A Practical Guide for Cooperative Success
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COOPERATIVE HOUSING TOOLBOX A Practical Guide for Cooperative Success TOOLBOX SERIES Published by Northcountry Cooperative Foundation in partnership with Northcountry Cooperative Development Fund COOPERATIVE HOUSING TOOLBOX A Practical Guide for Cooperative Success Published by Northcountry Cooperative Foundation in partnership with Northcountry Cooperative Development Fund Housing Cooperative Toolbox i Acknowledgements This publication is one in a series of toolboxes published by the Northcountry Cooperative Foundation. Funding for the development and production of this toolbox was provided by a grant from the Rural Cooperative Development Grant Program, U.S. Department of Agriculture. Additional support was provided by the Northwest Area Foundation. Information contained in this toolbox is being provided pursuant to a License Agreement between the New Hampshire Community Loan Fund and Northcountry Cooperative Development Fund. If you wish to purchase a copy of this toolbox, contact: Northcountry Cooperative Foundation 219 Main St. SE, Suite 500 Minneapolis, MN 55414 612-331-9103 www.ncdf.coop Thanks to: Margaret Lund, Northcountry Cooperative Development Fund Tom Guettler, Northcountry Cooperative Development Fund Angela Dawson, Northcountry Cooperative Development Fund Herb Cooper Levy, Executive Director, Robert Pierre Johnson Housing Development Corp. Daniel Blankenship, Burlington Community Land Trust New Hampshire Community Loan Fund Urban Homestead Assistance Board About the Publisher Northcountry Cooperative Foundation (NCF) is the non-profit, educational affiliate of the Northcountry Cooperative Development Fund (NCDF). NCDF was founded in 1978 by a group of natural food coopera- tives whose members wanted to invest their capital in business activities that supported their values. What began as a simple tool for self-preservation—a handful of co-ops lending money to each other because no one else would—soon grew into one of the first community-development loan funds in the country, and a model for community-based capital control. Since its founding, NCDF has expanded its market beyond natural foods to include other cooperative sectors. NCDF has made millions of dollars in capital available to a range of small consumer, worker, hous- ing and producer cooperatives and their members, playing an instrumental role in the success of these enterprises. From its beginning, serving a locally-based collaboration of small natural food cooperatives, NCDF has grown into a regional network of more than 100 community-based, democratically owned and governed enterprises. NCF, as the non-profit arm of NCDF, was formed to more effectively carry out and expand the educational and technical assistance activities with which NCDF has long been involved. Copyright 2003, Northcountry Cooperative Foundation in partnership with the Northcountry Cooperative Development Fund. Information contained within may not be reproduced in whole or in part without permis- sion of the Northcountry Cooperative Foundation. ii Housing Cooperative Toolbox TABLE OF CONTENTS Acknowledgements. ii About the Publisher . ii Introduction . 1 INTRODUCTION TO COOPERATIVES . 2 What is a Cooperative? . 2 Cooperative History and Origins . 3 What is a Housing Cooperative? . 4 Types of Housing Cooperatives . 5 Market Rate or Equity Cooperative . 5 Limited Equity Cooperative . 5 Leasehold Cooperative. 5 Differences Among Housing Types . 6 Benefits and Challenges of Cooperative Housing . 8 Economic Benefits . 8 Social Benefits. 10 FOR MEMBERS . 11 Member Rights and Responsibilities . 11 Member Rights . 11 Member Responsibilities . 11 Democracy and the Cooperative Model . 12 Housing Co-ops Embody Democratic Principles. 12 Legal Structure. 13 Articles of Incorporation . 13 Bylaws. 14 Occupancy Agreement (Proprietary Lease) . 15 Subscription Agreement . 15 Federal, State or Local Regulatory Agreements . 15 Other Documents . 15 Annual Membership Meeting. 16 Purpose of the Annual Meeting . 16 Location of the Annual Meeting. 16 Planning the Annual Meeting. 16 Timing of the Annual Meeting . 17 Challenges and Sources of Strength . 17 Challenges . 17 Sources of Strength. 17 Keys to Resident Retention . 18 FOR BOARDS OF DIRECTORS . 20 Board of Directors Duties. 20 Makeup. 21 Composition. 21 Meetings . 21 Term . 21 Characteristics and Qualifications of Board Members . 22 Characteristics of Board Members . 22 Qualifications of Board Candidates . 23 Housing Cooperative Toolbox iii TABLE OF CONTENTS Recruiting Board Members. 23 The Nominating Committee . 23 Qualities of an Effective Board Member. 24 Pre-Screening Board Candidates. 24 Interviewing Board Candidates . 24 Election Process . 25 Board Orientation . 25 Sample Agenda for Board Orientation . 26 Board Officers . ..