Government Relations is a Member Benefit that Garners Many Cooperative Achievements

Housing Cooperative Victories

Over the years NAHC has had many successful victories legislatively and in the courts. As mentioned in the Report from Washington, a disaster relief bill for the Federal Emergency Management Agency to provide eligibility for housing cooperatives and condominiums was enacted into law on October 5, 2018. The following are some of the other major victories:

Veterans Affairs (VA) Home Loan Guarantee Benefits for Housing Cooperatives

In 2006, Congress passed legislation allowing veterans to use the Veterans Affairs’ (VA) Home Loan Guaranty Program to purchase cooperative housing shares (units) using their low-interest loan benefits. These loan benefits allowed veterans to buy homes with no down payment and limited closing costs. However, the program to allow loans for cooperative housing ended at the end of 2011. In order to allow our nation’s veterans to use the VA loan for all forms of home ownership, we will be reintroducing legislation that would permanently offer this benefit to housing cooperators. To ensure that veterans are aware they can use the loans for cooperative housing shares (units), we are adding a provision so that the secretary of the VA can advertise the program to eligible veterans, participating lenders, and interested realtors.

HUD Assistant for Cooperative Housing

Legislation enacted to create the position of
senior adviser and special assistant for cooperative housing at the Department of Housing and
Urban Development (HUD) resulted in the 2003 appointment of a point person for cooperative housing issues and policies reporting to the federal housing commissioner. Congress created the special assistant for cooperative housing role so that an appointee reporting directly to the Federal Housing Commissioner could focus on the critical issues facing cooperative housing.

Housing Cooperatives and Subchapter T of the Internal Revenue Code (IRC)

In 1999, after a long and difficult challenge, the Internal Revenue Service (IRS) finally agreed to
no longer apply Section 277 of the IRC to housing cooperatives and found that housing cooperatives correctly belong under Subchapter T of the tax code.

Section 277 applies to membership organizations such as country clubs but never should have been applied to housing cooperatives. Interest income on reserve funds and revenue from parking facilities for the use of residents in the building should not be subject to taxation under Section 277 because housing cooperatives have no “net” income when the expenses of operating the cooperative are taken into account.

A cooperative action fund was created to help pay for expenses involved in the fight. NAHC waged an intense battle in Congress to gain support for bills to remedy the problem. Housing cooperators from all over the country contacted their members of Congress resulting in legislation in the House of Representatives and the Senate

to stop the IRS from applying Section 277 to housing cooperatives. One senator even told NAHC he would definitely introduce legislation because they received so many calls on this issue that they were unable to use their phones.

The ultimate victory on Section 277 occurred
in the courts after the 1998 successful decision in the Rutherford Tenants case brought to a successful close a long campaign waged in the courts and in Congress to establish that housing cooperatives are not subject to Section 277 of the IRC.

Looking Forward

NAHC’s success depends on its members. NAHC needs members to respond to NAHC’s “Calls to Action” and to stay informed about the issues. Remember, everyone in Washington wears a hat representing the issues they support. Wear your cooperative hat.

NAHC Board Member Addresses College Students on Housing Cooperatives

IN NOVEMBER, NAHC board secretary Karen Harvey spoke with diverse attendees at the North American Students of Cooperation (NASCO) Institute’s 2018 Annual Conference and forged connections to educate and encourage participants to take advantage of NAHC’s resources.

Leadership at this year’s Ann Arbor, Mich., conference encouraged attendees to try new things, expand their cooperative skills toolboxes, make lasting connections with fellow co-operators and use the conference theme, “A Legacy of Cooperation” to explore ways that cooperatives are connected to a resilient global movement.

Conference attendees followed a set of agreements as ground rules throughout the institute. The framing and language for these community agreements were created in partnership with Anti-Oppression Resource and Training Alliances (AORTA) and borrowed from various people’s movements for justice. To learn more, access AORTA’s website at www.aorta.coop. Here are a few with a short explanation which would be useful for many business meetings and conferences:

  • One Diva: One Mic. In both large and small groups, one person speaks at a time.

