By Elsie Danenber^
GET YOUR OWN HOME
THE CO-OPERATIVE WAY
by Elsie Danenberg
If you are in the middle-to-low income
brackets, you have undoubtedly discovered
that you cannot afford to build your own
home. The few families that have built
are saddled with unbearable mortgages
and carrying charges. No you and millions
of other Americans can't swing it. Not by
yourself, you can't.
But it may surprise you to learn that
more than 30,000 families all over the
U. S. have built their own homes families
with very limited capital. They've done
it merely by banding together into groups,
or co-operatives, in order to purchase their
land jointly, obtain materials in large
quantities, and contract as a unit for
architectural and building services, and
for equipment and furnishings.
This book is simply the actual story of
how some of these groups built homes of
their own at savings of hundreds to thou-
sands of dollars. No detail of planning
and financing is omitted. Mistakes are
treated as fully as successful achievements.
The groups range in size from six families
to several hundred. In composition, they
range from literally penniless miners and
farm laborers to university professors,
architects, scientists, engineers and busi-
From the collection of the
San Francisco, California
THE CO-OPERATIVE WAY
by Elsie Danenberg
1. THE STORY OF CO-OPERATIVES 1
Birth of co-operatives in Rochdale, England Rochdale
principles growth of co-ops in Great Britain co-ops in
Europe, Iceland, Asia, Palestine, South America, Africa,
Canada first co-ops in United States, first co-op law, rise
of Grangers, rural co-ops, oil co-ops producing co-ops,
marketing co-ops, purchasing co-ops, servicing co-ops
credit unions, hospitals, stores Co-operative League of
USA National Co-operatives, Inc. taxes paid by co-op-
eratives housing co-operatives in Europe, Asia, Australia,
South Africa, Australia, South America, Alaska, Nova
Scotia, Canada, and the United States.
2. TYPES OF HOUSING CO-OPERATIVES 18
Formal and informal housing co-ops extent of co-opera-
tion types of sponsorship self-help co-ops types of
communities: urban, rural, suburban homesteads co-
operative communities balanced communities occupa-
tions of members: manual, clerical, farming, factory, pro-
fessional how to organize a housing co-operative in
3. FINANCING HOUSING CO-OPERATIVES 26
Outline of twenty-one steps to guide new co-ops organi-
zational expenses incorporation, charters, by-laws, laws
governing co-ops use of debentures, preferred stock, com-
mon stock, bonds use of legal instruments including
ground leases, construction contracts, surety bonds, mort-
gage deeds, quit claim deeds, warranty deeds, fee simple
selection of site options costs of development FHA-in-
sured and VA-guaranteed mortgages, conventional financ-
ing combined FHA- and V A- financing down-payments
and equity purchase of land constructions loans per-
manent financing, blanket mortgages and release clauses
mortgage reduction and types of payment reserves
FHA requirements types of contractors' contracts, per-
formance bonds, completion bonds, mechanic's liens final
by-laws monthly payments and rentals WET Bill tax
exemptions table of monthly charges for FHA-insured
homes leases and purchase contracts useful pamphlets
on financing housing co-operatives.
4. BRYN GWELED, PENNSYLVANIA 47
5. MUTUAL HOUSING ASSOCIATION, CALIFORNIA ... 56
6. AMALGAMATED HOUSING, NEW YORK 62
7. PENN CRAFT, PENNSYLVANIA 71
IB. SEATTLE, WASHINGTON 81
9. RACINE, WISCONSIN 89
10. SAN JOSE, CALIFORNIA 96
11. SNAKE HILL, MASSACHUSETTS 105
12. PALO ALTO, CALIFORNIA Ill
13. BANNOCKBURN, MARYLAND 119
14. YORK, ILLINOIS 128
15. COLUMBIA, NORTH CAROLINA 137
16. MUTUALS 142
17. A SURVEY OF OTHER HOUSING CO-OPS , . 148
SPONSORED BY HOUSING ASSOCIATIONS
Cresttuood Madison, Wiscon- St. Paul and Minneapolis,
sin 148 Minnesota 151
SPONSORED BY LABOR UNIONS
Kenosha, Wisconsin 152 South Bend, Indiana 152
Philadelphia, Pennsylvania .. 152 Front Royal, Virginia 153
St. Louis, Missouri 152
MUTUAL HOUSING ASSOCIATIONS
Dayton, Ohio 153
Audubon Park, New Jersey. . 154
Dallas and Grand Prairie,
West Acres, Michigan 155
Oak Park, Dayton, Ohio 155
Mineral Wells, Texas 156
Greenbelt, Maryland 156
Duluth, Minnesota 157
Linden, New Jersey 157
Other Mutuals . .157
SPONSORED BY VETERANS' GROUPS
Naylor Gardens, Washington, New Brunswick, New Jersey. 162
D - c 158 Mishawaka, Indiana 162
Charlotte, N. Carolina 158 Chicago, Illinois 162
} r'T g nl' N ' ^ "" ^o Lorain > Oh ' ' 163
Toledo, Ohio 159 .,, , Tr , T7 . . .
Eaton Rouge, Louisiana 159 ^arleston, West Virgin* ... 163
Dayton, Ohio 161 Larchmonj, New York 163
Salt Lake City, Utah 161 Abington, Pennsylvania 164
Columbus, Ohio 161 Silver Springs, Maryland .... 165
Palos Verdes, California 161 Cold Springs, Kentucky 165
STUDENT HOUSING CO-OPS , 166
VARIOUS OTHER TYPES OF HOUSING CO-OPS
Granger, Iowa 166 Winchester, Massachusetts ... 177
Lexington, Massachusetts .... 167 Chicago, Illinois 177
lona, Idaho 168 Milwaukee, Wisconsin 177
Niles, Illinois 169 Stamford, Connecticut 178
Schenectady, New York 170 Melbourne, Florida 178
Chapel Hill, N. Carolina 170 Millinocket, Maine 179
Indianapolis, Indiana . 171 Yellow Springs, Ohio 179'
New Brighton, Minnesota ... 171 Detroit, Michigan 179
Mount Pleasant, New York. . 172 Macedonia, Georgia 180
Indianapolis, Indiana 173 Celo, North Carolina 180
Boulder, Colorado '. . . 173 Wilkinsburg, Pennsylvania . . 181
Watsonville, California 173 Ramapo, New York 181
Milwaukee, Wisconsin 174 Hollywood, California 182
Syracuse, New York 175 Chicago, Illinois 182
Dayton, Ohio 176 Media, Pennsylvania 183
Glenview, Illinois 176 West Haven, Connecticut ... 184
Front Top One of the two-story stone houses with stream-
lined kitchens built by miners in the self-help co-operative com-
munity of Penn-Craft, East Millsboro, Pennsylvania. Cash out-
lay for each house was $2000. Every home represents 35,000
hours of man labor.
Front Center One of the cement block homes built co-op-
eratively by the American Homesteading Foundation at Mel-
bourne, Florida. Units cost $7000.
Front Bottom One of a group of brick homes, costing from
$5500 to $8000, in a co-operative community in Front Royal,
Virginia. The development was sponsored by the Textile Work-
Back of Jacket Aerial view of Legion Village, a community
of 250 homes in Baton Rouge, Louisiana, sponsored by the
American Legion. Houses cost from $6300 to $7700.
lona, Idaho. Before and after. . . 22
Columbia, North Carolina. Before and after 23
Granger, Iowa. Before and after 54
Mutual Housing Association in Los Angeles, California 55
Snake Hill, Belmont, Massachusetts 86
Veterans' housing in San Jose, California 87
Bryn Gweled, Feasterville, Pennsylvania 118
Greenmont Mutual Housing Development in Dayton, Ohio 118
Projected student residence, University of Washington, Seattle. . 119
There are many advantages in the co-operative method of building
homes. Most of the disadvantages arise from the members' incom-
plete acceptance of the work-together principle. It is not to be expected
that all those who join a housing association will be imbued with
mutualism. Co-operators are made, not born. The give-and-take neces-
sary for the smooth functioning and for the success of the co-operative
must be learned just as surely as the intricacies of financing the project
must be learned. The extent to which this work-together principle is
practiced will determine, in large measure, the success of the co-opera-
Listed as a "disadvantage" of the true co-operative (in which title
to all land and all houses is held by the corporation), is the possibility
that if the co-operative should fail, the individual would lose every-
thing. Such an eventuality may be circumvented in two ways: (1) by
the establishment of reserve "cushions" to provide against "lean
times," when the members might fall behind in their monthly pay-
ments in sufficient numbers to financially embarrass the corporation.
The reserves would have to be large to support the corporation in case
unemployment were widespread. (2) By the insertion in the mortgage
agreement of a clause to the effect that a member who is paid-up cur-
rently will be able to obtain personal title to his house by paying the
unpaid balance of his share of the mortgage applicable to his property.
Under such a plan as the latter, Bannockburn Co-operators, Inc., Mary-
land, proposed to operate, during the early years of its organization,
when co-operative ownership of all land and houses was planned.
Difficulties in obtaining financing caused a change in thinking and
the group reverted to individual ownership of the homes.
Why form a co-operative? What does it "get you" anyway? These
are questions which will be injected eventually into a housing discus-
sion if not at the first meeting, then at the second or the third. They
are warranted if the group does not understand the benefits which
accrue from working together as a unit, and if the group has no reali-
zation of the advantages which attended other co-operative associations
organized before its own.
Appreciable savings have been effected by the co-operative housing
groups discussed in this book, in the following ways:
1. Through the bulk purchase of land. It is always less costly to
buy a large tract and divide it into individual lots than it is for each
individual to make a separate purchase of a single lot.
