Pitching Eric Adams’ City of Yes on affordable cooperative housing

The housing component in New York City Mayor Eric Adams’ City of Yes proposal would result in a massive rezoning throughout the five boroughs that officials hope will encourage the creation of more than 100,000 new homes over the next 15 years. Such a radical change has had the administration out seeking support for the proposal, which will require final approval from the City Planning Commission and the City Council’s blessing for the plan. 

One group of organizations and businesses has launched a campaign urging the mayor, who has pledged to spend $24 billion for developing affordable housing throughout the city, to set aside $3.6 billion, or 15% of the total funding, to create permanently affordable cooperative housing in office-to-residential conversions slated for Manhattan’s Midtown South. 

“Many residents are displaced from living where they work. By providing access to shared equity, affordable housing, residents will help stabilize the local economy, strengthen the civic infrastructure and anchor populations of workers who pay taxes and plan to stay in New York City,” said Casey Fannon, president and CEO of National Cooperative Bank, in a statement about the campaign.

Other members of the affordable housing coalition include the National Cooperative Business Association, Cooperative Development Foundation, Council of New York Cooperatives and Condominiums, Urban Homesteading Assistance Board, Mutualist Society, Amalgamated Bank, AFL-CIO Housing Investment Trust, 1 Worker, 1 Vote and Inclusiv.

City & State caught up with coalition representatives Andy Reicher, former executive director of the Urban Homesteading Assistance Board, and John Holdsclaw, executive vice president and chief policy officer at National Cooperative Bank, to discuss how the coalition came together and why affordable cooperatives should be included in the mayor’s City of Yes plan.

This interview has been edited for length and clarity.

What is the coalition exactly, and why did it come together? 

Reicher: The coalition represents a number of organizations that have a strong interest in cooperatives and solving many of the community's problems through a cooperative and mutualist model. And they all came together with an interest in promoting a cooperative model and a cooperative approach in New York that hopefully will serve as a model for elsewhere.

Holdsclaw: This coalition is a perfect example of a bunch of cooperatives and groups coming together for the betterment of the community, where we all unite for a common good to address the lack of affordable homeownership in this city. 

When you use the term “cooperative,” can you provide a little more context as to what exactly that means?

Reicher: A cooperative is a model of ownership where, in the case of housing, the people who live in the housing are the board of directors and the owners of the corporation. In New York state, they generally own the stock in the corporation and they make the board of directors. They run it. They make decisions, and they are tenants in their own corporation. 

In a food store coop, the shoppers would own it. In a worker coop, the workers would own the business and in a credit union, the people who have money on deposit or put the money in, who use the bank, they would make the credit union and the credit union would be the owners. And in banking, there is a cooperative model. There's lots of stock owned by the borrowers, and so the borrowers are the members of a corporation that elect the board of directors. I am actually a member of the board of directors of a coop bank.

Cooperatives are probably the largest interest group in the United States. There's certainly more than 100 million members of cooperatives across the nation. 

What do you hope to see accomplished by Mayor Eric Adams’ City of Yes initiative? 

Reicher: It is a substantial housing proposal. We just wanted to be sure that the opportunity for affordable cooperative home ownership is included. There are a lot of good reasons why affordable cooperative housing should be included in all of the housing measures that the city does. It's something that we and other groups have pushed for as the city puts out these types of programs. We didn't want it to be an afterthought. We wanted it to be included in the program.

Holdsclaw: A lot of times, when you're either dealing with something at the City Council level, or if you're dealing with something at the Assembly level, state Senate – it's always about finding the vehicle. And so when Mayor Adams came out with his vehicle and talked about the dollars and the effort, we didn't go in and say we wanted half of that money to go towards affordable cooperative housing. We just talked about a small portion, with hopes of the promotion of limited-equity cooperatives or affordable cooperative housing. This was the vehicle. This was the opportunity. And we just felt like, if not now, when? We wanted to take advantage of bringing together a broad coalition of cooperators to take advantage of this. 

