Cooperatives in the Mission

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Cooperatives in the Mission
Photo Source David Stark.

• Prepared for Mission Housing Development
  Corporation
• By Maria Perez, Kirsten Miller and Cynthia
  Tawasha
• Urban Studies, SFSU
• Spring 2001

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OVERVIEW
Study Objectives/Methodology
Analysis/ Recommendations
Background
Key Findings
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STUDY OBJECTIVES
To consider the feasibility of limited equity
cooperatives in the following areas
Financing/Development Activities Organizational
Capacity Social Implications Political Issues
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METHODOLOGY
In Person Telephone E-mail

• Literature Review
• Secondary Data Sources
• Interviews
• Case Studies

City Officials Co-op experts Lenders Property
Manager
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BACKGROUND

• A Few Facts on the Mission
• Limited Equity Cooperatives (LEC)
  Definition of Concept.
• How does it work?
• Significant Characteristics?
• Why this model?

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A Few Facts on the Mission
Income levels
1998 Mission District Median Income 35,000
Source Claritas, BAE 1998 Estimate from 1990
Census
MHDCs Target Population 20-40 SF AMI 1
person 20 AMI 10,500, 40 AMI 20,980
Source HUD 2000 Income Limits.
Housing Prices
Median Rent in 1999 1,678 Median Home Price in
1999 311,000
Source Rent Tech, 1999.
Source Mission Corridor Report 1999
Ownership Rate
Owners 16, Renters 84 San Francisco
Owners 35, Renters 65 Source 1990 US Census
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Mission District OMI Evictions   Year Number Per
cent   1990-96 112 21 1997 99
18 1998 215 40 1999 114 21  
 
Total 1990-99 540 100   Source SF Rent
Stabilization and Arbitration Board MEDA
1999 Mission Corridor Project, MEDA 1999
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LIMITED EQUITY COOPERATIVES
Articles of Incorporation
By Laws
Member
CONTROL
OCCUPANCY
OWNERSHIP
Tenant
Shareholder
Propriety Lease
Subscription Agreement
Stock Certificate
House Rules
Source Davis, 1994. The Affordable City
Toward a Third Sector Housing Policy.
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SIGNIFICANT CHARACTERISTICS

• Initial Share Purchase Price
• Resale Price Restrictions
• Purpose of Restrictions

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KEY FINDINGS
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Help from the public sector?
Fed
State
Local
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Private Sources

• Private Lenders
• National Cooperative Bank
• CalFed
• LIHTCs
• Leasehold Arrangements

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Development Activities

• Building Type
• Scattered Site vs Multifamily dwellings
• New Construction vs. Rehab
• Target below market properties at brink of going
  market rate
• Appropriate Number of Units
• 50-100 units to maximize the benefits of economy
  of scale

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Organizational Capacity

• Tenant Organizing
• Technical Assistance Provided for
• Developer
• Board of Directors
• Tenants
• Property Management

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Social Implications

• Positive Aspects
• Control one member one vote
• Community Building
• Empowerment
• Negative Aspects
• Time Commitment
• Economics of poverty

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Political Issues

• LECs are not institutionalized in California
• Potential finance sources are tied to political
  environment
• Maximizing Resources
• High Risk
• Staff Capacity

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ANALYSIS

• Access to Financing
• and Organizational Impact
• Commitment to LEC Concept
• Effects on Residents
• Current Political Climate

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RECOMMENDATIONS

• Should MHDC try to pursue an LEC project
• Consider a leasehold arrangement to
• access deep state and federal subsidies.
• Be prepared to present the significant
  benefits of a LEC over a multi- family rental
  project.
• Land Trust Model
• Lobby for the institutionalization of
• alternative forms of housing

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Cooperatives in the Mission

• Prepared for Mission Housing Development
  Corporation
• By Maria Perez, Kirsten Miller and Cynthia
  Tawasha
• Urban Studies, SFSU
• Spring 2001