Sunset Park Cooperatives

CO-OPERATION AMONG CO-OPERATIVES CO-OPERATION AMONG CO-OPERATIVES New York City has a long and tense history between housing, labor, public initiatives, and private interests. Throughout wars, economic crises, political upheavals, and largescale unemployment, many poor and working-class people in New York have been left to rely on cohabitation and public housing to survive. During this intergenerational process, a distinctly New York set of housing models has evolved. In 2018, we find ourselves in a new housing crisis. This time, however, government cooperation, previously crucial to the recovery of low-income communities, is faltering. Instead, current policies that favor private real estate development are disenfranchising middle-to-low income families. As rents skyrocket, pressure is mounting on affordable housing co-op's to follow the market and become market rate. Communities once sprawling with affordable co-op’s like Sunset Park, Brooklyn, now face displacement. Demand for affordable housing is multiplying while the supply is rapidly shrinking. What is the future of affordable housing in NYC, and how will co-op’s flourish without more effective government intervention? In this section, we describe existing low-income housing models in NYC, and the special role of labor and government cooperation in their development, with the aim of considering what future forms affordable housing may take in New

New York City has a long and tense history between housing, labor, public initiatives, and private interests. Throughout wars, economic crises, political upheavals, and largescale unemployment, many poor and working-class people in New York have been left to rely on cohabitation and public housing to survive. During this intergenerational process, a distinctly New York set of housing models has evolved. In 2018, we find ourselves in a new housing crisis. This time, however, government cooperation, previously crucial to the recovery of low-income communities, is faltering. Instead, current policies that favor private real estate development are disenfranchising middle-to-low income families. As rents skyrocket, pressure is mounting on affordable housing co-op's to follow the market and become market rate. Communities once sprawling with affordable co-op’s like Sunset Park, Brooklyn, now face displacement. Demand for affordable housing is multiplying while the supply is rapidly shrinking. What is the future of affordable housing in NYC, and how will co-op’s flourish without more effective government intervention? In this section, we describe existing low-income housing models in NYC, and the special role of labor and government cooperation in their development, with the aim of considering what future forms affordable housing may take in New

York.

MS DESIGN AND URBAN ECOLOGIES MC DISEÑO Y ECOLOGIAS URBANAS

2018

INTRODUCTION TO HOUSING AND LABOR

During WWI, the United States experienced mass immigration from European nations as people fled their wartorn countries and sought to establish a better life. In 1916, seeing an opportunity, a group of Finns settled in Sunset Park, Brooklyn, and established the first cooperative housing model in the United States. The co-op initially started as an agricultural worker co-op in order to gain access to government funding. After they had acquired funding, they went on to convert the worker co-op into a housing co-op. The Finnish housing co-op’s multiplied in Sunset Park, resulting in 30 affordable housing co-op's (25 of which remain).

In 1955, the government created the Mitchell-Lama Housing Program which subsidized the construction of 269 developments containing over 105,000 apartments for moderate and middle to low income housing. The largest of these, in the Baychester section of the Bronx, was renamed “Co-Op City”, and is the last of the Mitchell-Lama developments to remain affordable today. The city was actively working to increase the presence of affordable housing and in 1966 developed the Housing Development Fund (HDF) under Article XI of Private Housing Act, dedicating money to help subsidize the creation of further cooperative housing units throughout the city. However, in the 70’s the city experienced a fiscal crisis, largely due to deindustrialization and real estate disinvestment, that affected many city areas including South Bronx, Harlem, North and Central Brooklyn, including Sunset Park. The city was on the verge of bankruptcy and middle to low-income tenants were left with nothing as landlords abandoned their properties and the city stopped investing in their recovery. Despite landlord neglect, in 1973 the Urban Homesteading Assistance Board (UHAB) created the "sweat equity" model, and along with the Tenant Interim Leasing program (TIL) allowed tenants to establish Housing Development Fund Corporation's (HDFC's) in buildings that were owned by the city. UHAB worked alongside the Division of Alternative Management Programs (DAMP) who are responsible for the development of the following programs: Mutual Housing Associations ("sweat equity"), Urban Homesteading, Tenant Interim Leasing and Community Management Programs to allow residents to participate in the rehabilitation of their buildings with the understanding that once they were completed, the residents would become homeowners with the cooperative model. This led to the creation of hundreds of co-op conversions, saving the South Bronx.

