During Europe’s Medieval Period, the serfdom condition of bondage to the land of their noblemen kept farmers in a dependent status. In the United States after the end of the Civil War, a community of sharecroppers and tenant-farmers continued being tied down to the land of the lord with almost no hope for ownership and progress.
Today, low-income tenants using Section 8 housing vouchers are also tied to the lords of land, the landlords.
In 1995, rent control polices in Massachusetts were eliminated after a statewide referendum. The housing market responded fairly quickly to this change. In Cambridge, the rents and assessed values of formerly rent-controlled properties increased steeply. Landlords now prefer tenants who can pay full market rate rather than Section 8 tenants, whose housing assistance payments are capped at a certain amount by housing authorities.
Section 8 tenants are not even dreaming of owning a piece of land. Most of them are just trying to become more self-sufficient and leave the land of the lord. That can only be achieved by some type of homeownership. Homeownership provides security to families and individuals from unwanted moves.
For Section 8 recipients, a step toward economic mobility (and community control) can be limited-equity cooperatives. A Section 8 voucher can be used to pay some of the monthly carrying costs of a co-op unit. However, low-income families still have to come up with the funds to cover the share purchase price.
Housing co-ops are nothing new in Cambridge. There are several unrestricted market-rate co-ops. There are also limited-equity co-ops, most of which were created in the 1980s (when rent control was in place) with financial and/or technical assistance from the city.
There are problems to solve before developing more limited equity cooperatives in Cambridge, including high housing prices, almost no available land, the difficulties of getting financing, regulatory constraints, and restrictive housing policies.
There is also another, invisible obstacle—exclusionary criteria for acceptance as a co-op member. In my experience and in talking to other voucher holders, it seems that factors beyond need are at play in those decisions. It is not hard to imagine that those who decide on prospective members for limited-equity cooperatives might want individuals of their own race or style of living, people they already have connections with, or those who, although they might have other housing options, can give more in return. There is a natural tendency to be generous in interpreting the rules for those we like or belong to our particular group. The playing field in the world of even limited-equity cooperatives is so slanted that it feels like only those with enormous resolve, money, and connections make it past the starting line.
Creating limited-equity cooperatives that are specifically intended to be homeownership opportunities for voucher holders would be one step toward improving this situation. So would a detailed look at the membership of the existing co-ops and how well or poorly it reflects the low-income population at large.
Participating in limited-equity cooperatives by itself will not transform lives completely. It is only a nudge for low-income famines to start participating minimally in a socioeconomic environment that is out of their control. Nonetheless, expanding support for truly inclusive limited-equity cooperatives would be a meaningful step toward changing the golden rule. No, not that one. The one that says: “Those who have the gold, make the rules.”