mutual housing
From: Deborah Behrens (debbehAuto-trol.COM)
Date: Mon, 8 Aug 94 11:23 CDT
> Debbie - Could you provide more information about Mutual Housing
> Associations and the Neighborhood Reinvestment Corporation - addresses,
> focus of work, region of work? -- Jeffrey Hobson    N Street Cohousing 

For more information contact:
        80 Boylston St, #1230
        Boston, MA 02116
        (617) 565-8447

This is a handout I've gotten recently (it's about 4 pages long):


What is Mutual Housing?  Mutual housing is an affordable alternative to 
traditional home ownership and a significant steup up from rental housing.  
Mutual Housing is a permanent housing resource that offers residents security 
tenure, long-term affordability, a voice in the operation of their housing, and 
an opportunity to be a part of a stable community.  Mutual Housing is quality 
housing, built and maintained to standards that insure long-term, 
multigenerational use.

What is a Mutual Housing Association?  A Mutual Housing Association is a 
private, nonprofit, 501(c)(3) partnership organization that develops, owns and 
manages new and existing affordable housing in the community interest.  
Membership is composed of Mutual Housing residents and potential residents, 
representatives of municipal and state government, and leaders from businesses, 
corporations and the broader community.  The Association is governed by a Board 
of Directors representative of the membership.  Each Board member has one vote; 
Mutual Housing residents and potential residents constitute the majority.  
The mission of a Mutual Housing Association is to provide safe, permanently 
affordable housing, and security from displacement for low- and moderate-income 
residents.  Beyond developing housing, the Association's mission is to build a 
strong and stable community through the empowerment of its residents.  Mutual 
Housing Associations are committed to being ongoing producers of affordable 
housing to meet the current and future housing needs of the communities they 

Who Owns Mutual Housing?  The Mutual Housing Association as a corporate entity 
(rather than members as individuals) owns all of the housing units and 
complexes.  While residents do not own their units, they do have pride of 
ownership because Mutual Housing provides members with a lifetime right to 
occupy their units (as long as they do not violate the Occupancy Agreement) and 
the right to nominate a family or household member as a successor.  Through 
participation on local Resident Councils and through elected representatives to 
the Board of Directors, residents have a majority voice in all decisions and 
actions of the Mutual Housing Association; in effect, residents "own" the 
organization that owns their housing, thereby furthering the residents' 
ownership stake.

How is Mutual Housing Managed and Operated?  Residents pay an affordable 
housing charge which in aggregate covers operating costs, including realestate 
taxes, property insurance, maintenance, repairs, and long-term replacement 
reserves.  In most cases, residents pay a percentage of adjusted gross income 
for housing charges.  A small percentage of housing charges is set aside in a 
fund for ongoing production.  As the Association grows, the Future Development 
Fund provides an internal source of development capital.  
The properties are managed by a professional management staff with regular 
and direction from residents through organized Resident Councils and through 
Mutual Housing Association Property Management Committee.  Resident 
training and ongoing support ensure meaningful participation in operation and 
property management decisions.

How is Mutual Housing Developed?  Mutual Housing is developed by the Mutual 
Housing Association, whose staff includes development professionals.  In 
addition, members of the Board of Directors who contribute their expertise 
further enhance the Association's development capacity.  
Mutual Housing is developed for diverse populations with significant input from 
potential residents and the community at large.  Mutual Housing may be 
from existing structures through rehap or may be new construction.  It is built 
for long-term multigenerational use.
The Mutual Housing Association is committed to using all resources in excess of 
its operating and maintenance costs for the continued production of additional 
housing units.

How is Mutual Housing Capitalized?  Mutual Housing is capitalized with 
mechanisms that will not jeopardize permanent affordability or the 
long-term ownership of the housing.  The most desirable method of capitalizing 
Mutual Housing Association developments is with upfront grants from public and 
private sources.  Ideally, Mutual Housing is debt free.  Using upfront grants, 
the Association is able to develop housing that mitigates or eliminates the 
impact of debt service.  This results in increased affordability -- and the 
larger the grant, the lower the income group that can be served.  By 
the need for equity capital from outside investors, the Association's housing 
not subject to market pressures and hence, affordability is preserved.
Residents pay a one-time membership fee, which is applied to the capitalization 
needs of the development.  The fee is set by the Association and can range from 
several hundred dollars to several thousand dollars.  The fee earns nominal 
interest and is refundable when the resident moves.
The Association also uses its Future Development Fund to capitalize 
Debt financing and other financial mechanisms are used only to the extent 
necessary to cover the gap between available grants and development costs.

What are the Benefits of Mutual Housing to the Community and the Residents?
"A step up from rental housing,"  Mutual Housing offers many of the advantages 
of traditional home ownership.
- Quality housing -- the units are well constructed and well maintained.
- Good management -- since professional property management staff work 
for its members, management is sensitive and responsive to residents' concerns.
- Security of tenure -- Membership in the Mutual Housing Association assures 
residents that they will have an affordable home for as long as they wish to 
stay, provided they do not commit any serious breach of the Mutual Housing 
Occupancy Agreement.
- Continued affordability -- Because the housing is not to be sold, it is not 
affected by market pressures.  Housing costs are contained and directly related 
to the costs of operating the housing.  In most cases, residents pay a 
of adjusted gross income for housing charges, ensuring that the housing is 
affordable over a resident's lifetime.
- Resident control -- Each member has a voice in the affairs of the Mutual 
Housing Association, including policy decisions regarding property management 
plans for future development activities.

The Role of Neighborhood Reinvestment:  The Neighborhood Reinvestment 
is a national nonprofit organization that provides technical assistance and 
support to the national NeighborWorks network of local partnership 
actively serving 260 neighborhoods in 140 communities across the country.  At 
request of Congress, Neighborhood Reinvestment undertook pilot development of 
Mutual Housing Associations in Baltimore, Maryland, and the Lower East Side of 
New York City.  Mutual Housing Associations now also exist in Hartford and 
Stamford, Connecticut; Sacramento, California; Austin, Texas; Ithaca, New York; 
Madison Wisconsin; and Denver, Colorado.
Neighborhood Reinvestment provides direction and assistance in all phases of 
Mutual Housing Development.  When organizational formation is complete, sites 
are secured and a local Mutual Housing Association Board of Directors has been 
established, Neighborhood Reinvestment provides ongoing training, support and 
technical assistance to the Association's staff, Board and Resident Councils.  
Mutual Housing Associations have access to a broad range of services and 
resources available to the national NeighborWorks network.

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