NASCO Properties was incorporated in order to assist in stabilizing an ailing NASCO member co-op system, but it has evolved into the current organization of eleven co-op houses in seven cooperative systems. Like NASCO Development Services, NASCO Properties was created in the late 1980's as a vehicle for NASCO to become more directly involved in the development, expansion, and assistance of student cooperatives and permanently affordable cooperative housing.
NASCO Properties was created in the summer of 1988 in order to purchase the House of Commons, one of seven co-op houses owned by the University of Texas Inter-Cooperative Council (ICC-Austin) in Austin. The collapse of the Texas economy, caused by falling oil prices and the banking and saving and loan scandals, created a real estate crisis in Austin, and vacancies at the ICC-Austin threatened the co-op with bankruptcy.
ICC-Austin asked NASCO for help. NASCO devised a plan to purchase one of ICC-Austin's houses for $200,000, with funds borrowed from the Inter-Cooperative Council at the University of Michigan (ICC-UM). NP was incorporated as a special property-holding nonprofit organization, and promptly leased the House of Commons back to ICC-Austin. This gave the ICC-Austin a much needed cash infusion, which allowed them to survive the market crises, when most of Austin's rental real estate was foreclosed on, and today they have expanded and are once again a successful co-op.
Because the only lien on the House of Commons now belonged to another co-op (ICC-UM), NP's ownership of this house provided the missing link in NASCO's co-op development efforts: a nationwide source of equity.
The building was sold back to the UT-ICC in 2003, and the money gained from the sale was then re-used to purchase Sasona Cooperative (see below).
Shortly after the House of Commons project, the NASCO Development Services began working with a student group called Qumbya, which was then leasing a building in Chicago. When Qumbya (pronounced "Koom-bya") had difficulties getting direct loans, NASCO Properties agreed to purchase a building and lease it to them. This house, the first new co-op established through NP ownership, was purchased in 1989 and called Haymarket House. In 1991, CCDC and NP assisted Qumbya in expanding with the purchase of Howard Bowers House, and in 2000 a third building, called Concord House, was purchased.
These three houses were sold in 2004 to Lots in Common, a joint venture between NASCO and Riverton Community Housing, a non-profit co-op housing developer based in the Twin Cities. The intention was to use these properties as a "starter set" for Lots in Common (or "LINC") to use to fuel the growth of new coops. LINC uses a very similar model to that of NP, but has a corporate structure which allows for multiple "parents" to enter into the joint venture.
In 2009, the Qumbya properties were transferred back into NP, which will allow LINC to pursue new cooperative development in the future by working with other non-profits which have a need for affordable and educational housing.
In 1999, a group in Boulder asked for temporary help from NASCO Properties in order to secure a house offered to them at a discount by the sellers. The property was later purchased from NP by a local co-op developer, the Boulder Housing Coalition.
In the late 1990s, a group of rental co-ops in Urbana-Champaign organized a development corporation for the purpose of buying property. After a long search, they located a rooming house to purchase but could not convince lenders to finance the project. They requested assistance from NASCO Properties, which purchased the building in 2000 with the help of a loan from the National Cooperative Bank.
Later that year, another rooming house was offered to COUCH at a very reasonable price, and NASCO Properties again assisted with the purchase. This time the acquisition was financed through a local bank.
Buffalo, New York
In 2002, a group of students and community activists in Buffalo put together $7,500 for a down payment on a beautiful old mansion that was sold at a county tax auction, but they were unable to find a bank willing to loan them the balance needed to complete the purchase. Once again, NASCO Properties was called on to purchase the property. After a year of searching, NP secured financing for Nickel City through the Northcountry Cooperative Development Fund and the Kagawa Fund.
In 2006,the members of Nickel City found a property a few blocks away which became available at a good price, and which could be renovated to house enough members to make a sustainable coop. NASCO Properties was able to purchase the house, and the renovation took place in collaboration between Nickel City members and NASCO staff.
