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What is a Housing Cooperative?

What is Cooperative Housing?

Cooperative housing offers a different way of living, welcoming people including immigrants, young families, single parents, seniors, and people with a wide range of incomes.

A person can become a member of a housing cooperative by purchasing shares of the co-op. In rental co-ops members sign an agreement to rent their unit from the co-op. In the ownership model, co-op members are shareholders with exclusive use of their housing units. Together, members collectively own common spaces. They also share operating and maintenance costs. They make decisions democratically about how to run the property, including maintenance and renovations.

Co-ops are not owned by the government, and they’re not charities. They are independently owned non-profit organizations operated by their members. Co-ops are often less expensive to buy into compared to condos. Many housing co-ops try to keep rent affordable, and some offer subsidies for lower-income members.

Every co-op housing community is different. Some are large apartment complexes, others are townhouses, and others are single-family houses. Some are rental, others are owner-occupied. Different co-op models are available depending on the country. But they all have one thing in common — they’re focused on community.

How Do I Start a Housing Co-op?

So, you want to start a housing cooperative? Where do you begin? First, gather your core group of members and define your goals. Then decide which co-op model is best for you. Different models are available depending on the country you are in.

Choose a name and decide who will take on which roles on the board of directors. A critical part of getting started is building a team of experts who can advise you along the way. Talk to lawyers, accountants, and organizational and property development professionals who specialize in co-op housing.

You’ll need to agree on your rules, incorporate, open a bank account, and develop your policies and procedures. Building new or purchasing an existing building for your co-op is an important piece of the puzzle. Get ready to apply for loans, permits, and grants. The process can be complex, but you can find lots of support along the way.

One of the best things you can do to get started is to join local and regional federations, networks, and associations. They offer advice, networking, resources, training, and advocacy to help you make your dream a reality. So, get up to date with the cooperative legislation in your country.

There are five typical stages of a community-led housing journey: group, site, plan, build, and live. Community-led Homes in the UK have a great website with information on each step.

Who is Cooperative Housing For?

Cooperative housing is great for people who want to take an active role in their community. Everyone is welcome in cooperative housing. Some co-ops are focused on providing housing for lower-income individuals, some are family-oriented, others are focused on seniors.

Most co-ops welcome a wide range of members of different ages and diversities. People live in cooperative housing in more than 70 countries, and the living experience is very different depending on the co-op. Co-ops around the world are guided by 7 principles agreed upon by the International Cooperative Alliance.

Cooperatives are also based on the values of self-help, self-responsibility, democracy, equality, equity, and solidarity. Cooperative members believe in the ethical values of honesty, openness, social responsibility, and caring for others.

Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Those serving as elected representatives are accountable to the membership. Because of this, co-op housing works best for people who are looking to take an active role in their community.

Co-ops want applicants that are well suited to living in co-op housing and who will be active members. Read about co-op housing carefully to see if it’s a good fit for you.

Benefits of Cooperative Housing

Housing co-ops welcome many different people, including those of different cultural backgrounds, diversities, and income levels. Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions.

Housing co-op members have greater control over their living environment. This form of housing also fosters a strong sense of pride and community. Higher member satisfaction also means members tend to stay long-term, which leads to reduced operating expenses and a more stable community.

Unlike regular renters, co-op members have the security of tenure. This means they can call the co-op home as long as they follow the co-op rules and pay their housing charges in full and on time.

Because cooperatives operate on a not-for-profit basis, housing remains affordable for future generations. In some countries, housing co-ops provide subsidized rent, supporting members with lower incomes.

The cooperative housing model has been adopted in more than 70 countries and it’s gaining popularity among seniors, students, and families thanks to its many benefits. For information on student, housing co-ops go to the North American Students for Cooperation and Student Co-op Homes’ websites.

Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively. This education and training provide benefits to members that they can use in other areas of their lives.

Community is at the heart of cooperative housing. Diversity and inclusion are also an important part of cooperatives.

How Does Cooperative Housing Compare with Other Models?

When you join a housing co-op, you become part of a democratic community. You join a housing co-op by purchasing shares of the co-op that owns the property. As a member of a co-op, you’re an indirect owner.

You either rent your unit from the co-op or you are a shareholder with exclusive use of a housing unit. In contrast, condominium owners own their properties directly. Together, members collectively own common spaces. They also share operating and maintenance costs.

Different laws regulate housing co-ops, and these vary from region to region and country to country. For example, co-op members who rent can stay as long as they follow co-op rules. A co-op board is made up of elected members and makes decisions collectively, similar to a condominium board. All co-op members have the right to vote on key decisions like approving budgets and changing rules.

Co-ops are often more affordable than condominiums and rental housing because co-ops operate on a not-for-profit basis.

How Do Housing Co-ops Keep Rent Affordable?

Cooperative housing is designed to keep housing affordable and operates on a non-profit basis.

In some countries, housing co-ops offer housing to people with low incomes as part of their social purpose. Sometimes co-ops get assistance from the government whereas, in countries with limited economic resources, people organize themselves to provide adequate homes for their families.

Housing co-ops are not owned by the government. They are independent associations. They follow the laws that apply to them and their agreements with governments or other organizations. The members control the co-op. The owners don’t own their units outright; instead, each resident is a shareholder.

In inequity co-ops, members purchase shares equal to the value of their home. Some co-op owners are allowed to sell their shares in the open market. In limited-equity co-ops, members buy and sell shares at restricted prices. This ensures co-op homes remain affordable.

