By Dan Neumann
Originally published in The Beacon 

Housing advocates hope that a plan approved this week in Portland will serve as a model for how other towns in Maine can build tenant power, control real estate speculation and create permanent affordable housing.

On Monday, the Portland City Council voted 5-4 to approve a plan by Maine Cooperative Development Partners and Szanton Company to build “Douglass Commons,” a limited-equity cooperative housing development, on Douglass Street in the city’s Libbytown neighborhood. 

The plan calls for the construction of 56 rental units and 52 limited-equity cooperative units, which will be owned collectively by its residents.

The plan beat a competing bid by Avesta Housing and developer Jack Soley to create “Douglass Yards,” which proposed 40 apartments, 30 condos and 10 single-family homes.

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Avesta’s proposal was supported by the council’s Economic Development Committee, but lost after Councilor Belinda Ray submitted an amendment giving the full council the chance to consider the Douglass Commons proposal, which she argued better addressed the city’s urgent need for middle-income housing.
Mayor Kate Snyder and Councilors Nick Mavodones, Justin Costa and Spencer Thibodeau opposed Ray’s amendment.

Douglass Commons will become Maine’s second multi-unit limited-equity co-op in an urban area.

“We couldn’t be more thrilled,” said Brian Eng, a developer with Maine Cooperative Development Partners. “We’re hoping what we put on the table here will get additional governmental support at the state and local level and be something we’ll be able to replicate throughout the state.”

A path to permanent affordable housing

Cooperative housing is not new. In the early 20th century, many housing co-ops were sponsored by unions to secure housing for their workers. In cities like Washington, D.C. in the post-war era, low-income Black residents were being displaced because of rising housing costs. Housing organizers there rehabilitated old buildings and converted them to resident ownership.

Julian Rowand — a specialist with the Cooperative Development Institute and a partner on Douglass Commons — grew up in one of the limited-equity co-ops created in D.C. in the 1970s. “The residents are the exclusive owners of the property. There’s no landlord,” Rowand explained.

Members purchase shares in the cooperative, which entitles them to a vote in the governance and management of the building. They pay monthly fees to cover the co-op’s expenses, such as mortgage payments, property taxes and maintenance.

They limit equity by placing resale restrictions on the units. This allows residents to build some equity while preventing them from flipping the residence for a profit windfall if the market is hot.

“The premise is that housing is a right, not a speculative investment. So, in that way, it’s a decommodification of housing,” Rowand said.

Cutting out the landlord and their motive to extract a profit means the co-op operates at cost. Residents are not subject to rent hikes when the landlord wants to match the rising rents of other properties in the area. 
“The benefits can be pretty substantial. The most important one being that it empowers tenants to have more control over their own economic future,” said Craig Saddlemire, a founder of the Raise-Op Housing Cooperative, a collective of 50 residents including Indigenous people and immigrants who own fifteen housing units in Lewiston.

“Being able to participate in making decisions about your housing can provide a lot of stability,” said Saddlemire, who started the co-op in 2008 as a community organizer while a student at Bates College. “Learning how to use the cooperative organization to address your housing situation can also serve as a potential vehicle for even greater social change in the community.”

Raise-Op was the first multi-unit limited equity co-op to take off in an urban area in Maine. The co-op model has also grown in rural Maine by converting several mobile-home parks to resident ownership.
Saddlemire says the benefits of living in limited-equity co-ops grows over time. While housing may be built today that qualifies as affordable, there is no guarantee that same housing will still be affordable a few years down the road. Limited-equity co-ops, along with public housing, are paths to permanent affordable housing, he says.

“From 2014 to 2017, average market rents were going up between 10 to 35 percent,” he said, explaining that three- and four-bedroom apartments likely saw the largest percent increases as those are particularly scarce and sought after by working families. “For us, our operating costs went up five percent over the same time period, which is consistent with what inflation was for that time period.”

Housing for the ‘missing middle’

The residents of Sunset Terrace Mobile Home Park in Rockland and of Sunset Acres Mobile Home Park in Thomaston became the seventh and eighth resident-owned communities in Maine in 2016. | Courtesy Raise-Op

Portland’s Douglass Commons proposal seeks to fill the dearth of three- and four- bedroom apartments that larger families require, whereas the Avesta proposal sought to create mostly one-bedroom and studio apartments.

