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Lessons from the History of Affordable Housing Cooperatives in the United States: A Case Study in American Affordable Housing Policy

By Sazama, Gerald W. | The American Journal of Economics and Sociology, October 2000 | Go to article overview

Lessons from the History of Affordable Housing Cooperatives in the United States: A Case Study in American Affordable Housing Policy


Sazama, Gerald W., The American Journal of Economics and Sociology


GERALD W. SAZAMA [*]

ABSTRACT. Understanding the history of the affordable housing cooperatives in the United States helps us understand the general history of American affordable housing policy. This paper contains a decade-by-decade summary of the history of affordable cooperatives. The affordable cooperative movement has evolved from ethnic and union groups which developed self-help cooperatives in the 1920s, through the federal funding of low-income cooperatives in the 1960s and 70s, to local nonprofit organizations using ad hoc packages of funds to organize cooperatives during the 1980s and 90s. As this history unfolds, it provides answers to contemporary policy questions affecting both cooperatives and affordable housing in general.

I

Introduction

THE HISTORY OF THE AFFORDABLE HOUSING COOPERATIVE MOVEMENT in the United States is part of the history of the struggles of working people and the poor for decent housing. Understanding this history helps us to understand the general affordable housing movement, and to develop contemporary policies for both cooperatives and the affordable housing movement as a whole.

Circumstances and methods of the affordable housing cooperative movement vary decade by decade, but the objective of this movement is constant: to obtain for low- and moderate-income families decent housing, at an affordable price, with effective resident control. This movement started with ethnic and union groups developing self-help cooperatives in the twenties. It evolved into federal funding of low-income cooperatives in the sixties and seventies, and then into local nonprofit organizations using ad hoc packages of funds to organize affordable cooperatives during the eighties and nineties. The successes of these historical struggles have resulted in about 376,000 dwelling units in affordable housing cooperatives in the United States. [1] This number equals 17 percent of the total number of rent-reduction housing units owned by the nation's public housing authorities (HUD and Census Bureau, 1995; and Table 1).

The history of affordable housing cooperatives is relevant for today's affordable housing movement because, in a world that is increasingly market driven, cooperative housing provides contemporary housing advocates with an alternative that reinforces joint ownership of property (Hays, 1993). Also, affordable housing cooperatives empower low- and moderate-income families, since under the cooperative structure they own and control their own housing (Birchall, 1988; Cooper and Rodman, 1992; and Heskin and Leavitt, 1995). Finally, affordable cooperatives are contrary to the traditional welfare mentality prevalent in so much of subsidized rental housing because with co-ops, residents not only take responsibility for their actions, but they experience the direct consequences of these actions on the cost and quality of their housing (Miceli, Sazama, and Sirmans, 1994 and 1998).

As this history unfolds, it highlights policy questions relevant for contemporary affordable housing policy. Nine policy questions are examined, each at the end of the historical period when the question first became important. Some examples include: Should housing advocates support a federal or a decentralized housing policy? Should rents and monthly housing charges be collected as flat fees or as a percentage of household income? Should affordable housing be developed as co-ops or rental properties? Should emphasis be placed on providing more housing units, as opposed to the development of resident skills to control their own housing?

The following definitions will be used in this paper: A housing cooperative is a cooperative where member-residents jointly own their building. Ideally, member-residents democratically control the cooperative, and receive the social and economic benefits from living in and owning the cooperative. An affordable housing cooperative is available to moderate-, or low-income families.

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