Additional Resources:

National Association of Housing Cooperatives
1614 King Street

Alexandria, VA 22314-2719

703-549-5201

National Cooperative Business Association
1401 New York Avenue NW, Suite 1100
Washington, DC 20005

202-638-6222

Housing Assistance Council

1025 Vermont Avenue NW, Suite 600
Washington, DC 20005
202-842-8600

National Cooperative Bank
1401 Eye Street NW, Suite 700
Washington, DC 20005
202-336-7700

United States Department of Agrcicultural
Rural Business - Cooperative Service

‘Ag Box 3250

Washington, DC 20250-3250
202-720-7558


members are not required to qualify for mort-
gage loans. In addition, monthly operating
costs are usually lower since the cooperative
does not operate to make a profit.

Affordability for future residents can be assured
through a limited equity formula that sets limits
on resale prices and on the amount of equity that
members can build. This is a central feature of
housing geared toward low- income residents.

2. Empowerment/Control. Home ownership
through cooperatives empowers people by
putting them in control of their own living sit-
uations. Cooperative members are their own
landlords and are responsible for addressing
their own needs. They exercise control through
a democratically elected board of directors,
joint decision-making at membership meet-
ings, and by volunteering to serve on various
committees.

3. Stability. Home ownership provides stability to
families and neighborhoods by giving resi-
dents a vested interest in the care of their sur-
roundings and in issues involving their com-
munities.

4. Community Interaction. Development of
strong community bonds and social structures
comes as a result of working together to meet
the diverse needs and circumstances of coop-
erative residents.

More Information

Additional information about housing coopera-
tives and how they are organized is available in
Cooperatives: A Housing Alternative for Rural
America (Service Report 45) and Keys to
Successful Cooperative Housing (Service Report
44), from U.S. Department of Agriculture, Rural
Business~ Cooperative Service, Ag Box 3250,
Washington, D.C. 20250-3250; Tel. (202)
720-7558.


Who We Are

The goal of the Cooperative Services program of
USDA’s Rural Business /Cooperative
Development Service (RBS) is to help rural resi-
dents form new cooperative businesses and
improve the operations of existing cooperatives.
To accomplish this, Cooperative Services pro-
vides technical assistance to cooperatives and to
those thinking of forming cooperatives. It also
conducts cooperative-related research and pro-
duces information products to promote
public-understanding of cooperatives.

RBS is part of USDA’s Rural Economic and
Community Development mission area, which
was created in 1994 when USDA consolidated
rural economic programs that had previously
been scattered among various agencies. RBS
encompasses the former Agricultural
Cooperative Service and some of the business
and economic development programs of the for-
mer Rural Development Administration and
Rural Electrification Administration.

For most of the past century, USDA's cooperative
assistance has been concentrated on agricultural
cooperatives. While agricultural marketing and
supply cooperatives remain a primary focus of
USDA's efforts, RBS plans to gradually expand
the cooperative program to include assistance to
all types of rural cooperatives.

The United States Department of Agriculture (USDA)
prohibits discrimination in its programs on the basis
of race, color, national origin, sex, religion, age, dis-
ability, political beliefs and marital or familial status.
(Not all prohibited bases apply to all programs.)
Persons with disabilities who require alternative
means for communication of program information
(Braille, large print, audiotape, etc.) should contact the
USDA Office of Communications at (202) 720-2791.

To file a complaint, write the Secretary of
Agriculture, U.S. Department of Agriculture,
Washington, DC 20250, or call (202) 720-7327 (voice)
or (202) 720-1127 (TDD). USDA is an equal opportu-
nity employer.


Cooperative

Cooperative Information Report 53
March 1996

United States Department of Agriculture
Rural Business / Cooperative Service


Lack of attractive, affordable housing has limited
the economic growth potential and even con-
tributed to the decline of many rural communi-
ties across America. Communities unable to pro-
vide decent housing for low- or
moderate-income families find it difficult to
attract new business. Others are unable to pro-
vide affordable housing that meets the needs of
senior citizens. Still others can offer only substan-
dard housing that may lack basic amenities such
as adequate plumbing, heating, and cooling.

Cooperatives are a way to bring decent, afford-
able housing to rural communities.

What Is a Housing Cooperative?

A housing cooperative is a form of home owner-
ship in which people join to form a cooperative
corporation which owns the buildings in which
they live.

Purchasing a share in the cooperative entitles
owner-tesidents to lease and occupy a dwelling
unit and to have a voice in its operation.
Members pay their share of monthly expenses
via a carrying or occupancy charge. The coopera-
tive is controlled by members through a democ-
ratically elected board of directors.

How Do Housing Cooperatives Differ
From Other Types of Housing?

Cooperative housing is different from other
types of housing because of the way it is orga-
nized and operated.

Cooperatives differ from condominiums in that
residents do not own or hold title to their indi-
vidual dwelling units. Instead, residents own
shares in the whole cooperative corporation. Title
to the property is held by the corporation.

Cooperatives differ from rental housing in that
residents’ shares represent ownership and allow


them to have a voice in how the housing is oper-
ated.

How Does a Housing Cooperative
Operate?

1, Housing cooperatives exist to provide housing
to owner-residents rather than returns to
investors, so they operate on an at-cost, or
not-for-profit basis. As a result, costs are gen-
erally lower than in other types of housing.

2. Housing cooperatives are usually financed by
a blanket mortgage on the entire property. The
cooperative corporation holds title to the prop-
erty and is responsible for paying off the mort-
gage. Members’ share of the mortgage is
included in their monthly occupancy or carry-
ing charge.

3. Owner-residents control their cooperative
through a board of directors, and through par-
ticipation in membership meetings and com-
mittee work. The board sets the overall operat-
ing policies for the cooperative, oversees its
operation, and enforces rules and regulations.
The board of directors may hire and oversee
professional management for the cooperative
or may be self-managing.

4. Member responsibilities—as owners and resi-
dents—are outlined in an occupancy agree-
ment, which is similar to a lease.
Responsibilities include payment of monthly
fees, participation in governance, and adher-
ence to rules and regulations.

What Are the Benefits of Cooperative
Housing?

1, Affordability. The purchase price of a housing
unit in a cooperative is usually lower because
of the way the cooperative is financed and
structured. Because the cooperative corpora-
tion holds a blanket mortgage, individual