (202) 336-7804
www.ncbdc.org

Additional Reading Materials

Heskin, Allan The Struggle for Community
Available through National Cooperative Business Association
Item #: 88T
Price: $24.95
Multi-ethnic, working class tenants in Los Angeles successfully fought displacement by a proposed freeway and wound up creating a housing co-op. How are tenants empowered? What are the roles of class, ethnicity and gender in community struggles? (195 pages; softbound; Westview Press)

Heskin and Leavitt, The Hidden History of Housing Co-ops
Contains background info/partial case studies on Brooklyn (Utica Ave), p.165, and Harlem, p.169; general info on city program, TIL, and history of Harlem co-ops

Lategola, A.R. Paradise For Sale
Available through National Cooperative Business Association
Item #: R32
Price: $10.00
Tenant organizing and attempted cooperative conversion at Paradise Manor Apartments, a low-income housing complex in a neighborhood notorious for crime and drug problems. Puts a human face on the struggle of inner city residents to take control of a deplorable housing situation, and shows how federal housing policies and housing development professionals can help or hinder the efforts of low-income people to improve their housing, their neighborhoods, and their lives. (1996; 47 pages; spiral back; Center for Cooperatives, University of California)

Mushrush, Paula, Mark A. Larson, and Jerry D. Kraus Social Benefits of Cooperative Housing
Available through National Cooperative Business Association
Item #: R35
Price: $10.00
By comparing the lives of residents in three models of Section 8 affordable housing, a cooperative complex, a traditional rental complex, and dispersed rental "voucher" housing units, the authors make a compelling case for cooperative housing. This study should inform the work of both affordable housing developers and policy-makers as they look for new and better ways to support low-income families. (1997; 25 pages; spiral back; Center for Cooperatives, University of California)

Tucker, Thomas D., Converting Mobile Home Parks into Cooperatives
Available through National Cooperative Business Association
Item #: 82N
Price: $6.00
Case studies of the conversion of rental mobile home parks into cooperatives which offers a way to control costs and operations for residents, financial opportunities for owners and developers, and affordable housing for the community. (1983; 67 pages; softbound; National Cooperative Bank)

National Association of Housing Cooperative publications
DeGraphenreed, John W. The Conversions of Public Housing Units into a Limited Equity Housing Cooperative in Nashville, Tennessee, Under the Homeownership Demonstration Program

Thompson, David J., Renters Fight Back and Find Their Freedom: A Senior Mobile Home Park Goes Co-op

Willcox, Roger, Mobile Home Park Cooperatives: Today's Most Affordable Housing

Other Appendices

Rochdale Cooperative Principles

The Rochdale Cooperative Principles have served as a covenant for cooperative development since 1966. They are excerpted below.

THE ROCHDALE COOPERATIVE PRINCIPLES

(Wording approved by International Cooperative Alliance in 1966)

Membership of a cooperative society should be voluntary and available without artificial restriction or any social, political, racial or religious discrimination, to all persons who can make use of its services and are willing to accept the responsibilities of membership.
Cooperative societies are democratic organizations. Their affairs should be administered by persons elected or appointed in manner agreed by the members and accountable to them. Members of primary societies should enjoy equal rights of voting (one member, one vote) and participation in decisions affecting their societies. In other than primary societies the administration should be conducted on a democratic basis in a suitable form.
Share capital should only receive a strictly limited rate of interest.
The economic results arising out of the operations of a society belong to the members of that society and should be distributed in such a manner as would avoid one member gaining at the expense of others. This may be done by decision of the members as follows: (a) by provision for development of the business of the cooperative; (b) by provision of common services; or, (c) by distribution among the members in proportion to their transactions with the society.
All cooperative societies should make provision for the education of their members, officers, and employees and of the general public in the principles and techniques of cooperation, both economic and democratic.
All cooperative organizations, in order to best serve the interest of their members and their communities, should actively cooperate in every practical way with other cooperatives at local, national, and international levels.

In Other Words

Open membership
Economic democracy
Limited return on invested capital
Patronage rebates
Education
Cooperation among cooperatives

Articles of Incorporation

There is no requirement that the cooperative be incorporated under any particular state statute.

(1) In many states there is no appropriate legislation on the subject of cooperatives; while in others, legislation dealing with cooperative corporations relates to agricultural and marketing cooperatives, and is not applicable to housing cooperatives. Even where state statutes dealing with cooperative corporations permit housing cooperatives, the circumstances of the case may make incorporation there under undesirable.

(2) In the absence of applicable legislation, if the general incorporation statutes permit incorporation of the cooperative pursuant to the FHA model form, such incorporation is unobjectionable. But if appropriate "cooperative" or "non-profit" incorporation legislation has been enacted, incorporation should normally be affected under such legislation.

(3) Determination of the statutory requirements in a given state, and determination of the specific changes in the model form of Certificate of Incorporation needed as a result of such statutes, is a responsibility of the Regional Counsel. Changes in the certificate of incorporation required to meet statutory requirements may be approved by the Director on the recommendation of the Area Counsel. Determination of the statutory requirements in a given state and of the specific changes in the model form of Articles of Incorporation needed as a result of such statutes, as well as the acceptability of other changes proposed by the sponsor or counsel for the cooperative, is a responsibility of the Area Counsel. Such changes may be approved by the Director on the recommendation of the Area Counsel.

(4) The introductory wording in all certificates of incorporation will, of course, vary from state to state to comply with local procedures.

(5) It is preferred that the Commissioner's controls be based on a contract (Regulatory Agreement) rather than on the ownership of preferred stock. Therefore, the skeletal forms of Certificate of Incorporation should be used unless some valid reason exists for the controls to be evidenced via the ownership of preferred stock, in which case the longer forms of Certificate of Incorporation should be used, as described below.

(6) The par value of the common stock or membership may equal the total amount necessary to complete the project over and above the mortgage proceeds, plus the working capital deposit requirement if any. It is possible, however, for the necessary cash to be obtained partly from the sale of stock and partly from other paid-in or donated capital, provided that at time of closing it is shown that the cash is unencumbered corporate property. It is required that each cooperative member be issued a membership certificate or one or more shares of stock.

Sample Cooperative Bylaws

Editors Note: Following are the bylaws of a Massachusetts Limited Equity Co-op in a Tax Credit deal. This co-op was set up so that residents would be involved from the beginning -- even before all the residents moved in. This document is not a substitute

for legal counsel, but it is a good starting point for developing bylaws.

To see the bylaws, click here.

Resale controls - examples of provisions

Some resale controls are stricter in their allowing buildup of equity. Equity buildup can be limited to:

one dollar plus the value of the original down payment amount;
the original down payment plus inflation on the down payment amount, usually specifying a specific formula for determining inflation;
the original down payment amount, plus an inflation allowance, plus the original market value less depreciation of any approved improvements made to the unit; or
one of the above methods plus an amount that can be attributed to the share of the mortgage principal paid by the member as part of the monthly carrying charge.

Operating budget - considerations

Excerpted from INITIAL OPERATING BUDGET AND INITIAL SCHEDULE OF CARRYING CHARGES, HUD FORM NO. 93240, (APPLICABLE TO ALL COOPERATIVES). Editors note: this information pertains to a budget from developed by HUD for creating an operational budget for a cooperative housing project. There are general lessons for consideration that can be extracted from the document.

To see the operating budget considerations, please click here.