Even before Judi Kinch’s rent went from $600 to $950 she knew she’d have to take drastic action if she wanted to stay in Chicago. She’s a 29-year-old geologist employed by an environmental consulting firm, so she’s not poor. But she’s far enough from being rich that she sees Chicago’s real estate boom not as a way to make money but as an obstacle to finding a place to live.
Too good to be true? Limited-equity co-ops have been around Chicago since at least the 1960s, but few people know about them, and most of what they do know isn’t true.
Best of Chicago voting is live now. Vote for your favorites »
But the Logan Square Cooperative isn’t just a group of enterprising people far enough ahead of the curve to get a good deal for themselves. It’s a group of enterprising people who want others to be able to get a good deal in the future. So they’ve deliberately renounced a traditional privilege of property owners: they can’t sell their home someday and make a bundle. They’ve agreed to limit the equity they can build in their place–hence the name “limited-equity cooperative.”
Even if their area becomes a real estate mecca and gets a trendy new nickname, doubling or tripling their property’s value, none of them can sell his or her share in the co-op for big bucks and reap the profit. Logan Square’s corporate bylaws fix the share price right where it was in October 2001, plus the cost of any approved improvements. A share in their eight-flat will be just as affordable to the next resident as it was to them, whether that’s 5 years from now or 50.
Organizing is nothing new for Dolan, who held the first of a series of exploratory meetings that June. Interested people came–and went. “Most people hadn’t owned before,” recalls Judi Kinch, who was there, “and it made them nervous.” It wasn’t just the commitment involved in owning. It was the idea of doing it with a group. “It’s experimental. There aren’t many models out there.” (Condo ownership isn’t the same, she adds, because a co-op shareholder has a stake in the entire project, not just his or her unit and a few common areas.)
Housing cooperatives have enjoyed episodes of popularity in Chicago’s past. Expensive ones were built along the lakeshore in the 1920s, before the 1963 Condominium Property Act made it possible for apartment dwellers to own their own homes. (Today these market-rate co-ops differ little from condos, though co-op members still buy and sell shares in the co-ops, whereas condo owners buy and sell the units themselves.)
Nevertheless, limited-equity co-ops may be poised for a revival, because the city’s current housing market offers so little to those who aren’t affluent or who aren’t already owners. As Charles Daas puts it, limited-equity co-ops can “temper the effects of raw capitalism that are leading to the destruction of working-class enclaves in the city.” That’s right: the same unconventional institution used 35 years ago by the federal government to keep deteriorating neighborhoods from becoming uniformly poor may now play a role in keeping gentrifying neighborhoods from becoming uniformly wealthy.
