Clay Bren, his wife, Pearl, and their two-year-old Yorkshire Terrier named Geronimo holed up in their manufactured home late on a rainy November morning, watching true crime programs on their flat screen television.
Bren wanted to meet at his home rather than the Hillside Homeowners Cooperative’s office space — a building that is, as of yet, uninsulated and lacks heat. It’s one of many things that Bren and the other members of the homeownership cooperative are looking to change about their community, a 45-unit manufactured-home park within spitting distance of Centralia, Washington.
Bren gestured to the property line; on the other side was a neighborhood of “stick houses,” or single-family homes, in various states of repair. Just across that line was Centralia.
Residents have the power to make park improvements and negotiate with the city of Centralia. Unlike most manufactured-home parks in the state of Washington, Hillside Homeowners Cooperative belongs to the people who live there, and they decide its future.
They own the land. They set the rents. They decide what their community needs.
Co-op ownership is unique in a time when truly affordable housing options are dwindling and land is redeveloped as apartment complexes, condominiums and hotels. But it’s not a hands-off process — neighbors who may never have spoken to one another, who may not even speak the same language, must work collaboratively to buy and maintain their property.
“I’d recommend it,” Bren said. “But it’s hard work.”
Converting to co-op
Hillside Homeowners Cooperative is one of 11 cooperatively owned manufactured-home parks in the state. There are 1,272 parks total in Washington, and more are slated to close each year, according to the state Department of Commerce.
Two years ago it seemed likely that Hillside, tucked away against a hill covered in giant evergreen trees, would count among the losses. The property owners, a couple, signaled their intention to sell, but to whom? Someone who intended to maintain it as a manufactured-home park, one of the few deeply affordable homeownership options available to low-income and working-class families?
Local and national trends suggest probably not.
That’s why the Northwest Cooperative Development Center (NWCDC) stepped in with an offer of help.
The unique peril of manufactured-home parks is that residents can sink tens of thousands of dollars into their units for the initial purchase, maintenance and improvements, only to lose the property from underneath them. They buy the home, but they can’t buy the land, putting them in danger of displacement.
But if a community can find the right lender, they can band together and buy the property themselves. It just takes a little help to teach folks who may have never owned land before how to manage a $1 million-plus real estate deal. And that’s exactly what NWCDC and eight other organizations like it across the country do.
“We help residents convert into cooperatives, and even get assistance with a nonprofit lender that would help them buy the land from the owner,” said Daniel Arrañaga, a cooperative development specialist with the NWCDC.
Bren was skeptical.
The 58-year-old former terrarium builder had lived in the park for 30 years before the owners informed residents that they were getting rid of the property. At $225 per month in rent on top of the one-time cost of the mobile home, it was relatively affordable housing for folks on fixed incomes, like Bren and Pearl.
“I was almost against it,” Bren said. “I thought everyone could buy their individual lots.”
But the majority of residents voted to go cooperative, and the owners agreed to sell. Suddenly, the families who opted into the arrangement were in charge of a $1.4 million piece of property, and the loan to boot.
NWCDC was there to help with technical assistance, and will be through the life of the loan. The homeowners receive facilitation training, board training, financial training. They learn the Robert’s Rules of Order, familiar to people who have sat through enough public meetings. And for that, they know that they’re safe from market forces that are steadily destroying affordable housing options.
“The quick and short of the benefits is you have control over your future,” Arrañaga said. “As an owner, you’re still paying these rents, but you’re paying them to yourself as a nonprofit. Operating expenses, community infrastructure, a property manager, you’re paying for that.”
That means that the lot rent is dictated by expenses rather than market value.
“A private investor-owner would increase rent based on what the market says people can afford, which is not actually what they can afford,” Arrañaga said.
Initially, the transition was hard on Bren. He lives off disability income, and his monthly rent jumped to $325 per month, a $100-per-month increase.
“It almost made me homeless,” Bren said.
He’s stuck with it, though, because he knows the rent won’t go up any more, and he doesn’t have to worry about suddenly finding himself on the wrong end of an eviction notice. He’s now president of the cooperative.
Co-ops are a growing trend
The cooperative ownership model has been with us for some time, but it really got rolling for manufactured-home parks in the United States in the 1980s with the efforts of the New Hampshire Community Loan Fund.
