In celebration of National Cooperative month this October, let’s review some of the benefits of becoming a part of a Limited Equity Cooperative (LEC). An LEC is a model for homeownership in which residents collectively own and democratically control their building, usually by forming a tenant’s association. In other words, each resident owns an equal share of their building, which gives them voting rights for decisions about who manages the building.

1. Accessibility
   Since LEC properties are owned by a not-for-profit corporation, cooperative members are not personally responsible for paying off the properties’ mortgage, making it easier for those who struggle to qualify for individual mortgages to still achieve homeownership. Moreover, due to their nature of limiting equity, purchasing a share in an LEC often requires lower down payments and lower closing costs than purchasing a single-family home, condominium or market-rate housing cooperative would.
2. Affordability
   LECs are among the most affordable types of affordable housing even when compared to other affordable housing models such as community land trusts or deed-restricted inclusionary housing (ShelterForce, 2017). Moreover, cooperative members can typically receive tax deductions similar to homeowners of traditional development properties. Finally, because LECs limit the amount of equity an individual can earn on the resell of their share, units in cooperative properties remain affordable for long periods of time.
3. Stability
   The cooperative housing structure limits motivation for monthly charge increases ensuring that increases will be in proper accordance with increases in operating costs in comparison to the drastic rent hikes that can occur in rental housing. This increase in monthly expenses provides a sense of security and allows for members to take root in their homes for longer.
4. Control
   As owners, cooperative members can influence the decision-making process on important choices about the way in which their building is managed and the services that are available to them.

To learn more about LECs, come back next week to read Mi Casa Inc’s answers to Frequently Asked Questions about LECs and click here to register for the Cooperative Leadership Academy.