San Francisco Community Land Trust

Cooperative Housing:

Links with Organized Labor and Workers’

Movements

SFCLT Goals

� Resident controlled housing

� Permanent affordability� Community control and

preservation

SFCLT Mission and Model

Our Mission is to conserve the number of affordable homes in San Francisco through the acquisition and

conversion of rental buildings into permanently affordable limited equity housing cooperatives – an alternative model of home ownership – where the residents become owners of the building while the Community Land Trust maintains the ownership of

the land under the building.

What is a cooperative?

DefinitionA cooperative is an enterprise that is jointly-

owned and democratically-governed by a group of people for the purpose of meeting their common economic, social and cultural

needs and aspirations.

ICA Cooperative Principles

� Voluntary and open membership� Democratic member control� Member economic participation� Autonomy and independence� Education, training and information� Cooperation among cooperatives� Concern for community� International Cooperative Alliance

History of Housing Co-op’s in the U.S.Early Housing Co-op’s� The Rembrandt: First

housing cooperative created in 1857 in New York City to house artists

� Finnish immigrants began housing cooperatives in Brooklyn, New York City around 1916

History of Housing Co-op’s in the U.S.1920’s

Amalgamated Housing: 1927Mission: To provide quality housing and a

strong community for people of moderate income. To operate and live in accordance with the cooperative ideals,

including democratic governance, shared responsibility, constant education, and

mutual respect.Began with 300 families

Now houses 1482 families in NYCFirst LEHC in the U.S.

Amalgamated Housing� "It was offered to us to demonstrate that through

cooperative efforts we can better the lot of our co-workers. We have also been given the privilege to show that where all personal gain and benefit is eliminated, greater good can be accomplished for the benefit of all. It remains too for the members of our Cooperative Community to exert their efforts to run this cooperative and make it more useful, and more interesting, for all who live in these apartments"

� Abraham E. Kazan, Founder President, 1927-1967 Manager, 1927-1957

Abraham E. Kazan "The Father of Cooperative Housing in the United States"

History of Housing Co-op’s in the U.S.

1930’s – 1960� 1930’s student cooperative housing

movement, inspired by the leadership of Toyohiko Kagawa

� 1940’s Co-op housing moved outside New York City

� Cooperative movement was expanding in all sectors (worker, education, child care, etc.)

� 1950’s post-war housing and population boom saw increase in co-op housing across the country

� 1956 The Atchison Village Mutual Homes Corp. created one of the largest housing cooperative in California

History of Housing Co-op’s in the U.S.UHF and Co-op City

� 1951 trade union coop’s united to form the United Housing Foundation

� By 1965, under the leadership of Abraham Kazan, UHF had developed 23 housing cooperatives in New York City ranging from 124 to 5,860 units

� 1965 UHF began construction of Co-op City

� Co-op City, in the Bronx now has approx. 15,300 units of cooperative housing

St. Francis Square Co-op

History of Housing Co-op’s in the U.S.1950’s – 1970’s HUD Developed Co-op’s

� HUD guaranteed the mortgage for up to 40 years

� After HUD guarantee runs out, residents need to decide what to do

� Extend income / equity limits� Open up to market rates and

allow people to sell at market rate.

� Stay as a stock co-op, change to being a LEHC or convert to condo

� Some other creative option

Geary St and Laguna 1961St Francis cooperative apartments

St. Francis Square Co -op and the Fillmore

History of Housing Co-op’s in the U.S.

Summary of Post World War II Experience� About ¼ of the country's affordable housing cooperatives were built in

New York City from 1945-1960’s� These were financed under various arrangements available only in

New York (Mitchell - Lama) and with sponsorship by Trade Unions and the State of New York.

� Just over one-half of the affordable housing cooperatives have been financed by federal government programs.

� Successes in federal financing programs led to various state and municipal financing programs, which often worked in collaboration with local non-profit’s.

History of Housing Co-op’s in the U.S.

Current state of Housing Cooperatives and Financing� Cooperative housing financing follows federal housing financing and

has therefore steadily decreased.� Only a handful of affordable housing co-ops a year are now financed

through federal programs� As of 1995 there were more than 400,000 units of Limited Equity

Housing in the U.S. (National Association of Housing Cooperatives)� Affordable housing cooperative financing comes from: private banks,

local financing, Federal Home Loan Bank, Low-Income Housing Tax Credits, federal community block grants

St Francis co-op today

St. Francis Square Co -op

ILWU Statement on SF Redevelopment of the Western Addition

� “Recent expressions from the office of the Redevelopment Agency seem designed to stampede residents of the second Western Addition Project Area into the belief that mass evacuation of their homes is obligatory and inevitable, and that each family would do well to find its own separate solution to the problem of dislocation. The ILWU serves notice now that it will urge its members to join with all other tenants in A-2 in a mass refusal to budge from present dwellings until each and every family in the area has been provided with a home fit to live in at a price they can afford.

