Cooperatives Offer Alternatives
By Anne Sullivan, Reprented with permission from The News-Herald
Living in cooperative housing is the best of both worlds, according to Blaine Honeycutt, president of the board of directors at Georgetown Place Cooperatives. It many cases, it is less costly than buying a house or a condominium, and it provides for a level of homeownership that apartments do not, he said.
Nancy Fisher was a single mother who raised her children in a cooperative in Belleville. "It's a good place for a single mom," Fisher said of living in a cooperative. "Some (single parents) can't afford a home, and if you can, it's hard to do all the work involved." She believed in the concept of cooperative living and took a job as the site manager at Georgetown, a position she's held for 20 years. About four years ago, she moved to Georgetown. Cooperatives were first built in the 1920s to 1940s in cities such as New York, Chicago and Washington D.C., with dense populations.
Most were built after World War II and through the 1970s and provided a form of homeownership for low- and moderate-income families, according to the National Association of Housing Cooperatives. It was thought that young couples would move in, save enough money to buy a house and move out, Honeycutt said. Some residents did that, while others decided to stay.
Today, many cooperatives are communities blended with senior citizens and young couples. In tight housing markets, such as Ann Arbor, cooperatives might be the only source of affordable housing, according to the NAHC.
There are two types of cooperatives.
A limited equity co-op means residents must be below a certain income level and the sale prices and profits are controlled, said Randall Pentiuk, a cooperative attorney and vice president for the Midwest Association of Housing Cooperatives, and a board member for the NAHC.
As an example, the three co-ops in Taylor are limited equity, he said.The other type is market controlled and does not have limits on residents' income or sales profits, such as Bretton Village in Trenton.
Also, many senior citizen high-rise apartments are cooperatives, including Bishop Park Cooperatives in Wyandotte, and the high rises in Riverview and Trenton, he said. Moving into a cooperative is much like buying a house, except that you are buying a share in the community, not a unit, said Gerald Thomas, an MAHC board member.
Michigan, Ohio, Indiana, Massachusetts, Illinois, Kentucky, Pennsylvania, South Dakota and Washington State are part of the MAHC.
A criminal background check and a credit check are run on everyone applying to live in a coop, Pentiuk said. After approval and buying a share, you immediately become a tenant.
"That's an advantage over condos," Pentiuk said. "In a condo, Jeffrey Dahmer could move in next door."
Co-op residents pay a monthly fee to cover taxes, insurance, water, sewage, gas, lawn care, snow removal, and general upkeep of the property, in addition to the monthly mortgage, Thomas said. In some cooperatives, residents could have a mortgage on their unit as well, Pentiuk added.
A primary difference between living in a cooperative and a condo surfaces is upkeep inside the unit.
"If your garbage disposal goes out at your house or condo, you have to buy a new one," Pentiuk said. "In a co-op, you call maintenance and it's fixed."
There are more than 200 cooperatives in Michigan. Most were built with a 40-year U.S. Department of Housing and Urban Development mortgage and those mortgages soon will be paid off, Pentiuk said.
Some co-ops, like Georgetown, have refinanced and used the money to pay off the mortgage and make renovations, he said.
Co-ops remain a popular housing option in New York City, where most are market priced, not equity-limited, Pentiuk said.
In Michigan, a developer is looking to build a 10-unit cooperative in Saginaw, which will be a market equity development, he said.
Volume 1 Issue 7