There are many paths toward establishing a new community and controlling your housing through cooperation, but these are the key steps you will need to get started.
How to get started
Step 1: Write down what you want
A housing co-op exists to meet the shared needs of its members. The first step is to identify what needs you and your community have that are not being well met by the currently available housing. Do you need cheaper rent? More flexible terms? Control of your space? A big old garden? Housing security? Write down your vision for a housing arrangement that meets the needs of your community. Be bold and honest. The sky is the limit, but the ground is where you build from.
Step 2: Recruit other people
A co-op allows a group of people to meet their shared needs together when they could not do so separately. Share your vision and find the people that want to be a part of it. Recruitment is not just about finding people who like your idea, but people who are willing and able to participate in an egalitarian team and to do the work of creating a new organization.
As new people join the group, the goals and priorities of the co-op will need to adapt to the changing basket of the shared needs of the people in the group. Revisit, refine, and grow your vision.
Step 3: Make a plan
Once you’ve got the band together, it’s time to start making tangible plans. Your plans will necessarily change and evolve over time. You won’t have all the answers. Start writing down plans to make a framework for figuring out what is possible.
What: What do you want your property to look like? How big, how many units, what amenities, what location? Sketch it out!
When: When will you move-in? How long do people have to work on this before they might move on to other projects or locations? How long can people stay in their current housing? How long will real estate opportunities last?
How: How much will it cost to buy/build/lease a property? How much money and work will members need to contribute upfront and per month? How will we pay for regular and expected expenses? Pro Tip: Ask us for our Budget Template!
Step 4: Form a legal entity
A legal entity (such as a non-profit corporation, cooperative corporation, or LLC) gives you a legal and financial tool to share an asset among many people. It makes the rights and responsibilities of individual members explicit and legally enforceable. And it can protect the members from adversarial entities or individuals who may try to sue, displace, or take-over the co-op. Forming your legal entity allows you to open bank accounts, receive bills, purchase property and take loans in the name of the co-op.
A corporation is formed by filing a form with a state. It is often as simple as filling out a form on a website, but you should consult an attorney familiar with co-op law in your state before submitting any documents. Pro Tip: Look for a legal clinic at local law schools to see if they provide free services for groups starting new co-ops or non-profits.
Step 5: Acquire a property
There are several options for acquiring a property. Your co-op can master lease a residential property, purchase an existing property, or build/renovate a building to suit your needs. Many co-ops start off by leasing their first property then purchase a building later.
There are a variety of specialists you will probably need to hire (or ask to donate services pro bono!) in order to navigate the legal and financial process of purchasing or renovating a building:
Lawyer: to verify zoning compliance and review contracts
Real Estate Agent: to manage negotiations with sellers
General Contractor/Architect: to plan and estimate renovation costs and code compliance
Property Inspector: to assess the quality and safety of building components
Appraiser: to assess the fair market value of a potential property
Financial Consultant: to evaluate financing options and coordinate loan package
Is It Really That Easy?
Starting a new housing co-op for you and your community usually takes 1 to 3 years. It takes a lot of coordination, dedication, and a medium amount of pure luck. You won’t get rich (and probably won’t get paid at all) starting a co-op, but you will get the home you need and establish a community that will live on for decades to come. It’s not easy, but there is a lot of support out there and NASCO is here to help!
Co-op Development Organizer's Handbook
NASCO's Organizer's Handbook is a comprehensive guide to creating group-equity housing cooperatives. By explaining the cooperative movement, campus and community organizing, nonprofit incorporation, financing, and housing development, this important resource demystifies a challenging project. The first and second editions were released in 1991 and 1999, with a 3rd Edition released in 2008. This most recent edition is more comprehensive, written with accessible language with advice that can be used in a wide range of different coop settings.
The Handbook is an essential resource for the student or community organizer focusing on housing issues. Furthermore, it is an informative and illuminating read for people concerned about affordable housing and college accessibility. While the 3rd Edition focuses on group equity cooperatives, many of the resources will prove useful to people organizing student, community, and non-housing co-ops. Active students, affordable housing advocates, college administrators, foundations, libraries, concerned citizens, and nonprofit organizations will all find the Handbook an excellent addition to their collection of resources.
The Organizers Handbook is available in PDF format. (download)
Want to learn more? Come to NASCO Institute for two days of workshops focused on starting new co-ops.
To request assistance from NASCO development staff who can help you with your project, use the form below to contact us. Please note we prioritize assistance to community-oriented cooperatives with a focus on anti-gentrification and that provide assistance to historically marginalized groups.