  • No one knows everything; together we know a lot. Practice being humble because we all have something to learn from everyone in the room.

  • What’s said here stays here; what’s learned here leaves here. Respect confidentiality. Keep personal stories confidential but share what you learn.

 

The keynote speaker, Esteban Kelly, was interesting and enlightening. NASCO inducted Kelly into its Cooperative Hall of Fame in 2011.

NASCO offered the usual cooperative course tracks, such as Staff and Management, Building Cooperative Skills and Creating New Cooperatives, along with other tracks such as Anti-oppression, and Connection to the Cooperative Movement. Their caucuses provide opportunities for participants with shared identities to raise issues, build connections, and organize for change. The caucus groups are:

 

  • Women’s Caucus

  • People with Disabilities Caucus

  • Queer and Trans Caucus

  • Working Class Caucus

  • People of Color Caucus

NASCO encourages the importance of NAHC networking with millennials for there is much each group can learn from the other to ensure the future of cooperatives.

2019 Cooperative Hall of Fame Inductees Announced

Four outstanding cooperative leaders will receive the cooperative community’s most prestigious honor on May 8, 2019, when they are inducted into the Cooperative Hall of Fame at the National Press Club in Washington, D.C.

The inductees are: Terry Appleby, retired General Manager of Hanover Consumer Cooperative Society; Richard L. Ensweiler, retired president and CEO of Cornerstone Credit Union League; Anne Reynolds, former Executive Director of the University

of Wisconsin-Madison’s Center for Cooperatives; and Richard Stammer, retired president and CEO of Agri-Mark Inc. and Cabot Creamery Cooperative.

Under Appleby’s leadership, Hanover Consumer Cooperative Society quadrupled its store locations and created hundreds
of jobs, grossing more than $75 million in annual sales and transforming the regional food economy. Hanover sells $13 million dollars of local and regional products. Appleby also helped form National Co+op Grocers that represents close to 150 cooperatives operating in 37 states with combined annual sales of more than $2.1 billion.

In 2013, Ensweiler led an effort to merge the Texas Credit Union League with the Credit Union Association of Oklahoma and the Arkansas Credit Union League, forming Cornerstone Credit Union League. He helped build Credit Union House, a facility cooperatively funded by each of the 38 state credit union leagues. At Texas Credit Union League, Ensweiler created Juntos Avanzamos (“Together We Advance”), an outreach program focused on serving Texas’ Hispanic population.

Reynolds, who overhauled the university’s course on cooperatives, is the force behind the Madison Cooperative Development Coalition, community-based organizations, unions, and cooperatives. The group is currently implementing a $3.2 million City of Madison program that creates jobs and increases equity by developing unionized worker cooperatives. Reynolds also continues to develop and direct workshops on strategic planning and board training and business feasibility with groups like Cooperative Network and CooperationWorks!

Stammer helped New England dairy cooperatives sidestep bankruptcy with a merger with Agri-Mark, a cooperative of dairy farmers, and Cabot, a creamery cooperative that today generates sales approaching $1 billion and helped shape public policies
to protect the economic interests of the nation’s dairy farmers.
In 2014, Cabot received the U.S. Dairy Sustainability Award for Outstanding Dairy Processing and Manufacturing Sustainability.

NAHC is Cooperating with Other Cooperatives at Home, Around the World Linda Brockway Greg Carlson Fred Gibbs Karen Harvey Randall Pentiuk

HAPPY NEW YEAR! May 2018 be the best year ever for our members.

In early October, Linda Brockway and Greg Carlson attended the Co-op Festival and National Cooperative Business Association CLUSA’s Impact Conference. Both Brockway and Carlson networked with representatives of the cooperative sectors that make up the cooperative community, which includes housing.

