Removing Legal Barriers to Cooperative Housing

Sustainable Economies Law Center's picture

By SELC

August 12, 2013

Cooperatives of many models — but especially worker cooperatives — have gained much attention since the 2008 economic crash because they provide enormous opportunities to lessen income inequality, among other benefits. Similarly, housing cooperatives are an opportunity to create more affordable and stable housing. That’s why we at the Sustainable Economies Law Center seek to promote and clear the way for more housing cooperatives. We’ve been collaborating with the California Center for Cooperative Development (CCCD), as well as many regional housing organizations and professionals who serve housing cooperatives, to develop a state bill that, if passed, would reduce some of the legal barriers to forming housing cooperatives.


The Comunidad Cambria Co-op. Photo credit: Allan Heskin.

In most housing cooperatives, members are both owners and renters because the cooperative is structured as some kind of corporation or an LLC where the members each own a share, which gives them the right to rent a unit or room in the building. As owners, members make decisions that are in the best interests of themselves as residents.

California’s laws pertaining to buying, developing, and selling real estate were not written with cooperatives in mind (like many laws), so creating housing cooperatives in California is a challenge. California, like many other states, has a series of laws put in place to protect buyers from sellers and renters from owners. These laws provide important protections to buyers and renters of homes. But in the context of cooperatives, some of these laws create unnecessary red tape that is time-consuming and costly to get through.

Assembly Bill 1024 is trying to change this. The bill would carve out some exceptions to the Subdivision Map Act and to the Subdivided Lands Act for certain types of housing cooperatives.

Please visit our website for more information about how you can take action this week to urge your Senator in Sacramento to pass this bill.

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