housing co-ops

Housing Co-opsin the Cowichan Valley

March 15, 2014

Working Session

Yesterday

• About CHF BC• What is a housing co-op?• Some background on co-op housing• The co-op advantage• Starting a housing co-op: challenges and

opportunities• Questions and discussion

Today’s Challenge

• Review the distinction between non-profit and equity housing co-ops (and others)

• Identify interest in either model• Hold working sessions to explore the models

further• Discuss next steps

A community

A membership association

A housing business and real estate asset

Two types of housing co-ops

• Non-profit (rental)• Equity (ownership)

Other forms of housing

• Building co-ops• Cohousing• Strata corporations

Cohousing

• Very similar in financial structure to equity housing co-ops

• Use BCA or strata legislation as corporate form rather than CAA

• Intentional communities

The Co-op Advantage

• Housing at a fair price• Security of tenure• Democratic member control• Community

Non-profit housing co-ops

• A legal association of members• Members own the co-op, the co-op owns the

housing• Members work together to create a viable

business and a co-operative community• A non-profit co-op is a home, not an

investment• Goal is security of tenure, not equity

Equity housing co-ops

• A legal association of members• Members own the co-op and their homes; the

co-op owns the common areas • Members work together to create a viable

business and a co-operative community• An equity co-op is both a home and an

investment• Goals are security of tenure and equity

Non-Profit Housing Co-op Finances

• Members buy a share ranging from a small amount to $5,000 or more in some cases

• The share purchase is returned if the member leaves the co-op

• No interest or dividend is paid on the share• Shares serve as working capital and security

deposits

Non-Profit Housing Co-op Finances

• Members pay a monthly housing charge (rent)• The housing charge is the member’s share of

debt service, operating costs and allocations to reserves

• Some members pay a housing charge geared to their income

Equity Housing Co-op Finances

• Member shares are traded at market value (sometimes limited in return for government assistance or to reflect a social mission)

• Shares often serve as the initial development capital for the co-op

• Members own their homes and pay a monthly fee for maintenance, administration, etc.

Non-profit or equity: your choice

• Who lives in non-profit and equity co-ops?• Wealth vs income• Do we need partners?

Developing New Housing Co-ops

• The four pillars–People–Land–Buildings–Money

Development Agenda

• Mission and vision• The four pillars• Business plan–Capital–Long-term viability

Partnership Opportunities

• Local governments with land• Investors with patient capital• Members with equity

Working Groups

• Mission and vision–Why are you forming a housing co-op?–Who will you serve?–What’s your long-term, shared vision

of your co-op community?

Working Groups

• Land–Where will you live?–Do you already have land?–If not, how will you acquire your land?

Working Groups

• Buildings–What building form do you prefer?–Will you build or buy?–How big will your co-op be?

Working Groups

• Money–Do you have any?–How will you finance your co-op?–What can you risk?

Reports from working groups

• Mission and vision• Land• Building• Financing

Wrapping Up

• Observations• Next steps…