2. Through the elimination of the speculative profit of the real-
3. By purchasing tax delinquent land or land marked for re-
4. In co-operating to under-write the cost of developing the prop-
erty, including the construction of roads, and the installation of the
utilities of water, sewerage, gas, and electricity.
5. Through the collaborative use of architectural and engineering
Services with resultant reduction of fees. The architect's fee varies.
Maximum fees are prescribed by the American Institute of Architects.
The tables followed by the Connecticut Chapter of the AI of A are
used throughout New England. Some of the fees believed to be too
high are in process of revision. A summarization of the fees follows:
a. For a single, individual dwelling, the architect's fee should be 7
per cent of the estimated construction cost (if the house is not even-
tually constructed), or 7 per cent of the total construction cost (if the
house is constructed). In some parts of the country the percentage may
run as high as 10 per cent.
b. For developments of row houses, garden apartments, apartment
houses, or individual homes (with a limit on the number of basic
plans), the architect's percentage fee decreases as the total cost of
construction increases. Thus:
c. For developments costing under $50,000, the architect's fee
should be 6 per cent of the estimated construction cost or 6 per cent
of the total construction cost.
d. For developments costing $50,000 to $100,000 5.4 per cent;
$100,000 to $200,0005.36 per cent; $200,000 to $400,0005.32
per cent; $400,000 to $600,000 5.24 per cent; $600,000 to $800,000
5.16 per cent; $800,000 to $1,000,0005.08 per cent; $1,000,000
to $2,000,0005 per cent; $2,000,000 to $3,000,000 4.1 per cent;
$3,000,000 to $4,000,0003.47 per cent; $4,000,000 to $5,000,000
3.02 per cent; over $5,000,000 2.67 per cent; and so on.
6. Through the use of one contractor and the simultaneous con-
struction of a group of houses, with a preferable minimum of ten. In
some instances discussed in this book, savings were effected by sharing
construction cost economies; in other cases, by a reduction of the con-
tractor's profit percentage. While 10 to 12 per cent is the usual charge,
it may run as high as 1 5 per cent.
Mass construction and the streamlining of operations, possible when
a number of houses are erected at the same time by the same builder,
meant lower total costs in many instances.
7. By the purchase of building materials and supplies and house-
hold equipment from wholesale establishments or through regional
8. By the Association's acting as its own contractor.
9. Through the use of a master title, one title search, one set of
mortgage papers, one warranty, one survey fee, and one recording fee,
instead of fifty or a hundred.
10. Through permanent operation and maintenance of some or all
of the property. Maintenance costs were frequently lower in the co-
operative community (whether homes were individually owned or
co-operatively held) than in rental communities of comparable size
and value. In addition, members had the advantage of parks and play-
grounds co-operatively developed and maintained with costs equally
11. Through tax savings possible by group operation under urban
re-development acts or under limited-dividend statutes, in some states.
12. By interest savings through collective bargaining.
13. Through community services: stores, gas stations, and garages;
a nursery co-op, a housemaid's co-op, a gardener's co-op; a laundry
service; a buying club for furniture, electrical equipment, or daily food
provisions; a shrub or tree nursery; or a co-op service for the repair of
radios, television sets, washing machines, refrigerators, and oil burners.
14. Through the incorporation of self-help in the construction of
the homes. Some poured their own basements; others dug ditches for
underground electric and telephone conduits; several took part in rais-
ing the superstructures or in shingling and clapboarding the exteriors;
many labored on the interior decorating painting, papering, or finish-
ing floors; and not a few managed their own landscaping.
The accomplishments of a co-operative are not limited to dollars
and cents. These are the tangible assets. The manifestation of the in-
tangible assets is the plan for a better way of life in which the in-
dividual has a part, working with his neighbors toward a common
end with mutual advantages for all.
The Story of Co-ops
In co-operatives, members work together toward a common aim for
their mutual benefit. Co-operatives usually have no political affiliations,
are not confined to any race, religion, creed or color. They number
among their members men and women from all walks of life the
miner and the manufacturer, the baker and the banker, the farmer and
the factory worker, the office clerk and the oil driller, the artist and
the architect, the doctor and the potato digger, the homemaker and
the horticulturist, the lawyer and the fisherman.
In a dingy warehouse on Toad Lane in Rochdale, England, twenty-
eight mill workers opened a shop on December 21, 1844, with a bar-
rowful of butter, flour, oatmeal, sugar, and candles, bought with pen-
nies pooled from weekly savings, and the modern co-operative move-
ment was born.
From that beginning, the idea developed and spread around the
world, embracing practically every field of endeavor from marketing,
manufacturing, and mining to farming, oil refining, and housing.
Not alone on tuppence worth of porridge did the Rochdale Society
of Equitable Pioneers build its future. Its members founded an asso-
ciation on principles so sound that they became the basis for the ver-
satile and expanding co-operative movement embracing tens of mil-
lions of families around the world.
The Rochdale shop wasn't the first co-operative venture in England,
but it was the first truly successful one. Its predecessors were a co-
operative community fostered by Robert Owen, wealthy manufacturer,
and a string of stores started by Dr. William King of London. Both
projects failed, mainly because their sponsors provided all the material
and all the money and the members advanced nothing. History proves
that the most successful co-operative enterprises are founded on the
united efforts and the combined investments of all members.
2 Get Your Own Home the Co-operative Way
While most of the Rochdale pioneers were flannel weavers, there
were other craftsmen among them a tailor, a printer, an engineer, a
hatter and a cabinet worker. All of them, including the lone woman
member, Ann Tweedale, were very poor. Low wages and high company
store prices combined to tax their family budgets to the breaking point.
Reducing the cost of living would help make ends meet. Alone, no
man could manage that. Together, they were prepared to try.
Charles Howarth, a warper in a cotton mill, was probably respon-
sible for the first draft of the policies and aims of the society which
provided for: (1) the establishment of a store for the sale of provi-
sions and clothing; (2) the building of a number of homes for mem-
bers; (3) the manufacture of articles for the employment of members
without employment or suffering because of low wages; (4) the pur-
chase of land to be cultivated by the members when out of employ-
ment; (5) the establishment of a self-supporting home colony of
united interests; and (6) the opening of a temperance hotel for the
promotion of sobriety.
Tackling the store project first, the members built up a capital by
each contributing two pence less than a nickel every week for a
year. At the end of that time the shop was opened with $70 worth of
merchandise. The ridicule of the town soon changed to commendation
when the little establishment began to prosper. By the end of the year,
it had done $3,500 worth of business, selling to members and to non-
It is to this Rochdale group that co-operatives are indebted for the
principles on which they operate today. An object of derision at the
time, these principles seem to us now nothing more or less than com-
mon sense. The original draft provided :
1. All goods to be sold at prevailing market prices.
2. All merchandise to be sold for cash.
3. Membership to be open to men and women regardless of party
4. One vote to be allowed each member regardless of shares owned.
5. Full information, based on proper accounts and audits, to be
presented to members.
6. Interest payments for the use of capital to be restricted to a fair
7. Fair and honest dealings to be maintained in all business.
8. Savings to be returned to patrons in proportion to the patronage
9. A portion of all savings to be used for education and expansion.
The Story of Co-ops 3
On these principles the Rochdale pioneers prospered. By the end of
a century the Society listed 36,809 members and capital of nearly two
million dollars distributed among a hundred enterprises. By 1947,
Rochdale had grown to a city of ninety-two thousand of whom 32,116
were members of the co-operative movement, and the first little enter-
prise had expanded to include: fifty-three grocery stores, seventeen
butcher shops, six shoe stores, three drapery shops, three chemists'
shops, one tobacco store, one tobacco factory, two coal wharves, one
sweets shop, one laundry, two gentlemen's outfitters, and one slaughter
The co-operative idea spread rapidly through Great Britain. A
hundred years after the organization of the first society in Rochdale,
there were nine million co-operative members in the country, supply-
ing 25 per cent of the country's food and a sizeable portion of other
commodities and services from automobiles and clothing to banking
and insurance returning 120 million dollars yearly to members in
savings on purchases.
Meanwhile, from Great Britain the co-operative way of doing busi-
ness spread to other countries, and before the close of the century there
was scarcely a country in Europe without a co-operative similar in all
or some respects to the Rochdale Society. Moves toward co-operation
between co-operators of various lands began in 1884 when French
co-operators sent greetings to the British Co-operative Congress. In
1892, an organization known as the International Co-operative Alliance
was formed. It grew with such rapidity that by 1941, it represented
seventy-five million families in different countries around the world.
Outside of England the strongest developments are found in the
Scandinavian countries: Sweden, Denmark, Norway, and Finland. In
Sweden, co-operatives "dared to set their own prices" and thereby
presented a pattern for the rest of the world. In Denmark, co-opera-
tives were started in 1886 and when the Nazis overran the country in
1940, some farmers belonged to as many as ten different co-operative
societies. Finland, in the early years of its co-operative development,
joined forces with Sweden to form the Scandinavian Co-operative
Wholesale, known as SCW, in order to buy goods at better prices by
pooling their .orders.
In other countries, co-operatives met with varying degrees of success.
Iceland, for example, has been called the "most completely co-operative
country in the world." There, 75 per cent of the population belongs
to co-operatives. In Germany, one in every four persons belonged to a
co-operative before Hitler's time, but he destroyed many, and others
4 Get Your Own Home the Co-operative Way
became government-controlled. In Russia, all the co-operatives were
taken over by government when the Soviets came into power in 1918.