The tenants joined together under the basis of the Rochdale Principles which were established in England during the pre-industrial age. Worker co-op's were the original cooperative model to follow these principles which eventually spread to all forms of co-ops', whether it be housing, worker or food, creating founding principles of all cooperative models.

The cooperative model flourished, and even in this current climate there are 1,350 housing cooperatives currently existing in the city, many existing in Sunset Park. However there has been a shift. Co-op’s are no longer focused on maintaining affordability and fragmented networks are making support and solidarity increasingly difficult. Many co-op's, including 24 of the Finnish co-op's in Sunset Park, have become market-rate, making housing increasingly more unattainable for the Sunset Park community. However, due to these guiding principles all co-op’s have a general universal understanding and structure which could lead to the rehabilitation of these connections and help strengthen the ties in order to push forward and collectively succeed in maintaining the current co-op’s and developing co-op's new in the future.

ROCHDALE PRINCIPLES 1) Voluntary & Open Memberhsip 2) Democratic Member Control 3) Member Economic Participation 4) Authonomy & Independence 5) Education, Training & Information 6) Cooperation among Co-ops 7) Concern for Community ROCHDALE PRINCIPLES 1) Voluntary & Open Memberhsip 2) Democratic Member Control 3) Member Economic Participation 4) Authonomy & Independence 5) Education, Training & Information 6) Cooperation among Cooperatives 7) Concern for Community

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HOW DID WE GET HERE? HOW DID WE GET HERE? s op oC h rk nis t Pa n i e F ns Su

a m nx La Bro l l e y, tch Cit Mi -op Co

A

CH NY

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WWI WWI

1900

S m FC Ho HD ban Ur

GREAT DEPRESSION GREAT DEPRESSION

1916

WWII WWII

NYC FISCAL CRISIS NYC FISCAL CRISIS

1955

NYC Housing Administration Established NYC Housing Administration Established

stm

e nv

eI at v i Pr

ts

en

g

COLD WAR COLD WAR

1934

Finnish Co-op's; Sunset Park Finnish Co-op's; Sunset Park

in rn Bu

a te

es

g din

Mitchell Lama Co-op City established, Bronx Mitchell Lama Co-op City established, Bronx

1970 Real Estate Collapse Real Estate Collapse

1973 UHAB UHAB

GLOBAL MARKET'S LIBERALIZED SUBPRIME MORTGAGE CRISIS GLOBAL MARKET'S LIBERALIZED SUBPRIME MORTGAGE CRISIS

1975

1980's-90's

2012 Limited Equity Co-op's at risk of Market-Rate conversion Limited Equity Co-op's at risk of Market-Rate conversion

HDFC HDFC DAMP DAMP

EVOLUTION OF HOUSING CO-OP'S EVOLUTION OF HOUSING CO-OP'S Municipal Authority clears out slums Registered as a workers co-op, unand develops government-operated der Departemnt of Agriculture, as a housing farming co-op. Used state and federal funds to establish as a housign co-op Municipal Authority clears out slums and develops government-operated Registered as a workers co-op, unhousing der Departemnt of Agriculture, as a farming co-op. Used state and federal funds to establish as a housign co-op 1927, Amalgamated Clothing Workers Union built. The Amalgamated Housing Corporation in Bronx, Kazan being the chief organizer 1927, Amalgamated Clothing Workers Union built. The Amalgamated Housing Corporation in Bronx, Kazan being the chief organizer

