Cooperative Housing Our expert is Krista Houstoun, of The Sheldon Cooperative, speaking out about cooperative housing. Community: The Sheldon Cooperative Contact:
Mark Desbrow Part 2 of 2: Cooperative Housing Also, see Part 1 of this interview: Retirement Living Portland Oregon
Co ops, once very popular, seem to be making a comeback in these more economical times--learn more about the features of co ops and make it an option to consider for a home purchase. Our Interview with Experts is with The Sheldon Cooperative.
Read the entire interview or drop down to the Cooperative Housing topics:
Cooperative Housing: Cooperative Communities BG: Does cooperative housing make living or retiring in the city more affordable? TS: Yes. In fact, cooperative living is one of the most financially advantageous age 55+ options available today. In co-op style city retirement you'll reap the benefits of shared costs and collective bargaining. Purchasing items such as cleaning services, in home care or personal fitness classes can be done in a pooled manner by the cooperative members effectively and, therefore, priced down. Furthermore, overall operating and maintenance expenses are shared by the membership, making the overall cost of living more affordable than a single-family home. When you take the profit-driven middle-man out of the equation, you have control over your costs that most would not have in other retirement communities, be they city or suburban, without the burden of sole ownership. BG: What is the definition of cooperative housing? TS: Good living! [laughs]. But seriously, the true definition of a co-op for our purposes is a business organization owned and operated by a group of individuals for their mutual benefit. You know that saying, "it takes a village to raise a child"? Well a co-op is an extension of that thought that wisely says, "It takes a village to raise a village!" Humans are communal in nature; individualism is historically a newer concept and I don't think it's all it's cracked up to be, especially as we age. A co-op is a housing model that allows members to be connected, secure and in control. Cooperative Housing: Age in Place Community BG: Are senior cooperative retirement communities any different from non-age restricted co-op communities? TS: It is in one very important aspect: our building is designed to help you age-in-place. It won’t look institutional, but there will be subtle differences that you won’t think about until you need them. The standard family home would need major renovations to accommodate someone as they age or encounter medical difficulties (for example, what if we need a wheelchair in 10 years?) Here are a few features that will be tastefully implemented at The Sheldon:
BG: I know from experience those things are important and become more so with aging. Your website talks about community as an important aspect of living in a co-op. How do you achieve a feeling of community in a co-op? Do you consider this unique to cooperatives? TS: Community is intrinsic to the co-op structure. When you own something with other people, and you see them every day, a cooperation is THE most important aspect to making it a successful and pleasant place to live. In co-op's, you get to form governance committees and run a democracy within your building. The incentive to get involved with the community is obvious. Community-building is a huge advantage of co-op's. Additionally, the amount of community space we have set aside at The Sheldon, a senior cooperative community (at the request of the members), is significant for an urban location. Architects call this “Community Space Science.” Whether an art or a science, it is thoughtful design with an intended result: to get people to come together. Cooperative Housing: Financial Advantages of Cooperative Housing BG: Seniors are very interested in saving their hard-earned money. Can you explain the financial advantages of co operative housing and how it saves money for seniors in retirement? TS: In a co op, the costs to operate the building are equal to what members pay monthly. It's owned by the members so there is no third-party interests seeking to gain profit from the project. It essentially operates as a zero profit enterprise. Any increases in assessments reflect the actual costs to operate the building, and are voted on by members. We know of no way to provide the consumer with more high quality for less money because of the manner in which the project is financed. Members make their "down payments" or purchase "shares" in the cooperative prior to the commencement of construction. As a result of this, members eliminate the high return requirements that traditional real estate investors will require. Eliminating this return or "equity yield" allows the co-op members to retain control and essentially get more for less, by eliminating the return-seeking investor. Additionally, this co-op model offers predictability that is uncommon in your own home, much less, typical retirement communities. The Co-op has robust reserves for maintenance/future repairs and eliminates the profit-seeking owner that raises monthly assessments as much as the market will bear annually. Members are in control of all of this and have total transparency on the co-op’s costs since they own it. BG: I personally live in senior cooperative housing. It was a new experience for me and I am amazed at how economical my living costs are. We do have a small raise of the co op fees each year but we get so much more from the co op overall. I have had free replacement of windows, doors, bathroom tiles, disposal, dishwasher, laundry machines and on and on. The co-op pays for nearly everything. BG: On my website I describe co ops as being affordable, is this description accurate? TS: As a general rule, limited equity co ops are more affordable than other comparable options because of the unique manner in which they are financed and the long-term resident control over operating costs. In many typical retirement communities, the residents may receive annual or even monthly rental increases. Co op assessment increases must be approved by the cooperative. Also, the limited equity component of the project makes for a longer term more affordable solution. Many "affordable projects" have accompanying public subsidies that require people who live in the asset to be a certain percentage under median family income. Co-ops in general are typically more market-rate opportunities. Within the market-rate umbrella, they tend to be more affordable, particularly over the long term. BG: Co-ops as an investment -- do they appreciate as well as condominiums and single-family home investments? TS: Limited equity co-ops like this one have a