Their independence was restored three years later, but only the rural
co-operatives, with an estimated sixty million members, retained it
While co-operatives grew slowly in Asia, India had 100,000 socie-
ties by 1939, and China had 170,000 "Indusco" branches in 1943. The
number of China's co-ops has dropped since the end of the last World
War. Japan also had a thriving co-operative movement. Palestine built
a national economy on a co-operative basis with such success that the
Arabs began to follow the example. In South America, governments
took the lead in promoting co-operatives and in supplying funds. In
Africa, the co-operative movement became strongest in the south. In
Canada, 25 per cent of the farm crops are marketed through co-opera-
tives, and the fishermen of the Maritime Provinces also have their co-
operatives through which they sell their catches.
In the United States, the oldest form of organized co-operative
effort is mutual insurance. Benjamin Franklin sponsored the first enter-
prise in Philadelphia in 1752. A co-operative dairy commenced opera-
tions in Goshen, Connecticut, in 1810 and in the same year a cheese
dairy was established at South Trenton, New York. Ten years later, a
group of Ohio livestock producers started to make joint shipments to
a terminal market.
In 1845, the first consumers' co-operative store was opened in Bos-
ton, Massachusetts. Jesse Williams built his famous cheese factory in
Oneida, New York, in 1851 and within five years the first butter fac-
tory was erected in Campbell hall, Orange County, New York.
The farmers were not far behind the dairymen in organizing co-
operatively. In 1857 the Dane County Farmers' Protective Union was
formed and built a grain elevator at Madison, Wisconsin. In I860 the
farmers in Bureau County, Illinois, formed a co-operative hog auction,
and three years later the first farmers' fertilizer association was organ-
ized at Riverhead, Long Island, New York. The year 1867 saw the
formation of the first known co-operative association for the marketing
of fruit, in Hammonton, New Jersey.
The first law recognizing the co-operative method for buying and
selling appeared on the Michigan statute books in 1865 under the
title "An Act to authorize the formation of mechanics' and laboring
men's co-operative associations."
The second period in the history of American co-operation com-
menced in the late sixties with the rise of the Grangers, also known
The Story of Co-ops 5
as the Patrons of Husbandry, who took the lead in sponsoring co-
operative organizations among the farmers. At the same time the
Sovereigns of Industry came into existence and encouraged consumer
co-operatives in the New England and Middle Atlantic states.
In the 1880's the Knights of Labor came to the fore and tried to
foster producers' or workers' co-ops in which the workers shared
ownership of the industry. The push given co-ops by the Grangers
lasted well into the twentieth century and large co-operatives were
formed in various parts of the country. They were engaged in growing
oranges, drying fruit, dairying, raising livestock, operating grain ele-
vators, growing tobacco, wool, walnuts, raisins, vegetables, cranberries,
grapes, potatoes or fruit, and in raising poultry and marketing eggs.
The average householder has little idea of the magnitude of the
rural co-operative movement in this country where four out of every
ten farmers belong to one or more co-operatives. Unlike Great Britain
and Europe, where the co-operatives are composed mainly of industrial
workers in the cities and towns, the United States has developed a
network of farm co-operative associations which have a bigger mem-
bership and a larger business volume than associations of like nature
anywhere in the world. And in the newest field of development, that
of oil drilling, refining, and distribution, American co-operatives stand
foremost among co-operatives in all nations.
The third period in the history of American co-operation, which
lasted from 1890 to 1920, found the co-operatives in the rural areas
widening their spheres to include telephone companies, insurance
companies, irrigation associations, co-operative creameries, grain ele-
vators, fruit marketing combinations, and purchasing co-operatives.
The Farmers' Co-operative and Educational Union and the American
Farm Bureau Federation gave co-operatives a new lease on life. They
were greatly helped by immigrant farmers from European countries
where Rochdale practice was common.
In 1917, seventeen organizations in Minnesota and Wisconsin or-
ganized the Central Co-operative Exchange, later known as the Cen-
tral Co-operative Wholesale with headquarters in Superior, Wisconsin.
By 1940, the association was doing an annual business of $3,865,984
and included forty thousand families in its membership. The Central
Co-operative Wholesale is not to be confused with the Central States
Co-operative, Inc., an association formed in 1936 and serving Illinois,
Indiana, Ohio, and southern Michigan.
During this period the Dairymen's League Co-operative Federation
of New York was formed. The Co-operative Grange League Federa-
6 Get Your Own Home the Co-operative Way
tion Exchange, Inc., and the Eastern States Farmers' Exchange, founded
at the same time, are the largest co-ops of their kind in the country
As the co-operative movement spread across the country, little
groups combined with larger groups to form strong associations in
every state. They included the orange growers in California, the tobac-
co growers in Kentucky, the beef distributors in the Midwest, the wool
growers in Montana, the poultry shippers in New York, the lima bean
growers in one section of California and the almond growers in an-
other; the pecan growers in Georgia, the tobacco raisers in Maryland,
and the cattle raisers in Nebraska.
During the second decade of the twentieth century, local associa-
tions for receiving and forwarding to market farmers' products were
increasing at guinea pig rate. Nearly seven thousand associations for
marketing farm products were formed and about thirteen hundred or-
ganizations for purchasing supplies. Next, all the raisin growers in
California organized to form what is now the Sun-Maid Raisin
Growers' Association; the National Milk Producers Federation was or-
ganized in Chicago in 1916; the Poultry Producers of Central Califor-
nia came into being and now has six thousand members, and the
Washington Co-operative Egg and Poultry Association which has
25,000 members today, was organized; and in the West, the Farmers'
Union Live Stock Commission, which handles 800,000 animals a year,
was organized among the farmers in five states.
The fourth period of American co-operation commenced in 1920
when the bottom dropped out of farm prices and farmers' marketing
co-operatives took a new turn. Attempts were made 'to create large-
scale associations to handle the entire output of specified crops in the
important producing areas.
Contemporaneously with the commodity marketing experiment, as-
sociations were being formed according to patterns that were proving
satisfactory. Among the new entrants to the co-operative field was the
Minnesota Co-operative Creameries Association, now the Land O'Lakes
Creameries, Inc., marketing 100 million pounds of butter a year; the
Utah Poultry Producers Co-operative Association, which provides six
thousand poultrymen with marketing service; and thirteen wheat pools
with 98,000 members.
When motorized equipment replaced the horse on the farm, the
need for gas and oil resulted in the formation of the first oil-purchas-
ing co-operative in 1921. Eight years later, six hundred such co-opera-
tives had organized. By 1945, two thousand co-operatives handled 200
The Story of Co-ops
million dollars' worth of petroleum products. Today, four hundred oil
wells in Kansas, Indiana, Illinois, Texas, and Kentucky, provide crude
oil which passes through co-operatively owned pipelines to the ten
In order to understand the complexity of the co-operative movement
in the United States, it is necessary to have clearly in mind the four
types of co-operatives:
1. Producing Co-operatives. These are co-operatives in which the
members as workers raise, extract, or make goods. The self-help co-
operatives which developed during the depression of the 1930's were
primarily producing co-operatives. Producer co-operatives have not
been signally successful in this country.
2. Marketing co-operatives. These are co-operatives which undertake
to market crops or other products for members. Often these associa-
tions, as a necessary part of their job, act as producing co-operatives
for the user. For instance, they churn butter, manufacture cheese, can
fruits, or process vegetables.
Marketing co-operatives were successful from the start. While most
of the producer co-operatives had disappeared by 1940, the marketing
co-operatives were developing rapidly, with sales amounting to 4 bil-
lion dollars in a single year about one-sixth of all farm products sold.
3. Purchasing co-operatives. These co-operatives procure goods and
services needed by- members whether for consumption or production.
Those that serve farmers are called "farm supply" associations. They
may provide farmers with goods or services that they need in farm
production, or as consumers. Associations providing consumers with
groceries, clothing, or other goods or services for general consumption
are properly called "consumers' co-operatives." As a matter of fact, all
types of purchasing co-operatives are often called "consumers' co-oper-
atives," since these associations are organized by those who consume
goods either as producers or consumers. Purchasing co-operatives often
do much manufacturing or processing incidental to their purchasing
job. By 1944, the consumer co-operatives in the United States were
doing more than 750 million dollars' worth of business annually,
somewhat more than half of this being developed by farmers' groups.
4. Servicing Co-operatives.' These co-operatives provide technical or
professional services to their members. They may provide members
with insurance, financial assistance, electric power, hospitalization,
telephone service, burial service, housing or other needs.
Of all the service co-operatives, perhaps the most important to the
whole movement is the association formed to loan money to members.
8 Get Your Own Home the Co-operative Way
Some are called "credit unions." The first state law allowing credit
unions to operate was passed in the early 1900's. Today, credit unions
operate both under state and Federal laws. Loans may mean just a few
dollars to tide a member over until his next pay day or several hundred
dollars to pay for an emergency operation or in some cases real estate
loans. Usually, members know each other personally or have some com-
mon bond, such as belonging to the same church or labor union, or
working within the same office.
The oldest type of service co-operative is that which insures mem-
bers against damage or loss of property. The youngest co-operatives
are those organized to provide their members with refrigerated food
lockers. Another type of service organization is the campus co-op,
which provides college students with housing, meals, books and school
supplies, laundry service, and the like.
The rural electric service co-op was depression born. In 1935, only
one farm in ten was serviced by public utilities. Then the Government
encouraged responsible groups to extend electrical service by offering
them loans through the Rural Electrification Administration, and the
light and power co-operatives came into being. By 1945, almost half
of America's farms had electric power, and most of the nine hundred
Government borrower groups for this service were co-operatives.
In the field of health a pioneer consumers' enterprise was the Farm-
ers' Union Co-operative Hospital at Elk City, Oklahoma, initiated in
1929 by Dr. Michael Shadid. Today, this co-operative provides medi-
cal, dental, and surgical care with clinical and hospital service for some
ten thousand co-operators at costs much less than they would have to
pay at private rates.