It also targets middle-income tenants, who until now have been neglected in the city’s affordable housing planning. 

Douglass Commons set eligibility for incomes between 60 and 100 percent of Portland’s Area Median Income (AMI) — $90,810 for a family of three. Avesta’s eligibility for its proposed units was 100-120 percent AMI.

During the bidding process, Maine Cooperative Development Partners learned that none of the nearly 2,000 affordable housing units that the city has approved targets incomes between 60 and 100 percent AMI. Most are under 60 percent with a few in the 100-120 percent range.

“That 60 to 100 range is the missing middle. It’s the bulk of working people — teachers, city workers, for example — who want to stay in Portland but really can’t afford it,” Rowand said. “You have this very ironic situation where the people who work for the City of Portland can’t really afford to live in the City of Portland.”

Councilor Ray cited this “missing middle” on Monday in her statement of support for the Douglass Commons proposal. Councilor Tae Chong echoed Ray, saying that the fact that 57.1 percent of Portland voters supported the recent rent control ballot initiative indicates a deep concern about the lack of affordable housing in the city.

“You buy into the co-op and your rent doesn’t really change. It’s going to be more stable overtime,” Chong was quoted by the Portland Press Herald. “It creates more permanence for more families we’re hoping to attract. We don’t want to lose more kids.”

In the past, limited-equity co-ops have been able to grow in other cities as organized tenants pressured local politicians to pass laws such as D.C.’s Tenant Opportunity to Purchase Act in 1980. TOPA gave tenants the right of first refusal on their building if their landlords want to sell. 

Some cities, like Boston, are currently considering similar tenant-purchasing laws. Maine Cooperative Development Partners say they have been contacted by local housing authories in Westbrook, Biddeford and Mount Desert Island interested in co-ops.

“I think we are seeing a resurgence of ideas like cooperative housing and TOPA,” Rowand said. “Certainly, in this time of the pandemic, but even before too, issues of displacement, gentrification and affordability have come to the forefront. I think these recent ballot initiatives in Portland prove that there is appetite for this kind of thing with the general public.”

Rowand believes local officials must look to what cities like Boston are presently doing, and what other cities like D.C. did decades ago, if limited-equity co-ops are to flourish in Maine.

“In many cities, the model has turned into just trying to figure out how to incentivize developers with tax credits to build affordable housing. That has come in the place of working with grassroots housing organizations and supporting them from the ground up,” he said. “Communities in Maine should consider tenant-purchasing laws.”

In planning for permanent affordable housing, Saddlemire says that state and local officials must also consider leveling the playing field for self-organized tenants who are forced to compete with large commercial and nonprofit developers for capital and credit.

“We need to start creating funding mechanisms that are more friendly towards housing co-ops,” he said. “We’re structuring the programs in a very narrow way that only results in very large rental properties offering a period of affordability which will expire.”

Still, with the Portland City Council vote this week, the resident-owners at Raise-Op are glad to welcome new allies in to the cooperative housing movement.

“A lot of groups that have been interested in trying to start something but we haven’t seen anyone else get there,” Saddlemire said. “We really want to see the cooperative economy grow.”

Top photo: Portland’s Libbytown neighborhood | Corey Templeton, Creative Commons via Flickr

Every month PelotonLabs founder Liz Trice interviews a community member for The West End News. This month, to celebrate National Cooperative Month, Liz caught up with Julian Rowand of the Cooperative Development Institute to discuss cooperative housing.​

How did you get involved with cooperatives?

When my sister and I were a year old, my parents were renting in Washington, D.C. and they got an eviction notice. The residents organized to purchase the building and created what became the first Limited Equity Coop in Washington D.C. My mother was the resident manager there from when I was 2 years old until I moved back to DC as an adult and took over her job.

So, I grew up in a coop, and that affected my work – community organizing around gentrification and displacement. The people who were my neighbors there when I was a kid are like family to me. People stay for decades in cooperatives, and people look out for one another. We eventually created a federation of limited equity cooperatives in D.C. And then I moved to Maine to work for the Cooperative Development Institute in 2019.

How do you help new cooperatives become established?

