Mutual Housing

The term mutual housing is used by many types of nonprofit housing organizations, and it can have a variety of different definitions. It is a type of social housing, meaning that it is owned and managed for the benefit of residents and the community in which it is located, rather than as a type of investment for the private for-profit housing sector. Mutual housing associations (MHAs) are a far less prevalent form of community-based housing than resident cooperatives and housing owned by community development corporations.

Mutual housing is a model of housing provision in which the residents belong to and control a membership organization that, in turn, owns and manages their housing. Many mutual housing associations (MHAs) in the United States are modeled after the former West Germany's Mutual Housing Association's ideals, which include (a) continuing production of long-term affordable housing, (b) ensuring resident control, (c) providing professional support, and (d) involving the community in the process. Mutual housing generally is sponsored by neighborhood development organizations, consumer cooperatives, nonprofit developers, or technical assistance providers.

There are three more or less distinct forms of MHAs. The integrated-consumer cooperative owns and controls all the housing it develops. Residents form the board and hold shares in the entire development rather than in their individual buildings. In the dualistic model, there is an MHA that both develops housing and provides technical assistance to a resident cooperative organization that owns and manages their building. The third type of mutual housing is the federation, a network of independently incorporated cooperatives joined under an MHA.

NeighborWorks America (formerly the Neighborhood Reinvestment Corporation), a congressionally chartered public nonprofit corporation committed to revitalizing declining neighborhoods for the benefit of current residents, provides funding and technical assistance to nonprofit community-based organizations across the United States, including MHAs.

NeighborWork's interest in mutual housing is credited to former Congressman Jonathan Bingham of New York (1973–1982). On the basis of a trip to the former West Germany, Congressman Bingham sponsored legislation that would have created MHAs in the United States, modeled after those in Germany. Although this legislation failed to pass the 96th Congress, the Housing and Community Development Act of 1980 encouraged the development of MHAs, and the Neighborhood Reinvestment Corporation was asked to help develop a pilot program.

The MHA model advocated by NeighborWorks is closest to the integrated-consumer cooperative [Page 495]model, described above. It emphasizes the following: (a) the election of a board of trustees, a majority of whom must be residents of the mutual housing development or individuals waiting to move in; (b) security of tenure; (c) resident involvement in maintenance and management decisions; and (d) ability to nominate a qualified family member for immediate consideration for occupancy of the unit when the resident member gives up the unit or dies.

Mutual housing has many characteristics in common with other forms of nonprofit-owned community-based housing. They all emphasize the role of citizens (both residents and community members), they provide a high degree of security of tenure for occupants, and they strive to provide decent-quality housing over the long term, at below-market costs. One of the distinguishing features of MHAs is the commitment to continue to produce a significant supply of affordable housing until a threshold number of units is reached thereby promoting the economic self-sufficiency of the development. This goal is also shared by many, but not all, other types of nonprofit housing providers.

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