In Los Angeles a group of physicians launched the Ross-Loos Clinic
in 1929. The clinic serves thirty thousand employed persons with
complete medical, surgical, and dental care, plus hospitalization, at
similarly low costs. In the same year a group of Texas teachers first
set up an experiment in group hospital insurance. In the nation's capi-
tal the Group Health Association of Washington, D. C. (confined to
Government employees) was formed in 1937. It has ten thousand
members. Three other large associations are the Group Health Mutual,
Inc., and the Group Health Association of St. Paul, Minnesota, with
25,000 members, and the Group Health Co-operative in New York
City with ten thousand members.
While the co-operative movement as a whole broadened its activities
in an ever widening circle, several of its member associations were
making spectacular progress. Outstanding example is the Pacific Supply
The Story of Co-ops
Co-operative in the Northwest which has a membership of seventy
thousand families in six states and did a $12,500,000 business in 1946.
On the West Coast, the Associated Co-operatives of California became
statewide in 1944 and a year later listed twenty thousand members
and a $250,000 volume of business.
The co-operative movement spread to the trade unions. The Ameri-
can Federation of Labor has regularly endorsed consumers' co-opera-
tion for more than twenty-five years. First of the CIO unions to come
out for co-operatives was the United Rubber Workers, next the Steel
Workers, and then the United Transport Employees of America.
Before 1934, consumers' co-operation had been largely a city move-
ment. About this time the Co-operative League of the U. S. A., estab-
lished in 1916 to promote consumers' co-operation, broadened its mem-
bership to include the strong farmers' purchasing associations. The
League has done much to popularize the idea of consumer control over
goods and services. In 1933, National Co-operatives, Inc., was formed,
charged with commodity procurement on a nationwide scale for the
regional co-ops. Working together, the two form the pillars of the
co-operative structure of America the League "for education," and
the National "for business."
The Co-operative League was created to assist old societies in prop-
erly carrying on their business and educational affairs, to help new ones
organize, to spread the knowledge of the co-operative movement
throughout America, and to give a sense of unity and common pur-
pose to the co-operatives of the nation. The League is engaged in the
constant production of materials in pamphlet and book form. It spon-
sors and directs national educational conferences. It operates and main-
tains the Rochdale Institute in Chicago, which is specializing in the
techniques of carrying on co-operative business enterprises and the
philosophy and program for the consumers' co-operative movement.
National Co-operatives, co-partner of the League, has centered its
program on the three purposes for which it was set up: (1) to pur-
chase, manufacture, produce, and distribute co-operatively for and to
consumer co-operative wholesale associations; (2) to provide better,
more economical methods for purchasing, manufacturing, producing,
and distribution; and (3) to assist in the organization, financing, and
operation of consumer co-operative wholesale associations.
The increasing strength of city consumers' co-operatives is illustrated
in the growth of the Eastern Co-operative Wholesale Society, now
Eastern Co-operatives, Inc. Since its founding in 1936, this Co-opera-
tive has built its business into a volume of more than six million dol-
10 Get Your Own Home the Co-operative Way
lars annually. It is the largest co-operative purchasing federation de-
voting its efforts mainly to serving city consumers' co-operatives. About
two hundred units in eleven states are affiliated with this Co-operative.
During the past twenty-five years, co-operative business has estab-
lished itself in a number of new fields. The' extent of its diversification
and the spread of its membership is illustrated by a survey, made in
1946, which listed: 2,810 stores with 690,000 members; 125 service
stations with 810,000 members; 1,353 farm supply co-operatives with
710,000 members; fifty other commodity co-operatives with 24,000
members; sixty-eight medical co-operatives with 140,000 members;
forty-one funeral associations with 36,400 members; fifty-nine housing
associations with 2,100 members; 325 campus co-ops with 28,000
members; 235 miscellaneous co-operatives with 122,000 members; 850
rural electric co-ops with 1,149,700 members; 9,099 credit unions with
3,037,700 members; five thousand telephone co-ops with 330,000 mem-
bers; and eight insurance associations with 800,000 members.
It is often charged that co-operatives do not pay their full share of
taxes. Co-operative associations do pay the same property taxes that
similar business organi2ations are required to pay on property, divi-
dends on shares, and corporate reserves not credited to patrons as re-
funds. But farmers' marketing and purchasing co-operatives that meet
conditions prescribed by Congress are exempt from Federal income
taxes. Moreover, the Bureau of Internal Revenue has permitted co-
operatives or other businesses which are not entitled to exemption as
agricultural co-operatives to subtract from their total income the
amounts they pay out in patronage refunds, and to compute their in-
come taxes on the remainder. Many states exempt farmers' co-opera-
tives from state income taxes also.
In the case of consumers' co-operatives, the Bureau of Internal Re-
venue looks upon patronage refunds as rebates upon the business trans-
acted with members rather than as a true income of the association.
Commercial businesses which return their profits to their customers can
also deduct such refunds from their taxable income.
There has been little mention in the preceding pages of co-opera-
tive housing projects. In the early history of American co-operation,
there were few and their growth was slow. Unlike America, Europe
developed housing co-operatives simultaneously with its industrial and
European housing co-operatives may be divided into two classes: (1)
co-operatives that are essentially savings and credit societies, providing
their members with advances to enable them to build or buy homes;
The Story of Co-ops ll
and (2) co-ops that build houses for sale or rent to members. Co-op-
eratives of the second type are far more numerous, accounting for nine-
tenths of the total number of housing societies, although they repre-
sent only one-third of the total membership.
In England the building societies, which resemble our building and
loan associations, have grown faster than the housing co-operatives.
By the end of 1937, there were one thousand building societies in
England with a membership of 3i millions. At the close of the same
period, there were 336 co-operative housing groups with 37,000 mem-
bers. Co-operative housing societies fall into two main groups: tenancy
societies which own the houses and lease them, and house-purchase so-
cieties which provide houses for eventual ownership.
In Scotland the first housing co-operative project followed the col-
lapse of a row of railroad workers' tenements in Edinburgh in 1861,
which made a great many families homeless. The Edinburgh Co-opera-
tive Building Society organized a building co-operative which erected
two thousand units. In Wales, a co-operative housing association was
formed as early as 1908 to build houses for quarry workers in Aber-
daron on a seventy-three acre tract of land.
France had 238 building societies by the end of the first decade of
this century, 63 per cent of which operated on a co-operative principle,
while the remainder were joint stock companies. Together they erected
4,569 cottages and 3,653 flats. In Germany the National Federation
of German Co-operative Building Societies constructed 1,353 houses
and 614 apartment units during World War I. A garden city for four
thousand families was built at Nuremberg on a co-operative plan. By
1935, the Federation included 2,700 groups. Belgium developed its
co-operative housing slowly, partly because there were so many pro-
fessional organizations in existence and partly because the savings
banks granted credits to members for the construction of homes.
The Union of Soviet Socialist Republics issued a decree in 1924 de-
signed "to assist Workers' Co-operative Housing Societies of USSR"
by providing financial aid in housing projects. Three classes of housing
co-ops were established: those which administered and rented in exist-
ing municipalized houses, those which consisted of societies of workers,
and those which consisted of citizens as such, workers and non-workers.
The last two were described as building co-operatives.
In Czechoslovakia, under the Czech Government in power before
World War II, housing co-ops were under the supervision of the
Ministry of Social Welfare and were required to confine their activities
to the construction of houses and to the sale or lease of family dwell-
12 Get Your Own Home the Co-operative Way
ings. Loans were made to housing societies at low rates by the Govern-
ment and by consumer co-operatives.
Italy promoted housing co-operatives through the National Credit
Institute for Co-operatives. A large share of its assets was contributed
by the Government. By 1924, Rome had 120 co-operative housing so-
cieties. Government aid also helped housing in Switzerland to get a
start. In Zurich, co-operative building societies are aided by the city in
financing the erection of dwellings, one of the stipulations being that
each applicant must provide 6 per cent of the purchasing price. Best
known co-operative community is Freidorf, near Basle, developed in
1919 and housing 150 families, most of whom are employees of the
Swiss Co-operative Union. By 1936, there were 230 housing co-opera-
tives in Switzerland.
In Poland, the outstanding contribution to co-operative housing was
made by the Co-operative Housing Society of Warsaw. Twenty build-
ings were erected, totaling 1,700 apartments which were leased to
members, title remaining with the Co-operative. By 1936, the Society
had a membership of 1,780, nearly, 40 per cent of whom were em-
ployed in manual occupations. Co-operative housing groups are taking
a major part in the rebuilding of Warsaw, bombed during the last
Holland, strong advocate of co-operative housing, has promoted
two types of societies : those whose construction activities were confined
to providing homes for members, and those of semi-philanthropic
nature, which rented homes to low income groups. In either case, the
Government advanced 90 to 95 per cent of the capital required. Al-
though the societies planned, promoted, and operated the develop-
ments, they did not own them. At the end of a fifty-year amortization
period, the city housing department assumed absolute ownership.
Government aid was also responsible for the construction activities
of many of the housing co-ops in Austria. In Vienna, 2,600 houses
were built on city-owned land in the early twenties, the city supplying
the co-operatives with funds up to 85 per cent of the building outlay.
The Scandinavian countries have been foremost supporters of the
co-operative housing movement, with Sweden in the lead. In Sweden,
more than in any other country in the world, co-operative housing has
been closely related to the general co-operative movement. Early hous-
ing societies were called "housing clubs" or "workmen's housing asso-
ciations." Since there was no co-operative legislation in 1880, they
were organized as stock companies. The practice was to buy the houses
already built and to rent, not sell, to members.