I work primarily with residents in manufactured housing communities, or mobile home parks, when they’re still owned by a landlord who decides to sell. Sometimes they’re retiring, or they’ve heard of us and care about the residents, and they approach us to see if we’d be interested. We reach out to residents and find out if they’d be interested in purchasing the housing community. And then we work with local banks to offer a competitive deal and we facilitate the transaction and train the residents to run the coop.

What’s the advantage of cooperative housing vs. renting?

When you’re an owner/member/resident, you have a say through democratic governance what improvements are made and whether to increase the rent. Nobody can sell the housing out from under you. As a coop owner, you’re invested in the care of your property and your relationships with your neighbors. Cooperative housing usually becomes more affordable over time because increases are based on actual costs and there’s no external landlord. People are often willing to volunteer on improvement projects, landscaping is a perfect example. People want to come and work on the grounds and the gardens.

Could any rental building convert to being a cooperative?

Yes. There’s one in Lewiston, Raise-Op coop. Where I grew up in Washington D.C., and in many other cities, that happens regularly. Ideally, Portland and other cities in Maine would enact Tenant Opportunity to Purchase Act (TOPA) laws, where tenants have the opportunity to purchase a building that is going up for sale. TOPA requires owners to notify residents at least 30-60 days before the building goes on the open market to give them time to organize and present an offer. With some support, residents can organize and get financing. Massachusetts has laws requiring residents in manufactured housing communities to get notified. And Boston is considering a TOPA law that would apply to rental buildings. New Hampshire has very favorable laws for manufactured housing communities.

What does “Limited Equity” mean?

Limited Equity means that when you buy in, you pay a low price, and when you leave, the equity stays with the Coop, which is what makes it permanently affordable. Share prices are very affordable. Typically in a normal home purchase you need to have 10-15% of the value in cash. But in our manufactured housing communities the share price is often $100-$400. Something most people can save in a few months.
When you buy in, you’re agreeing to be an active member of a community – whether that’s volunteering on the board or on a committee and attending membership meetings. It’s also a different attitude towards housing, considering it more as a right than a financial investment. The cost of living in a cooperative is stable and becomes more affordable over time. So people are able to save and invest money. 

Are there any new construction housing cooperatives in Maine?

There are two exciting new projects in Portland. The city council is voting whether to allow coops on two parcels of city land. One is at Lambert and Washington Avenue Extension and the other is at the former West School site on Douglass Street. It’s an important opportunity because cooperative housing is absolutely essential to addressing housing issues in urban areas. It’s big for residents to have an option to be owners and stay in the city. And it’s also big for the city to make good on its promise to expand affordable housing options. Cooperative housing has the extra benefit of giving renters the stability and governance that homeowners have and making them affordable for generations to come.

How can I support the creation of cooperative housing in Maine?

You can write or call your city councilor to support cooperative housing at Douglass Street. [City Council’s workshop was on November 5th and their meeting to vote on November 9th.] You can contact Maine Cooperative Development Partners. Or you can contact us at the Cooperative Development Institute. In Lewiston, RaiseOp is a great resource.
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RESOURCES
Examples of cooperative businesses in Maine: https://maine.coop/maine-co-ops/
Cooperative Development Institute: https://cdi.coop
RaiseOp in Lewiston: https://www.raiseop.com
Maine Cooperative Development Partners: https://www.mainecooperativehousing.com

