What is a Housing Cooperative?
A housing cooperative is a corporation that exists primarily to provide housing and related services to its members. The ownership of a co-op is two tiered. On top is the corporation and under that are the member-owners who purchase shares in the cooperative-corporation. When a share is purchased, typically at the closing, a member signs a perpetual lease called an Occupancy Agreement that gives the member-owner a legal and exclusive right to occupy a particular dwelling unit (a live/work studio in our case) on condition that all member-owner obligations to the cooperative-corporation are met.
What Type of Cooperative Are We?
There are three types of Cooperatives. Market Rate or Equity, Limited Equity and Leasehold coops. The Lowertown Lofts Cooperative (LLC) is a limited equity cooperative. This means that our co-op adopted a bylaw provision to limit the maximum resale values of individual studios. This is designed to meet our mission to offer long-term affordable housing for artists and their families. Each unit has its own “transfer value” figured by a formula in our Bylaws.
Limited Equity cooperatives receive the same tax treatment as homeowners.
The Seven Cooperative Principles
The current articulation of these seven principles, approved by the International Cooperative Alliance (ICA) at a 1995 meeting that celebrated the 150th anniversary of the modern cooperative movement, are:
- Voluntary and Open Membership–Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership without gender, social, racial, political, or religious discrimination.
- Democratic Member Control–Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote).
- Member Economic Participation–Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members allocate surpluses for any of the following purposes: developing their cooperative, possibly by setting up reserves, part of which would at least be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.
Autonomy and Independence–Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, they do so on terms to ensure democratic control by their members and maintain their cooperative autonomy.
Education, Training, and Information–Cooperatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperatives.
Cooperation Among Cooperatives–Cooperatives service their members most effectively and strengthen the cooperative movement by working together through local, national and international structures.
Concern for Community–Cooperatives work for the sustainable development of their communities through policies approved by their members.