The Story of Co-ops 13
In June, 1916, the Stockholm Co-operative Society, known as SKB,
was formed as a semi-public association, with the aid of the Stockholm
City Council. It was primarily a rental society. Each tenant invested 10
per cent of the cost of his apartment, the city loaning the other 90 per
cent. SKB is today one of the principal real estate owners in the city.
By 1937 it had accommodated two thousand families in new homes.
In 1923, the Tenants' Savings and Building Society, known as HSB,
was organized in Stockholm, followed in three years by the formation
of the national society. The national society operates as a financial
center, obtains loan funds from the Government, sells "building loan
certificates," and accepts from members deposits in its savings fund.
In every city there is a parent society operating under the national.
Every co-op building project in the city is a separate local or daughter
society. The parent society in each city prepares plans for the small
local projects, makes contracts for construction, supervises construction,
finances construction in large measure, and finally grants a first mort-
gage on completion. Any second mortgage needed is obtained through
state or city agencies. When ready for occupancy, the home is sold by
the HSB parent society to the local co-operators who assume responsi-
HSB has a unified purchasing agency through which pass all orders
for materials that go into HSB houses. It also has an architectural
office and numerous factories producing building materials. It has ini-
tiated a special HSB Home Protection Insurance for members and has
extended activities to a summer colony called Arsta Havsbad. Co-
operative nurseries and playgrounds are integral parts of every HSB
house. New are the "Co-operative Child Hotels," where children are
received for care when parents can't keep them at home or must be
away for a few days. In a little more than twenty years, HSB has pro-
duced more than forty thousand dwellings. In 1945, it had a member-
ship of 37,000.
In Norway it is estimated that one quarter of all the houses are co-
operatively owned. After World War I, the Government established a
system under which housing societies were granted funds outright, or
as loans without interest or amortization. To prevent speculation, the
Government stipulated that all grants must be matched by municipali-
Denmark's oldest co-operative housing society was founded in 1805
by a group of workers who built sixteen thousand dwellings under a
lottery system. The Workmen's Co-operative Building Society, founded
in 1912, is an example of the genuine housing co-operative in Den-
14 Get Your Own Home the Co-operative Way
mark. Each apartment house operates as a separate branch of the main
society, but is under independent management. About one-third of all
new houses in Copenhagen are now built under co-operative leader-
ship. Finland's co-operative housing activities have been hampered by
the popularity of "joint stock lodging societies" a profit motivated
form of housing peculiar to this little country.
In India the Saraswat Co-operative Housing Society, organized in
1895, built a number of homes for workers, charging rents which were
30 per cent below those charged for comparable accommodations in
those communities where the houses were erected.
In Australia, the Government Co-operative Enterprises has provided
model homes for 6,060 families in the slums of Adelaide. Co-opera-
tive housing has been* very successful in the New South Wales prov-
ince, which has a Co-operation Act under which a "Community Ad-
vancement" society may borrow 100 per cent of the cost of its build-
ing development from the Government. The Co-op society then sells
the houses to its members on a quasi-rent basis. By the end of five
years, the tenant has acquired considerable equity in his dwelling. In
New Zealand there are one hundred building societies operating under
the consolidating building society measure of 1908. The Government
offers loans at low rates for home buying and building, yet there is
surprisingly little Government control.
The first building society in South Africa was formed in Natal
seventy-five years ago. In 1935, a hundred scattered groups were or-
ganized under the South Africa National Association of Building So-
In South America, many of the countries have had co-operative hous-
ing societies since the turn of the century. One of the oldest Argentine
consumer co-operatives is El Hogar Obrero, "The Worker's Home,"
which is the parent society of the country's consumer, credit, and hous-
ing co-operatives. It was intended from the beginning to provide
housing credit, and has built and continues to build small family
dwellings as well as large apartment houses. In Medellin, Colombia,
the Co-operative de la Vivienda, "Dwelling House Co-operative," has
made plans to build seven hundred homes in a planned community on
the outskirts of the city.
Alaska has several housing co-operative projects, although no or-
ganized housing co-operative movement. The largest project was initia-
ted by a group of veterans from Pennsylvania.
Halifax, Novia Scotia, boasted the first co-operative housing group
The Story of Co-ops 15
in the Dominion of Canada, called the Permanent Benefit Building
Society of Novia Scotia.
The famous Tompkinsville experiment in Novia Scotia produced
ten houses co-operatively built by miners under the direction of Rev.
J. J. Tompkins of St. Francis Xavier University at Antigonish and
Mary Arnold, formerly active in co-operative housing work in New
York City. The Government of Novia Scotia advanced money up to
75 per cent of the cost. The manner in which the miners operated
under a self-help program and planned their community to provide
acreage for growing food and for the development of farming inter-
ests in times of unemployment has become well known in the United
Under an act passed in 1874, building societies in Canada may not
only accept deposits but may also issue debentures which provide a sub-
stantial part of their funds. The past ten years have seen the formation
of a number of co-operative housing groups in Canada, the more re-
cent being in Saskatoon and Regina, Saskatchewan, and in Edmonton
and Calgary, Alberta.
It should be noted that most of the co-operative housing projects in
Europe were government aided, either by outright grants or by loans
repayable at low rates of interest. The path of co-operative housing in
the United States has been more difficult than that in Europe, because
the Government does not yet extend financial aid or assistance to co-
operatives for the erection of homes. They must get along on financing
plans actually set up for other types of private enterprise which aids
are not ideally suited to co-operatives.
The first known co-operative communities in the United States were
developed within a few years of each other. In 1825, Robert Owen,
wealthy English manufacturer, established a co-operative village at
New Harmony, Indiana. He planned his community on a thousand
acres of land, with the houses arranged in a rectangle in the center
and the community members living together and using a common
kitchen and dining room. He established co-operative farming and co-
operative hat, shoe, and candle factories. Script was used instead of
money, and labor hours were exchanged on a basis of time rather than
skill. The venture lasted five years.
John Humphrey Noyes, an American religious leader who founded
a community of Perfectionists at Putney, Vermont, developed his co-
operative community in Oneida, New York. Homes were built by the
members and saddles and silverware were manufactured in the com-
16 Get Your Own Home the Co-operative Way
munity. In 1881, the development was reorganized. The new stock
company, known as the Oneida Community Ltd. confined all indus-
trial activity to the manufacture of silverplated ware. This community
prospered where Owen's project failed, because the workers and not
the sponsor organized and operated the co-operative.
Organized co-operative housing made its initial appearance in apart-
ment house projects in the big cities. In the early 1920's, four groups
of buildings were constructed in the better section of San Francisco at
costs ranging from $9,500 to $25,000 for each apartment. Constructed
under a non-profit plan, they were examples of a limited type of con-
sumer co-operation, although sponsored by outside interests. In the
typical plan of procedure, the promoter found and assembled interested
participants and received a commission for his services which was
added to the construction cost. Evidence of ownership in a community
home was called a lease which was, in effect, a deed to one's apart-
ment for the nominated fifty-year life of the corporation. All sub-
scribers had a voice in the operation of the homes through the election
of officers or through committees which protected their collective in-
In Washington, D. C, the first co-operative apartment building was
erected in 1920. Despite strong opposition from local bankers, realtors,
and attorneys, all apartments were sold within a week. A co-operative
corporation was formed and took title, while the tenant owners received
a perpetual lease. Payments were either cash in full, or one-third cash
and the balance in payments over eleven years. Much of the financing
was done through the large insurance companies at better terms than
the bankers would allow.
Chicago started early in the century operating small apartment houses
on a co-operative plan, and one authority states that by 1924 there
were a hundred such buildings in the city.
In New York City there were a few small co-operative apartment
buildings as early as 1870. The Finnish immigrants in Brooklyn were
among the first to operate an apartment house on a co-operative basis
without public or private subsidy. The first large co-operative housing
project for Negroes, known as the Paul Lawrence Dunbar apartments
on Eighth Avenue, was sponsored by John D. Rockefeller, Jr. All five
hundred suites were sold under a co-operative plan before the middle
of 1928. This development eventually reverted to rental housing. The
biggest co-operative apartment house project was commenced in the
Bronx in 1926, under the sponsorship of the Amalgamated Clothing
Workers of America. The development expanded until by 1948 it en-
The Story of Co-ops 17
compassed fifteen buildings with 1,753 apartments built or near com-
pletion. Amalgamated is the nearest thing the United States has to
HSB of Sweden.
In this book, one hundred projects embracing about thirty thousand
families are discussed, some of them large, some of them small, but
all of them co-operative to a greater or lesser degree. There are hun-
dreds of others in this country, but their number and their nature can-
not be known until a survey is made, state by state, town by town.
Co-operative housing came into existence when individuals dis-
covered that they might accomplish together what they could not do
alone acquire homes for their families.
On the wall of the office of the manager of the Amalgamated Go-
operative Apartments in the Bronx is a letter from Franklin D. Roose-
velt containing a quote from the late Charles Steinmetz, which should
be remembered by all home-seekers:
"Co-operation is not a sentiment. It is an economic necessity."
of Housing Co-ops
The housing co-operatives described in this book differ in many
ways: in the extent of co-operation, in the type of sponsorship, in the
amount of self-help involved, in the manner of financing, in the kind
of community urban or rural and in the make-up of the membership
(some consist predominantly of factory workers, some of farmers, some
of clerical workers or members of the professions, and some are com-
posites of many occupations) . A mixture of employments provides the
most satisfactory type of membership.
