Co-ops Could be Housing Answer for Aging Baby Boomers, Elderly

Many of the features will be familiar to anyone who has recently toured model homes. The kitchen/dining/living area is open, and you often enter it from a corner, which makes the space feel even bigger. Large windows flood this area with natural light, and some living rooms have gas fireplaces. The ceilings are usually nine feet (standard in almost all new houses today) and the hallway width is four feet (8 to 12 inches wider than you will find in most new houses).

The kitchens have an island or space for a table and chairs. All the units have walk-in closets that are often two or three times larger than the ones the residents had in their old houses; many units have a laundry room. Each household also has a large storage closet, which can be in the unit itself or on the same floor.

The only details that suggest that older people live there are a grab bar in the shower, a raised toilet and three-foot-wide doorways, which are easier to manage with a walker or wheelchair.

The people who choose to live in senior co-ops are generally friendly and sociable, but the particulars of co-op ownership also help to create a strong sense of community. Unlike a condo, in which individuals own a unit and share ownership of the common areas, co-op residents own the entire project jointly. As Link Wilson of Miller Hanson put it, "With a condo you buy a piece of the cake. With a co-op you buy the whole cake."

Each household in a co-op purchases a share, which gives it the right to occupy a unit. All of the owners jointly own the property, and all are responsible for its maintenance, both the common areas and individual units.

In some co-ops the owners hold an individual mortgage, and in others they jointly hold a master mortgage.

Governance in a co-op also differs from a condo. Each co-op shareholder has one vote, regardless of unit size. In most condos, owners with larger units have more voting power than owners of smaller ones.

Co-op residents also have a say in who can become a shareholder. They can't refuse anyone 55 or older on the basis of gender, age, race, religion, national origin or physical disability if the person can live independently. But they can reject individuals known to be "drunkards, womanizers or just plain jerks," said Charles Bassford, a Twin Cities lawyer who represents 35 senior co-ops in that area.

Why hasn't the senior co-op concept caught on in other areas? Terry McKinley, president of the Senior Cooperative Foundation in Minneapolis, said the main reason is that senior co-ops are not structured in the way that most home builders and developers are used to doing business. With most senior co-ops, lenders require the developers to pre-sell as many as 70 percent of the units before construction can begin. This means that the developer must attract and keep 50 to 100 buyers happy and committed during the eight- to 10-month presale period and the 10 to 12 months of construction.

Most home builders work on a piecemeal basis, building only a few houses and working with only a few homeowners at a time. In the current housing market, where every builder can sell whatever he constructs, most are not interested in trying something new. But home builders are always poised to meet the demands of the marketplace. If a significant number of the 75 million baby boomers get interested in senior co-ops, I predict that some home builders will quickly get on the senior co-op bandwagon.

On the Internet, the Senior Cooperative Foundation is at http://www.seniorcoops.org . The two major developers of senior co-ops in Minnesota are Realife, at http://www.realifeinc.com , and Nichols Development, at http://www.summerhillcoop.com and http://www.gramercycos.com .

Katherine Salant can be contacted at www.katherinesalant.com.

© 2005, Katherine Salant

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