There are many types of housing available on the market today that it’s difficult to understand the intricacies of each one. Co-op housing is likely one of these. While this type of residency has been around for many years, it has remained an unknown commodity for some.
Co-op housing refers to a not-for-profit dwelling that is supplied to members. Members do not own their dwellings and thus merely pay rent for its use. When a member decides to move and leave their dwelling, they don’t need to sell it or even put it up for rent; instead they merely given it back to the co-op, who then goes and finds a new member interested in inhabiting this home.
How co-op housing works
The not-for-profit nature of co-ops is one where the member only pays enough to cover the basic costs associated with the general upkeep and maintenance of the buildings, with additional funds set aside to provide a reserve for unexpected and more capital-intensive expenditures.
Co-op housing fees can also be adjusted based on the income of the members, with government subsidies used to pay the difference between the full rental amount and that what the member actually pays. Co-op housing is in theory ‘owned’ by the members, with each given a vote on any decisions pertaining to the governance of their building.
Thus members have a voice in how their buildings are managed and in how funds are spent, and tenants aren’t accountable to any landlord in this scenario. Each co-op housing development is considered to be a legal association and is incorporated as a co-operative.
The benefits of co-op housing
The most obvious benefit with a co-op housing development is that given it’s a not-for-profit entity, costs are kept to a minimum so that rental increases are more moderate and predictable (due to the budgetary transparency and voting privileges of members). The fact units are never sold on the open market and thus subject to market forces also helps to keep ‘price’ increases in check.
The other major benefit of co-op housing is the sense of community it creates for all members, with many feeling they have an equal and substantive voice when it comes to the decisions being made regarding their building. That co-operative housing is part of a broader network of co-op businesses, such as banks, insurance, farming, day care, health services and more only adds to this perceived value.
You can learn more about the Co-Operative Principles of Housing Co-ops to find out about the requirements and obligations co-ops must abide by for their dwelling to be considered a co-op. These expectations are set out by the International Co-operative Alliance, the governing body for co-ops around the world.
The rights of co-op housing members
The following is a list of the rights members are entitled to when they are part of a co-operative housing development:
- Vote on the annual budget, which sets the monthly housing charges and affects the funds allocated to the maintenance and upkeep of your housing.
- Elect a board of directors made up of people who live in the co‑op.
- Run for the board of directors.
- Receive audited financial statements that show how the co‑op spent its money.
- Live there for as long as you like, if you keep to the by-laws agreed on by the co‑op membership.
- Pay only a limited portion of your income on housing (if you meet eligibility requirements).
As you can see, there are many advantages to choosing co-operative housing as your preferred choice when searching for the right housing option for you and your family.
If you would like to learn more about co-op housing and find out if it’s the right option for you, we encourage you to contact Team Bullock. They would be happy to help you determine what’s best for your particular situation.