The extent of co-operation is dictated partly by the desires of the
members and partly by circumstance. It varies all the way from a
minimum, confined to purchase of the land, to full co-operation, in-
volving ownership of the property and the homes by the corporation,
and operation of the community by the co-operative. A number of the
associations started out in high hopes of developing true Rochdale co-
operatives with title to the homes vested in the corporation, and mem-
bership open to all regardless of race, creed, or color. Difficulties in
obtaining financing forced them to change their plans, and they re-
verted to individual ownership of the homes and to a membership com-
posed "of the Caucasian race only." Those that survived and realized
their plans did so, in most instances, by obtaining private loans or
straight bank mortgages, instead of loans insured by the Federal Hous-
ing Administration or guaranteed by the Veterans' Administration.
Few of the associations have limited their co-operative activities to
purchasing the land. Most of the groups carried on together through
the site planning, the installation of utilities, the legal and architectural
services, and the construction, at the end of which phase, each in-
dividual took title to his dwelling with unrestricted control from that
Types of Housing Co-ops 19
It is difficult to pigeonhole co-operatives by drawing definite lines
to indicate where co-operation began or ended. However, most of the
co-operatives may be included in one of the following classifications:
1. Co-operation extending only through the purchase of land.
2. Co-operation extending through the land purchase, site planning,
installation of utilities including roads, water and sewerage, and the
legal and architectural services.
3. Co-operation extending through all the phases in the second
category, plus construction of the homes.
4. Full co-operation, including co-operative ownership of both land
and homes, and co-operative operation of the community and the com-
5. Co-operation only after the completion of the project, as in the
case of Government-built projects such as Greenmont in Dayton, Ohio;
Walnut Grove in South Bend, Indiana; and Nay lor Gardens in Wash-
ington, D. C.
Many of the groups which fall into the second and third categories
provided for co-operative operation of the development after comple-
tion and for control of the community lands and buildings by their
Co-operation may be very informal, after the manner in which four
professors in Winchester, Massachusetts, built their homes, or it may
follow a set pattern through the medium of a regularly incorporated
association, with each provision set forth in the by-laws or in the mem-
bership contracts. Good examples of the latter type are the Mutual
Housing Association, Inc., in Los Angeles; the Peninsula Housing As-
sociation, Inc., in Palo Alto, California; and Bryn Gweled Homesteads,
Inc., in Feasterville near Philadelphia, Pennsylvania, to name a few.
Mention must be made here of that large number of so-called co-
operatives which are not really co-operatives at all. They vary all the
way from borderline co-operatives to "commercial co-operatives"
developed by builders or realtors trading on the accepted meaning of
Sponsorship of the true co-operative may be active, with the sponsor
taking part in the formation, financial aid, and operation of the com-
munity; or it may be passive, with the sponsor merely providing the
initiative for the organization of the group. There are many types of
sponsorships all of which are described in this book. They include:
1. Sponsorship by a Co-operative Housing Association. Crestwood,
in Madison, Wisconsin, is an example.
2. Sponsorship by an individual. Monsignor Luigi Ligutti of the
20 Get Your Own Home the Co-operative Way
Catholic Rural Life Conference sponsored the development of the
Granger Homesteads near Des Moines, Iowa.
3. Sponsorship by public-spirited citizens and a city or state govern-
ment, as was the case in the formation of the Garden Homes Company
in Milwaukee, Wisconsin.
4. Sponsorship by a charitable, religious, or community service or-
ganization. The American Friends Service Committee, a Quaker group,
sponsored Penn-Craft in East Millsboro near Pittsburgh, Pennsylvania;
the Celo Community in Celo, North Carolina; and Little River Farm
in Abbeville, South Carolina.
5. Sponsorship by a labor organization. The United Auto Workers,
CIO, fathered the development of the Racine Co-operative Homes As-
sociation in Racine, Wisconsin; a second project in Kenosha, Wiscon-
sin; and a third in South Bend, Indiana. The Amalgamated Clothing
Workers sponsored the erection of the Amalgamated Housing projects
in New York City. The American Federation of Hosiery Workers was
responsible for the building of the Carl Mackley Apartments in Phila-
delphia, Pennsylvania. The Textile Workers' Union of America spon-
sored the development of Stonewall Heights at Front Royal, Virginia.
There are several others.
6. Sponsorship by a business organization. Fifty-one houses in Mil-
linocket, northern Maine, were built under the sponsorship of the
Great Northern Paper Company.
7. Sponsorship by a Veterans' organization. Under the direction of
the American Legion, 250 homes were built in Legion Village, Baton
Rouge, Louisiana. The AMVETS, a World War II group, formed the
Veterans Co-operative Housing Association to operate Naylor Gardens
in Washington, D. C, an apartment house project of 748 units. In
Philadelphia, the American Veterans' Committee, another World War
II organization, organized the American Veterans' Housing Co-opera-
tive for the erection of 183 homes. Many other veteran-sponsored
projects are discussed in this book.
8. Sponsorship by another co-operative. The North Shore Co-opera-
tive Society, Inc., for example, initiated the formation of Co-operative
Community, Inc., which built Redwood Village in Glenview, Illinois.
Self-help has been incorporated, to a greater or lesser degree, in
the programs of many of the co-operative housing projects. Examples
are Pioneer Homes in Watsonville, California; Penn-Craft in East
Millsboro, Pennsylvania; Bryn Gweled in Feasterville, Pennsylvania;
Tanguy Homesteads in Cheney, Pennsylvania; York Center Com-
munity Co-operative, Villa Park; Illinois; lona Homes, lona, Idaho;
Types of Housing Co-ops 21
Oakwood Community, Chapel Hill, North Carolina; Aquino Park,
veterans' community in Campbell, San Jose, California; Light of
Tyrrell Community in Columbia, North Carolina; Macedonia Com-
munity in Macedonia, Georgia; Hyland Home Owners' Association in
Dayton, Ohio; Redwood Village in Glenwood, Illinois; Melbourne
Homes in Melbourne, Florida; Millinocket Homes in Millinocket,
The financing of housing co-operatives takes various forms. Most
of the groups whose projects are described in this book followed a
similar pattern, obtaining funds through members' down-payments,
the sale of stock or debentures, and the contracting of mortgage loans
from insurance companies, banks, and other financial institutions. A
few were aided by union funds. Some received support from Federal,
state, county, or city governments.
Types of communities fall into three main categories: the urban
developments which are usually apartment houses; the rural develop-
ments which may take the form of homestead projects or co-operative
communities; and the suburban developments which are usually in-
dividual residences, row houses, or garden apartments.
A homestead, to be worthy of the name, must include, besides the
house, sufficient acreage to permit the homesteaders to raise their own
fruit and vegetables and to keep chickens and cows. A community
farm, for the production of stock feed and the raising of produce for
the commercial market, is an advisable inclusion. The Granger Home-
steads near Des Moines, Iowa, averaged five acres to a member; Bryn
Gweled in Feasterville, Pennsylvania, and Tanguy Homesteads in
Cheney, Pennsylvania, each allot two acres to a member. The Krepps
Farm project, the second development undertaken by the American
Friends Service Committee in East Millsboro, Pennsylvania, provides
each individual with ten acres. Pioneer Homes in Watsonville, Califor-
nia, divided its holdings into plots of two acres each. Individual hold-
ings in the Duluth Homesteads in Duluth, Minnesota, ranged from
3J to ten acres.
A co-operative community is one in which co-operation extends be-
yond the co-operative ownership of homes and land and into the daily
work life of the members. Best example is Macedonia, Georgia, where
all property, houses, farm stock, farm equipment, farm buildings,
dairy, sawmill, and woodworking shop are co-operatively owned and
operated. Members gain their subsistence from the farm or shop, and
all wages are pooled, being apportioned according to the size of the
22 Get Your Own Home the Co-operative Way
Housing co-operatives have adopted varying types of planning.
Sonic follow (lie commercial development p.illern with the houses in
rows or blocks making little or no precision lor open spaces or com-
munity l.nuls. Others have sought planned communities, providing lor
parks and playgrounds, a community hall, curvilinear streets \vitliout
through thoroughfares, and possibly a co-operative store and gas sta-
tion. Larger developments may add swimming pools, tennis courts,
shopping centers, and theaters.
A few, like Bannockburn Co-operators, Incorporated, near \Yash
ington, D. G, are seeking to build a balanced community, incorporat-
ing all the best features of the planned community and providing tor
a variation in types of dwellings to include single- family units, row
houses or duplexes, and apartments.
The make-up of the membership in a housing co-operative may be
confined to one trade or profession or it may be so varied as to repre-
sent a good cross-section of any average community. Many co operatives
start within a group of members allied in the same type of work, hut
soon expand to include memhers engaged in other occupations.
Thus the initial members of a Chicago group were newspaper em-
ployees. In another group they were architects, and in a third "oku
farm laborers. People in all sorts of occupations have initiated our
other housing co-operatives: miners, university professors, teachers,
social workers, churchmen, shipyard workers, engineers, electrical and
radio workers, auto-tire cord workers, university service employees,
screen cartoonists, hosiery workers, musicians, and needle workers.
The business of organizing a housing co-operative entails a careful
plan of procedure, competent legal guidance, expert technical assist-
ance, good management, and perseverance.
