District of Columbia

Limited Equity Cooperative
Task Force

Why?

Background

A 2019 report from the National Community Reinvestment Coalition found that Washington, D.C. had the highest percentage of gentrifying neighborhoods of any U.S. city, with over 20,000 people displaced in recent years.

The growing need for solutions prompted the establishment of a Limited-Equity Cooperative Task Force to provide comprehensive policy recommendations, assist District residents and the District government with improving existing limited-equity cooperatives, establish new limited-equity cooperatives, and help all limited-equity cooperatives succeed and prosper.

Limited Equity Cooperatives in DC

Task Force
Members

Policy
Recommendations

DC City
Council

"We propose that the city establish a goal of increasing the number of LEC units in Washington, D.C. by 45% by 2025 — from 4,400 units to 6,400 units."

6,400 Units by 2025

4,400 Units

Supported by

What?

What is a Limited Equity Cooperative (LEC)?

Also referred to as Limited Equity Housing Cooperatives, LECs are collectively owned by the residents, and each household owns a share in the building. Each household pays monthly costs, or carrying charges, for a unit from the collectively owned building. However, unlike market-rate cooperatives, the resale price is restricted to retain affordability. In other words, an owner who sells a share in the building does not receive the full market appreciation on the share. The LEC acts as an affordable housing asset for the individual household and the community in which the property resides.


Source: Coalition for Nonprofit Housing and Economic Development

"Limited-equity cooperatives are a key part of the affordable housing landscape in the District of Columbia."

DC Limited Equity Cooperative Task Force Tweet
History

Limited Equity Cooperatives in DC

Today, D.C. has approximately 4400 units of LEC housing in 99 co-op buildings.

Many co-ops are located in gentrifying and gentrified neighborhoods, representing a form of stable home ownership that has allowed low- and moderate-income Washingtonians to stay in their homes as retail, services, and job opportunities come to their neighborhoods, and as their local public schools improve.

Despite their proven success, there continue to be roadblocks that prevent the creation of new LECs, and existing LECs may face challenges in accessing assistance to sustain themselves long-term.

View Timeline

0 4300

Current Number of Limited Equity Co-op Units in DC

0 96

Co-op buildings

0 8

Wards

Today

Take Action

As housing prices continue to soar, and lower income residents find themselves squeezed into unaffordable housing or out of the District entirely, there is a renewed sense urgency.

It’s time to take the lessons we’ve learned — as LEC members, tenant organizers, technical assistance providers, financing agents, lawyers, and city leaders — to dramatically scale up this housing form in the District.

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for Limited Equity Cooperatives in Washington, DC.

Task Force Members

Paul Hazen - Chair

U.S. Overseas Cooperative Development Council

Lolita Ratchford

Ella Jo Baker Intentional Community Cooperative

Vernon Oakes

Oakes Management Inc.

Amanda Huron

University of the District of Columbia

Louise Howells

University of the District of Columbia

Elin Zurbrigg

Mi Casa Inc.

Ana Van Balen

Department of Housing and Community Development (DHCD)

Risha Williams

DC Housing Finance Agency (DCHFA)
  • Recommendation #1

    Provide full property tax abatement for all LECs.

  • Recommendation #2

    Provide an additional $5 million annually for CBOs that provide ongoing education and stewardship to LECs, in order to support no- and low-cost education and training for LEC boards and members. Areas of training to include the following: LEC structure and principles; legal documents for LECs; governance of LECs, including running elections and effective meetings; asset management, including finances and maintenance, as well as the use of an Asset Management Scorecard; and other aspects of property management.

  • Recommendation #3

    Develop a uniform Asset Management Scorecard, with the consultation and advice of CBOs, togauge the success of LECs. As noted under Recommendation #2, LEC boards should receive training in how to use the Asset Management Scorecard, and can use it annually to self-assess and report.

  • Recommendation #4

    Require training and expertise in cooperative management for property management companies.Areas of training should include the following: LEC structure and the LEC principles; legaldocuments for LECs; governance of LECs, including running elections and effective meetings;asset management, including finances and maintenance, reserves planning; and other aspects of property management.

  • Recommendation #5

    Ensure that LECs and individual members have access to affordable or pro bono legal services. Legal assistance is necessary for LECs, in terms of both initial development and ongoing issues. Legal assistance is also necessary for individual LEC members, specifically regarding the transfer of individual member shares, in order to preserve intergenerational resources and ease unit transition upon death of a member.

  • Recommendation #6

    Connect existing translation and interpretation services offered through the DC Language Access Program with LECs, and ensure funding levels for the program are sufficient for LEC members

  • Recommendation #7

    Designate DHCD as the agency responsible for coordinating all matters related to LECs. As part of this, DHCD should designate a point person who can connect the public with the staff with necessary expertise.

  • Recommendation #8

    Develop a tool-kit of financial and technical resources for LECs to sustain the physical conditions of their buildings affordably long-term, and widely promote these tools, providing an11 on-line resource site. Utilize tools such as small rental building and co-op repairs grants, affordable financing from DHCD and private lenders to provide good terms to co-ops for new renovations and/or refinancing. Include a resource list that provides contacts for co-op education, technical assistance, stewardship, and asset management services available to LECs, from a “Pool of Practitioners.”

  • Recommendation #9

    Create a database through DHCD to collect LEC information annually. CBOs have gathered much of this data and could share it with DHCD.

  • Recommendation #10

    Create a group purchasing program for LECs in the District.

  • Recommendation #11

    Encourage broad support for LECs, with the goal of increasing the number of LEC units in theDistrict by 45%--adding 2,000 new LEC units--by 2025.

  • Recommendation #12

    Establish minimum annual funding amounts needed to meet the goal of increasing the number ofLEC units by 45% by 2025. A higher prioritization of very affordable LECs, acquisition take-outs, and construction funding in the Notice of Funding Availability (NOFA) scoring is neededto increase the number of LECs in the District.

  • Recommendation #13

    Develop other viable sources for financing new LECs outside of and in coordination with DHCD.

  • Recommendation #14

    Improve availability and usability of pre-development financing for LECs.

  • Recommendation #15

    Improve the availability and dependability of acquisition financing tools for LECs—including anopen and sufficiently-funded First Right to Purchase Program, and facilitate the better use bridgeacquisition loan funds provided by intermediary lenders (such as the Preservation Loan Fund) by providing a clear path forward for take-out of these loans.

  • Recommendation #16

    Improve the dependability and timing of take-out and rehabilitation financing for LECs.

View Full Report

Co-op Voices

“We came together, we paid our rent every month, we did everything we were supposed to do. We paid off our building by 2016. So in twenty years, our co-op was completely paid for... After we paid for the building and everything, of course we weren’t paying as much rent as we had been paying, but we decided that we were each going to pay a certain amount of money each month, and from that, we were able to start doing some renovations on the building, and we paid cash... We’re going to continue to keep collecting money every month, and improving our building.

DC City Councilmembers

Thirteen Members make up the Council: a representative elected from each of the eight wards; and five members, including the Chairman, elected at-large.

Resources

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1978-1980

First Limited Equity Housing Cooperatives established in Washington, DC

Tenant Opportunity to Purchase Act (TOPA) laid the groundwork for preserving affordable housing by helping low income tenants become homeowners.

1980-2009

Growth of LECs

Almost 80% of the Limited Equity Cooperatives in DC today were established between 1980 and 2009.

2018

DC Limited Equity Cooperative Task Force Established

2019

Report Completed by Task Force

The report provides a set of 16 recommendations that will allow the city to build on its success in nurturing the development of LECs.
View Report

2020

DC Council to Hold Hearings on Recommendations