HPD, 2nd largest landlord HPD, 2nd largest landlord

2014

Reduced investment from city in low-income housing Reduced investment from city in low-income housing Sweat Equity/Homesteading Sweat Equity/Homesteading Legal ownership of homes Legal ownership of homes

ECONOMIC CONTEXT ECONOMIC CONTEXT Crumbling city infrastructure due to deinvestment Crumbling city infrastructure due to deinvestment

The Rebuild. Low-income tenant's organized to repair and reconstruct neglected housing The Rebuild. Low-income tenant's organized to repair and reconstruct neglected housing

The Economic Boom. Real estate speculation sets precedence for financial collapse of 2007 The Economic Boom. Real estate speculation sets precedence for financial collapse of 2007

2018

Affordable Now What? NeighborNow What? hood Co-op Affordable Neighborhood Co-op Program

New legislation; below 165% of AMI qualifies for affordable housing New legislation; below 165% of AMI qualifies for affordable housing

A LOOK AT SUNSET PARK A LOOK AT SUNSET PARK

UNDERSTANDING THE ASSETS UNDERSTANDING THE ASSETS

THE WORKER-HOUSING CONVERSATION

FINNISH CO-OP'S

When the Finn’s first arrived in Sunset Park they did not immediately become a housing cooperative. They first established themselves as an agricultural worker cooperative. In Sunset Park, the 99% of the worker co-op's are ogranized by immigrant women of color illustrating a shift in the demographic seen in the previous Finnish model. Worker cooperatives are values-driven businesses that put worker and community benefit at the core of their purpose. Using democratic practices, worker-members of the co-op participate in the profits, oversight, and the management of the enterprise. There are many types of worker co-op's, such as childcare, elder care and construction. Even though their services vary, they are unified through the founding cooperative principles. Through the initial establishment of a worker co-op, the Finnish made their community eligible to receive government funding specifically allocated to worker cooperative models. Using this funding, they gained the capitol necessary to establish housing cooperatives. This conversion process of worker to housing cooperative is a common practice and a goal shared by many worker co-op’s in Sunset Park and even New York as a whole. So, already having established a worker cooperative what are the next steps and how is Beyond Care going to make this transition?

Before looking forward towards potential collaborations and housing models, we must first take a look at housing models and cooperative structures in Sunset Park. On the following page is a map illustrating the existing cooperatives in Sunset Park.

The first co-op's in New York were the Finnish cooperatives in Sunset Park. The Finnish Co-op's have established a close knit network that is entirely self-sustaining and has remained strong despite the series of housing crises following their creation. Additionally, only one of the 25 Finnish co-op's has remained non-profit, meaning that the other 24 have become Market-rate, attracting a much more affluent demographic than that of other housing coop's in Sunset Park, but serving as a potential ally due to their stable capital and structure.

WORKER CO-OP'S

While only four worker co-ops are visible on the map, Sunset Park actually has 9 worker co-op's within the community. Many of the worker co-op's are based out of the Center of Family Life on 443 39th st, shown on the map.

The worker co-op's are all heading towards the same goal of developing housing to remain a part of the Sunset Park community. So partnerships can lead to increased clout within the neighborhood.

HDFC'S

Since the Finnish settled in Sunset Park, worker co-op's have undergone the conversion process into housing coop's. Sunset Park is home to many HDFC's that are seen throughout the park, but particularyly dense between 50th-55th st and 5th and 7th avenue . HDFC's are split between those who are low-income co-op's facing similar situations to that of Beyond Care and other's who are thriving and haven't expressed interested in collaboration. If relationships with the HDFC's in similar positions could be made, we could potentially combine forces being that they already have the structure and financing.

