Home & Garden
I could be handy mending a fuse
When your lights have gone.
You can knit a sweater by the fireside
Sunday mornings go for a ride.
Doing the garden, digging the weeds,
Who could ask for more?
Will you still need me, will you still feed me,
When I’m sixty-four?
Sixty-Four. It seemed so old when we were 20. Little did we know that we would still feel very much the same and, for many of us, would still be pursuing career, love and meaning in our lives just as though we were still 20.
Sadly, many of us who held the dream of home ownership and independence are still far from these aspirations, even as we approach retirement (or what we had hoped would be retirement).
Will we remain renters with all the insecurity that entails? Will we be forced to relocate at 70 years of age, upending our lives in a manner that was hard enough at 20 but now includes medical issues and family?
For this portion of society (and it’s no small slice), cooperative housing (or simply co-ops) may be an answer, and limited equity housing cooperatives (LEHCs) may make the most sense of all.
Berkeley is currently encouraging building development that addresses the needs of lower-income folks through its Inclusionary Zoning Ordinance (IZO) which requires developers to assure that at least 20 percent of any condos or apartments that get built will be affordable to persons who make no more than 80 percent of the local median income. Last year those figures were roughly $46K for a single person, $53K for two or $60K for a family of four. These figures represent a group that is generally unable to afford to own a home and often unable to rent in any but impoverished neighborhoods.
The IZO offers a second option to builders that do not wish to include low-cost housing in their projects. They can, instead, pay into a fund (ours is called the City of Berkeley Housing Trust Fund) that goes to support local affordable housing projects. Groups such as Resources for Community Development have used these funds to buy properties and help local groups, such as Berkeley’s 9th Street Co-op, manifest their vision. (Founded by Berkeley Councilmember, Linda Maio, RCD has developed over 1,400 long-term affordable living units in Alameda and other nearby counties.)
The Bay Area Community Land Trust is a local advocacy group that is helping to encourage co-operative housing. They would like to offer a third option and here’s why: So far the IZO has resulted in the creation of 143 rental units and only nine condos. So home ownership is, as usual, pushed further away from people with a low income. What they would like to see is an amendment to the Inclusionary Zoning Ordinance that would allow developers to meet their obligation by helping to create limited equity housing co-operatives.
In short, what is not happening today is the creation of home ownership for low-income persons through the Berkeley Housing Trust Fund (and that was clearly part of its mandate). So what is being proposed is a new way, a way in which Limited Equity Housing Cooperatives are formed directly out of the partnership with the builders.
What’s really different here, and follow me, but jeez, this is very confusing stuff, is that the money or efforts (that 20 percent that developers have to give up) can be funneled directly to a limited equity housing co-op project and here’s what makes that cool.
Co-ops aren’t like renting and they’re not like typical home ownership. They’re sort of like the group living many of us did 30 years ago. Remember buying food in bulk and sharing a big house? Well, it wasn’t for everybody and when we coupled up and married and had kids, it sort of went the way of old girlfriends. Nice to remember but you’d better not have it on speed-dial.
Group living had many advantages and a few disadvantages, and as my friend Kathy Labriola of the 9th Street Cooperative says, “Ironically, the good things and the bad things are the same things. A co-op is like a family. You may love them, but you don’t always like them.”
Co-op living means that you don’t have to do everything (or pay for everything) yourself. Costs and jobs are shared by the entire group, making many of the tasks that homeowners or renters face (digging the garden OR mending a fuse), much easier. This has also tended to foster extras for some co-ops such as the growing of fruits and vegetables, chicken farming and various green building improvement, all of which might have simply been too much for a single homeowner to manage while dealing with all the other monthly matters that homeowners face.
Cooperative living, like its budding cousin, Cohousing, requires a curtailing of selfishness and a willingness to share and to work things out. Each member of a co-op is typically expected to hold an elected position, take on a task and participate in regular meetings (monthly meetings are common). The Berkeley 9th St. Cooperative has only five member families (some are single, some are couples). There are currently five elected positions including president, VP, secretary, treasurer and maintenance coordinator. Elections are held each year and people swap jobs but everyone plays a role. Labor is also divvied up. Someone prunes the trees, someone waters the plants. Someone does the accounting. This may seem burdensome but it’s really much easier than doing all these things yourself. There isn’t that much more property to care for at a typical co-op of five persons than one might find at a single-family dwelling. And even if there is more square footage, economies of scale tell us that the actual difficulty of painting a 3,000-square-foot house isn’t twice the work of painting a 1,500-square-foot one. It might be 30 percent more work since much of the job is the same (making decisions, shopping, setting up tools and drop cloths).
LEHCs also change the way we think about the housing market in a very important way. We tend to think of the value of homes as naturally rising with the local market, but an LEHC doesn’t do that. Based on the radical notion that people can determine the amount of cost growth of their property, LEHCs pre-set the amount of value that the property can increase by each year (0-10 percent per annum is what the department of real estate mandates for LEHCs). Our own Tom Bates, while in the state assembly, proposed and passed the enabling legislation that gave us cooperate housing as we know it today in California.
The 9th Street co-op set their annual rate of increase at 2 percent, so that, as the years roll by, the property will still be affordable to new incoming members. However, it also means that being a member of an LEHC, such as this one, is no way to get rich by owning real estate. It’s just the opposite. The objective is to keep the value in the property and to make sure that it remains affordable to all its members. A monthly fee is charged to each member that covers their share of the mortgage, maintenance costs (whatever materials are needed and services that the members have to shop out), tax, insurance and whatever else the co-op pays for. With the value kept low, the monthly fees are also kept in check.
Many people have total monthly housing expenses in the range of about $600-800 per month, which is fairly incredible in today’s Bay Area market. The only problem is that, when you sell, you’re not going to make a killing. It requires a fairly radical rethinking of what we’re doing when we buy and sell real estate.
Of course, not all co-ops work this way. There are also Market Rate Housing Co-operatives (MRHC) and Berkeley has a few of these too. These function in all the same ways as were described above with the only difference being that the local real estate market determines the value of the shared in each co-op. And that brings up another interesting point, that of the actual manner of ownership in the co-op. One does not buy a unit or a room or a building in a co-op. One buys shares in the co-op. The co-op is owned by a non-profit corporation and the individual owners buy shares in the corporation. As the total value of the co-op rises (either by market forces or a fixed rate) each share increases in value. You never own property, per se, just a share in an entity that owns it.
If these ideas excite you, I’d encourage you to contact the Bay Area Community Land Trust (BACLT), a local organization that’s been organizing co-ops in recent years. They can help you to learn more about this radical (some might even say subversive) new way for us to live and create a more democratic and sustainable model of housing for the future. BACLT is also focused on the promotion of Elder Co-ops and Elder Cohousing and asking the question, “How will we live as the years roll by? Will we live alone in some big million dollar house that we can’t afford to repair? Or will we live with friends who look out for us and share the tasks and responsibilities that make up daily life?” BACLT is offering a bus tour this May to visit several elder-housing facilitates. They can be reached at 841-5307 if you think that this is your cup of herb tea.
If you think that Berkeley should amend the IZO to include that third choice, please contact your City Council member.
While it’s not clear whether LEHCs or MRHCs, Cohousing or Borg-operated, neutron-fired housing will turn out to be our best choice, it’s clear that the (American) dream of home ownership hasn’t turned out to be all that it was cracked up to be. Too few can live this way and I’m not so sure that it’s really the richest, smartest or the fairest way for us to go. People living in cohousing or co-ops sure look happy to me and when I’m 64, it might be just the place for me to mend a fuse. How about you? Care to dig a weed with me, Madam Vice President?