By Maureen Milliken
A proposal that will include the city's second cooperative housing development came to the Portland City Council meeting as the dark horse Monday night, but left the winner after councilors said it addresses the need for middle-income housing.
A 108-unit project on Douglass Street, Douglass Commons, proposed by Maine Cooperative Development Partners and Szanton Co., will have 56 cooperative ownership units in several buildings on the 3.24-acre site where West School once stood. There will also be 52 apartments.
The council's Economic Development Committee in August recommended a different project, proposed by Avesta Housing, Hebert Construction and Jack Soley. The Douglass Yard development included a 40-unit apartment building, a 30-unit condominium building and 10 single-family homes.
But members of the Housing Committee said in July they favored the Szanton/Maine Cooperative project. So both were presented to the council for the go-ahead to enter into a purchase-and-sale agreement for the city land on Monday.
Councilors who supported the Douglass Commons proposal said its key difference was an aim to provide housing for the "missing middle" — those who can't afford the city's high housing prices, but make too much money to qualify for the limited amount of housing available to low-income residents.
"It's about pioneering affordable, stable housing for families,” Councilor Tae Chong said. The project is in Chong's district.
Councilor Belinda Ray, who made the motion to approve the Douglass Commons project, said it better addresses the city's housing needs. "Our middle is hollowing out," she said.
'Long-term affordable housing'"The city council's vote to proceed with the Douglass Commons cooperative housing project is a vote to support vibrant communities and long-term affordable housing ownership for Portland families who would be otherwise be pushed out by market-rate rentals," Julian Rowand, of the Cooperative Development Institute, told Mainebiz Tuesday. "It's huge win for current Libbytown residents."
The proposal had the support of the Libbytown Neighborhood Association, and Rowand said the "strong testimony" offered by those who lived in the area was critical.
"It's also an important first step toward the city's goal of offering important and proven affordable housing options, like limited-equity cooperative housing, in an effort to address the current housing crisis affecting Portland," he said.
The developers will pay the city $475,000 for the site near Exit 6B of Interstate 295. The site was a municipal dump before West School was built there in 1962. The school closed in 1997, and was torn down in 2015. The site needs a brownfields cleanup, and developers will also go before the planning board for zoning approval to increase density allowances.
The proposal is for a four-story 56-unit apartment building and 52 co-op, or limited equity ownership, homes in three three-story buildings with 12 units each and four two-story buildings with four units each.
The target residents are those who make 75-80% of Portland's area median income, which is $70,630 for a one-person household, $100,900 for a four-person housing and $117,044 for a six-person household. Some 85% of all the units, including the apartments, would be for those between 60% and 110% of the Portland AMI. Low-income tax credits will be issued to pay for the apartment construction, and a percentage of those will be reserved for those who meet the low-income threshold of 60% AMI or less.
CDI, which supports cooperative business initiatives, partnered with Maine Cooperative Development Partners on the project. Other partners in the group are developer Brian Eng, Matt Peters and Liz Trice, all principals; Andy Reicher, of the Urban Homesteading Assistance Board; BrightBuilt Homes, an affiliate of Kaplan Thompson Architects; Mike White, of Island Carpentry; Aceto Landscape Architects; and Acorn Engineering.
Maine Cooperative Development Partners said that it has more than 20 households of prospective residents, who have been meeting for more than a year. The group includes multiple established immigrant families who share a vision of mixed-income ownership housing with shared community facilities and outdoor space, the developer has told the city.
"The development team will continue to work with these residents to crystalize their vision for site design, for self-governance, and to
recruit more households." the proposal said.
The beauty of the projectThe group was also approved this summer for a similar development on Lambert Street in the North Deering neighborhood. That project will have up to 46 single-family homes on 13 acres that are now vacant.
Members of a co-op own the development as a whole, and then lease their home for a price that covers the overall mortgage, maintenance and other expenses. Co-op ownership, which is catching on the state largely in mobile home parks, is a cheaper way to own a home.
"That's the beauty of this project," Eng said, of Maine Cooperative Development Partners, told Mainebiz in August. "We're talking about new Americans, teachers, firefighters, people who can't afford to buy a house in Portland."
Both the Lambert and Douglass street lots became available earlier this year when the city put out a request for proposals to sell the property to developers who would build more housing, part of the city's plan to add 2,257 housing units by 2027.
"The number one motivation is the housing crisis we're feeling in Portland right now," said Eng. Eng is probably better known for larger commercial developments, like the $90 million Pearl Street Riverfront District on the former Maine Energy Recovery Co. site in Bidderford, with Jim Brady, of Fathom Cos.
The co-op housing concept isn't new, but it's relatively rare in Maine. Residents who are part of a co-op share ownership of the housing, which can be anything from apartments to single-family homes. The model is made possible through the state's Maine Cooperative Affordable Housing Act, which allows limited equity housing ownership and the federal Department of Housing and Urban Development 213 Program, which insures cooperative housing mortgages.
Some notable projects are the 10 manufactured home communities in the state that are now resident-owned with help from ROC USA, which works with CDI, and Raise-Op, in Lewiston, where residents of three apartment buildings own 13 units. Raise-Op was recognized with a Grow Smart Growth Award last month for its cooperative housing apartment model.
https://www.mainebiz.biz/article/co-op-development-is-surprise-pick-for-portland-douglass-street-lot

Portland councilors will negotiate an agreement for more than 100 housing units at the site of the old West School.
BY MICHAEL KELLEY THE FORECASTER

A development team of Szanton Company and Maine Cooperative Development Partners proposes a 108-unit housing development for land the city now owns at 43 and 92 Douglass St. 