The fund has been helping New Hampshire parks convert to co-ops since 1984. Roughly 30 percent of manufactured-home parks in New Hampshire are cooperatives, said Doug Ryan, director of affordable homeownership with the Washington, D.C.-based nonprofit Prosperity Now.
Paul Bradley, an alumnus of the fund, decided to take the success seen in New Hampshire and provide ownership opportunities in other parts of the country. In 2008, he founded ROC USA, a limited liability corporation that initially involved three founding nonprofits who bought an equity stake in the venture.
Today, nine regional nonprofits — of which the NWCDC is one — fit under the ROC USA umbrella. These nonprofits provide training, technical assistance and partnership building for the fledgling co-ops. A year before the ROC USA launch, the Ford Foundation donated the equity for ROC USA Capital, a community lending subsidiary that specialized in the purchase of manufactured-home parks.
Since its founding, ROC USA has helped more than 200 resident-owned communities establish themselves in 14 states. ROC Capital has financed roughly half of them.
Not one has failed or reverted to commercial ownership, said Mike Bullard, spokesperson for ROC USA.
The Seattle problem
Manufactured-home communities that sprouted on the outskirts of Seattle, often as vacation properties, have been swallowed by metropolitan sprawl. Suddenly the land underneath the manufactured-home park increases in value as people who work in urban areas they cannot afford to live in begin driving up property values in traditionally cheap places.
Washington doesn’t have “right of first refusal” or “opportunity to buy” like other states, particularly those in the Northeast. These laws would require the owner to give manufactured-home residents the chance to purchase the property on which they live before pursuing other offers.
The Washington Legislature passed such a measure in 1993, but park owners sued. The case made it to the Supreme Court where the majority found that the measure constituted an unconstitutional taking of the owners’ property.
Washington law allows residents to organize unions on site and has funding to support multifamily housing programs to support the communities.
The right policies require political will in a system that hasn’t always valued joint ownership, Ryan said.
“Cooperatives have long been seen as some kind of communist plot to take over private property, and that’s why they haven’t taken off,” Ryan said.
Taking stock of housing
According to Co-operative Housing International, the U.S. had 6,400 housing co-ops with 1.2 million dwelling units in 2012. Co-op housing constituted approximately 1 percent of all U.S. dwelling units that year.
In the mid-20th century, the federal government encouraged the creation of cooperative housing by giving co-ops access to financial subsidy programs. President Richard Nixon ended the practice in the 1970s, replacing them with operating subsidies. This effectively stalled the development of cooperative ownership, according to Co-operative Housing International.
Examples of direct government support continued.
In 1986, New York City found itself with 9,716 of tax-foreclosed, or “in-rem,” properties on its hands. The city didn’t want the properties; vacant buildings cost money to maintain and keep secure. Instead, the city sold some of the buildings, predominately on the lower east side, to resident organizations that partnered with nonprofits.
Cooperative ownership could be one tool to increase affordable housing stock in urban spaces that almost universally lack the amount of affordable units required to meet the need.
Resident-ownership removes the profit incentive, allowing for cheaper monthly dues without compromising care of the building.
Commitment to space
Clay Bren walked the short loop around Hillside Homeowners Cooperative, ignoring the cold, light rain. He pointed out the office building, which he plans to renovate and insulate, and talked about how he hopes a notice board the community wants to install will increase participation in the cooperative. They’re also creating space for folks in the community who mostly speak Spanish so they can participate jointly in board meetings.
“It’ll be less intimidating,” Bren said.
He’s been soliciting The Home Depot to perhaps donate a playground for the kids who live in the community, plans that have briefly stalled because he didn’t have the EIN — a tax number for nonprofits — when he first approached the home improvement store.
Hillside Homeowners Cooperative is a work in progress, and leaders like Bren are constantly learning what works, and what doesn’t. How to be inclusive and how to best respond to the needs of the residents.
Experiences like his are part of what makes cooperative ownership so unique, and perhaps something that governments would find in their best interest to promote.
“Manufactured housing, unsubsidized, has its 15 minutes of fame,” Ryan said, noting that without some public support, the model will not succeed quickly enough to make a dent in an affordable-housing crisis. “We have to rethink our commitment to this space.”
Ashley Archibald is a Staff Reporter covering local government, policy and equity. Have a story idea? She can be can reached at ashleya (at) realchangenews (dot) org. Twitter @AshleyA_RC
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