NAHC Urges the HUD Secretary to Appoint a Special Assistant for Cooperatives

NAHC has sent a letter to Honorable Marcia L. Fudge, the 18th Secretary of the U.S.

Housing and Urban Development (HUD), urging her to promptly appoint a special assistant for cooperative housing. The National Housing Act (12 USC 1715e) authorizes a special assistant and staff to support cooperatives and “eliminate obstacles to the full utilization” of HUD multi-family and cooperative housing programs.

“This is a long time coming,” said NAHC Chairman Greg Carlson. “With HUD’s buy-outs and early retirements, it lost any institutional memory about housing cooperatives. With national headlines dealing with the need for affordable housing, NAHC believes the best affordable housing model is the Cooperative Housing model. Having a HUD special assistant for cooperatives will elevate housing cooperatives on a national level.”

In the past, HUD has had three special assistants for cooperative housing. Luis R. Bruce, Jr. served in this capacity from 1959 to 1961. Allen H. Jones followed in 2001 until 2004 when he retired from government service. During his tenure, Jones commissioned contracts to document the history of cooperative housing programs at HUD, the market for cooperatives in metropolitan areas, and the feasibility of a modified product that would produce affordable cooperatives without subsidy. J. Timothy O’Neill replaced Jones in the latter part of 2004.

At that time, NAHC board members met with O’Neill to discuss the status of accelerated processing for Section 213, HUD reverse mortgage for seniors in cooperatives, the cooperative chapter in the multifamily management handbook, and Section 8 payment and recertification delays.

CooperationWorks, Council of New York Cooperatives & Condominiums, National Cooperative Bank, National Cooperative Business Association CLUSA, ROC USA®, and The Urban Homesteading Assistance Board also signed on to the Fudge letter. The signers stressed that cooperative housing has helped to create and support enormous opportunities in the last century, particularly in underserved communities. Limited equity housing cooperatives and resident-owned communities in particular feature low barriers to entry and provide stability for resident-owners. As owners, residents have a voice in managing the finances of the cooperative, including managing fees. Cooperatives have a strong track record of resilience against economic downturns, contribute to the long-term growth and financial security of residents and their communities and help to combat gentrification.

Today, there is an enormous opportunity to expand affordable homeownership through limited equity housing cooperatives and resident owned communities. In New York City, where the largest stock of limited equity housing cooperatives exists, the residents are predominantly people of color, women and immigrants. Moreover, in urban and rural communities alike, affordable housing cooperatives are an increasingly popular tool to address the shortage of workforce housing, where a business may struggle to maintain a capable workforce because of lack of affordable housing in the area. There is also great potential to address affordable housing challenges among other segments of the population including college students and seniors.

Unfortunately, in recent decades, the institutional support for cooperative housing at HUD has declined. The signers believe that appointing an experienced cooperative housing specialist to serve as special assistant for cooperative housing is an important first step to rebuilding the support and capacity for cooperatives throughout HUD.

These cooperative organizations welcome the opportunity to discuss the positive impacts cooperative housing has on individuals, families, and communities and believe Fudge using her authority to appoint a Special Assistant for Cooperative Housing is critical.

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