BEYON

D CARE

CO-OP ASSEST'S OF SUNSET PARK CO-OP ASSEST'S OF SUNSET PARK 9

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25

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FINNISH COOPERATIVES FINNISH COOPERATIVES

96%

WORKER COOPERATIVES WORKER COOPERATIVES

MARKET-RATE

33.3% OPERATING FROM CFL

53

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SU ST

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GR

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PA R

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44

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34

100%

LIMITED EQUITY

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41

HDFC'S HDFC'S

NW O

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ET

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ET AR Y

HOUSING DEVELOPMENT FUND CORPORATIONS HOUSING DEVELOPMENT FUND CORPORATIONS Housing Development Fund Corporation's (HDFC's) cooperatives are corporation's formed to build or rehabilitate low-income housing. Community works with government to incorporate as an HDFC Community works with government to incorporate as an HDFC

CITY GOVERNMENT

THIRD PARTY TRANSFER PROGRAM (TPT) THIRD PARTY TRANSFER PROGRAM (TPT)

HPD acquire distressed property HPD acquire distressed property

Housing Development Fund Corporation's (HDFC's) cooperatives are corporation's formed to build or rehabilitate low-income housing.

GOVERNMENT

HDFC takes over property and tenants remain HDFC takes over property and tenants remain

The HDFC gets government funding and support to rehabilitate property or build new housing units

3RD PARTY

The HDFC gets government funding and support to rehabilitate property or build new housing units

City approved third-party developer rehabilitates property City approved third-party developer rehabilitates property

HDFC

Members elect a board which makes decisions about how the HDFC is operated and its policies Members elect a board which makes decisions about how the HDFC is operated and its policies

HDFC

The deed to the property is held by the HDFC; members own limited equity shares of the corporation

Government owned property

TENANT INTERIM LEASE (TIL) Government owned property Government owned property GOVERNMENT

Tenants lease from the city and recieve training

Tenants gain building ownership Tenants gain building ownership

The deed to the property is held by the HDFC; members own limited equity shares of the corporation

TENANT INTERIM LEASE (TIL) Tenants lease from the city and recieve training

AFFORDABLE NEIGHBORHOOD COOPERATIVE PROGRAM (ANCP) AFFORDABLE NEIGHBORHOOD COOPERATIVE PROGRAM (ANCP)

Government owned property HDFC

GOVERNMENT

The TIL program allows tenants to organize as HDFC's within city-owned buildings, and then purchase their buildings from the government as low-income housing, at a rate of $250 per unit. The city provides tenants training on building management, maintenance, and financial record-keeping. The TIL program allows tenants to organize as HDFC's within city-owned buildings, and then purchase their buildings from the government as low-income housing, at a rate of $250 per unit. The city provides tenants training on building management, maintenance, and financial record-keeping.

Tenants lease from the city and recieve training Tenants lease from the city and recieve training

The ANCP replaces the TIL program. The primary difference is that with ANCP, tenants pay $2,500 for their units (instead of $250) and government funding is replaced by private debt which is passed on to the tenants, creating a less affordable situation for low-income residents. The ANCP replaces the TIL program. The primary difference is that with ANCP, tenants pay $2,500 for their units (instead of $250) and government funding is replaced by private debt which is passed on to the tenants, creating a less affordable situation for low-income residents.

COMMUNITY LAND TRUST COMMUNITY LAND TRUST Stakeholders

MUTUAL HOUSING ASSOCIATION MUTUAL HOUSING ASSOCIATION

Development's owned by tenants or other organization's/stakeholder's who are using the land Development's owned by tenants or other organization's/stakeholder's who are using the land

CLT 1/3

1/3

CLT maintains ownership of land, while structural developments are owned by tenants or other stakeholder's CLT maintains ownership of land, while structural developments are owned by tenants or other stakeholder's

CLT Resident's CLT Resident's

Community members

CLT

Community members

Mutual Housing Associations are corporations that offer a permanent solution to the housing needs of low-income families. The Mutual Housing Association of New York (MHANY) program began as a response to squatters that occupied vacant, city-owned sites in the East New York neighborhood of Brooklyn. HPD created the program to dispossess in-rem buildings and turn illegal squatters into legal homesteaders. Through negotiations with the squatter population, the city created a separate entity called MHANY and sold the properties to it. MHANY retained land titles to existing sites, and had the legal right to transfer ownership to homesteaders that had worked on the rehabilitation of buildings they occupied. Under HPD rules, homesteaders that chose to sell their property received a limited portion of the resale price.

