1. Short title
This Act may be cited as the “Affordable CO-OP (Collective Opportunities for Owning Property) Act”.
Affordable CO-OP (Collective Opportunities for Owning Property) Act
A BILL
To support the development of limited equity cooperatives in the United States, and for other purposes.
2. Findings
The Congress finds the following:
Limited equity cooperative housing stems from the premise that housing should provide shelter, not a speculative opportunity. Residents purchase a below market-rate “equity” share of the cooperative corporation that owns the property of the cooperative and residents are charged affordable monthly carrying charges. The amount the share price increases over time is limited by the cooperative by-laws, creating an affordable entry point into housing that stays affordable over time. Members can sell their equity share at a specific rate to maintain affordability over a longer time period. In this way, limited equity cooperatives provide an important form of affordable homeownership and foster community among shareholders.
Over 1.5 million families and seniors benefit from cooperative housing models in the United States. There are over 200,000 units of limited equity housing units across the Nation. Limited equity cooperatives range in size, from single family detached cooperative structures to dense, mixed-use, multi-family models.
The largest limited equity housing cooperative in North America is Co-op City, located in the Bronx, New York. Co-op City provides over 44,000 residents with affordable, democratically controlled housing in an increasingly expensive region. This community can serve as a model for the nation on how to build and sustain decommodified housing and homeownership opportunities for those who are disproportionately exploited by the traditional housing market, banking, and credit system, including Black and brown households, low-income households, seniors, and people with disabilities.
Limited equity cooperatives do not enjoy strong Federal support relative to other forms of homeownership.
3. Increased production of new limited equity cooperatives
In general— The Secretary of Housing and Urban Development shall, not later than 1 year after the date of the enactment of this Act, establish a program to provide zero interest loans to nonprofit and public sector entities for the pre-development, acquisition, development, rehabilitation, or conversion of buildings into limited equity cooperatives.
Use of loaned amounts— Each entity provided a loan under this section may use such amounts to make loans to intermediaries, including community development financial institutions, credit unions, minority depository institutions and cooperative financial institutions to support the ability of residents ability to afford downpayments and monthly carrying charges.
Loan amount— Loans provided under this section shall be in an amount equal to not more than 95 percent of the total cost of a project undertaken by an entity.
Reserve— The Secretary of Housing and Urban Development shall use not less than 20 percent of any amounts appropriated under this section to provide financial support to limited equity cooperatives for which not less than 50 percent of the households have an annual income that is less than 60 percent of the area median income.
Conditions— The Secretary of Housing and Urban Development shall require entities participating in the program established pursuant to subsection (a) to—
minimize evictions of—
tenants residing in properties undergoing conversions to limited equity cooperatives using amounts provided under this section; and
residents that will reside in limited equity cooperatives developed using amounts provided under this section;
ensure that unit and building design supports the needs of older residents and residents with disabilities;
ensure that unit and building design, to the greatest extent practicable, rely on renewable energy and sustainable building models that support a just transition from fossil fuels;
comply with all requirements of the Fair Housing Act of 1968;
to the greatest extent possible, not limit access to limited equity housing cooperatives based on the eviction history or credit report of a prospective resident;
ensure that units built with amounts provided under this section are, to the greatest extent possible—
permanently affordable;
available to households with an annual income that is less than 120 percent of the area median income; and
available to households with an income that is above the Federal poverty line but below the estimated cost of living in a geographic area;
use community land trust models to ensure permanent affordability of the land underlying the property;
in the case of an entity developing or rehabilitating mixed-use limited equity housing cooperatives, the entity shall to the degree possible, colocate cooperative businesses, especially those owned and democratically controlled by employees, on the site of the limited equity cooperative; and
to the greatest extent applicable, ensure that all laborers and mechanics employed by the entity in the performance of construction, alteration, repair, or maintenance work financed in whole or in part with assistance under this section be paid wages at rates not less than those prevailing on similar construction in the locality, as determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code (commonly known as the “Davis Bacon Act”).
Authorization of appropriations— There are authorized to be appropriated, in fiscal years 2023 to 2033 to the Secretary of Housing and Urban Development such sums necessary to carry out this section.
4. Insurance of limited equity cooperative mortgages
in subsection (a)—
in paragraph (2), by striking “or” at the end;
in paragraph (3), by striking the period at the end and inserting “or;”; and
by inserting after paragraph (3) the following:
“(4) a limited equity cooperative.”
by adding at the end the following:
“(q) Notwithstanding any other provision of this section the Secretary may waive or specify alternative requirements for limited equity cooperatives if the Secretary determines that such waiver or alternative requirement would advances the needs of the development, rehabilitation, or preservation of limited equity cooperatives.
“(r) Limited equity cooperative defined—The term limited equity cooperative has the meaning given the term in the “Affordable CO-OP (Collective Opportunities for Owning Property) Act”.”
