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National Association of Housing Cooperatives Urges HUD to Consider Co-op Housing as “Viable Home Ownership Model”


The National Association of Housing Cooperatives recently applauded remarks made by Department of Housing and Urban Development Secretary Julian Castro about extending home ownership opportunity to low-income families. At an event called “2015: A Year of Housing Opportunity,” held at the National Press Club in Washington, D.C., Castro highlighted the department’s commitment to reach out to underserved borrowers and make home ownership more affordable. Excerpts from NAHC’s response follow:

The National Association of Housing Cooperatives (NAHC) represents over two million housing cooperative homeowners nationwide. We know that housing cooperatives are an affordable option for low-income people who want to get their foot into the housing market and we urge you to consider the cooperative model as you pursue home ownership initiatives.

Limited equity housing cooperatives require only a small initial investment, yet provide an affordable, resident-controlled homeownership opportunity. Co-ops can be flexible for serving affordable housing goals and secure because of the sharing of responsibilities and liabilities.

In a limited equity housing cooperative, individual share purchase prices are very low. Co-op share ownership entitles one to a long-term lease on a unit and a vote in corporate governance. The individual is both a “tenant” because of their lease with the corporation, and an “owner”, because of their stock ownership and participation in group governance. The co-op members elect a Board of Directors who make most decisions about the co-op.

In a co-op, many members stay for decades. When residents leave they sell their share(s) of stock (and not their unit, as condominium owners would). In a limited equity cooperative, the value one can obtain for one’s stock at sale is restricted by a specific formula, to make the housing affordable for current and future residents. Limited equity co-ops are non-speculative homeownership.

Co-ops provide many of the benefits of property ownership to their members. They provide direct control over one’s housing. There is no landlord profit. Limited equity cooperatives are a uniquely accessible form of property ownership. Share purchase prices are typically much less than down payments on comparable condominiums. Therefore, co-ops can service a broad range of income groups.

Again, we applaud HUD’s renewed interest in home ownership opportunity for low-income people and we urge you to consider including housing cooperatives as a viable home ownership model.

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