In rental co-ops, residents pay a monthly rent or occupancy charge that covers a fair share of the operating costs of the co-op. The co-op does not pay a return on the members’ shares or deposits. Instead, it sets aside reserves for the future and charges only what it needs to operate soundly.

In the Global South, some people pool their resources and work together to build and manage their housing co-op. These are mutual-aid self-help co-ops.

In all housing co-ops, members contribute financially to the co-op and share in the benefits of membership. In contrast, private equity and public real estate companies buy up housing and sell it at high prices to maximize returns for their shareholders.

What's the Legal Framework of Co-op Housing?

A cooperative is a legal entity owned and democratically controlled by its members.

Starting a co-op involves a few important legal steps. Get to know the legal guidelines for co-ops in your region or country. And consult a lawyer with experience in cooperative housing.

Cooperatives must register or incorporate in order to operate within the legal guidelines of their region or country.

Other legal tasks:

  • Create bylaws
  • Elect or appoint a board of directors
  • Get necessary permits and licenses
  • Maintain legal and financial records

Every co-op has its own rules or bylaws. If you’re considering joining a co-op, read their rules carefully to ensure that a co-op is a good fit for you.

To move into a co-op, you must either found the co-op or join it. Members elect the board of directors and vote on major decisions at the annual general meeting (AGM). The board of directors makes decisions about how the co-op is governed.

Because of the pandemic, some co-ops have updated their bylaws to holding online meetings. Democratic governance is a key part of how housing cooperatives work.

Housing Co-ops for Sustainability

Co-op housing communities worldwide are building a more sustainable future. Globally, cooperatives are working to meet the United Nations Sustainable Development Goals (SDGs).

The SDGs are the blueprint to achieve a better and more sustainable future for all by 2030. Co-op housing can help eliminate poverty by providing affordable housing, control over property rights, and security of tenure. Security of tenure means residents have a place to live that won’t be taken away from them, as long as they follow the co-op rules.

Co-ops are well placed to promote equality and empower women and girls as well as marginalized groups. Co-op living can also help members afford safe, sufficient, nutritious food, often providing land where they can grow their own.

In the Global South, members have access to basic services, such as adequate sanitation and clean drinking water. Co-ops can help provide access to quality education for children, and opportunities for vocational training and personal development for adults.

Many co-ops around the world have adopted sustainable practices to conserve water, energy, and natural habitats. They also reuse, recycle, and compost, with a long-term goal of carbon neutrality. Plus, new co-ops strive to use sustainable construction practices and try to achieve the best possible energy efficiency.

How Housing Co-ops are Mitigating Climate Change

Environmental protection and good business practices go hand in hand. Housing cooperatives around the world are leading the way with sustainability initiatives.

Bicycle and electric vehicle sharing, bulk purchasing programs, community green spaces and gardens, solar panels, and other forms of clean power generation, innovative recycling, and composting programs.

Housing co-ops are using smart building practices for new construction and refurbishments of older buildings to reduce energy and water consumption. To lower CO2 emissions, co-ops are using strawbale insulation, passive solar heating, district heating, and cooling from renewable sources. They are also using less water by installing low-flow toilets and rain barrels.

Want to make your housing co-op greener? Start by adopting an environmental sustainability policy. It will help guide your co-op’s procurement practices, operations, and member education.

In Canada, housing cooperatives can apply for microgrants to help fund their sustainability initiatives. In India, housing co-ops are setting up bio-composting plants to reduce waste and nourish their gardens.

In Kenya, co-op youth are planting trees to absorb CO2 and eco-neighborhoods are being built in many parts of Europe.

Why Become a Member of Cooperative Housing International?

CHI is a mutually supportive community of cooperative housing federations and associations in over 70 countries. Join Cooperative Housing International (CHI) and become part of the international cooperative movement.

CHI provides opportunities to develop valuable relationships. You can make peer-to-peer exchanges and form partnerships, develop business relationships, discuss solutions to common problems, and access education and advocacy.

Here are a few reasons why our members have joined CHI:

  • Gain knowledge about best practices and principles of good governance
  • Receive ongoing education via knowledge-sharing forums, webinars, panel discussions, and more
  • Foster partnerships and collaborations among leading and innovative stakeholders in the housing sector
  • Increase the influence of housing cooperatives at the global, regional, and sectoral levels.

Join the global cooperative movement to provide secure, affordable, and sustainable housing around the world.

Full members have voting rights and are usually national-level cooperatives and co-op associations or federations. Associate members are not cooperatives, but support them in some way.

Help your co-op organization reach its full potential by joining the global cooperative movement. Visit the Benefits of Membership section to learn more.

Advantages of Being Part of the Wider Global Movement

Cooperative Housing International (CHI) is one of the eight sectoral organizations of the International Cooperative Alliance (ICA). By being part of the ICA you gain access to CHI membership.

By joining the global cooperative movement you will be part of a community of over 3 million cooperatives representing over 1 billion members. Members tap into a worldwide support network, accessing news, global best practices, education, and advice.

Gain access to the ICA as a resource for cooperative expertise, in particular cooperative statistics, information, and intelligence. Participate in capacity building and training programs. Exchange information and technical resources.

Membership ensures issues important to your sector and the cooperative movement are understood and acted on at a global level. Be represented globally in multilateral organizations such as the United Nations, the G20, and the International Labour Organisation.

Stand out online by using the cooperative marque and a .coop domain name. These are the symbols of the global cooperative movement and of our collective identity.

As a member of CHI, you’re a part of something bigger.

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