Defining Co-ownership

Co-housing, Cooperative, Co-living and Co-ownership are all different terms that are often confused. With many misconceptions and misunderstandings causing the words to blend together, it’s hard to find clarity in the mess of business jargon and legal terms.

Cohousing

Cohousing is an intentional community comprised of multiple private homes built around shared areas and amenities. Cohousing originated in Denmark in the 1960s and continues to be a popular housing option particularly for families and seniors. It was introduced to the United States in the 1980s by two American architects, Kathryn McCamant and Charles Durrett, and continues to gain popularity with over 300 cohousing communities in the US today.

Cohousing communities begin with resident participation in the development and design of their community which allows them to tailor the community to their needs. A typical cohousing community is comprised of a cluster of private houses and at least one community building, typically containing a communal dining room, kitchen and recreation area. Members are expected to contribute and participate in their community. It is common in cohousing communities to share childcare, senior assistance and carpooling. Additionally, monthly activities are organized to facilitate socialization and community participation such as communal dining once a week and movie nights.

There are several benefits to this model of homeownership. Economic benefits derived from the pooling of resources and skills offer members savings in time and money. For families this comes in the form of childcare while elderly residents often benefit from carpooling. There are also mental health benefits derived from living in a cohousing community. Socialization is a huge part of cohousing communities and it relieves loneliness and isolation. Cohousing offers environmental benefits such as more sustainable living through carpooling, resource sharing and many communities will have communal gardens and green space.

Cohousing is not an option for everyone. There is a huge time investment in cohousing as it begins from development and design. Charles Montgomery, a Vancouver resident who recently bought into a cohousing community calls the process ‘time consuming and arduous’. This also means the costs itself can be much higher than traditional affordable housing. Gary Felder, a resident of the Rocky Hill Cohousing Community in the US, admits that cohousing is not a situation that every family is comfortable with and that making decisions with all the other households of your community is “the definition of hell for some people”. The social and communal structure may seem invasive and members may feel they lack privacy with such high intimacy levels with the rest of the community.

While cohousing isn’t for everyone, it is a viable option for people who seek a close-knit communal type of living space. You can maintain your own private dwelling but you have access to a rich community that can enhance your life economically, socially and emotionally.

Co-Living

Co-living is an intentional community within a single shared household. Co-living encompasses a broad spectrum of living arrangements. Toronto has over 525, 830 houses that are being rented according to the 2016 census.

The prevalence of co-living is influenced by several factors. High demand for housing, particularly in urban areas, coupled with a low supply of properties available, drive up the price of renting and purchasing properties. Affordable housing becomes an issue in this case particularly for younger demographics and seniors. 30% of renters in Ontario are under the age of 35 and 34% of renters are over 55. With the stagnation of wages and the average cost of renting in Toronto is $2,456, renting as a sole occupant becomes difficult. 27% of renters earn less than $39,000 per annum, which drives them to share the cost of housing with others.

There are many benefits to co-living. Economic benefits include pooling incomes to share the cost of renting and living as well as opening up opportunities for short-term tenants and housing options for students, seasonal and temporary workers. Additionally, co-living allows people to share and pool their resources together. Social benefits include socialization between household members and the sharing of pet sitting duties in many cases. Co-living for seniors has huge benefits for social and mental enrichment as proved in studies in Australia.

Co-living isn’t for everyone. Many benefits of living with roommates can be perceived as negatives for others. Living with other people has negative connotations including losing privacy and sharing decision-making in the household can lead to disagreements.

Cooperative Housing

Cooperative housing is a type of homeownership that members, instead of owning real estate, own a part of a legal corporation that owns the real estate. Co-ops are a legal entity and are non-profit housing communities which means there is no outside landlord, members each have a vote in decisions and are responsible for the maintenance of the property.

In Canada, there are over 2,200 housing co-ops which home almost 250,000 people according to the Co-operative Housing Federation of Canada. Co-ops come in many forms and can be tailored to a specific community such as co-ops for artists.

Cooperative housing offers a number of benefits to its members. Members have a right to vote and elect a diverse board of directors to assist in the management of the co-op. Co-ops are affordable and, since they are non-profit, they are not susceptible to rent increases to match the market value of similar units such as normal rentals. Co-ops are diverse and facilitate socialization between its members.

Co-ops are not suitable for all households. The diversity and social nature of a co-op may not always align with individuals. Members of a co-op do not own the property and do not build equity in the same way as normally purchasing property. There are also many rules and strict regulations around co-ops and the ability to rent out the spaces and selling your shares in the co-op.

Co-Ownership

Co-ownership is an agreement between two or more parties to purchase a property. It is a versatile ownership structure that can be facilitated between family members, friends or strangers. It is a relatively new concept in Canada though it is gaining popularity.

Co-ownership, while relatively new, has roots in history. A Boston marriage, popular in New England in the late 19th century, was the cohabitation of two wealthy women who lived independently of the financial support of a man. This cohabitation allowed women to purchase a property through their own earnings and allowed them to focus on their careers and independence. With the rise in the price of entering the real estate market, co-ownership is becoming a creative way for groups to enter the market and build equity that they would not be able to do on their own.

Co-ownership allows people to enter the housing market that they would not be able to do so on their own by pooling their financial resources as well as other skills they may have together with others. Co-ownership is versatile and allows the level of sharing and community between parties to be defined before the property is purchased. The burdens of homeownership including financial burdens and maintenance costs are shared across the parties as equity builds.

There are issues with co-ownership as it is a relatively new concept. Co-ownership is a time investment as the legal and financial framework takes longer to create and implement. Lenders and banks are often uneasy to loan to large groups without marital or family ties. There is also a cultural issue around the notion that property and housing equity is a legacy asset and, as such, families are meant to pass it down the generations. With co-ownership, legacy becomes a more complex issue as the legal ties overturn legacy ties.

Conclusion

As you can see, cohousing, co-living, cooperative housing and co-ownership share similarities but are vastly different options for housing and living. Whether you are looking to purchase a more affordable home or just wanting to pool resources and make your rent cheaper, the best option depends on you and what your individual needs and goals are.