Housing Co-Operatives: What Are They And What Are They Good For?

Windmill Line Co-op, a nominal equity co-op in Toronto, Canada.

What Are Housing Co-operatives?

When you start to look into housing co-operatives, you might be struck more by their diversity than what they share. Their contribution to a country’s housing stock ranges from less than one per cent to 30% of all homes. There are multiple tenure arrangements. Sometimes the land is leased. Sometimes there are public subsidies. Sometimes the units are limited to people with low incomes. Indeed, aside from operating according to international co-operative principles,1 they don’t seem to have a lot in common.

Yet, housing co-operatives keep popping as part of the solution to the affordable housing crisis. A group of researchers in Australia have looked at the diversity with a view to guiding co-operative housing policy development in that country. The researchers have helpfully clarified the mysteries of tenure.

Unlocking the tenure puzzle

Generally speaking, co-ops operate using one of three models, which relate to the equity contributions of theor members:

  • Nominal: members purchase a share in the co-operative for a nominal amount. They pay a housing charge, or rent, for their unit. Also called ‘non-equity’ co-ops.
  • Limited: members purchase a share in the co-operative and through this purchase earn access to a housing unit. The cost of the share, and the return on that investment, are controlled.2
  • Market: members purchase a share in the co-operative that is determined by the market.
How do co-ops provide affordable housing?

Affordable housing is most commonly provided in the nominal equity co-ops, but may occur in the other models depending on the specific objectives and operating policies of the co-op. Affordability is generally achieved through public funding for an operating subsidy or housing allowances to individual members, although contributions from private philanthropies and charities can be another source.

Why do co-ops deserve a look in?

Studies that look at health outcomes at a population level (country- or world-wide) identify social factors that contribute to improved well-being and less illness. The social factors include having a sense of control over your circumstances and strong social networks and supports.

The Australian study documents that residents report satisfaction with the quality of their housing and their stability, which demonstrates some degree of control over personal circumstances. Residents also report having strong social networks and good relationships with their neighbours. Some of the surveyed co-ops provide ancillary services (e.g. childcare, senior care), which respond to the needs of residents and the surrounding community.

What does the future hold for housing co-operatives?

One might wonder, with these benefits, why housing aren’t more widespread. Once again, the Australian overview provides insight, noting that all forms of housing tenure are functions of public policy, programming and legislation.

Individual homeownership, for example, is supported by favourable financing terms and other supports that enable people to devote significant amounts of their income to the purchase homes. And clearly, where co-operative housing comprises 30% of the housing stock, it is possible to construct a favourable environment.

The authors conclude their study by recommending a policy framework to promote co-operative housing in Australia. You can download the paper from the University of Newcastle in Australia: Articulating Value In Cooperative Housing: International And Methodological Review


  1. Those principles are: voluntary and open membership, democratic member control, member economic participation, autonomy and independence, education, training and information, co-operation among co-operatives, and concern for community
  2. For more on this specific form of housing co-operative, try: Limited-Equity Cooperative: What Is It? How Can It Help Finance Affordable Housing?


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