cgallant at pacela.org
07-31-2007, 05:24 PM
I hope you don't mind my posting. Carol Gallant, a member of the list
serve, sent me an excerpt and suggested I respond as the picture
painted of
housing cooperatives -- to my mind a very useful method for creating
both
affordable homeownership and community development -- by a previous
poster
was largely inaccurate.
Housing cooperatives have been used to create homeownership in a
multifamily setting for many decades. There are at least 1.2 million
units
of cooperative housing in the United States, at least 25% of which are
affordable to new purchasers permanently or for very long terms
through
restrictions in resale prices.
A housing cooperative is a corporation which owns all of the land and
buildings of a multifamily residential development. The
members/shareholders of the corporation each own an undivided interest
in
the assets of the corporation and have exclusive occupancy rights to a
specific dwelling unit owned by the corporation. They are very like a
condominium association, except that a condominium association parcels
out
all of the real estate among the various homeowners while the
cooperative
keeps all of the real estate undivided and instead parcels out
occupancy
rights. They are treated equally with single-family homes and condos by
the
Internal Revenue Code in terms of mortgage-interest and property tax
deductibility and protection from capital gain taxation on sale.
Due to their legal structure, cooperatives have some advantages in
providing for affordability, including economies of scale. All
cooperatives
(housing or otherwise) operate at cost for the sole benefit of their
member-owners. Over time, monthly housing charges in cooperatives fall
farther and farther below monthly rental charges for comparable
buildings
-- there is no third-party landlord seeking a profit. Because of the
unitary ownership of real estate, cooperatives can finance building
repairs
and improvements far more easily than either condominiums or
single-family
homeowners. The corporation can simply mortgage the property as a
whole, at
what is often an advantaged interest rate, and without any individual
homeowner having to qualify for the loan. This allows housing
cooperatives
to prudently operate without accumulating reserves at the level
necessary
to finance 100% of needed repairs, substantially reducing monthly
housing
costs. And closing costs for cooperative purchasers can be
substantially
lower than closing costs for comparable condos or single-family homes:
there is little or no tax proration and no need to pre-fund a tax and
insurance escrow (the cooperative corporation pays both taxes and
insurance
from its own accounts, funded by monthly payments from its
members/shareholders). Because no real estate changes hands, no title
insurance is required, which further lowers closing costs.
Additional information on housing cooperatives is available at
www.housinginfo.coop
We moved recently. Please note my new contact information, below.
________________________________________________
Terry Lewis, Esq. | President, NCB Community Works, LLC | NCB
2011 Crystal Drive | Suite 800 | Arlington, VA 22202
Tel (703) 302-8140 | Cell (301) 938-0923 | Fax (703) 647-3471 |
tlewis@ncb.coop
NCB refers to National Consumer Cooperative Bank and its subsidiaries
(primarily NCB, FSB and NCB Financial Advisors, Inc.), its affiliated
non-profit corporation, NCB Capital Impact, and also NCB Community
Works,
LLC, which is jointly owned by NCB Capital Impact. Each is a separate
entity within the NCB Financial Group.
______________________________________
This e-mail and any files transmitted with it are confidential and
intended solely for the use of the individual or entity to whom
they are addressed. If you have received this e-mail in error please
notify the
originator of the message. This footer also confirms that this
e-mail message has been scanned for the presence of computer viruses.
Any views expressed in this message are those of the individual
sender, except where the sender specifies and with authority,
states them to be the views of NCB.
Please do not send sensitive information, such as account, Social
Security, Tax ID, or credit card numbers to us using email.
Carol D. Gallant
Director, Program Development
Pacific Asian Consortium in Employment
1055 Wilshire Blvd - Suite 1475
Los Angeles, CA 90017
213-989-3218
This post transferred from the cdb-l mailing list
serve, sent me an excerpt and suggested I respond as the picture
painted of
housing cooperatives -- to my mind a very useful method for creating
both
affordable homeownership and community development -- by a previous
poster
was largely inaccurate.
Housing cooperatives have been used to create homeownership in a
multifamily setting for many decades. There are at least 1.2 million
units
of cooperative housing in the United States, at least 25% of which are
affordable to new purchasers permanently or for very long terms
through
restrictions in resale prices.
A housing cooperative is a corporation which owns all of the land and
buildings of a multifamily residential development. The
members/shareholders of the corporation each own an undivided interest
in
the assets of the corporation and have exclusive occupancy rights to a
specific dwelling unit owned by the corporation. They are very like a
condominium association, except that a condominium association parcels
out
all of the real estate among the various homeowners while the
cooperative
keeps all of the real estate undivided and instead parcels out
occupancy
rights. They are treated equally with single-family homes and condos by
the
Internal Revenue Code in terms of mortgage-interest and property tax
deductibility and protection from capital gain taxation on sale.
Due to their legal structure, cooperatives have some advantages in
providing for affordability, including economies of scale. All
cooperatives
(housing or otherwise) operate at cost for the sole benefit of their
member-owners. Over time, monthly housing charges in cooperatives fall
farther and farther below monthly rental charges for comparable
buildings
-- there is no third-party landlord seeking a profit. Because of the
unitary ownership of real estate, cooperatives can finance building
repairs
and improvements far more easily than either condominiums or
single-family
homeowners. The corporation can simply mortgage the property as a
whole, at
what is often an advantaged interest rate, and without any individual
homeowner having to qualify for the loan. This allows housing
cooperatives
to prudently operate without accumulating reserves at the level
necessary
to finance 100% of needed repairs, substantially reducing monthly
housing
costs. And closing costs for cooperative purchasers can be
substantially
lower than closing costs for comparable condos or single-family homes:
there is little or no tax proration and no need to pre-fund a tax and
insurance escrow (the cooperative corporation pays both taxes and
insurance
from its own accounts, funded by monthly payments from its
members/shareholders). Because no real estate changes hands, no title
insurance is required, which further lowers closing costs.
Additional information on housing cooperatives is available at
www.housinginfo.coop
We moved recently. Please note my new contact information, below.
________________________________________________
Terry Lewis, Esq. | President, NCB Community Works, LLC | NCB
2011 Crystal Drive | Suite 800 | Arlington, VA 22202
Tel (703) 302-8140 | Cell (301) 938-0923 | Fax (703) 647-3471 |
tlewis@ncb.coop
NCB refers to National Consumer Cooperative Bank and its subsidiaries
(primarily NCB, FSB and NCB Financial Advisors, Inc.), its affiliated
non-profit corporation, NCB Capital Impact, and also NCB Community
Works,
LLC, which is jointly owned by NCB Capital Impact. Each is a separate
entity within the NCB Financial Group.
______________________________________
This e-mail and any files transmitted with it are confidential and
intended solely for the use of the individual or entity to whom
they are addressed. If you have received this e-mail in error please
notify the
originator of the message. This footer also confirms that this
e-mail message has been scanned for the presence of computer viruses.
Any views expressed in this message are those of the individual
sender, except where the sender specifies and with authority,
states them to be the views of NCB.
Please do not send sensitive information, such as account, Social
Security, Tax ID, or credit card numbers to us using email.
Carol D. Gallant
Director, Program Development
Pacific Asian Consortium in Employment
1055 Wilshire Blvd - Suite 1475
Los Angeles, CA 90017
213-989-3218
This post transferred from the cdb-l mailing list