PORTLAND — A divided City Council decided Monday to pursue selling the former site of West School on Douglass Street to a developer who plans to build a four-story, 56-unit apartment building and 52 co-units in several buildings on the property.

The Douglass Commons development would be a mix of affordable, workforce and market rate housing. The co-op part of the project would give those tenants a financial stake in ownership, even though they would not own their units.

The council will approve a final sales agreement with developer Szanton Company/Maine Cooperative Development Partners, which has offered $475,000 for the property, at a later date. A zoning change is needed before the project would be ready for Planning Board review.

Reaching a decision on a project was not easy.

This summer, the council’s Housing Committee and its Economic Development committee agreed that the city-owned land on Douglass Street was a prime spot for a housing development, but they disagreed on which of two proposed developments they preferred.

The Housing Committee favored the Douglass Commons project. The Economic Development Committee, however, voted in August in favor of a plan from Jack Soley, Avesta Housing and Hebert Construction. The Douglass Yards proposal included a 40-unit apartment building, a 30-unit condominium building and 10 single-family homes. The single-family houses would have room to add on an apartment if the owners wanted to do that.

The council was equally divided Monday, with Jill Duson, Kimberly Cook, Pious Ali, Belinda Ray and Tae Chong supporting Douglass Commons, and Councilors Nick Mavodones, Spencer Thibodeau, Justin Costa and Mayor Kate Snyder favoring Douglass Yards.

Councilor Tae Chong said he favored the Douglass Commons proposal because it could be more appealing for families, who would be attracted to living close to the city skate park, the Douglass Street athletic fields and Kiwanis Pool.

Chong, whose district includes the site, said he preferred the Douglass Commons proposal, which could bring in as many as 186 children to Portland Public Schools, because it is more family friendly. The property is close to the Douglass athletic fields, city skate park and Kiwanis Pool.

“For me it is about pioneering affordable, stable housing for families,” Chong said.

Councilor Belinda Ray said the Douglass Commons project will better provide housing for those earning between 60% and 120% of the area median income, which is $70,630 for an individual and $100,900 for a family of four.

“I see that proposal addressing our needs much better,” she said.

The Libbytown Neighborhood Association favored the Douglass Commons plan and neighbors Monday spoke in favor of it.

Jon Bradstreet, who has owned 73-75 Douglass St. since 2007, said while he had concerns about the size and scope of both projects, he backed the Douglass Commons proposal “due to conformity to the current neighborhood look” and the green space that separates the project site from existing houses.

Another Douglass Street resident, Charles O’Rourke, said the team behind the Douglass Commons proposal has “earned his confidence” because they have met with neighbors and made “meaningful adjustments based on community feedback.”

But Ali Malone of Craigie Street said she supported the Douglass Yards project because of the potential for the single-family homes to be able to expand, something she hopes other developers will take note of.

“This is an exciting model for the city that will create extra housing and give flexibility to families to grow into or out of units of varying size,” she said.

Jonathan Culley, owner of Redfern Properties and vice chairperson of the Avesta Board of Directors, argued that the Douglass Yards project makes more sense for the city because it is expected to generate $9.3 million more in tax revenue over a 30-year period and offered $100,000 more for the land.

Georges Budagu Makoko, publisher of the Amjambo Africa newspaper, said Avesta has had a long history providing housing for those who are new to the country.

“There are so many in the immigrant community that need affordable housing,” he said. “Avesta Housing has been providing that for them. I don’t know anyone that does a better job.”

Mavodones said the Douglass Yards proposal makes more financial sense for the city. Snyder said she favored it because it could be constructed faster and is not requesting money from the city’s Housing Fund, which supports the construction of affordable housing in the city.

