Housing co-ops, a potential affordable housing solution

Providing affordable housing options is a tough nut to crack — especially in a booming housing market like Asheville’s. While city voters approved $25 million in spending on affordable housing as part of a 2015 bond referendum totaling $74 million, the question remains: What’s the best way to spend money to support affordable housing solutions?

To begin to answer that question, the city of Asheville is sponsoring a series of three educational events aimed at sparking community conversations around innovative housing models that have shown promise elsewhere. The first event in the series explored community land trusts as a solution for preserving affordable housing in rapidly gentrifying areas. The second event, held on May 4 at the city’s Public Works building on Charlotte Street, focused on housing cooperatives.

In a limited-equity housing cooperative, residents own shares in a real estate corporation. By purchasing a stake in the equity of the co-op, residents can bypass some of the hurdles associated with obtaining a conventional mortgage while enjoying many of the benefits of homeownership. If residents decide to sell their stake and move, they can even make a limited amount of profit once they have paid off their shares.

Success story

Andrea Golden and Patricia Guerra represented an existing local housing co-op, the Dulce Lomita Mobile Home Cooperative, which is a community in the Emma neighborhood.

With the assistance of a translator, Guerra told other workshop participants she had been living in a parking lot in Leicester when she received a letter telling her she had to leave. She moved into a place on Tunnel Road, but that arrangement was also a challenge: The rent exceeded her means and her landlord was only reachable through text messages.

Things changed, Guerra said, when she was invited to become part of the Dulce Lomita community: “This was a personal satisfaction to know that you were the owner of your things and there was nobody that was going to come to get you out of there. And you can make payments accordingly to what it is that you make, and nobody’s going to push you to do more. This is great to be in a family and community and to be able to see the children playing together.”

Golden explained how the mobile home cooperative works. Members must come to a consensus before they sell their shares, and 13 percent of profits from the sale are invested into the community. The remaining 87 percent of the profit is distributed to all shareholders (present and past), according to years lived in the co-op.

The co-op, Golden said, creates a path to home ownership regardless of credit history or citizenship status. “Emma has been a community where low income people, and black people, and immigrants have been building for a long time,” she said. “And we think that it’s a legacy that’s worth protecting, even in the face of really aggressive development of Asheville-Buncombe County. So we don’t see ourselves as beginning something, we see ourselves as honoring and allowing this legacy.”

Asheville and beyond

The meeting also featured a national perspective on housing cooperatives. Urban Homesteading Assistance Board (UHAB) Executive Director Andy Reichert and Project Associate Alex Roesch presented via the online teleconferencing service Skype from their office in New York. They explained what a housing cooperative is, how it has worked in New York and other cities, and how it could work in Asheville. “There’s nothing magic about these ownership structures that make them more affordable,” Reichert said. “But they are opportunities … to work much more closely to get all the interests aligned so that the cost of housing, over time, can be lower.”

Their presentation highlighted economic, social, personal and community benefits associated with the co-op model. These include a sense of pride, life skills, independence, and satisfaction. With a co-op, they speakers explained, the residents are in a business arrangement with one another, they participate in the management of the property and they feel ownership of their home.

Reichert highlighted the historical benefits of communities coming together to make decisions on housing co-ops. “One of the things that we learned early on is that a successful co-op is a people development process,” Reichert said. “Getting people to take charge, take control, learn all the things they need to do about running their own organization.” Some of those skills include running meetings, understanding how the building works, understanding the finances of the building, going through the legal conversion process in becoming a co-op, and then facing the issues that come along with the process.

Next steps

City Council member and chair of the Housing and Community Development Committee Gordon Smith explained that the city invites public input into how the affordable housing bond funds should be used. “It’s unspecified as we wait for the community to show us the direction that ya’ll want to go,” Smith said. “We’ve got the money and we’re waiting for that direction.”

The Affordable Homeownership Solutions series, Smith explained, came out of a city desire to “create a catalyst.” The community doesn’t necessarily want the government — and ever-changing elected leaders — to be solely in charge of deciding the best solutions to the affordable housing problem, he said.

“So the idea is for us to convene as many people as possible to get the information out there, and then see where we’re led,” Smith told the crowd.

Jeff Staudinger, the city’s longtime Assistant Director of Community and Economic Development (who is in the process of retiring), moderated the event. He commented that Asheville will not necessarily use New York as an example for housing cooperatives, since the co-ops there emerged from different circumstances than Asheville’s might. But UHAB’s experiences have the potential to provide some guidance. And he said he is hopeful that this three-part educational series on affordable housing will lay the groundwork for a steering committee (which is yet to be established) that will direct the allocation of a significant portion of the affordable housing bond money.

Carol Taylor, a retired editor at Lark Books, commented after the meeting, saying how excited she was to see Asheville considering housing cooperatives. “I can’t think of anything we could do for the city of Asheville that would be more useful than creating some affordable housing, to keep it from being what it may become,” Taylor said. “And what’s so fascinating to me, what’s so wonderful, is the community. This is community-driven. And I really think the folks in Asheville mean for it to be, to stay, community-driven.”

She also noted that, although she doesn’t have much experience in real estate or housing, she believes some form of government support will be necessary in order to make progress. “I can’t see — especially in a housing market like Asheville — I can’t imagine how this can be done without some government support,” Taylor said.

The third part in the Permanently Affordable Homeownership Solutions series will be split into two sections. The first will take place at 6:30 p.m on Wednesday, May 17, at the Dr. Wesley Grant Sr. Southside Center at 285 Livingston St., and will feature two short films, Streets of Dreams and Arc of Justice, on the subject of affordable housing and community land trusts. The second section, held at 6 p.m. on Thursday, May 18, will be an education session and meeting at Stephens-Lee Recreation Center at 30 George Washington Carver Avenue. Staudinger says he hopes the community will come to some form of consensus on how to proceed with stimulating affordable housing solutions.