An Enormous Land Transition is Underway. Here’s How to Make it Just.
Neil Thapar, the Law Center's Director of Food and Farms, penned this essay, How to Win Land Justice in a Decade, as part of our Land Justice campaign in January 2020. It was recently republished in Civil Eats.
Excerpt: In the next decade, we can rewrite the story of our collective future—one that manifests indigenous sovereignty, reparations, and a livable climate. Winning land is a precondition not only for a racially equitable food and farm economy, but for a real, thriving, and inclusive democracy. And, true to the definition of democracy, we all have a role to play.
Read the full article on Civil Eats here, or the full, original version on the Law Center's blog here.
Berkeley Revises Loan Requirements to Help Finance Employee Ownership
By Karen Khan of Fifty by Fifty
The Cheese Board Collective, in Berkeley, CA, has been owned by its workers since 1971.
Excerpt: For worker cooperatives, one of the barriers to growth is access to capital. Small business loans usually require the business owner to offer what is known as a “personal guarantee”—i.e., if the business fails to pay off a loan, the owner is on the hook to pay it back. Without a lone owner to guarantee the loan, lenders have been wary of lending to cooperatives, where multiple people own the business. To help grow local cooperatives, Berkeley, CA, is changing the rules.
Berkeley established a small business loan fund with a $500,000 grant from the U.S. Department of Commerce Economic Development Administration in 1987, writes Oscar Perry Abello in Next City. The fund has been used to support minority-owned and women-owned businesses denied traditional loans, but because of the personal loan guarantee, loans to cooperatives have been exceedingly rare.
Read the full article here.
(Originally published on November 19, 2019.)
These Organizations are Putting People Over Profits
Law Center staff at the Law Center's 10-year anniversary party held on October 12, 2019.
Excerpt: Many organizations — including those funded by AmbitioUS — are popping up in recent years to develop new economic systems focused on local production, sustainability, and community. However, many of these organizations run into entrenched legal barriers and regulations that work for free-market capitalism but not so well for collaborative ventures. The Sustainable Economies Law Center is a nonprofit law center that is working to cultivate a new legal landscape. AmbitioUS is supporting SELC’s project, Next Egg, which will give individual investors a community-based option for investing outside of Wall Street.
Read the full article here.
(Originally published January 8, 2020.)
Major advances in 2019 toward a more democratic economy
By Juliana Broad with the Next System Project
Excerpt: Recent pro-cooperative policy changes in Berkeley, California have given rise to what could be heralded as a new “Berkeley Model” of cooperative economic development. In February, the city council unanimously adopted a set of recommendations that will support the development of worker co-ops in the city. The city council’s resolutions include giving worker co-ops preference for city contracts, providing technical assistance for existing small businesses to convert into worker co-ops, and implementing a workaround so that worker co-ops can access the city’s revolving loan fund.
The council’s workaround deserves some attention. Revolving loan funds are pools of money sustained by the U.S. Economic Development Administration that can be extended as lines of credit to businesses that have been turned down by loans elsewhere (for example, by “risk-averse” private banks). Like most small-business lenders, revolving loan funds normally require an individual associated with the business to personally guarantee to repay the loan if the business defaults. Rather tellingly, this requirement is at odds with the multiple-owner model of a worker co-op. The Berkeley City Council’s innovation—developed in conjunction with the Oakland-based Sustainable Economies Law Center—makes it easier for worker co-ops to access these loans by adding an alternative to the conventional individual guarantee. Given that there are more than 500 other revolving loan funds across the country, there will be plenty of opportunities to replicate and build off of the framework established with the “Berkeley Model.”
Read the full article here.
(Originally published December 19, 2019.)
The East Bay Permanent Real Estate Cooperative’s new way to build housing equity
By Jade Yamazaki Stewart of Oakland Magazine
Excerpt: [East Bay Permanent Real Estate Cooperative's] organization uses cooperative ownership models to turn tenants into owners and give them the opportunity to build equity and intergenerational wealth. It’s part of a larger movement to make housing affordable one property at a time. In the Bay Area, the Oakland Community Land Trust, the Bay Area Community Land Trust, and the Northern California Community Land Trust are all buying properties and turning them into affordable housing. But the East Bay co-op’s funding and ownership model is unique.