“I keep coming back to this sense of urgency. I want to see the housing built as quickly as possible. I think we have a real sense of urgency here in the city of Portland,” she said.
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While both projects had a final completion goal of summer 2023, the Douglass Yards project anticipated starting construction in 2021 and having the single-family homes and condos completed in spring 2022, around the time the Douglass Commons project was slated to start.

https://www.pressherald.com/2020/11/17/council-chooses-housing-plan-for-douglass-st-site/

 Often-overlooked housing programs and models can help working poor Maine families build the equity they need to weather financial storms. 
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BY TAE CHONG SPECIAL TO THE PRESS HERALD

Imagine that your family has no assets. Imagine that your family has had generations of little to no savings or other assets. Or perhaps imagine that you are a refugee or an asylum seeker who has arrived with just the clothes on your back. How do you save enough money to put 20 percent down to buy a $280,000 fixer-upper home in southern Maine? How do you save $60,000 when you are one car mishap or one minor medical emergency away from losing your life’s savings?
Let’s do some simple math with an imaginary family of two working parents with two children. Each parent is making $15 an hour, and each parent is working a full-time job with no medical benefits. $15 x (40-hour) jobs x 2 parents = $60,000.

The take-home pay after taxes, Medicare and Social Security is roughly $46,800. The rate for a joint tax return is 22 percent. Fair market rent for a three-bedroom apartment in Portland in 2020 is $1,982. $1,982 x 12 = $23,784 in rent.  $46,800 – $23,784 = $23,016 left over.
The family now has $23,016 or $442 a week to spend on groceries, child care, health care, heat, clothing, cellphone, internet, utilities, car payments, insurance, gas, repairs and more. (Remember, each parent is working a 40-hour-a-week job. Now think, how is a single parent going to solve this problem with half the resources and more barriers?)
Many programs exist to help lift families out of poverty. Two need more attention and support: Family Self Sufficiency and Housing, which builds equity for its residents, and cooperative and land trust housing are two housing models that build equity for its tenants.
Family Self Sufficiency is a federal employment savings program for employed residents living in public or Section 8 housing. The guidelines are simple: If you work with your FSS case manager, receive Temporary Assistance for Needy Families and work to increase your income, you can begin to save.
Public housing residents and Section 8 recipients pay 30 percent of monthly adjusted income in rent. If their income increases, their rent increases. This is still true for FSS participants, but the difference in rent is put in your savings account, and if you complete your goals, after a year there are no restrictions on how it is used. You can use it for life emergencies, pay for college or keep saving and perhaps purchase a house.
Using simple math without adjusted monthly incomes, let’s say that the family with two working parents making $15 an hour lives in public or Section 8 housing and got new jobs because of an adult ed or a workforce program. Let’s say the parents are now making $18 an hour. Their rent at $15 was $1,560 a month, or $18,720 a year.
Now their rent is $1,872 a month, or $22,464 a year. $22,464 – $18,720 is $3,744 after one year. The $3,744 is theirs. Without FSS, that increase in rent would have gone to the landlord; instead, it is saved for the FSS participant.
Why is building assets important for families in poverty? Even in subsidized housing, families in poverty are in jeopardy of being food insecure, in health neglect and in financial instability. When families in poverty do not have assets, they resort to high-interest loans and/or same-day lending – or they may simply fail to pay their bills, thus affecting their credit scores, which could affect their employment options and limit their access to lower-interest-rate loans.
Other overlooked programs that help households in poverty build assets are cooperative housing and land trust housing. Participants in coops and land trusts are part owners of their developments. A portion of their rent over time builds equity and monetary value. In cooperatives, residents can borrow against their equity for emergency funds, college, purchasing a car and more.
Housing is not the end goal – self-sufficiency and a personal safety net are. If we want to tackle poverty and racial income and asset disparities, the math is simple: The poor need more assets to weather financial storms. Otherwise, they are stuck in a cycle of poverty and potentially lifelong renters. The cards are stacked against them, but these programs help to increase their odds of climbing out of poverty. Housing the poor needs to be more intentional, strategic and holistic.

ABOUT THE AUTHOR  Tae Chong is a member of the Portland City Council, representing District 3.
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​https://www.pressherald.com/2020/11/04/maine-voices-asset-building-key-to-breaking-cycle-of-poverty/