Benefits to Senior Co-op Housing in Rural Areas

There are several attractive member- benefits of a senior housing cooperative. They are:

• Lower barriers to entry. Members who might not qualify for an individual loan can still become homeowners as part of the cooperative’s blanket loan.
• Maintain equity. Membership in the cooperative allows seniors to retain equity, rather than spending it on a long-term care facility or on rental housing.
• Independence. Allow seniors to live independently, but with some supportive services
• Flexibility. The co-op members control the range and cost of services that will be provided.  Therefore, the cooperative can be designed to meet the specific needs of its members.
• Cost Control. If members want the housing to remain affordable, of particular concern to senior citizens on fixed incomes, they can create a limited-equity cooperative where the growth in the sale price of units in constrained.
• Community. Allows seniors to create a natural community in which to age in place, eliminating the isolation that can accompany old age in rural areas.

Barriers to Senior Co-op Housing in Rural Areas

There are several significant barriers to extensive development of senior cooperative housing in small towns and rural areas.

First, declining or stagnant rural areas won’t have a real estate market to support it.  Senior citizens need buyers for their single family homes for them to become member/owners of a housing cooperative.  If the community is growing and there is demand for single family housing, this won’t be a problem.

Second, it may be difficult to assemble in one location the critical mass of individuals interested in being part of a cooperative housing project.

Third, even if the local economy is strong, rural buyers and bankers have little experience with housing cooperatives.  The concept is foreign to them.  Promoting understanding and buy-in to the coop housing concept among potential buyers and lenders takes considerable time, effort and resources.

Fourth, it’s hard work to be a member of a housing cooperative.  Once a critical mass of buyers is found, the buyers will need to educate themselves on cooperative governance, bylaws and governing documents of the coop must be drafted and a governing board must be established and functioning even before residents move in.  It’s hard work that would appeal to some seniors and intimidate others.