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A History of Housing Cooperatives


Starting with the Housing Acts of 1954 and 1959, the federal government began to shift from direct construction of public housing to publicly assisted housing. The National Housing Act of 1959 stimulated the development of low and moderate income communities during the 1960s and 1970s. Sections 221(d)(3), 202, and 236 of the Housing Acts were added to help form cooperatives of affordable guaranteed insured government loans. This approach became the mechanism of choice for the explosion of housing programs in the 1960s.

Early in 1960, the United Housing Foundation and the Foundation for Cooperative Housing joined with the Cooperative League of the USA and other institutions to create the National Association of Housing Cooperatives, in which all established cooperatives are eligible for membership. Many regional associations of cooperatives across the country were formed during this time, such as the Midwest Association of Housing Cooperatives, as well as advocacy organizations that sponsored developing cooperative housing projects in California, Arizona, New Mexico, Oregon, Washington and Hawaii.

Another institution that played a significant role in the history of cooperative housing was organized in 1961. The Association of Middle Income Housing, now named the Metropolitan Mutual Housing Association, concentrated most of its development efforts in New York, and organized the 420-unit Chatham Green cooperative in 1962 in Manhattan. By 1965 the United Housing Foundation and its predecessors had created some 23 cooperative housing projects in New York City, ranging in size from the 124-unit Mutual Housing Association in the Bronx to Rochdale Village in Queens on Long Island, with 5,860 apartments and also its own food stores, nursery schools, a credit union, and a multitude of civic and social organizations.

In one of the most momentous events of the housing cooperative movement, Title VIII of the Federal Civil Rights Act of 1968, was passed. This “Fair Housing Act” prohibited discrimination in housing due to race, color, national origin, or religion, and was signed in the week following the assassination of Dr. Martin Luther King, Jr. This Act was an attempt to achieve a goal of national residential integration. The purpose of Title VIII was to “provide, within constitutional limitations, for fair housing throughout the United States.” In 1974, sex was added and in 1988, familial status and handicaps were added, giving us the Federal Fair Housing Law that we know today.

With another economic recession in 1974, many newly formed cooperatives, under 5 years of age, were defaulted at a high level. At this time HUD made available “Section 8 Subsidies” for members to save the cooperative from defaulting. Under the Section 8 program, individual members paid carrying charges based strictly on income; originally this was 25% of the member’s gross household income. In the 1980’s, this was changed to 30% of household income. Even though it helped many BMIR and 236 cooperatives through the financial difficulties it also had a profound impact on how cooperatives operated. The primary purpose of the program was to accommodate cooperative ownership by bending rules in some cases, as well as changing how cooperatives are managed in others.

The National Housing Act of 1974 introduced sweeping changes in federal affordable housing policy. The trend in this era was a shift away from below market interest rate programs (BMIR) and towards Section 8 rent supplements. The shift also focused on converting existing public housing into housing for the very poor. Through these two decades, co-ops were built with project-based Section 8 funds from the government.

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