The Cheat Sheet: Co-ops

It seems there has been some recent confusion about what exactly a housing co-operative is and how it works. This is understandable; co-ops are kind of an obscure subject. So here is my quick primer on what they are and how they work. I have greatly simplified things, and am working from my own experience living in and serving on the board of a small federal co-op.

What’s a Co-op?

All kinds of ventures can be co-operatives, not just non-profit ones. For example, there’s Mountain Equipment Co-op*, and the West End Food Co-op, and back in Forest I lived down the street from a hardware store co-op. However, for the purposes of this post, let’s stick to non-profit housing co-ops.

Co-ops vary in size, from dozens to hundreds of units. Some are just one building, and others consist of scattered properties. Some, like mine, used to be private housing; some were purpose-built; others, like Alexandra Park, were once social housing.

All co-ops have this in common: they are organizations owned and run by their members. Unlike buying stock in a company, when you join a housing co-op you don’t get a share of the profit (not least because it’s non-profit!). Instead, you get a vote. This means you are not just a tenant; you get a say in how the co-op is run. You can vote on the annual budget or on the co-op’s by-laws. You can also vote for who gets to be on the board of directors — or even run for a board position yourself.

The board is entirely made up of co-op members. They are in charge of staff who do day-to-day management — a property management company, an accountant, etc. Board members sign off on cheques, get monthly financial statements, draft new by-laws and policies, manage evictions, and more.

Members can also join committees that report to the board. There might be committees for putting together the budget, setting maintenance standards, or organizing social events.

You don’t have to be on the board or join a committee if you don’t want to, but part of living in a co-op is agreeing to some level of participation. At the very least, show up to the AGM! Seriously, please come to the AGM. There is pizza…and a raffle…

Market Rent vs. Subsidy

Co-ops are a mix of “market rent” and subsidized units. Market rent is supposed to be about what you would pay if you were renting an apartment normally, but in practice it works out to be much cheaper. Non-profit co-ops aren’t supposed to be money-making enterprises, so there is less incentive to jack up rents. Ideally, you break even at the end of the year.

Okay, so if market rent units aren’t huge money-makers for co-ops, where does the money for subsidies come from?

It comes from government — sometimes municipal, sometimes federal. Co-ops make an “operating agreement” with the government: in exchange for the co-op operating under certain basic rules, the government will provide the co-op with money for housing subsidies.** Rules might include a minimum number of units that must be subsidized, or a maximum income cap for new members, or having to hold a certain number of general meetings per year.

What are the Perks?

The rent is cheap. See above. Getting a subsidy is also pretty sweet. A pre-condition is that you also have to have an application on file with Housing Connections (to get into TCHC, basically), but realistically it means nothing because you will never make it to the top of the waitlist. Ha! Ha! Ha!

You get a say in how it is run. It’s not like renting from a landlord. If you think the rent is too damn high, or if you worry that the co-op should be putting more money into reserves to pay for capital repairs, or if you feel really strongly about composting,*** you can raise it at a meeting or (better yet) join the relevant committee and convince your neighbours. You might end up learning all kinds of useful things, like how to read a financial statement, chair a meeting, or send out an RFP.

You get to know your neighbours. If you join a co-op, you probably already have the mindset that “we’re all in this together”, and so do your neighbours. You might end up starting a garden together, picking out linoleum, cat-sitting, baby-sitting… If you lose your job, you might be able to get a subsidy that will let you stay in your apartment instead of having to move somewhere cheaper. And the building will never be sold off and turned into condos, guaranteed! When you live in a co-op, you’re there for the long term.

You live with people from all walks of life. Mixed-income housing means that seniors, single moms, middle-class nuclear families, and perhaps even pinko rockstar NDP city councillors end up living side by side. Even here in Toronto, it’s possible to live in a same-y bubble where everyone around you is poor or everyone around you is rich, and frankly, neither is healthy — from an economic or social point of view. Co-op members who pay market rent should never be perceived as “cheating”, nor should members with subsidies be seen as “burdens”. The entire point of co-op living is not shutting ourselves off from each other with the wall that divides the deserving from the undeserving, but living and sharing with each other like fucking human beings in whose diverse gifts (all things counter, original, spare, strange) there is the genesis of a more humane way to live, Jesus fucking Christ.

Co-opocalypse

You might not know this, but this is a crisis time for co-ops across Canada. During the 60’s and 70’s, the government invested heavily in creating and funding co-ops. But in the 90’s, the federal and provincial governments started cutting funding and ending their co-op programs. This means that for many co-ops, their standard 50-year operating agreements are ending and the money has run out for good. Without the funding that comes with an operating agreement, they can’t maintain their current proportion of subsidized units.

This is extremely stressful because many of the people who depend on co-ops for affordable housing may face increasingly un-affordable rents. We will have to start denying subsidies to our fellow co-op members, even if they really can’t afford it. And it’s really fucking hard to evict your neighbours!

The government started co-ops in the first place because it was in their best interest: they could create affordable housing that works without actually having to run it. We are hoping that, as operating agreements end, the government realizes that its other options for creating affordable housing are way more of a hassle and chooses at the last minute to re-invest in co-ops. Of course it’s totally possible that they’ll be like “We’re not promising affordable housing for anyone anymore” and we’ll all be fucked. Ha ha ha ha ha!

If you would like to learn more about co-ops:

• Buy me a coffee and we’ll chat. If I’m busy, I may know other people.
• Come out to this “Close the Housing Gap” rally on Wednesday, March 19 at Queen’s Park.
• If you live in a co-op yourself but are a total noob, Co-operative Housing Federation of Toronto is an excellent source of education and support. If your co-op has a CHFT membership you can get reasonably priced workshops and guides on all manner of things.

Lastly, if I have made some egregious mistake, please comment and let me know so I can correct this post! I am well-informed, but not an expert.

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* Does this mean you can help run Mountain Equipment Co-op? Yes, it does.

** There are two ways a co-op can give subsidies:

1) Have a set amount of subsidies available.
2) Have a subsidy pool, and allocate the money according to how many people need it.

My co-op uses the first method. It lets us do things like charge a very low flat rate to members who are on social assistance. For people who aren’t on social assistance but still need help, there is a formula to calculate how much they should pay based on their income. However, that means if we’ve given out the maximum number of subsidies available, some people will get no help at all. With the second method, everyone who needs it gets a little bit of help, although it might not be enough to cover rent. It’s a very difficult choice to make, and when you’re on the board, it might be your responsibility to decide things like that.

*** People in my co-op feel very strongly about composting.