HUD mandated limited appreciation on the Share Price or "Down Payment," such a limit on appreciation is capped at 2% per year. This is done to make the project more financially predictable, stable and liquid for the membership. Condos tend to go up or down with the market, but limited equity co-ops like The Sheldon only increase by 2% per year and therefore grow long waiting lists (reducing the difficulty of selling your share if needed). The longer the co-ops are around, the more affordable they become. BG:Who determines how much the monthly co-op fee is raised over time? This is a democratic process. The member-elected board of directors must vote to approve an increase in assessment.In my co-op community, appliances are replaced without cost to me when necessary--do all co-ops have that appliances are replaced--why is that? There is a schedule for appliance replacement. This typically comes out of an established reserve account. The appliances in your unit are actually the property of the co-op, so the co-op has a responsibility to fix or replace them when needed. Cooperative Housing: Features of Senior Cooperative Retirement Communities BG: What are the main features of a co-op that most co-ops have? TS: Most 55+ cooperatives have plenty of common areas including libraries, kitchens for parties and potlucks, event space, outdoor space, security cameras, underground parking, community garden space, and some have wood shops and car washes. Some co-ops have dining services. The Sheldon being in an urban location will have a restaurant space that is owned by the co-op and open to the public. The Sheldon will additionally be highly sustainable, as it is targeting a LEED Gold designation. BG: What would your senior cooperative retirement community have that another doesn't--what might another have that you do not -- who determines the features? Urban locations offer many different amenities and features than our suburban counterparts. Specifically, our co-op is located on the streetcar line and is two blocks away from Legacy Good Samaritan Hospital. We will also have a restaurant on the ground floor and exceptionally large balconies with electrical, gas and water supplies. The location and these features were specifically based on initial member input. The only thing we wouldn’t have is wide-open space, but that feature is the main distinction between city vs. rural retirement. Cooperative Housing: Where are Senior Cooperative Retirement Communities Found BG: Are senior cooperative retirement communities found more in the city, suburbs or country? If so, why? TS: Most of the nation's co-ops are found in suburban locations, which makes The Sheldon's urban location very unique. Until pretty recently, there had been a steady movement out to the suburbs since immediately after WWII. Retirement communities followed that trend as well. But now we are seeing a retraction back inward to the city, and like much of America, there is an increasing desire on the part of people over 55+ to live in urban locations. The reasons for this range from financial to social to environmental. But I think many people are simply sick of being isolated and crave more human interaction. Plus with the recent oil spills, the general hassle of car maintenance, and health concerns people are also looking for car-free, walkable environments. Cooperative Housing: Health and Wellness Philosophy of The Sheldon BG: I have discovered, being a senior, that health, money and mental activities are of highest priority in senior living. How does The Sheldon address these issues. TS: The Sheldon values these things as high priority, too. One way we have addressed these issues is by partnering with Legacy Good Samaritan Hospital—which is two blocks from The Sheldon site—to bring health and wellness education to The Sheldon members, as well as to the surrounding community. We've already participated in our first wellness fair with Legacy Good Sam, and it was very successful simply because seniors want to stay informed. We think intellectual discussions on health and how it relates to seniors is vital to a high quality of life. Cooperative Housing: The Sheldon Senior Cooperative Retirement Community BG: A little bit more about The Sheldon--your website is beautiful and describes your community's many advantages. If I could, I think I would want to live there. You seem to have thought of everything. TS: I think we’ve covered almost everything, but this is a truly unique community. As one of our founding members, Mitzi Scott, put it, “It’s a neighborhood…It’s a neighborhood in a building. This one is different! On every level it’s different.” From the grassroots approach started by a group of friends, to the urban and eco-friendly construction of the project, we feel confident that there may not be anything like it on the West Coast. Our main "wow-factors" are the stellar location in vibrant NW Portland, the community space, and the building’s ability to help one age in place.
BG: A garden in the City, how great is that--can you tell us more about this unique amenity for city living. Why did you decide to have a garden area for city dwellers. Carolyn Sheldon, one-half of The Sheldon's namesake (the other being renowned architect Bing Sheldon) was insistent on the garden. She refused to leave her heirloom tomatoes behind! That’s also why the balconies are so huge at The Sheldon, so members can have additional space for personal gardening and for entertaining guests.
BG: How many units will the Sheldon have, how many have sold. Do you have plans for more communities like The Sheldon. TS: The Sheldon is set to have 62 units, and as of now (June 2010) we have pre-sold 37 units. I think the fact that we are already over half full when we are still in the predevelopment stages proves there is a growing demand for this type of new-urbanism senior living model. Mark Desbrow, the developer of The Sheldon Cooperative, does plan to mimic The Sheldon model, once it's complete, and bring it to various parts of the West Coast.
BG: Thank you again for taking the time to give this very informative expert interview on cooperative housing. I encourage people to visit your website The Sheldon Cooperative for more information.
This is an information only website. We make no recommendations or opinions. Please make your own careful investigations of communities mentioned on this site. The features of a cooperative housing community vary according to the community--please check the features of individual communities carefully. Please verify all information on Cooperative Housing as it can change. Also see Part 1 of the Interview: Retirement Living Portland Oregon
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