The single-family house with the white picket fence was never part of my mythology. The American dream of owning a home was not only anathema to my anarchofeminist worldview, it was also completely out of reach financially. I was born and raised in New Jersey in a working-class Italian family, and owning a home was never an option.
When I turned 18 and moved to Berkeley, California in 1974, I moved into a communal house with other women, and lived communally for the next 15 years. During the 1980′s, I lived with a group of 5 close women friends, and we lived together through 4 rented houses. With each house the story was the same: after a couple of years, the owners sold the house to nice, white, middle-class nuclear families and evicted us. This repeated phenomenon was caused by two trends that were on a collision course: ridiculously inflated real estate prices and our penchant for enforcing Berkeley’s rent control law to fight off illegal rent increases. In each house, the property owners would first try to get away with illegal rent increases, and when we would take them to Berkeley’s Rent Stabilization Board and have these increases overturned, they would put the house on the market and sell it. Anyone could crunch the numbers and see that a property owner could make a lot more profit by selling the house to a yuppie hetero-normative family than by renting to queer anarcho-hippy activists who would enforce rent control and plant zucchini and pot in the front yard. After the fourth eviction in 1988, our group could not find another rental house we could afford.
That same year, I was lucky enough to have the opportunity to move into a newly-forming Limited Equity Housing Co-op, the Ninth Street Co-op in what was then semi-industrial West Berkeley. This was a five-unit apartment complex of two duplexes and one stand-alone house, with a big yard. It had been built in the 1940′s and had a series of property owners who neglected the place and didn’t do much maintenance or repairs.
An LEHC is a collective form of ownership which allows each tenant to become a home-owner by buying a share in the property. Since our co-op has five units, each household owns one-fifth of the property, but the whole property is owned collectively as a non-profit. Each resident agrees to limit their equity, so the property will always be affordable, and no one can ever make a profit on it. An LEHC effectively removes housing from the speculative housing market and makes it permanently affordable to lower-income people.
This is how it works: when we bought our share, each household paid about $2500 as a “share value” or down payment, and each year our share value increases by 2 percent. At that time each household was paying around $350 a month to the co-op to cover our share of the mortgage, property taxes, insurance, repairs, etc. Now, nearly 25 years later, my share value is worth about $5000. If I move out, I sell my share of the property back to the Co-op, and they choose a new person or family to buy into the property by paying the $5000 down payment, and each household pays about $550 a month. Obviously, that is a very small down payment to buy a home in Berkeley, and an extremely low monthly cost for owning a home. Many people are paying more than that just to rent a room. In Berkeley you can spend half a million dollars on a small home, paying thousands of dollars a month on a mortgage, even with the real estate slump of the past few years. We know that if we had not bought the buildings and had remained tenants, our rents would now be at least $1500 a month. And if we had bought the units as condos, they would certainly cost at least $200,000 each. Because we were all low-income tenants who had never owned property and knew nothing about financing and managing property, we spent years learning everything the hard way. Assistance from other “co-op fanatics,” as we called ourselves, was essential in our success. We had to do 40 years of deferred maintenance such as putting on new roofs, new wiring in all units, earthquake safety retrofits, plumbing, and new heaters, and it was a challenge to learn how to budget for these major repairs and replacements.
It has been a strange experience to be a part of collective ownership of property. As a tenant activist for many years in the Berkeley Tenants Union, slogans such as “Property is Theft” were common and we considered the landlords an enemy of the working class. When Jeff Jordan was running for Berkeley’s elected Rent Board in the late 70′s, he suggested putting a guillotine on the roof of the BTU office to let landlords know how tenants felt about them.
I never imagined it would even be possible to own a home, as housing prices in Berkeley were inflated beyond anything remotely related to the actual value of the property. An LEHC is a way for poor and working-class people to take control of their housing, to own and manage their homes and keep the housing permanently affordable for future generations. I believe that LEHCs are part of the DIY anarchist ethic of people wresting control of their most basic needs away from the capitalist class.
There are 10 housing co-ops in Berkeley, with a total of about 250 units. They range in size from small co-ops with 5 to 10 units, to mid-sized co-ops with 20 to 30 units, and a few large co-ops with up to 60 units. Most were formed during the 70′s and 80′s, the most recent in 1995. Since then it has been increasingly difficult to develop co-ops, for a number of reasons. It is very difficult to persuade banks to give a mortgage to a co-op, as banks don’t understand the concepts of collective ownership, non-profit housing, and limited equity. They especially can’t imagine why owners would forfeit their God-given right to make a profit on their housing, and instead voluntarily limit their equity. Banks prefer to finance traditional home ownership, condos, or rental property. In addition, the high price of real estate in the Bay Area has made all affordable housing more expensive to develop, and without large government subsidies it is harder to build housing that is affordable to lower-income households. And most tenants do not have the expertise to own and self-manage property, so they usually need training and technical assistance to succeed in becoming a co-op.
Five years ago, I was involved in forming the Bay Area Community Land Trust (BACLT), to develop more housing co-ops, in order to provide affordable housing that is resident-owned and controlled. We chose to do this through a community land trust, which works like this: the land trust owns the land, and the residents own and control the buildings on the land. The land trust retains title to the land permanently, leasing it to the residents through a 99-year lease. The land trust has some minimal oversight to ensure two key goals: that the residents are managing the property well and that they are keeping the housing affordable to lower-income people.
When I first moved into the Ninth Street Co-op, I knew nothing about land trusts and did not see why a co-op would need a land trust. However, over the years I have seen many co-ops operate in isolation and run into problems. While our co-op has always kept our annual increase in equity at 2 percent per year, co-ops can legally raise their equity up to 10 percent per year. As a result, some co-ops have allowed equity increases that have escalated their share value (down payment) up to $20,000, making it way too high for low-income people to afford to buy into the co-op. Having a land trust would require that the equity increase be capped much lower to keep the housing affordable. Many other co-ops have been poorly managed because residents have not received training or have allowed a few people to have too much control. Some co-ops have run into financial problems because they have failed to budget for needed maintenance and repairs, or have failed to take action when a resident was involved in drug-dealing or other activities that made residents feel unsafe. Having a community land trust as a cooperative partner in the property provides additional protection for the residents and more accountability to the community.
Bay Area Community Land Trust is currently working with several groups of tenants to assist them in buying their houses or apartment buildings and becoming a co-op. While there are numerous challenges for each project, we are optimistic that one or more projects will be completed in 2011. If your living group or building is interested in pursuing this strategy, contact BayAreaCLT.org or (510) 545-3258. BACLT also provides training for existing co-ops and living groups in facilitation, property self-management, budgets and co-op finances, and conflict resolution. We are also eager to have more activists involved in BACLT, and encourage people to get involved in this exciting project.
If you are outside the Bay Area and interested in the land trust model, contact the National Community Land Trust Network at www.cltnetwork.org to find a community land trust in your area. Their website has a terrific video called “Homes and Hands” which shows land trusts and co-ops all over the US.