Daily newspaper headlines beg for solutions for America’s affordable housing crisis. There are lots of valuable ideas, but few implementations that are scalable. For example, there’s much talk about the concept of “workforce housing” but very few concrete examples. Numerous definitions of “workforce housing” exist with the most prevalent being that it serves working people earning 80-120 percent of median income who pay no more than 30 percent of their income in rent.
There is a housing crisis in many major U.S. cities, a continued rise in homelessness and a vast shortage of affordable housing for extremely low, very low and low-income households (30-80 percent of median income). While just a drop in the bucket, federal and state programs and subsidies are at least addressing some of the problems of supply.
A similar and growing crisis exists in the supply of affordable housing for households earning between 80-120 percent. This segment of the population, however, is not eligible for subsidies or affordable housing and most often is paying far more than the 30 percent of income that the U.S. Housing and Urban Development regards as normal. This 80-120 percent segment is mostly destined to be renters-for-life, and with overpaying for rents and miniscule ability to save, they will never have the down payment to own a home or pay a mortgage.
Nor, most likely, will they be able to afford to live near their job. Commuting is a major contributor to global warming. Affordable housing for this segment of our major cities is fast disappearing. “Workforce housing” targets this segment with words and policies, but, regretfully, with few real projects.
One group did do something about it, however. Here’s the story of a workforce housing cooperative operating in the heart of one of the biggest cities in North America.
This housing cooperative gives first preference to low-income workers with jobs in downtown hotels and restaurants. Those resident members are easily able to walk, bike or take public transportation to their jobs. The 85 cooperative apartments (33 one-bedrooms, 24 two bedrooms, 24 three bedrooms, and four four-bedroom units) are a mix of subsidized and slightly below-market-rate units. Four units were developed as accessible. Because of the central city location, only 10 on-site parking spaces were provided. One space is reserved for Enterprise CarShare and one space reserved for handicapped parking.
How did such a sensible, affordable home for the lowest-paid employees of Toronto’s Downtown hotels and restaurants get built a third-of-a-mile away from Toronto City Hall in the city’s business center? The cooperative is six minutes by bike from Union Station, Toronto’s transportation and downtown hub. One Local 75 Housing Co-op resident was quoted in the National Post as saying, “I love it. I can walk to work. I don’t have to get up at 5:30 a.m. and get the bus.”
The city of Toronto had a vacant site at 60 E. Richmond Street. Toronto Community Housing (TCH) was fast losing social housing units downtown. The Cooperative Housing Federation of Toronto (CHFT) had not seen any new cooperative in 20 years, and Local 75 UNITE (Hospitality Workers) had members traveling quite a distance to their downtown jobs. The ingredients were there, but there was not yet a cook.
Along came Toronto City Councillor Pam McConnell. McConnell had lived in Spruce Court Co-op for 40 years. At times she was a cooperative housing manager and rose to become president of the Cooperative Housing Federation of Toronto. In 2017, the year she died prematurely, she was a deputy mayor of Toronto. McConnell saw a unique alliance that met her cooperative vision to house low-income workers in downtown Toronto.
The alliance spent a few years looking for an outcome that was acceptable to all four groups. At the conclusion of their efforts: The city of Toronto leased the vacant site to TCH for 50 years; TCH, CHFT, and UNITE signed a memorandum of understanding on who would be eligible to live there and what income groups would qualify. TCH then subleased the property to Local 75 Housing Cooperative, Inc. The final agreement reserved 47 units for displaced low-income households who once lived in the gentrifying Regent Park neighborhood and 38 units for UNITE members or non-union workers in the hospitality industry.
To support the project and to bolster the cooperative’s operating budget, UNITE filled another gap. UNITE rented most of the ground floor commercial space for two purposes. One was for its Toronto offices, and the other, more importantly, was for a training restaurant.
