The cooperative, known affectionately as PIHCO, will be the first limited-equity housing cooperative in Pilsen, and one of roughly thirty in the city. A limited-equity cooperative is a form of affordable housing where all members of the co-op will purchase a share, which comes with the right to occupy a unit within the co-op’s property, and agree up front to a long-term cap on the resale value of each share. The cost of each share will only increase by a set rate, not the market value—ensuring that future residents will have the ability to purchase their own shares at a cost that they can afford
Like most limited-equity co-ops, including LSC, PIHCO is a nonprofit that will be run under a set of legal bylaws. These bylaws are the basis of the cooperative, outlining all details on how to buy into the cooperative, how ownership is transferred when an individual dies, and the voting rights of all co-op members. The cooperative is a collaborative effort by nature; as a result, it will be run by a member-run and member-selected board of directors, which will oversee new member applications, member terminations, property renovations, and handle the monthly dues. Dues will cover individual shares of operating expenses including mortgage payments, property taxes, maintenance of the building(s), insurance, and a reserve of money for emergencies and modifications. PIHCO is largely modeling their bylaws after those of LSC, with the assistance of the University of Chicago Law School’s Housing Initiative Clinic.
This type of housing initiative would be impossible without the assistance of organizations such as the Housing Initiative Clinic and, in some cases, affordable housing funding. “The [state] government can, and should, support limited-equity co-ops for low income residents in the same way they support other kinds of affordable housing,” said Jeff Leslie, director of the clinic. “By giving below-market rate loans for purchasing and renovations of the properties, low interest rates, and sometimes tax credits.” Making low rates available to limited-equity cooperatives allows them to have a considerably lower monthly mortgage payment than their surrounding neighbors, ensuring affordability in the long-term. Groups such as the clinic work with cooperatives to create legally binding paperwork including bylaws, ensuring long-term affordability. But because public funding for affordable housing, including low income co-ops, is so scarce, co-ops such as Logan Square and PIHCO look for creative ways to serve residents without relying on subsidy.
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