Cooperative Ownership of a Cohousing Community

David Oesper

"Most cohousing groups, at some point in their discussions, bring up the possibility of organizing their community as a cooperative. In this ownership structure, the entire community is owned by all of the residents as a nonprofit corporation, and each household buys a share in the corporation equivalent to the price of their home."

Since all residents of Mirador will be renting, would their “share” in the nonprofit corporation be a rental deposit, or some other arbitrary amount that is comparable to a rental deposit?
Some residents of Mirador will not live there year-round. Would these part-time residents be excluded from membership in the nonprofit corporation (i.e. the operating authority)?

"Philosophically, a cooperative seems to be an ideal structure for a cohousing community. As one resident put it, 'In a sense, I own everybody’s unit. I’m responsible for everyone’s unit working. It has a different feeling.'"

"Although cooperatives are a proven form of home ownership, American banks are generally wary of financing them. Even the National Cooperative Bank (NCB), which was created to support cooperatives, will not provide complete construction financing and offers only a limited range of loans. As a result, most cohousing projects have been set up as condominiums, a structure that banks and city officials already understand. Structuring the project as a condominium development doesn’t seem to have any effect -- negative or positive -- on the success or failure of community building."

So a challenge we will have with operating Mirador as a cooperative is to secure financing for its construction. Since the cooperative will be depending on rental income (and tourism) for cash flow, it will take longer to pay back the construction loan at presumably a higher interest rate than if the houses were sold outright to the residents. Is there another type of corporation that could operate Mirador that would have the financial resources to secure the construction loan but also allow residents to have a great deal of say in how Mirador is operated?
Another approach would be to find one or more benefactors who could provide the construction loan, or who could secure a loan from a traditional lending institution. Mirador would then be owned by the benefactor(s) until the cooperative has paid off the construction loan.


The Senior Cohousing Handbook, Second Edition, by Charles Durrett (2009): Chapters 1 & 2, Appendix C

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