This Non-Profit Wants to Help You Turn Your Building Into a Co-op

Co-ops are the perennial flowers of the affordable-housing field. Beginning in the 1930s, and at various intervals since then, cooperative home ownership has come in and out of vogue as a low-cost alternative to conventional renter-landlord and owner-occupied models. The concept is simple: co-op members purchase shares of a building or complex, entitling them to reside in one particular unit; shareholders then manage the property themselves under a democratic framework; if a member sells their shares and moves out, they’re entitled to realize a profit—but a chunk of the sale is claimed by the cooperative, ensuring its financial future while blunting the increase in home values over time. The system works, though its popularity waxes and wanes.

"You see these waves of co-op development," says Andrew Reicher. "The ’50s, the ’70s—and again today." As president of New York-based non-profit the Urban Homesteading Assistance Board (UHAB), Reicher has been on the scene long enough to have witnessed the last wave, to survive the ensuing lull, and now to reckon with another co-op upswing. Originally trained as an architect, Reichert became fascinated with the affordability field in the early 1970s, moving to the South Bronx to help community-led groups save their buildings from the arson and blight then ravaging the area. Starting with UHAB in 1978, Reicher rose to the leadership position three years later, and today he does much the same thing he’s done from the start: helping UHAB provide financial and technical assistance for renters looking to take (and maintain) control of their buildings. Reicher talked to Dwell about this once-and-future housing solution.  

How did UHAB get started, and what was the impetus for it?

Remember this was the ‘70s. In 1978 alone, the government of New York City took over 11,000 buildings from delinquent landlords. Some had fire damage, or were in total disrepair; some were empty, but 4,000 were still occupied. UHAB was born to help support urban homesteading—the idea being that when landlords are out of the picture, people can and will step up and take over their buildings. Housing is a people process: give people a chance and they’ll put a new lock in, get a contract for oil heat.  

With my background as an architect, I always felt like it was exciting to do renovations and become involved with a building. So UHAB started by showing people how to do that, giving residents a chance to learn leadership skills, to elect and manage a co-op board, deal with contractors, win grants and get into public programs. In our first year, we had representatives from over 200 buildings in New York reach out to us. And as we watched residents gain confidence and get agency over their housing, I think we were learning as much from them as they were from us. Today, people power is still at the core of what we do. My predecessors at UHAB actually take credit for inventing the term "sweat equity." 

Your group recently got quite a lot of press for one project in the South Bronx, where you converted a private rental building into a co-op. Walk us through how that happened.

That was actually the first project we’ve done that wasn’t city-owned at the time we converted it. The property, 700 East 134th, was a privately-owned building; it had a series of landlords over the years, some of whom did some level of rehab on the building, fixed up apartments and hallways. But the most recent landlord then tried to claim that the building should be deregulated, that its rent-stabilized units should be converted to market rate. And the tenants organized, and with the help of a local activist, they got a legal services attorney and resisted. They then went back and forth for five, six years, fighting over the deregulation effort, until they decided it would make sense to buy the building themselves and become a co-op. That’s when they called us. We met with the residents, held a number of training sessions, explaining what a co-op is, what responsibilities you take on, what’s the extra work, the benefits, and what might it cost. It’s essential that tenants make an informed choice—you don’t want to find yourself leading a parade, then look back and see no one is behind you.  

The "what-it-might cost" question seems like the big one. How do you make sure these cooperatives are economically sustainable?

We always need government financing upfront. The city provides a lot of that, both with its own money and with federal money; we’ve also worked in other cities, using federal programs to create similar co-ops. But we couldn’t go forward without low-cost loans and subsidies. One of New York’s most helpful programs is tax abatement: because the limited-equity model allows you to keep prices down, these projects provide the city with affordable housing, well below the cost of comparably-scaled condominiums, so the city ensures they have low or zero property taxes for about a 40 year span. Beyond that, the overall operating plan is something we help co-ops like East 134th put together at the outset, creating a budget that might involve foundation grants, support for green-energy retrofits and so on; over the long term, UHAB then stays involved with our partner co-ops, running educational seminars. We have programming as many as 200 nights a year, helping 1,300 co-ops around the city and the region. 

With so much of the debate right now focused around development vs. regulation, it kind of feels like co-ops are left out of the equation. Why do you think there’s renewed interest now, and what’s next for the co-op movement? 

I think it’s part of a broader phenomenon: labor unions, credit unions, worker co-ops, all those things have had a big resurgence in our current economic times. This generation of people facing economic difficulties—young people, families, businesses—they’re looking for new solutions. Especially after the success of 700 E. 134th, we’ve been getting calls from all across the country for help, people who want to learn how to create co-ops. But for the momentum to keep going, there needs to be more financing available. While states like New York have helped a lot, the federal government needs to step up, especially by removing obstacles to supporting co-ops and co-op members from agencies like the Small Business Administration and the Veterans Administration. At the same time, we in the co-op movement have some thinking to do. We want co-ops to be permanently affordable to restrict future profit, so that even if neighborhoods become valuable, low-income people can still thrive there; at the same time, we want co-ops to be an opportunity for people to start building generational wealth. There are examples out there that show this can be done—some co-ops are now a century old, and still going strong! But the wealth versus affordability issue, that’s something we still need to reckon with.  

Top photo courtesy of UHAB.

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