We break down complex business news to help you understand how money moves in Chicago and how it affects you.
When Amy Jewell and her husband, Toby Mitchell, moved to Chicago from California 10 years ago, they considered the idea of starting building a shared apartment complex.
By pooling money with other like-minded families to purchase a building, the couple thought it would be easier to stay in the city and build a close-knit community with their neighbors.
Jewell and Mitchell aren't alone. Many Chicagoans looking to buy a home find it too expensive outside the city, but some are exploring an alternative to homeownership – co-operative housing – to keep their homes afloat. .
They say progress has been slow, mainly due to legal considerations and the red tape involved when multiple people buy property. So far, Jewell and Mitchell have established a legal entity for the future cooperative, executed written articles of incorporation and an operating agreement, and toured the facility.
Toby Mitchell and his wife Amy Jewell spent four years setting up Cooperative House.
Tyler Pasiak Lariviere/Sun-Times
During the past four years of planning, the couple also had to move out of their Humboldt Park apartment because their landlord sold the apartment to a developer. Mr Mitchell said the unexpected measures further exacerbated concerns about affordable housing.
“We came to the area and found what we thought was a great deal on a nice apartment,” Mitchell said. “Then the landlord sold it to a small developer because he was going to convert it into luxury units. We love it here so much that we had no intention of leaving the area, but we didn't want to move. and had to pay more for a new location five blocks away.”
Cooperative housing comes in many different styles, but is generally defined as a home or apartment complex that is purchased in pieces and shared by multiple people who share common spaces.
“I think everyone is feeling the pinch,” Mitchell said. ” [lived in Humboldt Park] It's like we're being oppressed before we're probably being oppressed. ”
communal living expenses
Moving into a co-operative house in Hyde Park was an easy choice for Peter Reimer, who saw it as a cost-effective way to make friends.
Reimer, her partner and baby currently live in Bowers House, part of the Chicago-based Cumbia Housing Cooperative Network. Room rates range from $450 to $600 per month, depending on size.
“Before the pandemic, my partner and I thought it would be really great to own a home,” Reimer said. “However, I never thought that considering the current interest rates, property taxes, and maintenance costs, the calculations would be favorable to homeownership.In any case, a home should be an investment. I really don’t think so.”
Bowers was established in 1991 as a cooperative house and has 18 guest rooms. Residents have their own bedrooms and share common spaces such as a kitchen, living room, co-working space, backyard, and library.
The living room of the Bowers mansion.
Tyler Pasiak Lariviere/Sun-Times
Another big draw of the home, Reimer said, is the communal dinners and meals, which typically cost residents an extra $200 to $240 a month and fresh, often Locally grown produce and other pantry essentials will be available. Additional charges also include utilities, including internet.
Members also share household chores such as cleaning the bathroom and shoveling snow. You also have a say in matters related to the house, such as renovations, starting a garden, or hosting a party, which are dealt with at fortnightly meetings.
“If it weren't for Bowers, I would never have been able to afford to live in a house this big and nice in this area,” Reimer said. “The proximity to public transport and the lake is very important to me, as is the community aspect. Living with other people who want to be a part of my life, my children's lives. That's very valuable to me.”
Marieke and her partner Peter Reimer.
Tyler Pasiak Lariviere/Sun-Times
overcome economic hurdles
Dave Glowatz, founder of Sol House, a co-op in Logan Square, said that although co-op housing is relatively affordable, it is difficult to secure loans for non-traditional living arrangements. , said it's not that popular.
That's because residents collectively own the building through shares in a cooperative corporation, rather than owning individual plots that could serve as collateral for a loan, he said.
“$90,000 for a membership here is much cheaper than $250,000 for a condo, but unless you have $90,000 on hand, you may not be able to get a loan,” Glowacs said. Told. “So in some ways we have created affordable housing, but there are widespread conditions that prevent people from taking full advantage of it.”
Glowatz had owned a single-family home for years, but was tired of the ongoing maintenance costs. So he teamed up with his friends and others who wanted to move out of the condo and purchased the current Logan Square building, which has six three-bedroom units, under a nonprofit organization. .
“What we realized in the last minute was that there was no central place to go to get information about forming a cooperative, and that barrier still exists,” Glowacs said. “The second hurdle was funding, which still exists.”
Sol House is a limited stock cooperative. In other words, members “purchase'' their shares in the cooperative when they join. The last share sold for $90,000, well below the market price for comparable three-bedroom units in the neighborhood, Glowatz said.
In addition to purchasing stock, members pay $1,000 to $2,000 a month for taxes, utilities, insurance, maintenance, and other expenses.
Sarah Kaplan, a Chicago attorney who represents housing co-ops and is co-founder of HUB Housing Co-op in Marshall Square, said most co-ops are required to register as nonprofits, so typically He said he could only qualify for a commercial loan. But commercial loans typically have higher interest rates than residential loans, she says.
“I think anyone considering this should know that it's a possibility,” she says. “What I see people in Chicago doing is individuals buying homes and buildings. They have good terms on their mortgage rates, and they don't lose those terms. We want to turn it into a cooperative.”
The building owner may rent the property to a cooperative and give the cooperative the right to purchase the property once the owner's loan is paid off, if the terms of the mortgage allow.
buy a house with friends
Chicago teacher Linda Becker remembers being told by her financial advisor that she couldn't afford a single-family home.
“I was told that the only thing I could actually afford was a condo,” Becker said. “But I was really thinking about having a backyard and a garden. If I was going to spend this much money, I wanted something that would also get some dirt.”
When Becker's college roommate moved to Chicago, the two started talking about buying a house together. With the help of a lawyer, the friends and their respective spouses drew up a housing contract and bought her two apartments in Logan Square.
“It went well,” Becker said. “In the end, we ended up having a baby, sharing a nanny, and setting up the place. We thought about what vegetables to plant in the garden. It was amazing.”
Another couple eventually moved out of state. Becker and her husband still live in the building and purchased a second unit, which they now rent.
Becker's experience buying a building with a friend gives her insight into how a lack of affordable housing can force people out of their neighborhoods or force them to get creative. , he said that he was able to understand it more deeply.
“I hope that affordable housing becomes an issue that is addressed at the local, state and federal level,” she said. “But I'm also grateful that I was able to create a comfortable living environment in a non-traditional way. Even though the cost of living is high, there are creative solutions that can make you feel comfortable as a property owner.”
