Can co-op development be a housing crisis solution?

On a hillside in Seattle’s Columbia City neighborhood, the Corvidae Co-op project is quietly staging a housing revolution. Amid the development’s 10 units, residents swap stories and gossip in the shared laundry room and cook meals together in the common room. From the balconies or shared porches and community space between buildings, one can see a neighboring forest, dense with ferns and conifers. A group of developers, architects, and residents hope that places like this will be part of the future of affordable urban living. 

The development, which opened in June, was a collaboration between Allied8 Architecture & Design, an architecture and housing policy advocacy firm, and Frolic, a design and development firm co-founded by MIT grads Joshua Morrison and Tamara Knox. The project cleverly utilized a cooperative financing model Frolic has been developing over the last five years, and currently has put in play on a handful of sites in Seattle and the Bay Area. 

A homeowner with a large lot in a residential that’s just been upzoned—which allows additional units on a single parcel—pools his or her equity with cash from investors to secure a construction loan to build additional units and common space on site. Then, new neighbors buy the units at a much more affordable price point, and all share in collective ownership, responsibility, and appreciation value of the development. Bernadette, one of the residents at Corvidae, is a single mom and massage therapist. She bought a home with $20,000 down, a fraction of what is needed for typical buyers in Seattle, who puts down a median payment of $165,000.

“From a design perspective, it aligns the incentives between long-term investments and upfront costs,” Morrison says of Allied8's design. “It's a built-in system for making smart decisions around energy efficiency and building with materials that last a long time and reduce maintenance, because as a co-op, you're paying your mortgage, but you're also paying a monthly co-op fee, too.”

The imaginations—and financial creativity—of developers, nonprofit groups, and architects has been sparked in recent years by the affordability crisis in the United States. Owning a piece of the urban landscape, whether by yourself or with friends or family, has become increasingly untenable. While many factors still stand in the way of building more such community-led projects, an increasing number of examples are showing that it’s not only possible, but also offers new avenues of creativity for architects to both have more control and ownership over projects they participate in and develop, and also to create new kinds of dwellings and common spaces.

“The cooperative real estate movement is trying to ensure that we get to decide what happens in our neighborhoods, to see that the amenities and things that are good for regional economic systems, like affordable housing, are there,” said Mohit Mookim, a lawyer at the Sustainable Economies Law Center. “The movement is growing, and a lot of marginalized people are coming out of housing insecurity or not having housing, which is the most exciting area of growth in this space.”

In Traverse City, Mich., a crowdfunded, mixed-use development called Commongrounds opened in late 2023. The cooperative includes 18 income-based apartment units, additional rooms for short-term rentals, a food market, a preschool, and a coworking space. Developers on the coasts, including East Bay Permanent Real Estate Cooperative in Oakland and TLee Development in Boston, have also finished and broken ground on similar projects, and the number of community land trusts continues to grow. Community organizations that may have had to pay a significant amount of their budget in rent can now benefit from asset appreciation and redirect more budget towards building their communities. 

Recent developments suggest the system still moves slowly. Corvidae took five years to complete, Morrison said, with many financial aspects of the project requiring extensive effort to pencil out. He’s quick to say that Frolic considers itself a firm operating at the intersection of design, financing and development, rather than an architecture firm. But from an architectural standpoint, this kind of shared-ownership infill project offers new opportunities to build better community spaces, small units, and new kinds of lifestyles, including designing for extended families and multigenerational homes.

“From a design perspective, it totally opens up how you think about floor plans and how you think about efficient designs of space,” he said. “It's a fascinating design challenge, and it's cultural. How do you create flexibility of use for different situations? [How do you] design for people, but not have everything be part of their own domain?”

The United States still has several thousand older cooperative housing developments spread throughout large northeastern cities, especially New York City and Washington, D.C., which blossomed roughly 80 years ago when developers sought to serve couples and families seeking to own their own home. But when the condo concept started to catch on in the late ‘50s and early ‘60s, the industry pivoted hard towards this model of development, and in the following years, inertia and traditional financial practices didn’t leave as much appetite for cooperative projects. Only since 2015 have changes in federal rules around real estate development allowed small investors, defined as those with a net worth of under $1 million or who made less than $200,000 a year, to finance real estate development, which has buoyed crowdfunding and cooperative projects. 

Compared to Europe, where cooperative models for development have taken root, the United States has put up barriers to building these kinds of places. According to Seattle architect Mike Eliason, whose forthcoming book "Building for People" explores a constellation of progressive, climate-adaptive eco-district-style development, including many with cooperative ownership, "[The barriers are] not just one thing, [they're] 100 different things." 

To begin, American planning and zoning, even for transit-oriented development, tends to crowd large-scale multifamily projects in busy transit corridors near arterial streets, which cram new apartments and mid-rises near busy roads, increasing pollution and noise exposure. They often don’t include family-sized units or more affordable options. Additionally, attempts to do this kind of work as a cooperative often run into significant financial issues.

“Probably the biggest hurdle is financing,” said Eliason. While European nations, like Germany, have lower construction costs, and development banks that specifically provide capital for these kinds of projects—some cities even donate land—the cost becomes much more prohibitive stateside. That's in part why Eliason wrote the book: to broaden exposure to the fact that better models in terms of design, planning, and funding, do exist. 

“Conversations are starting to happen, which is really intriguing, because we really need to break away from the status quo of development in this country,” he said. 

Industry inertia can stand in the way, says Morrison. Morrison and Knox, at Frolic, struggled when they felt the appraiser undervalued their project. The lack of comps, or comparative models and projects to base valuation and investment decisions on, remains a hang-up for a more conservative lending and financial systems. 

“Appraisals are a huge limitation,” he said, “and the system just isn’t set up to do something new.” 

Despite that, a growing number of U.S. architecture firms that already work on community-oriented design have begun taking a deeper look at cooperative financing as a model to support their work.

Declan Keefe is cofounder and developer at Boston-based CoEverything, which specializes in cooperative projects. He said that doing this work means letting go of some of the direct control architects have in their work. But the flipside is getting the community excited about the projects. When CoEverything was working on the Dorchester Co-Op development, Boston’s only food co-op, residents became engaged in the design of an on-site cafe and murals that enlivened the facade. During work on the 1463 Dorchester project with TLee Development, which included 29 units of workforce housing and commercial space, local crowdfund investors voted to give the retail lease to a new bookstore; most commercial landlords would have likely favored a more established business.

“Those smaller details become collaboratively designed, and lead to a more energized design process,” he said. 

Frolic currently has a slate of projects similar to Corvidae in the works, including a pair of developments in East Palo Alto in the Bay Area, and 84 homeowners on a waitlist to discuss similar developments. Morrison envisions a time when Frolic can share its experience—development process, financing plans, legal documents—with others, so additional developers can continue to expand this model of development. Like the project itself, it’s a cooperative approach.

“We can reduce a lot of the barriers we faced when trying to get this up and running,” said Morrison. “We like creating this larger community of partners that's able to create these projects and scale over time.”

Patrick Sisson is a freelance writer covering architecture and design. He lives in Los Angeles.