Ralph Evans, president of Associated Co-operatives, Inc., of Oal
land, California, and vice president of the Peninsula Housing As-
sociation which is building four hundred homes for members in
Palo Alto, California, offers an outline for the promotion and develop-
ment of a housing co-operative which is designed for a large pro^t.
but which may be modified to include even the smallest of housing
developments. The suggested steps include:
1. Call together a small harmonious group not over eight or ten
who will meet frequently and talk over a general plan. Estimate the
probable membership goal. Decide about the amount of land that
would he needed, hearing in mind what m.iv he- available. In consider-
ing the site, think not only of home sites, but also of space for com-
mons or park land, availability of schools, utilities, transportation, and
On the potato fl.us of lon.i, Kl.iho, a family of ei#lu lived in the
room sh.uk puiinwl .11 upper right. Another family of six occupied
slu-il shown .n Ich Oi !',.im/iM.. .1 M li help co-operative, the farmers
ommunity. The lower photo sho\\s .1 typical cottage in
The mud-chinked shanty at the top of the page was "home" to
the John Dunbars before they joined a group-housing project in
Columbia, North Carolina, and built this new whitewashed bungalow
with the aid of credit union funds.
Types of Housing Co-ops 23
the business district. If the project is to support a market and service
station, it will require a minimum of two hundred families.
2. Incorporate under the co-operative law or other suitable
statutes. The services of an attorney are usually necessary in helping
to draw up the Articles of Incorporation and the by-laws. He will also
make arrangements for the permit to issue memberships and securities.
Proceeds of sale of shares should first be impounded and then released
upon the order of the corpbration commissioner. The attorney should
be retained in an advisory capacity after incorporation. Expenses at this
stage should be kept at a minimum, so the incorporating group will
not lose heavily if the project does not go ahead. All these preliminary
expenses should not exceed $200 to $300.
3. Elect a board of directors to meet frequently and carry on the
business of the corporation. It is highly desirable to have several per-
sons of co-operative, business and housing experience in the group.
4. Set a membership fee which will be rather a substantial amount
say about $200 so that members will be making a definite commit-
ment in joining. Provision for added investment necessary to purchase
and develop land at a later date should be included with the applica-
tion for membership. Membership and investment (in California)
must be limited to persons holding legal residence in the state, or a
permit must be secured from the Securities and Exchange Commission.
(Note: Some states have no such limitations. Others require that a
certain number or a certain percentage of the membership be legal
residents of the state.)
5. Hold some small meetings with friends of the original group to
present the general plan and get a reaction to it. Encourage questions.
This will build up a method of presentation for larger meetings.
6. Prepare some mimeographed or printed material to mail to those
who may be interested. A general statement of objectives should be
made. A request for further information, perhaps in the form of a
questionnaire, will reveal the interest of the prospective member. When
the questionnaire is returned, a mailing, setting out the project in detail
to date, should be made. From these returns, a mailing list should be
built up. A small mimeographed news letter should be sent at regular
intervals to all those on the mailing lists.
7. Hold public meetings with a well-qualified architect or engineer
as the main speaker. Some of the members should explain the project
and discuss the merits of co-operative housing. Build up the mailing
list by asking those present to leave names and addresses if they are
interested in further information.
24 Get Your Own Home the Co-operative Way
8. When the membership grows enough to indicate success of the
project, get a reliable real estate agent to locate suitable tracts of land.
Try to get an option on a desirable site and use it to make a more
positive appeal for membership. The owner should be told frankly that
a rather long period is required to build up membership to complete
purchase. The owner should be kept advised of progress.
9. The directors should appoint members to work on various phases
of development and planning. These phases may include: membership
and publicity, site development and utilities, architecture, land owner-
ship and restrictions, and finances.
10. Draw up an estimate of finances required to purchase the land
and develop it, with roads, and utilities (water, sewerage, electricity),
ready for building. Make the required investment an obligation of
11. When the membership reaches twenty or thirty, it will be
necessary to have about half-time office help to carry on the mailing-
mimeograph-bookkeeping work. Some paid help will have to be used
before this time. Volunteer work should be used to a large extent at
all times. Not only will it keep expenses down; it also educates mem-
bers and keeps up interest.
12. An architect and affiliated engineers should be engaged, at least
in an advisory capacity, to aid in site selection and help in different
phases of planning and committee work.
13. Purchase the land as soon as it is financially feasible. A mortgage
can be secured to aid member-financing in the purchase.
14. Prepare a printed and illustrated pamphlet for use in promoting
15. Architect and engineers should prepare a site plan outlining
the complete development contemplated. This should include roads,
commons, business district, recreation areas, as well as residence lots.
16. Allocate building sites to members. Prices should be established
by the paid staff of the architect.
17. Employ a permanent community manager. A thoroughly quali-
fied and trained man should be selected and paid an adequate salary.
18. The architect should prepare plans and specifications for the
houses and the community and business buildings.
19. Install roads, utilities, and sewer facilities all work prelimi-
nary to home construction.
20. Join your regional wholesale so you can secure wholesale prices
on the building materials and household appliances available through
National Co-operatives, Inc.
Types of Housing Co-ops 25
21. Let contracts for home construction in as large lots as feasible,
preferably one hundred or more.
Small housing co-operatives which do not contemplate more than
thirty or forty houses may modify any of the above steps to suit the
extent of their project and the size of their pocketbooks. Thus a
corps of architects and engineers would not be feasible on a small
project, but some architectural supervision is an absolute necessity.
The York Center Co-operative Community, Villa Park, Illinois, per-
fected a plan whereby members submitted their individual plans to an
architectural firm for advice and revision at the rate of $6 an hour.
Likewise, smaller co-operatives which cannot afford a community
manager may utilize the services of one of their members, preferably
one with building experience, during the construction period, paying
him so much an hour with a limit to the amount he may charge in any
one month. The veterans in Aquino Homes, San Jose, California,
operated very satisfactorily under such an arrangement. At the conclu-
sion of construction, instead of the "permanent community manager"
suggested for the big projects, the small co-op may turn over the opera-
tion of the community to its member directors.
The last step outlined by the Peninsula Housing Association Incor-
porated, calling for the construction of homes "in lots of one hundred
or more," for the purpose of economizing through mass production,
would not, of course, apply to the small co-op.
Savings should be made on the simultaneous construction of any
number of houses, however small. It has been the experience of several
housing co-operatives that builders are willing to make concessions and
reduce their profit percentage if awarded contracts for a minimum of
ten houses. Materials may frequently be bought more economically for
several residences than for one.
As a whole, Peninsula's outline may serve as a guide for any housing
co-operative, regardless of the size of its membership or the extent of
Financing Housing Co-ops
The chief difficulty which every co-operative housing association
must master is the problem of financing. With that enigma satisfac-
torily resolved, there is little excuse for the failure of any project. To
aid the new organization in determining what to do first and how
to do it, the following outline, incorporating the various steps in finan-
cing, is offered:
1. Collect membership fees to provide organizational funds.
2. Determine the amount of land desired and the price the asso-
ciation wants to pay. Plan the number of houses to be erected and find
out from members the price range they hope will cover the units they
3. Decide on the legal form to be used in the formation of the
4. Select the site and make arrangements for the purchase of an
5. Draw up a list of approximate costs for development of the
property, including roads, water and sewerage installations, and elec-
6. If plans include FHA-insured mortgages, consult informally
with the nearest Federal Housing Administration office regarding plans
for the project.
7. Arrange for members to make definite commitments for the
lease or purchase of a specific unit.
8. Determine the approximate equity required from members and
collect a substantial down-payment or share money from each member.
9. Purchase the land as soon as feasible. Some co-ops acquired their
sites before the mortgage commitment was made. Others waited until
10. Begin preliminary negotiations for a construction loan, if one
will be necessary, and for permanent financing.
Financing Housing Co-ops 27
11. Make decision on the type of permanent financing.
12. Plan the method of mortgage reduction and make provision for
13. Apply for loans.
14. Solicit bids from contractors and decide on the type of contract.
15. Prepare the final by-laws.
16. Decide on the exact rent or monthly payments.
17. Draw up leases or individual contracts.
18. Collect the balance of equity from members.
19. Close the construction contract.
20. Execute the construction loans.
21. Execute the permanent loans after construction is complete.
The following is a description of the financing steps just outlined.
The figure at the beginning of each step corresponds to the figure in
1. Organizational expenses. These vary, but should be kept to a
minimum. Initial expenses include the incorporation filing fees, a small
retainer fee for the architect, the cost of a land option, the office ex-
penses, the initial legal fees, the cost of conducting a membership
drive, and the incidental expenses, with some amount set aside for
necessary travel. Except in large projects, it is not recommended that
a salaried manager be hired until construction is complete.
In most states, the cost of filing the incorporation papers will not
exceed $50 exclusive of the attorney's fee for preparing the legal
forms. The cost of the option depends on the landowner. Some of the
housing co-operatives paid from $100 to $200. Some paid nothing at
all. The funds for office expenses consisting mainly of postage, tele-
phone, stationery, and descriptive pamphlets should not be large.
Small projects would do well to curb their desires for nice offices and
fancy brochures. Some of the most successful co-operatives described
in this book started their business life in a member's parlor or kitchen.
Pamphlets can be typewritten or mimeographed until the association
develops a bank account that warrants glossy print photographs and
engraved stationery. Preliminary expenses on projects of fifty to one
hundred units should not exceed $15 per projected unit and should
be covered by the initial membership fee.
Many of the housing associations require a down-payment of $200
to $500 immediately after the applicant is admitted to membership.
This is a good plan. It signifies the serious intent of the member to
carry through and provides the organization with working capital for
the down-payment on the land and the development of the property.
28 Get Your Own Home the Co-operative Way
2. Size of the land. Members must decide on the size of the property
they want, the approximate price they feel they can manage, the num-
ber of houses to be erected, their size, and their approximate cost.
While the latter can be only a guess in the beginning, it will serve to
indicate to the association whether the members want $10,000 or
$20,000 homes. An architect may be brought in to assist the site selec-
tion committee in the choice of the property and in the planning of
the houses. He should be in on any conferences with the FHA.
