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Cooperative Housing

Not so many decades ago most of America wondered with often negative curiosity about cooperative living. Frequently called communes, compounds, or even cults, cooperative homes were generally misunderstood and looked down upon as filthy places where dope-smoking adults communally raised dirty and disillusioned children.

The truth is that when properly set up a cooperative home can offer several individuals and families a stable environment in which to live and a community of neighbors who are working together for a common goal.

Today co-op housing is arranged as a not-for-profit corporation with resident members serving in various ways to ensure the success of the company - all as shareholders. Residents can serve on the board to help shape the rules, fees, assigned tasks, and other aspects of the co-op.

With the housing market in its current recessive state, cooperative living is an excellent solution giving many who can’t afford a house of their own a growing investment and a safe place to live. It could also serve homeowners who are on the brink of losing their large homes to foreclosure by giving them a way to keep their home while sharing the financial and maintenance burden. Of course, in order to turn a single family home into a co-op house, the owner would have to file through the legal process and have the proper documentation (which may not be a viable option in every zoning district).

Co-op members, while considered shareholders, can often reap the tax benefits afforded single family house owners. In most cases residents of co-op housing can deduct their share of the mortgage interest and real estate taxes from their annual federal tax return and can be exempt from paying taxes on the capital gains if they sell their shares in the housing unit after living there full-time for more than two years.

On the more personal side, resident members are more like a very tight-knit community. They are much more than neighbors. In many cases they will rely on each other for certain aspects of the upkeep and maintenance of the housing unit. Each co-op is different, but residents are generally required to participate in a certain number of chores or hours of service to the co-op. Tasks may include landscaping, gardening, repairs, cleaning, shopping, serving on the board of directors, and whatever else the democratically elected board deems necessary and reasonable. This is, of course, on top of each member’s monthly payment to the co-op to cover their share of the mortgage, taxes, insurance, utilities, maintenance, and possibly a co-op kitty for unexpected expenses.

Just as there are numerous reasons for buying a new home, there are several different goals for forming co-op housing. Co-op housing types include: market rate cooperatives, limited equity cooperatives, leasing co-ops, senior housing co-ops, mobile home co-ops, special needs co-ops, student co-ops, artist co-ops, mutual housing associations, intentional communities, and cohousing co-ops. And there are likely more.

Right now there are approximately 1.2 million families living in co-operative situations across the United States, many in or near major metropolitan areas like New York City, Chicago, Washington, D.C., Miami, Detroit, Atlanta and San Francisco.

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