Meeting held at 7pm at St. Mark’s Church 57 W 138th St
Following up on last month’s meeting where the issue of co-ops was first raised, the RTA hosted a meeting to more specifically address questions concerning potential options for Riverton tenants. Richard Heitler of the Urban Homesteading Association Board offered a detailed explanation of what co-ops are and how they work both from his official role as UHAB’s Chief Organizational Officer and as a longtime co-op member himself. From its website: “UHAB supports self-help housing and community building in low-income neighborhoods by training organizing, developing, and assisting resident-controlled limited-equity housing co-operatives.”
Since forming in 1973 by using their “sweat equity” to transform an abandoned building into their first co-operative, the non-profit organization now supports over 1,100 shared equity co-ops around New York City and has helped people in similar situations to Riverton turn into co-operative situations. As their mission statements says: “The Urban Homesteading Assistance Board transforms renters into homeowners who collectively own and democratically govern true housing co-operatives that will remain affordable, in perpetuity, to people of modest means.” Needless to say, Heitler and UHAB bring a wealth of experience and expertise to this issue, and he had a lot to share. He explained that co-op living means that technically residents become owners of shares in a corporation that owns the building – the shares being roughly equivalent to the size/type of apartment one has. Collectively the tenants run the building and the monthly cost is equivalent to what it takes to maintain the building, which means nothing goes towards profit or a separate landlord. The principle behind shared equity co-ops is to ensure affordability for people living in the neighborhood – not what the market rate is. Hence, resale prices are capped, as Heitler put it, “keeping it affordable for generations.” He then showed images from some co-ops in NYC and offered a detailed case study from Davis, CA comparing a co-op and a rental property from 1986 to 2005. Over the length of the study, the monthly payment at the co-op (Dos Pinos), which started out slightly higher (in part due to the fact that the rooms were on average larger), increased by only 26%. The rental (Sequoia) on the other hand increased 93%! Dos Pinos remains the lowest cost of home ownership in Davis. (See the details of this study for yourself here.) What the argument for co-ops boils down to is that profit is not part of the picture and as a result living becomes more affordable over time. The catch? Heitler pointed that out too – you can’t get rich in a co-op, because you can’t buy low and sell high. You can only buy low and stay low. However, this means with the money saved on rent each and every month, co-op members can use that money on other things. Heitler proudly pointed out that he’d sent his daughters to university and grad school with money NOT spent on rent. UHAB’s website offers a lot of good information and is worth studying to learn more. www.uhab.org. They also offer a site for resources for co-op members here: www.uhab.coop.
As far as all this goes for Riverton, as Heitler and others pointed out throughout the evening – there is no guarantee that anyone can acquire it, and given the massive debt on the property, that is an uphill battle. In response to questions, Heitler advised that as far as UHAB’s policy goes, in order for a property to go co-op you need to get 75-80% of the residents to buy into it, less than that just won’t work. Asked whether he’d seen a situation like Riverton, he responded that in some ways yes and some ways no. For all of the 1,100 properties they’ve converted to co-ops in their 37 year history were failed rentals. However, none of them were in the financial straits that the Riverton has been dragged into to by its previous owner.
Next up was Lucille L. McEwen, esq., president and CEO of the Harlem Congregations for Community Improvement. From its website: “Harlem Congregations for Community Improvement, Inc. (HCCI) is committed to the holistic revitalization of Harlem. We provide economic development and empowerment opportunities to help Harlem residents rebuild and sustain their community.” McEwen discussed Riverton’s potential eligibility for subsidies in order to do a capital needs assessment, and the absolute necessity to get the support of public officials in order to gain access to public subsidies. Between her and Heitler, a bit of a chicken and egg problem was revealed. That is, in order to see if buying the building as a co-op is within tenants’ means, they need to put up the money to have the building assessed. This would be a large commitment and one residents seem hesitant to do without knowing what the costs of a co-op would be, which again can’t be known until an assessment is done….
Resident Darren Pearce (sp?) also spoke from his position as a realtor. He also pushed for getting our representatives, particular the state senators involved in helping forgive Riverton’s debt – making the possibility of purchasing the building more realistic. He stressed that due to the current economic situation and housing market this may be the best time to negotiate such a deal. In the midst of this Kathleen from Keith L. Wright’s office leapt up to explain that the FHA loan on Riverton was not bought by Freddie Mac or Fannie Mae and thus not eligible for certain subsidies (I’m hazy on this, sorry.) But that CW has promised to not sell the building for 3 years.
Finally, Emily Goldstein from Tenants and Neighbors who has been helping to bring information on what can be done at Riverton reminded the audience that this will be a long process. And that seems like the main point to be taken from everything heard thus far. Rentals are easy because you don’t have to get involved. You pay your rent and that’s it. However, as Riverton residents have seen, if the landlord does something you don’t like, raises the rent, cuts services – not much you can do about it. A co-operative situation puts the power in the hands of the community that lives there. But that takes work – not simply a few meetings, but coming together and understanding and wrestling with the issues at length. Heitler has shown that this can work. For a community as large as Riverton, this will mean an ongoing commitment and tremendous leadership towards realizing a common goal – once that common goal is ascertained. Look here for more updates. – Nick Sousanis
Nick is the co-founder and former editor of www.thedetroiter.com an arts and cultural web-magazine in Detroit. He is now a doctoral student at Columbia University’s Teachers College. He and his wife Leah reside at Riverton.