In 2006, the board decided to pursue a more pro-active approach to bringing the benefits of NP title-holding to coops, and issued a Request For Proposals. Within weeks, there were several applicants with compelling proposals, but due to a number of factors, Kalamazoo Collective Housing was considered the best option. The group had been leasing a house (the Meristem Cooperative) in Kalamazoo, and was seeking the purchase of a second house (now the Fletcher Collective). A suitable property was found within 2 blocks of the original house, and within a few months NP was ready to close on the house.
Since then, the Fletcher Collective and Kalamazoo Collective Housing have been seeking to use the stability of the leased houses to grow their own development fund, and look forward to providing affordable community-focused housing in the Kalamazoo area.
Beginning in 2007, NASCO Properties and the University of Kansas Student Housing Association (UKSHA) began to talk about whether the Lawrence Coops might not be a great fit for NP management. UKSHA has a long history in the city of Lawrence, particularly its largest house - Sunflower House.
Sunflower House was in need of a great deal of renovation in order to remain a great place for students to live in the future, but UKSHA was unable to borrow enough money to take on such a large project. NP was more likely to be able to borrow enough money to make the renovation possible, and still allow UKSHA to operate their coop as they saw fit. In 2010, NP purchased the three UKSHA properties and began a massive renovation of the Sunflower House. In the fall of 2010, Sunflower House was ready to house a new generation of coop members in Lawrence!
In 2001, a group who were former members of College Houses cooperatives formed a new organization to develop community based co-ops, called Community Housing Expansion of Austin. They soon found an old group home that was for sale, and purchased the building with owner financing. Unfortunately, the financing had a balloon payment due in two years, and they were unable to find a bank to lend them money.
NASCO Properties was called in, and the property was purchase through a complicated arrangement through which the House of Commons was sold back to the University of Texas ICC, the money was used as a down payment on the CHEA House, named Sasona Co-op, and the balance borrowed on a pass-through loan from the ICC.
In 2013, Community Housing Expansion of Austin and NASCO Properties worked together to create the La Reunion apartment cooperative, with twenty two bedroom apartments at affordable rates, with one more apartment unit that has been converted into community space for meetings, childrens' activities, and shared meals. This project has made cooperative living available not only to non-students living outside of campus, but to families that may need more personal living space than can be found in the other group living cooperatives in Austin. The La Reunion apartment cooperative is also the first house within NASCO Properties open to members who rely on Section 8 vouchers, making cooperative living accessible to low income members who would not have been able to take advantage of other Austin co-ops.
In 1990, NP worked with the Student Cooperative Organization at Ohio University to purchase The Vine housing cooperative. The 8 member house was managed for a year as a rental property, and by 1991 it had become a fully functioning co-op. The ICC at the University of Michigan provided temporary financing, and the Kagawa Fund (part of the Cooperative Development Foundation), along with other student co-ops and local lenders provided long term loans.
In 2015, NASCO Properties worked with the members of the Student Cooperative Organization to purchase Firehouse, a second 8 member house. This doubled the size of the local co-op and making it possible for SCO to create a new cooperative culture alongside the rich culture that's developed in the first 25 years of cooperation within The Vine.
In spring 2016, NASCO Properties was approached to help the Brown Association for Cooperative Housing work through issues of financial stability and maintenance needs of two aging buildings. BACH had been operating housing cooperatives in Providence for nearly 50 years, and was operating two houses - Finlandia and Watermyn.
After speaking with BACH members, the local lender, and the board representatives from the other NASCO Properties coops, a plan was approved to bring BACH's two houses into NASCO Properties. Today, the two BACH houses are still run by their members, and are also financially stable and getting the maintenance resources they need to last for decades to come.
The Present Picture
Today, NASCO Properties is searching constantly for new opportunities to expand its existing cooperative systems or establish new co-ops around the country. NP is more financially stable than ever before, but its approach to expansion is demand driven and not yet fully proactive. Over time, NP expects to build its holdings to a much greater level, enabling an increasing number of members to enjoy the benefits of cooperative ownership, and the stability of the NP method of title holding.
NASCO Properties is likely to ask cooperatives interested in joining NP to submit a proposal to the NASCO Properties board. This process was successfully concluded in 2007, 2014, and 2016, and is expected to serve as a model going forward. To learn more about the NASCO Properties Request for Proposals process, requirements and process for the 2016 RFP are available here.