Shoestring Democracy: Gated Condominiums and Market Rate Co-operatives in New York [pre-print]

This article develops the concept of shoestring democracy as a way to characterize the resulting social relations of private governance structures embedded in two types of collective housing schemes found in New York City and the adjoining suburbs: gated condominium communities (gated condominiums) and market rate co-operative apartment complexes (co-ops). Drawing from ethnographies of gated condominiums and co-ops in New York City and neighboring Nassau County, New York, we examine these two forms of collective home ownership and the impact of private governance structures on residents and their sense of representation and participation in ongoing community life. “Shoestring democracy” encompasses a broad range of behaviors utilized to insulate residents from local conflicts and disagreements, and limits rather than promotes political participation. The greatest differences were found in discussions of safety and security, in that condominium residents have developed an elaborate discourse of the fear of crime and others, especially racialized others, to explain why they moved to their secured communities. Co-op interviewees, on the other hand, generally felt a sense of safety in their buildings, often due to the gatekeeper effect of the co-op board and doormen. In gated communities, covenants, contracts, and deed restrictions (CC&Rs) guarantee that most problems are resolved before they start. While the same can be said for co-ops, these interviewees find that these rules and regulations seem to mystify everyday governing practices for the average coop resident. Moral minimalism and a lack of structural and procedural knowledge may insulate residents from local conflicts and disagreement, but also may discourage civic participation. Exploring the apathy residents’ expressed about participation and a lack of representation suggests that although the Rochdale Principles of cooperation that are the legal and social basis for co-ops may have been important at one time, current practices of private governing boards do more to restrict participatory democratic practices than encourage them. The policy implications are outlined with suggestions of how to make homeowners associations and co-op boards more accountable and encourage greater adherence to the original co-op mandate. Do not cite, excerpt, or reprint this version. Instead, cite: Low, Setha, Gregory T. Donovan, and Jen Gieseking. 2012. “Shoestring Democracy: Gated Condominiums and Market-Rate Cooperatives in New York. ” Journal of Urban Affairs 34 (3): 279–296. doi:10.1111/j.14679906. 2011.00576. x. INTRODUCTION In the United States, where private homeownership has been touted as the primary means for its citizens to achieve financial security and social status (c.f. Saegert et al 2009), the governance structures that regulate collective home ownership are being privatized through various schemes and increasingly operated as corporations. In a study of gated condominium communities (hereafter condominiums) completed in 2005 by the first author, it was found that the greatest impact on social relations within the residential development was the structure of the private governance, and not simply the physical walls and gates that stimulated the first author’s initial concern. In fact, the governance structure of the homeowners’ association (hereafter HOA) board and other elements of common interest development housing—better known as CIDs that include condominiums, planned urban developments and co-ops as alternative planning forms-changed the nature of home ownership (Barton and Silverman 1994). These gated condominiums used an extreme form of social segregation to monitor and control “community,” raising important questions as to whose economic, social, political and cultural ideals are enforced by both the physical and metaphorical gates (Low 2003). To understand further the impact of private governance on homeownership and housing schemes, the research group, under direction of the first author, began a study of another form of private governance, market rate housing cooperative apartment complexes (hereafter co-ops), to determine if some of the same outcomes would also be observed. These outcomes include desire for safety and security, a desire to be among “people like us,” moral minimalism, and lack of representation and civic engagement on the part of residents. This article draws upon exemplary interviews collected from 1995 through 2005 and theoretical findings to frame and compare to the co-op interviews collected from 20062010. These new findings do not replicate the published findings of Low (2003, 2007, 2008); instead they extend this work into the more nuanced concept of “shoestring democracy. ” This concept is a way to characterize the resulting social relations of private governance structures embedded in two types of collective housing schemes found in New York City and the adjoining suburbs. “Shoestring democracy” encompasses a broad range of behaviors utilized to insulate residents from local conflicts and disagreements, and limits rather than promotes political participation. Do not cite, excerpt, or reprint this version. Instead, cite: Low, Setha, Gregory T. Donovan, and Jen Gieseking. 2012. “Shoestring Democracy: Gated Condominiums and Market-Rate Cooperatives in New York. ” Journal of Urban Affairs 34 (3): 279–296. doi:10.1111/j.14679906. 2011.00576. x. The article begins with a summary of gated condominiums and market rate co-ops including a brief history of each. A review of the original condominium study is followed by a more extensive description of the recent study of co-ops and a summary description of the methods and interviewees. Excerpts drawn from both studies are then used to illustrate the various dimensions of the comparison, including the new forms of discourse found only in the co-op interviews and the differences in the interpretation of safety and security, interpersonal conflict and interaction, as well as similar representation and civic engagement at each. Shoestring democracy is a concept that best characterizes the findings from this comparison of governance strategies and their impact on civic engagement and social interaction within the different housing schemes. The conclusion retraces the argument and suggests what policy considerations can be drawn from this comparative study. In brief, we found that by comparing the two studies certain similarities and differences were highlighted. Gated condominium residents remain more concerned with safety and security and more fearful of others than co-op residents, who feel that they live with people like themselves. On the other hand, the governance structures of both market rate co-ops and gated condominiums were found to increase the amount of moral minimalism among residents. That is, residents of both gated condominiums and market rate co-ops tend to turn to their elected governing boards as well as hired management, and not to each other, to resolve conflict. Further, the lack of representation and sense that the board does not reflect one’s values or interests, occurs in both housing schemes. What was most surprising was the development of shoestring democracy in the co-ops where the Rochdale principles for the promotion of democratic practices and cooperative behavior are historically foundational and institutionally still in force. Ownership Structure in Gated Condominium and Market Rate Co-ops in New York While market rate co-op housing and gated condominiums share many similarities in terms of their interest in safety, security, and retaining investment value, their greatest difference is the structure of ownership. Each private housing scheme has a distinct history that influences current practices: condominiums are based on a planning and design model, and co-ops are derived from wealthy New Yorkers’ “home clubs” and the adoption of the idealistic Rochdale Do not cite, excerpt, or reprint this version. Instead, cite: Low, Setha, Gregory T. Donovan, and Jen Gieseking. 2012. “Shoestring Democracy: Gated Condominiums and Market-Rate Cooperatives in New York. ” Journal of Urban Affairs 34 (3): 279–296. doi:10.1111/j.14679906. 2011.00576. x. principles. In co-ops, residents become members of a corporation or limited partnership that collectively owns an apartment building or group of houses. Residents become shareholders and purchase shares that entitle them to a long-term “proprietary lease. ” Individual shareholders do not “own” their units, but own a percentage of shares within the co-op. Condominiums, on the other hand, are real property, with fee simple (individual) ownership of the house or apartment, and common ownership of facilities, land or buildings (see Barton and Silverman 1994 for a more comprehension discussion). Fees covering maintenance, taxes and improvements are distributed to all residents in both organizations. Both condominiums and co-ops are legally organized by their developer and/or owners as corporations, that is, with a governance structure that includes a board made up of elected residents and the developer and owners if they still retain property, that makes all decisions about the finances and repairs and is protected by corporate legal statutes against lawsuits. The scope of board management is legally greater in co-op buildings because all property, including the individual housing units, is under the control of the board. The most significant differences are to be found in the ways these housing schemes operate, namely the degree of control held by the board over the market transactions of buying and selling of apartments or houses. In the condominium arrangement, an individual can sell or rent his or her apartment without the approval of the other residents or the condominium board. While the condominium board has the right of first refusal to buy any apartment up for sale and to ask to review the financials of the purchaser, the seller i