To encourage long-term affordability, MHANY has the first option to purchase the unit and then resell it to a household on the waiting list at a restricted sale price. In addition to the vacant buildings, HPD provided technical assistance, permanent financing, and a portion of construction financing to MHANY cooperatives. MHANY seeks to change the way affordable housing for low and moderate income people is developed and operated, improve community conditions, increase neighborhood conditons, and help low and moderate income people who have the means (credit, savings and interest) to purchase their own homes.

Experts/Officials Experts/Officials Government owned property transfers ownership to MHA

A community land trust (CLT) is a nonprofit, community-based corporation committed to the permanent stewardship of land and the permanent affordability of housing and other buildings located upon its land. CLT’s acquire land by making a market rate purchase, receiving gifted land from a private donor or government entity, or “bargain sale” which is a below-market purchase where a seller accepts cash for a portion of the land’s value and claims a tax deduction for the remainder of the land’s value. Land acquired by a CLT is retained through a renewable 99-year lease. Any residential or commercial buildings already located on lands acquired by a CLT or any buildings later constructed on these lands are not retained by the CLT. The owner of a house, a condominium, or a multi-unit residential or commercial building located on a CLT’s land holds a deed for the building and a lease for the underlying land.

Government owned property transfers ownership to MHA GOVERNMENT

MHA Tenants work on building rehabilitation gain and ownership of units Tenants work on building rehabilitation gain and ownership of units

HOUSING STRUCTURES HOUSING STRUCTURES

FINLANDIA

BEDROOM

KITCHEN

OFFICE FINLANDIA

LIVING ROOM

FINNISH CO-OP'S

At a time when most working-class families were crowded into tenements often lacking even the basics in sanitation, these Finnish-built cooperatives boasted five rooms each, modern conveniences like hot water, showers, and gas stoves, and decorative touches like marble window sills. Encouraged by the success of the housing they built, members of the Finnish Socialist Club applied the co-op model to other businesses, starting a cooperative bakery at 43rd and Eighth Avenue. The bakery was followed by a restaurant, meat market, grocery store, and even a poolroom and mechanics garage, all on the same five blocks on Eighth Avenue. With thousands of members, they did brisk business – in 1922, it was reported by the US Department of Labor that in total, they had revenues of $260,000, the equivalent of $4 million today.

CO-HOUSING

Co-housing is a housing structure in which multiple familes coincide in the same building with various shared spaces as opposed to completely individual units. From a legal point of view, co-housing is governed as a co-op in which each family has their own piece of the housing; however, fundamentally, co-housing is a very different way of living from other domestic arrangements now available to New Yorkers—one that speaks to people who want to own an apartment but not feel isolated. In exchange for paying above-market prices for one of the units within a building, the group’s members will commonly share 11,000 square feet of common areas including dining and lounge spaces— placing less economic responsibility on each tenant.

HOUSING MODEL COMPARISON HOUSING MODEL COMPARISON

ADVANTAGES/ADVANTAGES

HDFC

CO-HOUSING

FINNISH

CLT

• Federal and State funding/ assistance • Income cap mandated by law • Cooperative values/principles • Federal and State funding/ assistance • Income cap mandated by law • Cooperative values/principles

• Economical gain by sharing spaces • Cooperative governance • Community owned spaces / shared responsibility • Economical gain by sharing spaces • Cooperative governance • Community owned spaces / shared responsibility

FINANANCE MODEL/FINANANCE MODEL

• Subject to government oversight/regulation • Definition of "low-income" creates legal loopholes • Subject to government oversight/regulation • Definition of "low-income" creates legal loopholes

• Limited equity corporation with government subsidy and tax benefits • Limited equity corporation with government subsidy and tax benefits

