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Co-op Housing: What It Is and How It Works

Shedding some light on a misunderstood affordable housing alternative.

Co-op housing made headlines recently, as Olivia Chow’s declaration of candidacy prompted supporters of rival mayoral campaigns to resurrect decades-old stories about how she and her late husband Jack Layton had lived in Hazelburn Co-operative Homes from 1985 to 1990. As Chow and Layton had a combined income of $120,000, much confusion arose about whether the couple were occupying a low-income unit (they weren’t), whether they had broken any co-op or municipal rules (they hadn’t), and if they were preventing others in need from obtaining affordable housing by living there (not really).

Many years later, Torontonians still seem uncertain about how co-op housing differs from other forms of affordable housing, whether and to what extent it is subsidized, and why we don’t have more of it. Please allow us to explain in this, er, explainer.

What is co-operative housing? How is it different from private low-income housing or “social housing”?

Co-operative housing is a form of non-profit housing that emerged in the 1800s as part of the co-operative movement, but only really in the mid-1960s took hold in Canada as a method of providing affordable housing for families. Several pilot projects were funded by the Canada Mortgage and Housing Corporation (CMHC) in 1969, and thousands more co-op homes were created via various federal and provincial programs through to the early 1990s.

Unlike privately owned low-income housing or City-run “social housing,” co-ops offer a mix of market-value units and geared-to-income units in a fixed ratio or funded from a subsidy pool. This economic diversity within co-op communities is crucial to their financial support and overall success. Some co-ops are designated low- to moderate-income housing, with income limits imposed on their members as part of their federal agreements. Others have no income limits, and can have a broader range of incomes among their residents.

While each co-op is owned by its membership, individual members do not own equity in their housing. If a member moves out, the vacated unit is available to another individual or family on the co-op’s waiting list. Though each co-op operates somewhat differently, many co-ops maintain two lists: one for those awaiting market-value units, and one (generally much longer) for those requiring geared-to-income subsidy. In addition, many co-ops try to accommodate changes in the lives of their members—a household might find itself able to transition from geared-to-income to market-value, for example, or obliged to go from market-value to geared-to-income.

And this hints at the true difference between co-operative housing and other forms of non-profit housing: management—not just from a building manager or front office staff, but from the board and from the members themselves, the people who choose to live and work in them, who contribute to them, and who actively shape them into thriving communities.

How is co-op housing funded? What makes co-op housing affordable?

Historically, co-ops across the country have been funded through a variety of federal, provincial, and municipal programs. While some other provinces continue to provide funding for the non-profit housing sector, Ontario revoked its operating agreements with housing co-ops and non-profit housing providers in the early 2000s, transferring its housing programs to municipal control.

In Toronto, the vast majority of co-ops are federally funded, and such co-ops are defined by the section of the National Housing Act that was in effect when the co-op was founded. (For example, a Section 56.1 co-op is one that was founded between 1979 and 1985, while Section 56.1 of the National Housing Act was in effect.) Government subsidies for co-ops most often take the form of CMHC-provided, long-term fixed-rate mortgage agreements provided for co-op properties, and funding to bridge the difference between subsidized members’ housing charges and those of market-value members. Plus, much like house owners, many co-op residents pay a far lower tax rate through their housing charges than do condo owners or renters of apartments.

As a result, housing charges for all members can be kept low while still addressing the cost of utilities, maintenance and repair, and replacement reserves. Interestingly, some of Toronto’s most successful housing co-ops were originally public housing complexes that were taken over by their residents and converted.

How does co-op housing work? Who runs it, who manages it, and who maintains it?

Each co-op is governed by a board of directors elected from the co-op membership at an annual general meeting. Each co-op has a set of bylaws that were ratified when the co-op was founded, and that are amended as necessary by the membership. Larger co-ops often have greater resources to work with, and may have dedicated building managers and maintenance staff; smaller co-ops have fewer resources, and may share building management with other co-ops or engage outside management companies. Many housing co-ops have committees apart from their boards that are responsible for finances, capital projects, safety, environment, member engagement, and more. Quite a few co-ops require a minimum amount of participation from each member, measured in hours per week or per month.

Some co-ops have a particular membership focus: Toronto’s Arcadia Court, for example, is for people working in the arts, and Local 75 Housing Co-operative was developed for low-income restaurant and hotel workers.

Co-op housing sounds great! Co-op housing sounds terrible!

Well, it can be either, or both. Co-ops are by their nature diverse communities, and include people of varying ages, backgrounds, sexual identities and orientations, abilities, and beliefs. The best co-ops have a clear vision of what they want to achieve for their community, skilled building management familiar with the residents and their needs, a committed and capable board, and an engaged and active membership. And every co-op faces difficulties when one or more of these areas falls short, as they do from time to time.

