Cooperatives defined in CodeNEXT

Our advocacy work has met with great success in the past few weeks. It has been difficult for housing co-ops to find places in which they can legally operate in Austin. The only properties in which they are allowed are the same relatively scarce properties that can be developed into market rate apartments and condos for higher returns along major roadways in Austin. The housing co-op sector lacks the often national or even international financial resources of profit-oriented real estate developers. They have also been lumped into the same land use category as boarding homes, dormitories and half-way houses which are often controversial within neighborhoods. A way to make cooperative housing development easier would be to allow co-ops in a wider range of planning zones than currently allowed for large apartment and condo buildings, and to separate them from other more controversial uses. We have taken concrete steps in these directions.

CodeNEXT is Austin’s new land development code, the document that determines what can be built where and how you can use those building. In the draft code Cooperatives are called out as a distinct land use for buildings. Because principled cooperatives have concern for community they make for more “organic” neighbors   who often engaged in local civic organizations and community volunteering. Housing co-ops can more easily integrate into an existing neighborhood fabric than larger, investment-driven development. This distinction will make it easier to for Cooperatives organized like a household to establish themselves in more residential areas of Austin.

 

Definition of Cooperative
Being a draft code, the definition  can and should be improved to reflect current cooperatives and encourage the development of new cooperatives all over Austin. The current CodeNEXT definition is:

 

“Cooperative Housing: A residential project of more than three units in which an undivided interest in land is coupled with the exclusive right of occupancy of any unit located on said land, whether such right is contained in the form of a written or oral agreement, when such right does not appear on the face of the deed.”

 

This is a good start toward a definition of cooperative housing, but it has some problems that require revision. The first issue is that “unit” is undefined in the draft code at this point. It is typically assumed that a unit is a living space that has both a kitchen and a bathroom. This is problematic because most of the 20+housing cooperatives in Austin are in single-unit buildings. Only two cooperatives in Austin currently have more than three units. These single unit co-ops are either large single-family homes housing between 8-33 people, or dormitory style buildings with anywhere between 30-130 residents. Two are multiunit buildings. The number of units is not a defining feature of a cooperative and should be removed from this definition.

 

The other issue concerns the “undivided interest in land coupled with the exclusive right of Occupancy.” To make sense of it, the undivided interest refers to a Cooperative Entity that entirely owns or manages a piece of real estate. Members have an equal ownership in the Co-op instead of individual ownership of the real estate. This attempt to differentiate the two is helpful, but this type of language is a reference to the contracts of Limited Equity Cooperatives. The primary type of housing co-op in Austin is the zero or common equity type. These do not give exclusive right of occupancy to a specific unit but give an inexclusive right of occupancy to a bedroom or a unit (not necessarily any particular one.)  and may also reserve the right to people to move into another space, typically used to make accommodations for policies such as the ADA or to help people experiencing severe maintenance issues, like a flooded bedroom.  

This definition does not reflect all types of existing housing cooperatives in Austin.   By not including democratic management and/or adherence to the Cooperative Principles, laid out here by the International Cooperative Alliance, this definition also might establish loopholes for non-cooperative developments.. It is important to make the definition of housing co-ops as clear as possible and insure it reflects the democratic spirit of existing cooperatives and democratic mission of the cooperative movement.

Call to action: The most important thing Cooperators can do right now is go comment on or reply to/upvote comments in regards to Cooperatives.  

To find the section and leave an original comment, go to page 207 of this document.

Reply/Upvote:

- Hannah Frankel’s comment which lists definitions from other cities.

- My comment which summarizes my critique above.

-Code Advisory Group Member Rich Heyman’s comment which lists why the existing definition does not do much to solve existing problem.