• Invasion of privacy • Competitive pricing with market-rate housing • Invasion of privacy • Competitive pricing with market-rate housing

• Similar to HOA or cooperative • Similar to HOA or cooperative

PRIMANRY ORGS. AND GOVERNMENT INITIATIVES/RELEVANT ORGS. UHAB, HPD-TIL, TPT, ANCP, CEANYC UHAB, HPD-TIL, TPT, ANCP, CEANYC

National Cohousing Association National Cohousing Association

• Network/Organization • Insitutional knowledge about community housing • Market-rate • Cooperative values/principles • Limited accesibility to outside network • Financial stability • Market-rate • Network/Organization • Limited accesibility to outside network • Insitutional knowledge about community housing • Cooperative values/principles • Financial stability

• Market-rate cooperative corporation

Association of Finnish Building Cooperatives

• Market-rate cooperative corporation

Association of Finnish Building Cooperatives

• Non-profit; community benefit mandated by law • Affordability from freezing land from market

• CLT owns land • Other organizations or tenants own development

• Non-profit; community benefit mandated by law • Affordability from freezing land from market

MHA

DISADVANTAGES/DISADVANTAGES

• Sweat Equity; tenants gain ownership after rehabilitation • Sweat Equity; tenants gain ownership after rehabilitation

• Non-community members part of governing structure • Larger number of entities involved • Non-community members part of governing structure • Larger number of entities involved

• No legal enforcement of affordability criteria • No legal enforcement of affordability criteria

• CLT owns land • Other organizations or tenants own development

• Government assistance in property acquisition • Sweat equity; tenant ownership • Government assistance in property acquisition • Sweat equity; tenant ownership

UHAB, NYCLI UHAB, NYCLI

NYC Department of Housing Development and Preservation, MHANY, Metropolitan Mutual Housing Association NYC Department of Housing Development and Preservation, MHANY, Metropolitan Mutual Housing Association

THE FUTURE THE FUTURE The City of New York has a long history of supporting low-income and community housing through funding, partnerships, and tax incentives.

The City of New York has a long history of supporting low-income and community housing through funding, partnerships, and tax incentives.

During the 1970’s and 1980’s, public land was available for government housing programs. In recent years, however, the availability of land for such initiatives has drastically decreased as the government has exhausted its inventory of public land. This has had a large negative impact on the affordability of housing schemes that the government facilitates today. Additionally, although many regulations exist to keep certain types of housing affordable, lack of oversight and lack of enforcement allows many units to pass into for-profit models and unaffordability.

In order to form a new and sustainable model for affordable, low-income housing, several factors should be considered:

LAND LAND

Land rates drastically affect the cost of housing. To establish a new affordable housing development, addressing the issue of land ownership separately can be extremely beneficial (such as in the CLT model). Land rates drastically affect the cost of housing. To establish a new affordable housing development, addressing the issue of land ownership separately can be extremely beneficial (such as in the CLT model).

REAL ESTATE DEVELOPMENT REAL ESTATE DEVELOPMENT

NYC has an array of initiatives to support low-income housing, many of which require partnerships with government approved non-profit real-estate developers. To be successful, a new housing development find a non-profit developer with shared values and mission. NYC has an array of initiatives to support low-income housing, many of which require partnerships with government approved non-profit real-estate developers. To be successful, a new housing development find a non-profit developer with shared values and mission.

PARTNERSHIPS PARTNERSHIPS

Establishing new units of affordable housing requires partnerships with many different entities. These include government agencies, non-profit organizations, and for-profit companies. Knowledge of different the different organizations and different types of partnerships that must be involved, as well as knowledge of different government programs, will be crucial to any new development. Establishing new units of affordable housing requires partnerships with many different entities. These include government agencies, non-profit organizations, and for-profit companies. Knowledge of different the different organizations and different types of partnerships that must be involved, as well as knowledge of different government programs, will be crucial to any new development.

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