Housing Beyond and Within the Market, Part 3: Cooperatives in Boston
This article is co-published with Market Failure, ed. Eric Peterson. It is the last in a three-part series. Follow the links to read Part 1 and Part 2.
In our last post, I introduced Zurich’s century-old cooperative housing model as a way to address the dual challenge of keeping housing affordable while helping narrow the racial wealth gap in the United States. I outlined how operating at cost, at scale, and at the cutting edge of architectural processes has allowed Zurich’s nonprofit housing cooperatives to proliferate. In this post, I discuss cooperative conditions in metropolitan Boston, Massachusetts, with a view toward the potential for expanding the cooperative housing sector there. Findings are based on interviews conducted with current and former policy makers, developers, architects, and residents of existing co-ops in the summer of 2020. MIT workshop research assistants Ana Arenas and Hugh Ebdy, as well as workshop participants Amy Fang, Julian Geltman, Ben Hoyle, Jayson Kim, and Christopher Moyer conducted these interviews.
Figure 1. In this map, MIT workshop participant Julian Geltman reveals the distribution of publicly owned properties in Boston in 2020 as a possible basis for the promotion of nonprofit cooperative housing. The land and its disposition are managed either by the Department of Neighborhood Development (DND) or the Boston Planning and Development Agency (BPDA). Data courtesy DND and BDPA. Courtesy of Julian Geltman.
A Diverse and Polarized Cooperative Landscape
Housing in Boston is very different than in Zurich (Figure 1). First and foremost, 35 percent of homes are owner-occupied (versus 10 percent in Zurich, excluding co-ops). Yet there are also similarities. In Boston, around 20 percent of dwelling units are considered “affordable,” meaning income- and price-restricted in some way, a share comparable to Zurich’s 25 percent (which includes co-ops and public housing). Boston, we realized, also has a long and varied history of nonprofit, or limited-equity, co-ops.
Figure 2. St. Joseph’s Cooperative Homes in Boston’s Roxbury neighborhood, completed in 1969, is an example of one of Boston’s many older nonprofit cooperatives. The project was made possible by land cleared through urban renewal programs, and the sponsorship of two neighborhood organizations. It remains affordable to low-income households thanks to a project-based Section 8 contract. Photograph by Ana Arenas, 2020.
Indeed, our first key finding is that such cooperatives exist—and do so in an astonishing range of locations, ages, sizes, and built forms, initiated by diverse actors toward a variety of goals. The bulk of these non-profit co-ops, like St. Joseph’s, a development of 137 two-story row houses in Roxbury, date to between the 1950s and early 1970s, when the U.S. government actively promoted the format (Figure 2; see Figure 2, post 1). Others, along Symphony Road, were created out of burned-out rowhouses, date to the late 1970s and 1980s, when, as in other U.S. cities, local officials encouraged residents to take over distressed or abandoned buildings.
Figure 3. Laconia Lofts in South Boston is a condominium development completed in 1999, designed by David Hacin for developer Jack McLaughlin. It was built on city-owned land made available through an RFP. The project includes one-third resale-restricted live-work studios reserved for low-income artists. As MIT workshop participant Amy Fang and research assistant Ana Arenas and found in their research, bridging the differing priorities of market-rate and resale-restricted residents in such developments can be difficult. Photograph by Ana Arenas, 2020. Plan courtesy of David Hacin.
We also found in Boston many examples of other housing models that share characteristics of the nonprofit co-op. Some are condominiums with resale restrictions and particular missions (e.g.: serving artists), like Laconia Lofts (Figure 3). Others are part of the American “cohousing” movement, loosely modeled on certain kinds of intentional communities in Scandinavia, and which, like Zurich cooperatives, embody attention to architectural design, new relationships of individual and shared spaces, and democratic self-governance, albeit without resale restrictions. The Boston area also has multiple community land trusts (CLTs), in which housing (of any tenure) sits on land owned by a nonprofit trust, keeping land off the market in perpetuity like in Zurich cooperatives.
The non-profit cooperative, however, is chiefly understood in Boston quite narrowly, as something that pertains to particular buildings rather than a wider movement. Unlike in Zurich, there is little cognizance of the nonprofit co-op as a product of the larger consumers’ cooperative movement, or as a system that requires both active resident organization and the support from the state to thrive. It is also seen, like all forms of below-market housing in the U.S., chiefly as housing for people of limited means rather than as an alternative to the market, open to all.
Figure 4. 1010 Memorial Drive is a market-rate cooperative in Cambridge, completed 1964. Two-bedroom apartments with Charles River views today sell for upwards of one million dollars. Photograph by Ana Arenas, 2020.
