How housing co-ops work

Page 4

Following are the steps for developments of co-operative housing provided by Communitas, a resource group for housing co-operatives.

1. Apply for seed money from Canada Mortgage and Housing Corporation (CMHC).

2. Ten people incorporate as a co-op under provincial legislation.

3. Perform a feasibility study to see if it will work financially.

4. Apply for a final commitment from CMHC.

5. Apply for financing.

6. Buy and renovate, or build housing.

7. Members and board take trainings.

8. Hire a part-time manager.

9. Move in.

Housing co-operatives are run on a break-even, non-profit basis with all operating costs and replacement reserve costs determining monthly housing charge. The more the members can apply their skills to working for the co-op, the more money there is to be saved.

Once people move in, it works like this:

1. Each family signs an agreement with the co-op and buys shares in the co-op.

2. Each family pays its housing charges to the co-op on a montly basis. Each family pays is own utility bills.

3. The money collected pays for the mortgage, taxes, insurance and operating costs. Some of the money collected is put aside in a reserve account for future replacements.

4. A government subsidy is received to reduce the housing charges of 30% of the

co-op members. The other 70% must pay the actual cost of operating the unit. Unlike public housing, the idea of a co-op housing is to create an environment of mixed income families, not a low-income "ghetto."

5. Many people think a co-op is like a condominium unit, but in a co-op, instead of each family privately owning their unit, all the members own it together.

6. Decisions are made by the membership and their elected board of directors. Each member has one vote.

7. When a family moves out, all of their shares are returned to them, providing their unit is in good shape and providing they do not owe money to the co-op.