Living in a co-op often takes more social effort than in the average house or apartment building, as members continually have to work with each other (and with people different from themselves) to make sound decisions, navigate financial challenges and personality conflicts, and maintain the integrity of the community.

Basically, if you’re the kind of person who just wants to come and go from your home and not interact with your neighbours, go to meetings, or contribute your time and energy to your shared surroundings, you will likely find that co-op living is not for you.

Why is co-op housing in decline? Why isn’t more co-op housing being created?

Around the mid-1990s, federal and provincial governments decided that they wanted to change their approach to affordable housing, emphasizing privately owned projects with government-assisted rent supplement units, and public housing built and managed by municipal housing authorities (both of which are taxed at a higher rate than co-op housing—and taxes are most definitely a factor). While some are mixed-income communities, and achieve this by various means, others are uniformly low-income by default or design. While CMHC continues to honour its mortgage agreements with co-ops across the country, many of those agreements are set to expire in the next few years as the mortgages are paid in full. As the agreements end, so do the subsidies.

While, in theory, all that money currently going to mortgage payments could go towards subsidizing low-income units and paying the bills, in reality these co-ops are finding themselves with aging buildings that need replacement of essential infrastructure like roofs, boilers, elevators, plumbing, and electrical systems. Even with beefed-up replacement reserves, they may not have enough cash to make such big-ticket investments. Without continued assistance, these affordable housing communities could cease to be affordable for all their residents. Organizations like the Co-operative Housing Federation of Canada and the Co-operative Housing Federation of Toronto are working with affected co-ops to help with the transition and to lobby for funding from other levels of government to prevent the loss of thousands of low-income units.

However, there are some small signs of hope. Despite funding challenges and the lack of formal government programs for new co-op housing, a few new housing co-ops have sprung up in recent years—notably Atkinson Housing Co-op (formerly the Alexandra Park housing project) and Local 75 Housing Co-operative at 60 Richmond Street East, at what used to be the site of Dixon Hall homeless shelter.

Where can I find out more? How do I find out about the availability of co-op housing, and to put myself on a waiting list?

Noted activist Alicia Pang (@Neville_Park) has a handy cheat sheet on housing co-ops that includes some information not captured here. Additional information can also be found at the CHF Canada website and at CHF Toronto. You might want to bookmark this page of all CHFT member co-ops with open waiting lists. If you do decide to apply, be sure to read up on each co-op first, as some are tailored to specific needs or have special requirements.


  • wklis

    Soon you’ll hear nothing but “co-op, co-op, co-op” followed by a “never mind, good-bye”.

  • newman_goodmoon

    The definitive answers surrounding the controversy about Jack Layton and Olivia Chow living in non-profit co-op housing may be found in Sun News – ‘Straight Talk’ and Lorrie Goldstein’s article published on March 22, 2014:

    • vampchick21

      Too bad the facts are wrong in that.

    • Queen of Kickbacks

      You mean Goldstein’s fact about the “routinely awful judgment of Mayor Rob Ford”?

      • vampchick21

        That’s about the only real fact in there….lol

    • dsmithhfx

      The Sun is a separatist plot.

    • OgtheDim

      That’s a nice bit of hagiography going on there as far as Kerr is concerned.

      Goldstein should spend more time on dealing with facts, rather then opinions.

      i.e. That article is neither definitive nor does it provide answers.

    • Kenn Kirby

      Still banging that drum, huh? All Goldstein’s article says is that they didn’t pay 30% or more from their income to their rent. These are not answers but opinion with some #’s thrown in. As you know, the missing amount to be found between the price they paid and the ‘Fair Market Value’ is the profit that would have gone to the property owner, if it was not a Co-op. I love how you can be profiting from living in a Co-op and constantly complaining about them at the same time. How do you not see the hypocrisy in your views/lifestyle?

    • scottld

      The definitive answers were written AT THE TIME and clear them.

      Polanyi, Margaret. “Layton cleared of wrongdoing Police say councillor committed no impropriety by living in co-op.” The Globe and Mail. August 17, 1990, p. A8.

      • torontothegreat

        I wasn’t living in Toronto when all this happened, but I do know dectractors will argue that they were cleared of anything “criminally wrong” – I’m honestly not even too sure why the police were involved in this, in the first place.

