Best Practice

Limited Equity Housing Opportunities and Cooperative Ownership Structures

Limited equity housing opportunities and cooperative ownership structures such as tenant unions, help collectively preserve the long-term affordability of a group of units. Existing affordable housing can be converted to cooperatives when public subsidies expire. Usually one mortgage covers all the units, and the amount of equity earned for resale of the home and membership is limited. This structure also offers an opportunity to empower and connect residents through participation in democratic governance of the cooperative. Local jurisdictions and financial institutions must allow this kind of ownership, and often a nonprofit helps manage such cooperatives.

Cost

Local jurisdictions and financial institutions must allow for this kind of ownership structure, so time will need to be committed to ensuring the local legality of limited equity housing. Municipalities must also consider the negative affordability impact on the local rental market of increasing the desirability of the area. There are a range of cooperative structures that could impact cost. On-going operations may incur additional costs, such as an organizer, for administration of tenant groups.

Timeframe

1 year, with long-term vision

Code

Collaboration / Partnerships, Government, Ownership

Challenge

Affordable Housing, Increase Homeownership

Practice Tool

Planning / Organizing, Policy / Regulation

Population

Homeowners, Low-Income Residents

Setting

Urban and Rural