HOUSING COOPERATIVES UNITED STATES 1949-1950 Joint publication of Division of Housing Research Housing HOUSING AND HOME FINANCE AGENCY Research Bureau of Labor Statistics UNITED STATES DEPARTMENT OF LABOR WASHINGTON 1951 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Cooperative Housing in the United States 1949 and 1950 Housing Research Paper No. 24 Bulletin No. 1093 HOUSING AND HOME FINANCE AGENCY UNITED STATES DEPARTMENT OF LABOR Office of the Administrator Bureau of Labor Statistics Housing Research Division For sale by the Superintendent of Documents, U . S. Government Printing: Office, Washington 25, D. C. Price 65 cents (paper) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis P r e f a c e After the end of World W ar II the severe housing shortage in this country led to an increased interest in cooperative housing as one means of solving the problem. This gave further impetus to a movement which began in the United States about a third of a century ago among people who held that by joining together in the purchase of land and the construction of houses they could obtain dwellings of good quality at less cost than those being provided in other ways. As things have worked out, some housing cooperatives have been outstandingly successful and have accomplished everything their sponsors hoped for. Others, however, have proved to be disap­ pointing, either falling by the wayside or failing to attain the original objectives. Although this pattern of success and failure in the housing cooperative field in the United States has long been known in a general way, no comprehensive study has ever been made to show the extent and nature of the movement. There has never been available a comprehensive assembly of data which could be used to ascertain the causes of success or failure among housing cooperatives. The present study is aimed at drawing together statistical material which may be useful for such analyses. It should suggest also profitable avenues for further research in this field. In this connection, it should be pointed out that the present study was undertaken to assemble information which might help future consumer groups, planning to form cooperative housing associations, to avoid the pitfalls which have beset some of their predecessors. Consequently it would minimize the value of the study for its intended purpose if the findings also included the experience of housing associations which were originally organized by builders or real estate firms as a selling aid. Their exclusion from the study was not meant to imply, however, that such endeavors have not in many cases been highly successful from the standpoint of individuals who obtained housing in this fashion. In fact, the need for a companion study of the latter type of housing associations is readily apparent. The study is the work of the Bureau of Labor Statistics of the United States Department of Labor, financed in part by the Division of Housing Research, Housing and Home Finance Agency. The survey was under the direction of Florence E. Parker, the Bureau’s Specialist on Co­ operatives. She also participated in the field work, assisted by Charles J. Appleby, Donald J. Dowd, Joseph C. Furey, Robert P. Lane, Herbert H. Moede, and James E. Zenith — all on the Prices Staff of the Bureau. The section on the legal and administrative status of cooperatives under the National Housing Acts was prepared by C. Franklin Daniels, Deputy Assistant Commissioner, Cooperative Housing Division, Federal Housing Administration. The corresponding section on mutual housing cor­ porations and the Public Housing Administration was prepared by Donald Landay of that agency. June 3, 1952 h i Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis C o n te n ts Page P r e f a c e ............................................................................................ ill C h a p t e r I.— I n t r o d u c t i o n a n d s u m m a r y .................................................... 1 Definition of t e r m s ....................................................................... 1 S c o p e o f s t u d y ............................................................................. 2 S u m m a r y of f i n d i n g s ...................................................................... 3 C o n c l u s i o n s ................................................................................. 5 Chapter II.— Characteristics of housing associations ................................... 9 G e o g r a p h i c distribution ......................................... 9 M e m b e r s h i p a n d i n c o m e .................................................................. 1 0 A g e of associations ....................................................................... 1 0 L a w of incorporation .................................................................... 1 1 S p o n s o r s h i p of a s s o c i a t i o n s .............................................................. 1 1 S t a g e s a t w h i c h c o o p e r a t i o n w a s u s e d ................................................ 1 2 M e m b e r s h i p ................................................................................. 1 3 Membership requirements ......................................................... 1 3 V o t i n g ................................................................................. 1 4 M e m b e r s h i p m a k e - u p ............................................................... 1 4 S o u r c e s of n e w m e m b e r s ........................................................... 1 5 F a m i l y d a t a .......................................................................... 16 C h a p t e r III.— T h e pro j e c t s ................................................................... 1 8 L a n d p u r c h a s e a n d characteristics .................................................... 1 8 P r o j e c t p l a n n i n g .......................................................................... 1 9 M e m b e r s h i p p a r t i c ipation in p l a n n i n g ................................................ 2 0 Size of p r o j e c t ............................................................................. 2 0 Size of d w e l l i n g s .......................................................................... 2 6 C o n t r a c t i n g b y a s s o c i a t i o n ............................................................... 2 6 C h a p t e r I V . — C o s t a n d finances .............................................................. 2 7 Cost to association ........................................................................ 2 7 Cost of land and its development ................................................. 2 7 C o s t of project, b y i t e m of e x p e n s e ............................................... 2 8 T o t a l i n v e s t m e n t in p r o j e c t ........................................................ 2 9 C o n t r a c t p r o v i s i o n s .................................................................. 3 0 Self-help b y m e m b e r s ............................................................... 3 0 O t h e r s o u r c e s of s a v i n g s ........................................................... 3 3 Financing of projects .................................................................... 3 3 Sources of funds .................................................................... 3 3 Mortgage indebtedness ............................................................. 3 5 Mortgage insurance ................................................................ 3 7 F i n a n c i a l status ...................................................................... 3 8 C o s t to m e m b e r ........................................................................... 3 9 Entrance charges .................................................................... 3 9 P r i c e of u n i t .......................................................................... 4 0 M e m b e r ’s d o w n p a y m e n t ........................................................... 4 0 C a r r y i n g cost to m e m b e r ........................................................... 4 1 Additional assessments ............................................................ 4 3 Method and period of amortization .............................................. 4 4 W h a t t h e m e m b e r g ets f o r his m o n e y ................................................ 4 4 Land space ........................................................................... 4 4 C o n s t r u c t i o n characteristics ....................................................... 4 5 C o s t of u n i t in relation to s i z e .................................................... 5 1 M a i n t e n a n c e a n d r e p a i r s ........................................................... 5 1 Evidence of ownership, and period of lease ................................... 5 3 Digitized for FRASER V http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Contents— Continued Page C h a p t e r V . — I n t e r n a l a r r a n g e m e n t s ....................................................... 5 4 Exchange of equity