Cooperative Housing

Housing cooperatives are democratically governed nonprofit corporations whose resident shareholders jointly own multiple-unit properties. The U.S. Census Bureau defines a cooperative as

Cooperatives resemble rental housing in that residents pay a monthly fee in return for unit occupancy. These fees buy down the collectively held mortgage, pay for expenses, and capitalize reserve funds. Cooperatives also resemble homeowner-ship, in that residents own shares in the total property, enjoy the advantages of homeownership, and are collectively responsible for maintenance and management of the property. Meanwhile, they are owned and governed collectively, offering a hybrid form of property rights.

Cooperatives differ by type of shares issued. Market-equity cooperatives allow shares to be traded at market value as if units were individually owned. These cooperatives, comprising predominantly middle-class and affluent households, sometimes allocate shares by unit size or desirability. Limited-equity cooperatives restrict the amount of return on sale to the equity accrued during occupancy, adjusting for inflation, interest, or improvements. Leased cooperatives do not own their properties but rather hold long-term leases from a community land trust, mutual housing association, or limited partnership that bestows many but not all of the rights of other cooperatives, including possibly a purchase option.

Cooperatives account for less than 1% of the U.S. housing stock, compared to as much as 25% in some Scandinavian countries. The National Association of Housing Cooperatives reports that there are over 1.2 million families living in homes owned and operated through cooperative associations in the United States. Most cooperatives do not house low-income residents. Though disproportionately located in New York, cooperatives exist in other large cities and in more than 30 states.