There is an affordable-housing crisis across America. As of June, the median sale price of a home in the United States was nearly $400,000. In large cities, the cost of homeownership is significantly higher. The median apartment in Manhattan sells for well over $1 million. Renting provides no relief. The average apartment in Manhattan rents for an eye-popping $5,058 a month, and the median is $4,050, an increase of $800 in the past year alone. Washington, D.C., metro rents have soared 15.7 percent, and similar rising housing costs can be found in other American cities large and small.
There is a huge exception to this problem: Co-op City.
Co-op City, in the northeast Bronx in New York, is the largest housing cooperative in the United States, containing 15,372 apartments in 35 high-rises and seven low-rise townhouse clusters. Today, residents of the smallest three-room apartments pay an equity deposit of $22,500 to buy into the cooperative and thereafter $751 in monthly carrying charges, which include utilities. Even the residents of the largest 6.5-room apartments pay less than $1,700/month. Co-op City’s raison d’etre has always been affordability. It may provide both a model and a cautionary tale for communities facing crises of housing affordability across the country.
Today’s crisis of housing availability and affordability has a historical precedent in the post-World War II era that ultimately led to the construction of Co-op City. After World War II, returning service members increased pressure on the housing supply. In most of the country, this was met with growing numbers of single-family houses, mainly in fast-growing suburbs.
In New York state, the Mitchell Lama Program sought to increase the supply of urban housing for the middle and working classes. The program, which began in 1955, provided low-cost loans, tax abatements and a fixed rate of return to developers in exchange for their agreement to charge residents an affordable monthly rate. Both for-profit rental housing and nonprofit cooperative housing were eligible for the program. Between 1955 and the suspension of the program in 1974, over 100,000 affordable apartments were built under the auspices of Mitchell Lama. The largest nonprofit developer was the United Housing Foundation (UHF), which built over 30,000 apartments. Co-op City was the UHF’s biggest and final development.
Like other UHF projects, Co-op City was designed as a “limited equity” cooperative. When residents moved in, they “bought in” to the cooperative as a whole, rather than owning their individual apartments. As part of the cooperative, residents (or cooperators) paid monthly carrying charges, consisting of maintenance, utilities, operating expenses and the mortgage on the property. They participated equally in the management of the cooperative through an elected resident board. When residents left, they sold their share back to the cooperative and recouped their equity deposit.