And it goes without saying, with the affordable housing crunch in New York, only 1.4% of all the city's rentals were available in 2023. You've got the city owning all of these buildings that no one's in, and (still) the high demand for housing. So our only cause was, we've got to take advantage of this opportunity to at least educate the administration, advocate to provide a set-aside for ownership. 

If you go beyond the cooperative piece of this, it really comes down to economic justice and the need for homeownership (being one of the largest assets that many people are ever going to have in their life) is taken away when you have … renters only. The model that we're trying to promote would at least allow someone to own their home, in a stable community in that part of town. 

How is cooperative housing playing in other cities? 

Reicher: There's a lot of interest. We do work nationwide. There’s just been this resurgence of interest in cooperative, and cooperative-like shared equity housing, community land trusts and other things like that, all across the nation. We get requests from cities: Chicago, Nashville, Seattle and Portland, Maine are all cities where we’re working on coops. People just want this. 

There's a lot of talk in New York about why can't we have a new Mitchell-Lama program, when the city created tens of thousands of cooperative units – 75,000, 85,000, 90,000 units of cooperative housing was created, most of which is still in existence, almost all of which – 95% – still provides some of the most affordable homeownership opportunities in the city. And people say, why can't we have a Mitchell-Lama 2? The way you're going to have it is to just include cooperative housing as you're putting out these programs. You have a variety of housing forms, like conversion of office space. There will be other efforts that are made, and they should include cooperative housing as well. 

As John was saying, it's an opportunity to raise up the idea of cooperative housing, cooperative homeownership, the opportunity for people who are generally marginalized and often outside of the homeownership market. Cooperatives have proven that you can, in fact, provide a homeownership opportunity for them. People think about it as just equity (it does create a piece of equity), but it creates some enormous stability long-term, in which you're secure in your tenure. You're not necessarily subject to the market forces that drive rental charges. You're not at the whim of a landlord. You're in control. You're the homeowner and you have an equity stake in it. 

You already have a proposal you’ve made for New York. Please walk me through it.

Reicher: We used the mayor's numbers … (and) asked for 15% of the $24 billion that they were setting aside (for housing). So it's $3.6 billion over a 10-year period and it would produce about 20,000 permanently affordable home ownership of apartments … The average household in New York is now about 2.5 residents. So that gets you to about 50,000 residents that would reside in this housing. They're very rough numbers. As you know, the costs of doing anything are changing rapidly. Hopefully, you can do more, but who knows where inflation will be.

Can this push for cooperative housing work with the push to convert commercial office space into residential?

Reicher: Midtown South was the mayor’s proposal. I haven't really studied the particulars of the physical office conversion, but those are older office buildings, which actually make for easier housing than the newer ones (which have a lot of exterior windows, a lot of interior space, which makes it difficult for housing) … That's always a difficulty, and there's also zoning issues … But it's a reuse of buildings that we have at the moment that people really don't see a future for.

Holdsclaw: If you look at parts of the mayor's (plan), there's also a component that makes it simpler for owners of homes and small business buildings to alter and update their buildings, as opposed to some of the larger (buildings) … There's also a desire to create affordable and supportive housing from some of the smaller buildings.

Can you talk about the stability that comes with cooperative housing?

Holdsclaw: On the part of stability, there's also this chance to create some level of generational wealth. Ownership is tied to that … Shared ownership is the hottest thing in philanthropy right now. They haven't figured out how to fund it, but at the same time, at its core, it's all about ownership. 

I think you're going to see … this ownership component come around more and more as it relates to workers, as it relates to home ownership, as it relates to purchasing coops and things of that nature. Obviously, for our efforts today, we're talking about the mayor’s City of Yes proposal again and asking just for 15%, or a fraction of the overall authorized money that he's asking for, for this to be successful. This is going to be an issue that's not going to go away, because there's no way in this country that we're going to close the racial wealth gap or any wealth gap at all without some component of homeownership being there.