    • newman_goodmoon

      David, thanks for writing the Blog and links posted above. I appreciate David Demchuk’s views and opinions, although sometimes we don’t always agree on some issues.
      The political mud slinging between both sides of the political spectrum can sometimes get tiresome. The net benefit is that co-op housing is back in the fore-front for discussion and all angles should be examined and discussed.
      I’m originally from Toronto and had spent most of my life in the Big TO. What I see and hear in municipal, provincial, and in the federal goverment over some decades are in many cases politictions lacking in leadership because their own personal self-interst get in the way of doing what needs to be done, more often than not because of lobbyist…that includes the co-op housing sector.
      We need people with integrity that provides ethical leadership not only in politicts, but also in the co-op housing sector in Canada. Instead, what I see and hear are those who pander along with all their deciet and lies. I can’t recall of ever had the pleasure of communicating or meeting with a truley honourable politician or major co-op housing sector stakeholder…

      • newman_goodmoon

        I’ve made it my business to discredit non-profit co-op housing stakeholders in Canada since 1999 and since that time have been doing the same with some government bureaucrat’s at CMHC and some politician’s that have been engaged in the co-op housing sector.
        Ken Hummel, Member, Athol Green Co-operative Homes Incorporated

        • dsmithhfx


        • OgtheDim

          Discrediting some stakeholders is a bit different from “Non-profits are vulnerable to embezzlement by their very nature”.

          Methinks your views are slanted based on experience.

  • Patrick_Metzger

    It’s worth mentioning that Toronto also has private, non-government funded co-ops where all units sell at market value. In NYC, this is by far the most popular type of apartment ownership structure, whereas in Toronto condos are more common.

    We used to live in a private co-op, and we were always explaining to people that we weren’t taking undue advantage of government subsidized housing.

    • newman_goodmoon

      There are some 2000 housing co-ops in Canada. The vast majority of non-profit or ‘zero equity’ co-ops are members’ of CHF Canada lobbyist federations.
      Sandra Cabra explains the co-op housing real estate market – ‘members do not actually own the real estate, but shares, or a membership of cooperative housing corporation that owns or leases’.
      Their video explains:

      • newman_goodmoon

        CMHC sponsored a survey of non-profit housing co-operatives and interviews with members’ of co-operatives. The Research Highlight detailed Crisis Situations in Co-operatives: Better Interventions Hinge on a Better Understanding. A link to this Research Highlight:
        In my view, these are the inherent problems with non-profit co-ops regardless of point-in-time, scale, and geographical area in Canada.
        Condominium’s and housing co-ops share some similar problems with board of directors and management. The Condo Information Centre is a good research tool for that info. A link to their website:

        • OgtheDim

          Ur not really engaging in conversation here.

      • OgtheDim

        “Non-profits are vulnerable to embezzlement by their very nature”

        Nice smear on people who do things for nothing.

        The assumption that only owners will watch every nickel and dime is also a smear.

        You may want to sound objective, but you are obviously not.

      • dsmithhfx

        “Non-profits are vulnerable to embezzlement by their very nature.”

        Good thing they were not in charge during the global financial markets meltdown then.

  • SpecialAgentA

    People can co-operate with each other for decent and affordable housing? The banks and corporations must hate that.

    • Punned_It

      You bet they do! That’s why articles smearing left wing politicians are written.

      A direct challenge to the banks is co-op banking, called a credit union. It’s a non profit financial institution. You buy a share to become a member (which is returned to you when you close your account). Because you are a member, you can attend the annual general meeting, vote on the board of directors, or run for a position on the board.

      You get all the same services as the banks, but at lower costs, with fewer service fees. Mortgages and other loan interest rates are typically lower than the banks. At my credit union, because my mortgage is there, all service fees are waved.

      There are several in Toronto. I haven’t dealt with any of the big banks for more than 20 years.

  • newman_goodmoon

    I shared some comments about funding issues in respect to the end of operating agreements between CMHC and non-profit co-op housing in Canada and some stakeholders in regards to an article written by Sam Smith and published by Metro.
    A link to that article:

  • Kenn Chaplin

    I joined Bleecker Street Co-op (since renamed for its founding, long-term manager Diane Frankling) in 1992 and, yes, I fit the profile for a subsidized unit. These are equal – in up-keep, amenities and sense of community – to market value units. Most of us do not know who among us pays what. There is zero stigma in my experience. Many, such as was the case with Olivia and Jack, pay market rate (nearly always lower than the average rate for similar private sector accommodation) which, because it doesn’t go into private, for-profit hands, gets rolled back into the operations of the not-for-profit co-op.

    This is a major difference co-ops have with Toronto Community Housing, also known in the past as Metro Housing or, elsewhere in the province, Ontario Housing (all of which were downloaded to municipalities to shoulder several years ago) which are all subsidized, and all at the mercy of municipal inefficiencies and budget shuffling.

    The press charges against Jack and Olivia were a trumped up canard the answer to which can only further Torontonians’ understanding, as does your article, of just what goes on behind those co-op doors.

    I was given priority for a co-op unit when I left work due to HIV/AIDS and mental illness. I have survived both, thanks in large part to the security in housing I feel co-ops offer. It is a model of living which deserves even wider application.

    • newman_goodmoon

      Mr. Chaplin, thanks for sharing your views on those issues. I’m pleased to see that your experience with co-op housing has been positive and assist you towards some measure of recovery in respect to your health issues.