Non-Equity Rental Cooperatives … And A Whole Lot More

exterior view of townhouses and mid-rise apartment building
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A non-equity rental housing co-operative in Toronto.

In Australia, Skynews recently interviewed Melina Morrison, the CEO of the Business Council of Cooperatives and Mutuals. Morrison was up to bat in order to speak about housing cooperatives, in hopes that some public funding would be directed to build more cooperative housing.

At the beginning of the interview, Morrison clarifies that she is talking about non-equity rental coops and distinguishing them from a host of different forms of cooperative housing. In just four minutes Morrison explains why non-equity rental coops are worthy of funding. She tells listeners that non-equity rental coops have worked successfully in other countries, including Canada. When asked what the downsides are, she smiles and says, “there aren’t any.”

So let’s shift to Canada to find out more about housing for which there are no downsides. A 2022 report titled Ensuring And Preserving Affordability In Low Density Intensification: Options For Brampton (Ensuring And Preserving Affordability). It’s a good place to start. Melissa Goldstein, a housing researcher and consultant, prepared Ensuring and Preserving Affordability for the City of Brampton. The report’s central focus is about adding housing to the city that people with low incomes will be able to afford.

Like a lot of cities in North America, most of Brampton’s residential land has been zoned for low density development (detached homes). Most of the zoned land has been developed and more housing is needed. Changing zoning to allow increased density is one way to make space for more housing.

The cost of buying or renting housing in Brampton has risen to the point that it is unaffordable for many Brampton residents. There is a fair bit of evidence that adding density will push housing prices up. Where a city is trying to increase the supply of deeply affordable housing, changing density on its own isn’t going to be enough. In Ensuring And Preserving Affordability, Goldstein discusses the other elements that are needed to increase the supply of deeply affordable housing.

Ensuring And Preserving Affordability discusses a range of models that will deliver deeply affordable housing and protect it in the long term. Non-equity rental coops, which were discussed in the interview in Australia, is one model. There are others, including community land trusts and limited equity housing. Goldstein provides clear descriptions of each model.

For a city that is interested in deeply affordable housing for its residents, Goldstein is clear there are a number of models and there is flexibility within each one. A discerning council will need to decide what’s best for their constituents.

Having decided to increase the supply of deeply affordable housing (regardless of the model that is chosen), it will also be necessary to regulate the cost of the housing. The rent that will be charged must be separated from private sector pricing, which is already much more than people with very low incomes can pay. Ensuring and Preserving Affordability discusses regulatory tools to control prices. Again, there are a number of ways this can be done and the council will need to weigh the choices available to it.

As well, to improve the chances that deeply affordable housing will be built, it is necessary to consider who will build it and how the project will be paid for. Ensuring and Preserving Affordability identifies possible actors and possible funders for the City of Brampton to consider.

Ensuring and Preserving Affordability is a great resource for readers who are working on ways to add deeply affordable housing in their community. Goldstein includes relevant contemporary examples from the United States and Canada and presents the information in a way that is easy to digest. You can access the report at MelissaGoldstein.com: Ensuring And Preserving Affordability In Low Density Intensification: Options For Brampton

And for more about non-equity rental coops in Australia, see this news story at Skynews: Co-op housing model could be the answer to social housing crisis