5. Affordable housing cooperative community fund grant program
In general— The Secretary of Housing and Urban Development shall, not later than 1 year after the date of the enactment of this Act, establish a Affordable Cooperative Community Fund Grant Program to provide discretionary grants to States with limited or zero equity cooperative housing to be used to finance community development activities for limited equity cooperative residents, including—
improving the physical condition of limited equity cooperative property, including upgrades to affordable cooperative housing structures that support accessibility, visitability of common areas, retrofits to improve climate resiliency or reduce household energy burdens, efforts to include or improve broadband, and to support community and wellness programming;
activities to further promote democratic, transparent governance;
coordinating programming for individuals living in permanently affordable limited or zero-equity cooperative housing, including support for older adults to age in community; and
activities to support the co-location of cooperative businesses, including child care centers and elder care centers.
Subgrants— Any State that receives an amount under this section may make subgrants of such amount to—
limited equity cooperatives;
community organizations that support the health, financial stability, and well-being of the residents of limited equity cooperativesor improve the physical condition, including accessibility features, of limited equity cooperatives;
Housing Development Finance Corporations; and
nonprofit housing developers that provide development services designed to create and preserve limited equity housing cooperatives.
Requirement— Any amounts provided to a State under this section that are used for improving the physical condition of limited cooperative housing properties should be used, to the greatest extent practicable, in a manner that supports a just transition away from fossil fuel energy consumption and protects households residing in limited equity cooperatives from the threats of climate change.
Authorization of appropriation— There are authorized to be appropriated to the Secretary of Housing and Urban Development $1,000,000,000 to carry out this section in each of fiscal years 2023 through 2033.
6. Weatherization
In general— The Secretary of Housing and Urban Development and the Secretary of Energy shall jointly identify limited equity cooperatives that are eligible for the weatherization assistance program and issue guidance to States with respect to how to support weatherization efforts within these limited equity cooperatives.
Guidance— When developing guidance pursuant to subsection (a), Secretary of Housing and Urban Development and the Secretary of Energy shall, to the greatest extent practicable, ensure that guidelines do not further restrict weatherization assistance program eligibility.
7. Disaster relief
In general— Section 408(c)(2)(A) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5174(c)(2)(A)) is amended—
in clause (i), by striking “and” at the end;
in clause (ii), by striking the period at the end and inserting “; and”; and
by adding at the end the following:
“(iii) the repair and rehabilitation of shared elements of the home or apartment structure in limited equity cooperatives, as such term is defined in the “Affordable CO-OP (Collective Opportunities for Owning Property) Act”.”
Prohibition— If a major disaster or emergency is declared under section 401 or 501 or a public health emergency is declared under section 319 of the Public Health Service Act residents living in cooperative housing may not be barred from receiving assistance exclusively due to their residence in a cooperative housing structure.
8. Office of shared equity housing
Establishment—
In general— The Secretary of Housing and Urban Development shall, not later than 180 days after the date of the enactment of this Act, establish an Office of Shared Equity Housing to be headed by a Special Assistant for Cooperatives.
Responsibilities— The Office of Shared Equity Housing shall—
support Federal policies and programs related to the development and sustainment of permanently affordable shared equity housing models, including limited equity cooperatives, zero-equity cooperatives, and community land trusts;
provide technical assistance to States and units of local government with respect to shared equity housing models, including limited equity cooperatives and community land trusts and Mutual Housing Associations;
participate in the Interagency Working Group on Cooperative Development, and work with other members of the Interagency Working Group on Cooperative Development to explore how, to the greatest extent possible, the Federal Government can support robust financial support for schools located in school districts with limited equity cooperatives; and
not later than 1 year after the date of the enactment of this section, and each year there after, publish on the website of the Office, the number of limited equity cooperatives in the United States.
Guidance— The Secretary of Housing and Urban Development, acting through the Special Assistant for Cooperatives, shall, not later that 1 year after the date of the enactment of this Act, issue guidance to States and units of local government that encourages the elimination of barriers to financing, developing, maintaining, and sustaining limited equity cooperatives.
Report— The Secretary of Housing and Urban Development, acting through the Special Assistant for Cooperatives, shall, not later than 3 years after the date of the enactment of this Act, issue a report to Congress that includes—
an analysis of the impact on the loan program established under section 3;
an analysis of current and historical Federal programs administered by the Secretary of Housing and Urban Development and the Secretary of the Treasury that support or have supported the production or preservation of limited equity cooperatives, including a review of the role of project based rental assistance in funding limited equity cooperatives;
an identification of barriers to using existing Federal funding to support for limited equity cooperatives; and
recommendations for the Congress with respect to how to further support Federal funding for limited equity cooperatives.
Contracting— The Assistance Secretary for Cooperatives may enter contracts with nonprofit organizations to provide technical assistance services.
Authorization of appropriations— There are authorized to be appropriated to the Secretary, such sums necessary to carry out the administrative activities of the Office of Cooperatives.
9. Definitions
In this Act:
Limited equity cooperative— The term limited equity cooperative means a shared equity affordable homeownership model in which—
residents purchase a share in a residential development and commit to resell their share at a price that maintains affordability at purchase and over the long term;
residents control the operation and management of a residential development on a one-member-resident, one-vote basis;
membership is offered without discrimination to the general public; and
a commitment is made to a shareshare or membership price that maintains affordability at purchase and over the long term.
Older resident— The term older resident means a household composed of one or more persons at least one of whom is 62 years of age or more at the time of occupancy.