Housing and Land Policy
Policy Brief on Short-Term Rentals: Coming soon!
Housing and Land Advocacy
AB 569: A bill to facilitate the development of cooperative housing in California
UPDATE September 29, 2014
Over the weekend the Governor signed another bill that Sustainable Economies Law Center helped create! This bill, AB 569, will facilitate cooperative housing development in California, especially the creation of Limited Equity Housing Cooperatives (LEHCs). LEHCs provide residents with a unique form of equity stake in their home that restricts the resale value of shares to keep the prices low when regular market forces would otherwise drive them up.
This is the culmination of three years of work by a coalition of organizations, including the Sustainable Economies Law Center, the California Center for Cooperative Development, the Bay Area Community Land Trust, and other organizations that support affordable and cooperative housing throughout California. Assemblymember Ed Chau backed the bill and helped it through the legislative process.
So many people are seeking more stable and affordable housing in California, especially in the Bay Area's volatile housing market. The legal landscape surrounding the creation of cooperative housing in California is unnecessarily complex, which is why we helped write and support AB 569.
AB 569 will remove two of the most significant barriers to the cooperative ownership of housing and make one minor amendment to facilitate the operation of smaller housing cooperatives. AB 569 will address these barriers by making the following amendments:
1) Remove Barriers to Financing for Cooperative Housing: Until AB 569 goes into effect next year, the California Subdivided Lands Act prohibits the sale of housing cooperative shares when the units are subject to a mortgage secured by the entire property, which has the effect of banning housing cooperatives in California, since most cooperatives finance the purchase of a building with a single blanket mortgage. AB 569 creates safeguards to protect members of cooperatives, while allowing a cooperative to actually obtain a mortgage.
2) Modify the Situations in which Limited Equity Housing Cooperatives are Exempt from the Public Report Requirement: This expands the opportunities under which Limited Equity Housing Co-ops can secure an exemption from the costly public report requirement by adding state or federally charted credit unions and state or federally certified community development financial institutions (CDFIs) to the list of financing agencies qualified to enter into the regulatory agreement under the public report exemption.
3) Remove Burdensome Election Procedures for Collectively Governed Housing Cooperatives by exempting housing cooperative where every member serves on the board of directors from burdensome election procedure in the California Davis Stirling Act.
SELC and the rest of the coalition that worked on this bill also hoped for amendments to the California Subdivision Map Act that would remove other unnecessary barriers to creating cooperative housing in California. We got a lot accomplished with the bill this year by amending many confusing provisions of law, which required educating legislators about housing cooperatives. We didn't want to run the risk of the bill getting further stalled by adding more layers of complexity, but we hope to be part of efforts in the future to make more revisions to state laws so they are more conducive to housing cooperatives.
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We envision a world where every person has a home, and housing is a right rather than a commodity. We prioritize working alongside low-income communities and communities of color – those who historically and currently have the least housing security – to develop legal structures and policy mechanisms that remove housing from the speculative marketplace and give communities control over land and housing resources. In particular, we promote cooperative housing, community land trusts, and other cooperative mechanisms for creating truly affordable, community controlled, and ecologically sustainable housing.
The Sustainable Economies Law Center’s Housing Program provides education, research, legal advice, and advocacy to promote more just, sustainable, and cooperative housing models.
Incubation of East Bay Permanent Real Estate Cooperative: In partnership with the People of Color Sustainable Housing Network, the Law Center is piloting a new model of collective land ownership that mobilizes community capital to preserve affordable and democratically controlled housing and commercial spaces. Read more about this model on our PREC Pilot Project page, or visit EBPREC’s website.
Aging Cooperatively: Elders deserve to live with housing security in a community of their choosing and retain self-determination for as long as possible. The Sustainable Economies Law Center is increasing its legal support for cooperatively-owned, resident-controlled housing options for seniors. That's why we've brought on a Borchard Fellow for Law & Aging, Julie Gilgoff, to help realize this vision. To find out more, please visit our Aging Cooperatively webpage.
Legal Services: Our Center provides one-time legal advice for sustainable housing projects at our Resilient Communities Legal Cafe. Occasionally, we develop longer-term relationships with clients to create particularly unique and replicable housing models, though our capacity to do this is quite limited.
Legal Research and Online Resources: We conduct legal research on land and housing issues and publish easy-to-read legal information on our brand new online legal resource library - CommunityHousingLaw.org. This website is still a work in progress, so stay tuned for more information on starting housing cooperatives, community land trusts, and other forms of shared, cooperative, and equitable housing!
Public Education: We often host teach-ins and community conversations on a range of issues related to cooperative housing and community control of land, including this webinar on financing permanently affordable housing. Visit our events calendar to see what's coming up!
Short-term residential rentals, like those facilitated by online platforms including Airbnb, Homeaway, and Flipkey, have become a popular alternative to traditional hotels in recent years. A drastic increase in short-term rental (STR) activity has many cities feeling the negative cumulative impacts of STRs on housing prices and availability, neighborhood quality, and public revenues. However STRs can also provide some benefits, including creating opportunities for income generation, diversifying travel options, and spreading tourism dollars to local residents and businesses. Our policy recommendations for equitable short-term rental regulation balance the potential benefits of STRs with the need for protection of important public interests. Click here to read or download Regulating Short-Term Rentals: A Guidebook for Equitable Policy.
The Sustainable Economies Law Center and several key partners successfully introduced and passed AB 569, a bill to facilitate cooperative housing development in California, especially the creation of Limited Equity Housing Cooperatives (LEHCs)! Click here to learn more.
The latest updates on our advocacy work to create more sustainable and cooperative models of housing and land stewardship.
- Read our latest blog on "Community Development and the Commons" here.
- Read our "Slow Homes Manifesto" here.
Why Are We “Rethinking Home”?
All human beings need economically sustainable housing solutions. However, the burden of housing ourselves is heavy and the predominant options are limiting. Throughout the world, landless people’s movements are vocalizing the essential unfairness of the fact that so many people must struggle to simply secure a place to physically exist, much less make a livelihood, on the planet.
The struggle is not confined to the poor. Middle-income people in the U.S. are floundering to determine how their current housing arrangements will be financially sustainable into the future. The speculative marketplace drives many of society’s decisions about land and housing, and contributes to the scarcity of land resources. Land and housing resources have also been made artificially scarce because we have parceled them into ever larger and more expensive single-family boxes. We are “rethinking home,” because we want to challenge and change many of the predominant models for housing ourselves, and create more cooperative and just alternatives.
SELC is supporting AB 1024, An Act to facilitate cooperative ownership of housing in California, along with several other organizations around the state. The bill passed unanimously out of the Committee on Housing and Community Development in the California State Assembly last month and is heading towards the Judiciary Committee. Click here to learn more.