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There are many different ways that residents can exercise ownership or control over their development. The most important thing to remember is that if you can define what the structure should look like, a lawyer can probably make it happen.

In a co-op, residents own all the stock of a corporation that owns the development. Residents do not own their own unit, but they do completely control their development. Co-ops work best in large buildings where residents are familiar with the cooperative concept.

Resident-controlled rentals are almost exactly the same as co-ops, except that the development is owned by a non-profit controlled by the residents. Unlike a co-op, residents hold no equity in this model.

Mutual Housing Associations are also non-profits, but they typically have a board that includes residents, future residents, and representatives of the public and private sectors. They have a mission of continuing to expand to include more and more housing, and they often manage their own developments. They are useful for owning scattered sites. MHAs lease their housing to their residents.

Owners of condominiums do own their own units, and a share of all common facilities as well. Limited Equity Condominiums limit the sale price to keep the units affordable.

There are many variations on all these models including combinations with land trusts, a wide variety of partnerships, and structures in which residents have input, but not control. For more detailed information, click on the links below.




Limited Equity Co-ops Strong Track Record
Pick Your Neighbors
Easy to Finance Improvements
Easy In Easy Out
Model unknown in many places
You do not own your unit
Requires significant participation
Difficult in small developments
Limited Equity Condos Own your unit
Less participation required
Can work in small developments
Easier for developer to finance
Easier to self-manage
Model is well known
Owners must obtain a mortgage
Not available to low income
Can lose affordability on foreclosure
High transaction costs
Hard to finance improvements
Hard to pick new residents
Resident-Controlled Rentals Similar advantages to co-op
As "rental", easy to understand
Similar disadvantages to co-op
No equity (ownership) for residents
Mutual Housing Associations Similar to RC Rental
Subsidies available from Neighborhood Reinvestment
Expands to fill need of more people
Term not well-defined
Similar disadvantages to RC Rental
General Partnerships Cash available from developers
Expertise of developers
Must share power with developers
Overlay:  Cohousing Community-related advantages such as sharing childcare and meals More participation required
Overlay: Land Trusts Strong tool to guarantee long term affordability
Expertise of land trust
Dependent on existence of third party
Overlay:  Syndication Brings in funds
Brings in expertise
less control for residents
Syndicator often not sympathetic to resident control
Major financial costs
Tax Credits very competitive




Unless otherwise indicated, copyright 1999 ARCH. All rights reserved.
Revised: October 02, 2003.

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