A main reason for this difference in perception is likely historical. Until the 1960s, most co-owned housing in the U.S. took the form of market-rate cooperatives like 1010 Memorial Drive in Cambridge, a 62-unit, 20-story tower completed in 1964, which have somewhat different rules for governance than nonprofit co-ops and allow sales and resales at whatever prices the market will bear (Figure 4). In the 1960s, the condominium (or individual-title system of ownership) was popularized, and quickly came to predominate in market-rate development. Still, there are likely more market-rate than nonprofit cooperatives today. The confusion around “cooperative”—a form of luxury as well as nonprofit housing—thus remains. More problematically, Boston’s cooperative landscape replicates the dichotomy between affordable and market-rate housing, and the related issue of either promoting individual wealth-building or not, as outlined in Part 1.
Common Place, or the Limits of “Intentional Community”
This brings us to our second key finding: the lack of a broader cultural, financial, and regulatory commitment to nonprofit cooperatives makes it hard even for those who choose the model to stick with it.
Figure 5. Common Place, Cambridge, is a 1905 apartment building converted to a nonprofit cooperative in 1972 by ten professional and academic households committed to the ideals of an “intentional community.” As conversations with a co-founder led by MIT workshop research assistant Hugh Ebdy made clear, four decades later, the nonprofit aspects of this ideal were hard to maintain in light of the growing financial needs of its ageing members. Photograph by Ana Arenas, 2020.
In 1972, ten households, all academics and professionals, bought an apartment house in Cambridge built in 1905 and converted it into Common Place, in the words of a co-founder, a cooperative “intentional community” (Figure 5). Their goals were to keep expenses low and support one another in matters such as child care. Despite good incomes, however, they had difficulty obtaining financing because banks viewed the model with skepticism. Except where extremely common, lenders rarely understand the structure of shared-title (cooperative) ownership, even market-rate. Eventually, Common Place secured financing from a church that members belonged to.
“In a country that prides itself on personal responsibility and freedom as much as the pursuit of money, there is a place for the self-reliance of the within-yet-beyond-the-market nonprofit cooperative.”
Then came other problems. After a decade or so, one household moved out of state and realized that what they would take out of the building would not allow them to pay for a home where they were going. The buy-out formula was adjusted to allow for limited appreciation. As residents aged, looming healthcare costs led to a second amendment of by-laws. In the early 2010s, almost forty years after its creation, with eight out of ten original members still in residence, Common Place had lifted restrictions on resales.
The story of Common Place underscores a fundamental condition working against nonprofit co-ops in the United States: the lack of any real security in the realm of life expenses like healthcare, education, and retirement generates enormous pressure to treat housing as an investment; a vehicle to generate wealth.
157 Washington Street, or the Limits of Governmental Initiative Without Broad Institutional Backing
Our third key finding is that nonprofit co-ops in Boston lack sufficient institutional support to thrive. There has been, and continues to be, remarkably broad political support for limited-equity cooperatives in local government. The City of Boston’s Department of Neighborhood Development (DND), in particular, has sustained an interest over many decades, and in recent years has encouraged the state to allocate Low-Income Housing Tax Credits, typically reserved for rental housing, to cooperatives.
But unlike in the postwar decades, this enthusiasm isn’t shared by other institutional players, such as labor unions, pension funds, universities, and churches, with access to capital and whose interests might include ensuring affordable housing for members.
This lack of broad support means that there is little knowledge building and information sharing among cooperatives that could, for instance, support those in the process of launching a new project. The Massachusetts Association of Housing Cooperatives is a young organization and to date has focused on lobbying, not technical or financial assistance. It also makes it difficult for individual projects grow into the kinds of cooperative organizations seen in Zurich, which own and manage more than one building. A related consequence is that co-ops in Boston tend to be developed by professional builders rather than cooperative corporations, making it impossible to include residents in the planning and design process.
Figure 6. 157 Washington Street, in Boston’s Dorchester neighborhood, is a mixed-income cooperative financed in part by federal Low-Income Housing Tax Credits. It was completed in 2012, designed by Elton + Hampton Architects and developed by Codman Square Neighborhood Development Corporation (CSNDC). As MIT workshop participant Christopher Moyer argues in his analysis, residents are given such limited control over their homes, that in some ways the cooperative is no more than a “glorified rental.” Photo by Ana Arenas, 2020. Plan courtesy of Elton + Hampton Architects.
