Various housing cooperative structures exist to meet different needs
Housing cooperatives, in which members own shares of a cooperative that owns the building, land and any common areas where they live, can be developed via various legal and finance structures. Some examples of these different structures include market rate cooperatives, limited equity cooperatives, leasing cooperatives, mutual housing associations and senior housing cooperatives.
According to a publication produced by Cooperative Development Services and the University of Wisconsin Center for Cooperatives, these different types of housing cooperatives can be defined as follows:
A market rate cooperative sells shares at full market value in the original sale and permits a market rate of return on resales by its members.
A limited equity cooperative limits the return allowed when shares are sold. The amount of return is determined by a formula established in the corporation’s bylaws.
A leasing cooperative leases the property from an investor on a long-term basis, sometimes with an option to buy. The residents operate the property as a cooperative.
A mutual housing association is a non-profit corporation set up to develop, own and operate housing. Generally, the association is owned and controlled by the residents of the housing produced.
A senior housing cooperative is a cooperative that has design and service features appropriate to senior residents.
Please see the referenced University of Wisconsin Center for Cooperatives publication More than Just Housing: Co-Op Housing for the answers to many more frequently asked questions regarding housing cooperatives, such as:
- How do I finance my purchase?
- What monthly payments do I have to make?
- What tax benefits are available to me?
- How do I acquire equity?
- What’s the difference between owning a co-op and owning a condo?
- How can low-income families afford owning a co-op?
- Why is being a cooperative member better than renting?
- What do most housing cooperatives look like?