This event clearly assisted cooperative members in meeting the Rochdale’s 6th principle, “Cooperation among cooperatives.” Let us continue to seek out neighboring cooperatives in other sectors, so that the cooperatives can work together to enhance the community. NAHC would like to encourage our member associations to do business with other cooperatives.

Later in the month, NAHC held its annual conference October 25-28, 2017. This conference was one of the best. The attendees had an educational experience like no other (please read accompanying articles in this publication for more details).

During the annual meeting of members, the NAHC membership elected, and our member associations appointed several new members to the NAHC board. Congratulations to Carlos Aznar, Marlene Dau, Aletha Davis and John Gordon as our new board members. May your NAHC experience be a fruitful
one. The NAHC board elected new officers: Fred Gibbs stepped up to the chair of the board, Randall Pentiuk is NAHC’s new executive vice president and our new secretary is Karen Harvey. Good luck to all.

NAHC would like to extend sincere appreciation to our outgoing Chair Ralph Marcus (NAHC’s 2017 Awardee of the Jerry Voorhis Memorial Award) and previous Secretary Anne Hill. Thank you both for your many years of service and devotion to NAHC and our mission.

In early November, Karen Harvey represented NAHC at the North America Students of Cooperatives Organization (NASCO) annual institute meeting. NASCO is a partner with NAHC. Our members have been going to the NASCO conference for some years to get a younger point of view and to have NASCO become involved in NAHC.

NAHC is now a member of the International Cooperative Alliance (ICA). By being a member of the ICA, NAHC is also a member of the Cooperative Housing International (CHI). NAHC is very happy to be part of the international cooperative community. In November, Brockway traveled as the NAHC delegate to the CHI board meeting in Kuala Lumpur, Malaysia, and was elected to the CHI Board for a two-year period.

As 2017 ended, Congress passed a new tax code, which was signed by President Donald Trump in December. This new tax code doubles the standard deduction while capping or restricting the previous itemized deduction. This change may be advantageous for many of our members, but for those in urban
areas like New York, Chicago and San Francisco, it may not be beneficial. Only time will tell.

NAHC, along with our governmental relationship specialist, Judy Sullivan, continues to fight cooperative discrimination on the federal level regarding the Federal Emergency Management Agency (FEMA) relief for housing cooperatives, reverse mortgages for housing cooperative seniors and veteran home loan
mortgage guarantees for housing cooperatives.

Please be sure to mark your calendars for the NAHC’s 58th annual conference in Phoenix, Ariz., which will be held October 24-27, 2018. Please watch out for the “Save the Date” postcards, which should be forwarded to you in early April

NAHC Honors Its Outgoing Chair with the Jerry Voorhis Award

NAHC Member Services Committee Chair Linda Brockway presented the Jerry Voorhis Award to retiring NAHC Chairman Ralph J. Marcus for his 30-year dedication and commitment to the cooperative housing movement. As a child, Marcus and his family lived in a cooperative community. As an adult, he is president and CEO of Marcus Management, Inc., a Michigan-based property management company, specializing in cooperative housing and condominium association management in and around the greater Detroit area.

Marcus, a cooperative advocate, was instrumental, and the driving force, in affecting state legislation and in writing regulations during 1993 that made it possible for cooperative housing corporations to qualify as homeowners under Michigan’s Homestead Act. He also provides training at the annual conferences of the Midwest Association of Housing Cooperatives (MAHC) and NAHC. Additionally, he serves on the RCM Board of Governors, co-chair of NAHC’s Governance and Strategic Planning Committee and a member of the finance committees.

Marcus, who holds a bachelor of science degree from the College of Business from Michigan State University, is vice-chairman of the Board of Volunteers of America, Michigan.

The Jerry Voorhis Award recognizes significant leadership in both theory and practices. NAHC’s board created this lifetime achievement award in memory of its namesake. As president of the Cooperative League of the USA, Voorhis was a NAHC founder and a California congressman and author of books on cooperation. A man of integrity, Voorhis believed in and did his best to teach, apply and widen the use of basic cooperative principles.