� “ILWU enunciates the principle of “An injury to one is an injury to all.” It is disgraceful that the Redevelopment Agency cannot even find two-thirds of the former residents of A-1, Local 6 asserts its determination that tenants of the A-2 area shall not simply become “missing persons” lost in the tragic confusion of being uprooted from their homes.

� “ILWU will start at once to explore with all interested organizations, the feasibility of establishing a broad membership organization on the order of a Tenants League of Resistance. The purpose of such an organization would be to bargain formally with the Redevelopment Agency, and will use as a lever in bargaining its ability to mobilize the resistance of its members to being expelled from their homes.”

Leroy King, ILWU, St Francis Co-op

St. Francis Square Co -op and the ILWU

Models of Co-op Housing in Urban Areas

� Previous public housing (HUD financed) turned into affordable co-op’s (NYC, SF, DC)

� Small intentional community cooperatives (Berkeley, CA, Burlington, VT)

� Student Cooperatives (Madison, WI)� Tax Credit Developments (Burlington, VT)� Manufactured Home Parks (MN, NH, FLA, CA)� Mid size developments (MA, CA, Washington, DC)� Small to mid-size LEHC’s from converted rental buildings (SF, CA, MA)� Senior Housing Co-ops through Cooperative Services Inc (CSI)

Housing Cooperatives

Common Features� Collective Ownership� Democratic Structure� Limited liability� Not for Profit � Lower costs

Cooperatives are economicalAffordable Homes Comparison

for a home starting off at $200,000

$0.00

$100,000.00

$200,000.00

$300,000.00

$400,000.00

$500,000.00

$600,000.00

$700,000.00

$800,000.00

$900,000.00

$1,000,000.00

5 10 15 20 25 30

A @ 5% Cap

B @3.5% Cap

C Co-op

David Thompson, Neighborhood Partners, LLC

How Does a Housing Co-op Compare with Other Housing?

In a condominium association, each individual owns a divided piece of the property.

In a housing co-op, all members combined own an undivided share of the property.

In a rental apartment, tenants own nothing.

Economic and Social Benefits of Co-op Housing

Economic Benefits� Low entry capital costs� Stable low payments� Lower costs relative to

market over time� Wealth creation� Equity / ownership that

grows in value� Limited Liability� Protection from

predatory lenders� Operates at-cost

Social Benefits� Self-Management� Community control� Leadership development� Democratic participation� Flexibility to change units� Enhanced security� Lower rates of mortgage

delinquency and default

In summary: Why we choose Co-op housing

� Affordability� Inexpensive home ownership� Operates at cost� Joint purchasing

� Accessible Home Ownership� Low transaction costs� Can borrow collectively

� Flexible Housing Model� Lots of different building types

and populations� Intergenerational living

Margaret Lund, former EDNorthcountry Cooperative

Development Fund

� Financial Advantages� Tax deductibility of interest� Equity accumulation� Protection from predatory

lenders� Home Ownership

� Makes home ownership possible

� Supportive Community� Leadership development� Skills development� Community long term

investment� Civic participation� Enhanced security

Individual Benefits

In summary: Why we choose Co-op housing

Community Benefits� Engine of economic growth

� Cooperatives bring more stability to a neighborhood which can lead to neighborhood economic growth and investment

� Stability� Stable payments� Broader home ownership without displacement� Quick resale for co-op’s with limited equity formula

Margaret Lund, Former ED,Northcountry Cooperative Development Fund

Types of Housing Cooperatives

� Market Rate Stock Cooperatives� Limited Equity Housing Cooperatives

(ownership)� Resident Operated Non-Profits /

Leasehold Cooperatives (rental)

Challenges of Living and Managing a Housing Cooperative

� Finding financing to fill the gap if working with moderate or low income households

� Building and maintaining adequate replacement reserves for capital improvements

� Maintaining high member participation over time� Resolving conflicts and disputes between members

Thank you for your time.

Please fill out an evaluation form.