What is the potential for limited equity housing co-operatives to add to the supply of the non-market housing stock? The two kinds of housing co-operatives that get aired in this post are market co-operatives1 and non-market limited equity co-operatives2.
Participants in two different workshops assessed the potential for limited equity housing co-operatives. One was held at ETH Zurich3 and the second at the Massachusetts Institute of Technology. The results of the workshops are published in a three part article, which is linked below.
It is the second part of the article that caught affordablehousingaction.org’s interest to start with. It is built on the workshop at ETH Zurich. It looks at housing co-operatives in Zurich, some of which have been operating for almost a century. They got their start during a housing crisis, when older people and people with young families were leaving the city.
Susanne Schindler, who co-led both workshops and is primary author of the articles, identifies the financial and regulatory systems that have supported the growth of the non-profit, co-operative housing sector in Zurich. The co-operatives’ rents are regulated by the municipal government. The municipal government also guarantees mortgage financing for co-operatives. All of the lending comes from the private sector and includes banks and pension plans.
Zurich’s housing cooperatives have also become leaders in innovative design. The co-operatives identify housing needs that are not served by the existing market and build these needs into proposal calls for new developments. Not only has this helped to expand the housing choices, it has opened the door for new architects in the field to have a chance at designing housing.
The first part of the article provides an analysis of U.S. housing market. As Schindler outlines, putting all wealth eggs in the private home ownership basket is risky4. She argues that non-profit equity housing cooperatives provide an alternative ownership model helps to reduce that risk.
The third part summarizes the results of the MIT workshop, which identifies barriers and for expanding the co-operative housing sector in Boston. For example, there are housing co-operatives in Boston, but there is also a lot of confusion about them, because there are some that operate in the private market and some that are detached from it.
The entire series was published by Platform in 2021. It has just come to our attention, and is still worth a read now. Congratulations to Susanne Schindler, and her colleagues and students, for weaving together this interesting piece. It will be of particular interest in the U.S., but also holds valuable insights for other jurisdictions that are grappling with the high cost of housing. Links to each part are here:
Part 1: Housing Beyond and Within the Market, Part 1: Cooperative Housing and the Racial Wealth Gap
Part 2: Housing Beyond and Within the Market, Part 2: Cooperative Conditions in Zurich
Part 3: Housing Beyond and Within the Market, Part 3: Cooperatives in Boston
And for a deep dive into the wide variety of co-operatives in operation, try: Limited-Equity Cooperative: What Is It? How Can It Help Finance Affordable Housing? and Housing Co-Operatives: What Are They And What Are They Good For?.
Footnotes
- In market co-operatives, when a home passes from one occupant to the next, the value of the unit is determined by the market.
- In a non-market limited equity cooperative, the new occupant becomes a member of the co-operative and earns the right to occupy a unit. Membership has a fixed fee, which is not related to the market value of the unit. As well, the co-op member pays a monthly amount (sometimes referred to as rent) which covers the cost of maintenance, debt and operations.
- A Wikipedia post about this public technical university is here: ETH Zurich
- For more on this subject, this time in England, try: Reasons To Be Wary Of Home Ownership