Cooperative projects financed in part with tax credits also suffer the fact that with the subsidies come income restrictions, undermining some of the goals of the nonprofit cooperative model. An example for this is 157 Washington Street in Boston’s Dorchester neighborhood, a project with fifteen limited-equity (as well as eight market-rate co-op) units completed in 2012 (Figure 6). The use of tax credits stipulates that residents must leave as their incomes rise. This may maximize the utility of the federal subsidy—ensuring it only benefits those in the most financial need—but it does so at the expense of residents’ control over, and stability in, their homes.
Highland+, or the limits to design of affordability first, cooperative ideals second
Which brings us to our final key findings: like Zurich, Boston has a substantial portfolio of publicly owned land (see Figure 1), and there is interest in design innovation in housing. In fact, the DND, one of two city agencies that can allocate public land for housing, often collaborates with the Mayor’s Housing Innovation Lab (iLAB) on requests for proposals (RFP) for the development of affordable housing, in pursuit of new design and development models, including for nonprofit cooperatives.
In contrast to Zurich, however, political pressure limits the DND’s land disposition practices to serving only the neediest. It thus selects proposals that deepen affordability at the expense of the other benefits of cooperatives—even in RFPs explicitly framed in terms of design innovation.
In 2017, for example, the DND issued an RFP for three clusters of city-owned sites in Roxbury with the goal of creating energy-efficient cooperative housing for families (Figure 7).
Figure 7. The 2016 Request for Proposals for sites at Marcella and Highland Avenues in Boston’s Roxbury neighborhood, whose page on the City of Boston DND’s website is shown here, explicitly asked for cooperative housing and design innovation for low-income households. As workshop participant Jayson Kim found, achieving these goals using Low-Income Housing Tax Credits has proven difficult. Screenshot captured February 9, 2021. Courtesy City of Boston DND.
The winning proposal for one of the clusters, Highland+, however, only included one- and two-bedroom apartments (it was selected on the basis of other merits). The project underwent revisions after selection, expanding the range of apartment sizes. Still, like at 157 Washington Street, the main criteria for selection was determined by stipulations of the tax credits: affordability. To prioritize other goals of cooperative development such as design innovation or resident involvement, other processes that allow for pre-selecting residents as well as new sources of financing would have to be found.
At-Cost Housing for All
What conclusion can we draw from our five-week workshop on cooperative conditions? Could the Zurich system be replicated in Boston? Can its benefits outweigh those of private ownership, including the potential for wealth creation? In short, should public policies aimed at closing racial gaps in housing and wealth continue to focus on market-rate homeownership, or should they also emphasize the co-op and its nonmarket values? Yes, yes, and yes.
To date, Boston lacks the broader frameworks and institutional support to scale the co-op up as in Zurich. Yet there is no shortage of willingness among particular individuals, groups, and policy makers to engage the nonprofit, at-cost cooperative model as a political, social, and, at times, architectural idea.
Figure 8. In these renderings, MIT workshop participant Benjamin Hoyle explores options for the renovation, redevelopment, and/or expansion of Harwell Homes, a nonprofit cooperative in Cambridge completed in 1974. Taking cues from practices in Zurich, all options maintain nonprofit status and cost rent throughout. Courtesy of Benjamin Hoyle.
Perhaps the most-ready path forward in Boston is to convince well-endowed local institutions like labor unions, pension funds, churches, and universities to embrace and scale the nonprofit co-op. There are precedents. Harwell Homes, a limited-equity cooperative consisting of fifty-six, two-story, semidetached houses in Cambridge, was completed in 1971 through the financial support, in part, of MIT and Harvard. Another route is to encourage existing co-ops to grow. It’s not hard to imagine a co-op like Harwell Homes—or any of the others mentioned in this article—using its assets to upgrade or expand, just as the century-old Allgemeine Baugenossenschaft Zürich (ABZ) has done in Zurich (Figure 8).
Then there’s the question of should. In a country that prides itself on personal responsibility and freedom as much as the pursuit of money, we believe there’s a place for the self-reliance of the within-yet-beyond-the-market nonprofit cooperative. It might not generate much individual wealth or close the racial wealth gap, but its other benefits, namely long-term affordability, control, stability, community, and better design, are well worth it.
Author’s note: I would like to thank Ana Arenas and Hugh Ebdy, research assistants of the MIT workshop, who were instrumental in developing the framing of the class and of this article. Thanks are also due to the many experts on cooperative housing in Zurich and the Boston area who so generously shared their thoughts, knowledge, and contacts with the classes. Final thanks go to the institutions, MIT and ETH, as well as their students, who made this research possible.