Tia Taruc-Myers and her husband had been living in a North Oakland fourplex on 61st Street off of Martin Luther King Jr. Way since 2008. Although she had an absentee landlord, rent stayed at around $460 per room, so she didn’t complain. Then, last summer, the landlord painted the building a color Taruc-Myers describes as “gentrifier gray” and put it up for sale. “We were really scared when we heard the building was going to be sold,” she said. “We felt that we were definitely going to lose our home.” So Taruc-Myers reached out to the co-op's Executive Director Noni Session, and she eventually agreed to take on the property as its first project, to be known as Co-op 789.
Read the full article here.
(Originally published October 2, 2019.)
Making a More Democratic Economy, One Revolving Loan Fund at a Time
By Oscar Perry Abello of Next City
Excerpt: The Sustainable Economies Law Center supported worker cooperative members to participate in the local policy-making process that eventually led to the changes to Berkeley’s small business loan fund in September. The center’s “policy brigade” initiative brought together a group of worker co-op members into a yearlong cohort, providing hands-on experience in policy advocacy work.
Read the full article here.
(Originally published November 19, 2019.)
Santa Clara, California is taking steps to invest in worker cooperatives
By NCBA CLUSA
Excerpt: In a unanimous vote last week, the Santa Clara City Council adopted recommendations put forward by the Committee on Economic Development, Communications and Marketing to advance worker cooperative development in the community. The motion to move the worker co-op effort forward was led by Santa Clara Mayor Lisa Gillmor.
Read the full article here.
(Originally published November 5, 2019.)
How affordable housing activists are trying to thwart cutthroat real estate capitalism
by James Rainey, Los Angeles Times
Excerpt: “Part of what we will need to turn things around in this world is to have people become really dedicated and affectionate land stewards,” said Janelle Orsi, founder and executive director of the Sustainable Economies Law Center.
Orsi’s public interest firm is crafting the “justice easements” to lock in affordability. Like agricultural easements designed to preserve farmland, the justice easements will designate housing as the only appropriate land use, with an additional requirement — that future rent increases be limited to, for instance, hikes in the consumer price index.
Read the full article here.
(Originally published October 21, 2019.)
Berkeley approves new financial opportunities to promote worker cooperatives
From the Office of Mayor Jesse Arreguin
(Berkeley, CA) – Businesses that are at risk of closure because their owner is retiring or putting the business up for sale are now eligible for the City’s Revolving Loan Fund (RLF) for the purpose of converting them into worker cooperatives, thanks to a unanimous vote of the Berkeley City Council last night revising the RLF policy. This will help the workers acquire and democratically own and operate the business, keeping it rooted in Berkeley and elevating the jobs and wealth-building opportunities provided to its employees.
...The Sustainable Economies Law Center (SELC) worked with Berkeley’s Office of Economic Development on the latest proposal. This comes after a report by Project Equity revealed that half of business owners in the United States are considering transitioning within the next five years, with 85% having no succession plan, and a third planning to close down altogether.
“The changes the Council have adopted will make it possible for more workers to become owners of the companies they helped build, elevating the quality of their jobs and saving businesses from closure” said Sara Stephens, Housing and Cooperatives Attorney for the SELC. “These amendments will certainly prove widely influential, as cities around the country are looking to Berkeley as a model for how cities can prioritize worker cooperatives and more equitable local economies."
Read the full article here.
(Originally published September 26, 2019.)
EB PREC’s Plan to Replace Landlords With Communal Ownership
By Zach Haber, Post News Group
Excerpt: The East Bay Permanent Real Estate Cooperative (EB PREC) is working to keep Black, indigenous, people of color and allied communities in the East Bay by communally purchasing and sustaining land and housing with local residents.
“The critical part of our project is that we take land and housing permanently off the speculative market,” said EB PREC’s Executive Director and third-generation West Oakland resident Noni Session. She, along with six other local residents, form the Black led and POC majority staff of EB PREC, and the growing cooperative currently has more than 125 other non-staff members including resident owners and investors.
In an interview with The Oakland Post, Session explained how EB PREC is replacing landlords with resident owners and investors who are driven by the desire to sustain the community as opposed to make money.
Read the full article here.
(Originally published September 19, 2019.)