Called Hawthorne Food and Drink, the training center is open to all UNITE members and to any member of the public who wants to work in the hospitality industry. For example, United Way of Toronto and other government work programs provide scholarships to homeless and low-income people who want a job in the field. The Hospitality Workers Training Center (HWTC), a nonprofit sponsored by Local 75 UNITE, downtown hotels and government and nonprofit employment organizations operate the restaurant. In less than seven years of operation, Hawthorne has trained hundreds of hospitality workers.
The Canadian Architect magazine wrote this about the cooperative: “Designed by Teeple Architects, 60 Richmond East is a boldly contemporary high-rise with sculpted lines and splashes of colour, as well as a compelling blend of social, environmental, and urban aspirations.”
The 11-story building has won numerous awards for its architecture and sustainable construction, such as Governor General’s Medal in Architecture; Greater Toronto Chapter Innovation in LEED Award – First Place; Toronto Urban Design Award – Award of Excellence; ArchDaily Building of the Year Award; Sustainable Architecture & Building Award; and Canadian Architect Award of Excellence.
The need for workforce housing cooperatives like Local 75 Housing Cooperative in major American cities is enormous. Cities desperately need targeted affordable housing to attract teachers, public employees, service workers, nonprofit employees and gig workers who are the moderate-income backbone of the urban economy. Due to the very high costs of housing in many cities, the need stretches from households earning between 80-140 percent of median income.
Religious organizations, teachers’ associations, unions, employer and employee groups, nonprofit housing and community organizations are some examples of people who could step forward to sponsor such initiatives for their members.
The oldest continuing housing cooperative sponsored by a union is Amalgamated Housing Cooperative in the Bronx. It was first occupied in 1927. A second housing cooperative called Amalgamated Dwellings in Manhattan was occupied in 1929. Amalgamated Clothing Workers Union under the leadership of their president, Sidney Hillman built the two housing cooperatives. The manager was Abraham E. Kazen, who went on to become known as the ‘father of cooperative housing in the United States of America.’
In the 1950s, a group of trade unions under the leadership of Kazen drew upon the Amalgamated experience and went on to form United Housing Foundation in New York City. Through their joint sponsorship, UHF spurred the creation of over 20 housing cooperatives. Those unions created about 33,000 units of cooperative housing in New York City targeted to their members. Some were developed by unions to house their particular members. UHF functioned to provide affordable housing to the city’s core workforce. Through UHF, union workers got to live affordably and have cooperative homeownership in the city where they worked. Without a doubt, and without knowing what it would be called later, the UHF cooperatives in NYC were the first mass provision of “workforce housing” in the USA.
Only a coalition of that type of scale sponsoring limited-equity housing cooperatives (LEHC) and using state and federal funding can meet the affordable ‘workforce housing’ shortage facing today’s moderate-income working families.
Silicon Valley and San Francisco in California are at the epicenter of the jobs-housing crisis. Apple, Cisco, Google, Facebook, and other tech giants are investing billions of dollars in foundations to address the regional affordable housing crisis. Some of these new funds should foster LEHCs for targeted employee groups such as teachers, municipal workers, tech workers, etc.
LEHCs have the best record of maintaining affordability over time, requiring modest down payments, creating lower entry home ownership, ensuring owner occupancy and creating democratic governance and community. In particular, the U.S. is fortunate that the National Cooperative Bank and Capital Impact are available to share their extensive experience in funding affordable cooperative housing.
The moderate-income housing and homeownership deficit are growing at crisis proportions. The overpayment of rent by moderate-income families is destroying the asset building opportunities of this core segment of the population. Without employing a cooperative housing solution that has access to targeted government, foundation and institutional financing, the U.S. will be left with cities of lifetime renters not able to save. Without an affordable ownership solution for the middle class, America’s societal structure and values and the American Dream are at risk
David J. Thompson has visited Soldier On twice to learn about the progress of the limited equity cooperative model. He has worked on the California legislation and successful bond measure in 2014 which made $1 billion more available to house veterans in new ways. David is president of Twin Pines Cooperative Foundation and a co-principal of Neighborhood Partners, LLC. www.npllc.org