In the formative stage of the development, the architect will usually
agree to serve for the payment of a small retainer fee which covers
only his cost of rough sketches, tentative estimates, and advice. The
association generally agrees to pay the full fee when final drawings
and specifications are submitted.
3. Legal form of the association. Incorporation should precede the
purchase of the property, as it usually prevents individual liability for
the debts or obligations of the association. As a general rule, in an
incorporated association, each member is liable only to the extent of
the total amount of his share subscriptions, paid or unpaid. But where
there is no incorporation, he is liable for the full amount of the asso-
The articles of incorporation establish the legal status of the asso-
ciation. The law under which incorporation takes place will specify
the essential information which is required in these articles. Although
most of the co-operative statutes specify what the articles must contain,
their final drafting is a job for an attorney familiar with laws govern-
ing corporations. Because it is easier to amend by-laws than it is to
amend a charter (the articles of incorporation), co-operatives sometimes
specify in the charter certain provisions considered essential to sound
co-operative functioning, even though the law does not require it.
There are several different types of corporate forms which may be
used. The type depends on the laws of the state and the particular
needs of the project. A list of the applicable laws is included in Bul-
letin No. 858 of the U. S. Bureau of Labor Statistics, available from
the Superintendent of Documents, Washington, for twenty cents.
The ways of incorporating include: (1) incorporation under the co-
operative association, co-operative housing, or limited-dividend housing
laws; (2) incorporation under non-profit, benevolent, or fraternal cor-
poration laws of the state, if these are broad enough to cover the
project; or (3) incorporation under the business corporation laws. In
some states the association might incorporate under an urban re-
Financing Housing Co-ops 29
development law. In such case, there may be specific benefits in the
form of partial tax exemption or assistance in site acquisition.
In those states where there is no co-operative law or an inadequate
one, recourse may be had to incorporation under the District of Colum-
bia Co-operative law. Investigation should be made first, however, to
see what disadvantages might attend such a procedure. The York Cen-
ter Community Co-operative, Villa Park, Illinois, incorporated first
under the D. C. law. But the State of Illinois denied the Co-operative's
application for registration on the grounds that the Illinois Corporation
Act does not permit not-for-profit corporations to issue stock or pay
dividends, as is allowed under the D. C. law. So it 'was necessary to
incorporate all over again under the Illinois laws. The advice of an
attorney, in such instances, is a time saver and a money saver. The
attorney will also be helpful in ascertaining the corporation's tax lia-
bility under the various incorporation laws, and in defining the rights
of members to share in the assets of the corporation in the event of
dissolution. His services are also necessary to prepare and file the
If the corporation is to be capitalized, the best type of capitalization
is a single class of common stock. Some states do not permit not-for-
profit corporations to issue stock. This discussion pertains to those that
do. The single class of common stock is readily understood and ac-
cepted by individuals who have no special training in financing. Al-
though provision may be made for future payments of dividends, it is
more advantageous to rebate savings as patronage refunds in accordance
with co-operative principles.
The more complex forms of capitalization involve the use of de-
bentures, preferred stocks, and various classes of common stocks. A
debenture is a bond or note, forming one of an issue. As a debt which
the corporation is pledged to pay, it takes its place along with the
other claims on the corporation and has preference over common
stock. The interest payments on a debenture do not constitute a tax-
able distribution of the corporation, for such costs are regarded as a
business expense, just as if the money were borrowed from a bank and
interest paid on the debt.
Preferred stock represents an ownership interest entitled to its in-
terest return, and repayment prior to any settlement to common stock
holders. Interest paid on both preferred and common stock is taxable.
Sale of preferred stock has been used to finance co-operative corpora-
tions, the stock generally being issued to a limited number of members,
30 Get Your Own Home the Co-operative Way
friends, or associations willing to invest a portion of their capital in
the development. However, co-operative organizations whose members
expect to deduct from their taxable income the pro-rata interest and
real estate tax payments made by the association on their behalf, should
not utilize preferred stock.
Bonds are a part interest in the assets of the corporation. They may
be utilized to raise a portion of the funds for financing a project, but
this type of financing should not be necessary under the high-percent-
age single-mortgage loan. Bonds might be sold to raise the funds for
development of that portion of the property not used initially for home
sites. However, bonds bear interest, which adds to the cost of improve-
ments financed in this way. Compelling contractors or building mate-
rial firms to take bonds for a portion of their contract is likely to re-
sult in a higher cost than would have been the case if payment had
been in cash.
In the business operation of the co-operatives, legal instruments of
all sorts must be prepared and executed so that they are satisfactory
to the parties concerned. The variety and the number depend on the
type of operation and the methods of financing.
These legal instruments may include: the deed transferring title to
the house to the organization; the title to the land, if the land is pur-
chased; or a ground lease, if the land is rented. Except in those in-
stances where the organization does not engage a general contractor or
any subcontractors, a construction contract must be prepared and exe-
cuted in a form satisfactory to the mortgagee or lender, and to the
FHA, if the loan is to be eligible for insurance. The construction con-
tract should provide that the builder furnish a satisfactory completion
bond. Construction advances to be FHA-insured, require the builder
to -provide assurance of completion by a surety company bond in an
amount equal to at least 10 per cent of the construction cost, or by
an escrow deposit, in an approved financial institution, of cash or
securities in an amount equal to 10 per cent of the construction cost.
The mortgage deed and the mortgage note or bond are additional
instruments which generally must be prepared and executed. If the
loan is insured by FHA, standard forms prepared by FHA for each
state must be used. Some amendments of these forms are permissible.
The entrance of the legal instruments into the life of the housing
co-operator brings with it a host of confusing terms and phrases. The
words mortgagee and mortgagor are commonly twisted. The mortgagee
is the one to whom the property is mortgaged, i.e.: the bank or finan-
cial institution or private party. The mortgagor or mortgager is the one
Financing Housing Co-ops 31
who mortgages, that is, who grants property as security for a debt or
Then there are all sorts of property deeds, of which the warranty
is the most common. The quit claim is the poorest kind of deed and is
used usually to obtain a release of such claims as the party giving it
may hold. In effect, the seller says: "I sell to you as I possess. I don't
say the title is good or it isn't. I sell you what I think I have." In
this case, the buyer takes a chance. There may be no choice. It is quite
probable that the seller acquired the property through a quit claim
A warranty deed is a warrant or guaranty of good title. The seller
may enumerate certain items of which he is not sure. He might, for
instance, indicate he was uncertain of one boundary line of the prop-
erty. In such case the buyer is not responsible. Any claims made later
against him, may be referred to, and settled by, the seller. Regardless
of the deed, some lenders require a survey anyway, to make sure the
house is being built on the land designated in the deed, and that the
metes and bounds of the property are as delineated in the deed.
The term fee simple is an indication of the greatest possible owner-
ship. It is an English term originating in feudal law, and it is used to
describe an estate or property which may be deeded, transferred, mort-
gaged, or bequeathed.
4. Site of the development. The next step is to select the site and
make arrangements for the option to purchase. The cost of the option
and its duration depend entirely on the owner. The usual length of
time is sixty or ninety days, although it may be as little as thirty days
or as much as six months. Get a long option five or six months if
5. Costs of development. At this point, it is well to draw up a list
of approximate costs which will be entailed in developing the prop-
erty. These costs include: constructing the roads, installing sewerage
lines or septic tanks, installing water lines or drilling wells, and con-
tracting for electrical and telephone service. Most of the discussions
of housing projects in this book give figures on the costs of such
Once the costs of development are known, it is possible to figure
the price of the improved lot. This price should include at least the
cost of roads, water and sewerage lines. There is quite a variation in
the differential between the cost of the raw or unimproved lot and the
cost of the developed or improved lot. In Usonia Homes, Mount
Pleasant, New York, the cost of the raw lot was $260 and the cost
32 Get Your Own Home the Co-operative Way
of the developed lot, $1260; in the Home Owners Co-operative Inc.,
Syracuse, New York, the unimproved lot cost $200 and the improved
lot, $600; in Melbourne, Florida, the raw lot cost $75 and the devel-
oped lot, $250; in the York Center Community Co-operative, Villa
Park, Chicago, the unimproved lot cost $430 and the developed lot,
6. FHA^-msured mortgages. If application for FHA mortgage in-
surance is contemplated, it is important to discuss the project in the
very early stages of formation with the staff of the nearest FHA field
office. This is essential, so that the procedures, the eligibility require-
ments as to structural standards, the financing, the corporate organiza-
tion, and the administrative and management procedures can be dis-
cussed and utilized in the planning, organization, and development of
the project, before any unalterable decisions are made, or any sub-
stantial sums of money disbursed.
There are many ways of financing a housing co-operative. The choice
should be dictated by the institution or plan that offers the most satis-
factory terms. If the loan is to be insured by the Federal Housing
Administration, or guaranteed by the Veterans' Administration, the
maximum interest rate and the amount which can be borrowed are
prescribed by these agencies.
Conventional financing refers to operations conducted by private
lending institutions without Federal assistance, that is, without bene-
fit of FHA insurance or VA (Veterans' Administration) loan guaran-
tees. A conventional bank loan mortgage is frequently called a straight
bank mortgage. The principal disadvantage of the latter is the large
down-payment required. Thus, an individual may be able to secure an
FHA-insured mortgage for 80 or 90 per cent of the FHA valuation of
his property, but only a 60 or 65 per cent straight bank mortgage loan.
The FHA lends no money. It insures mortgage loans on residential
properties (made by private lending institutions), and it insures
financial institutions against loss on loans for remodeling, repairing, and
improving various types of property. Titles I and II, formulated by the
Federal Housing Administration shortly after it was established under
the National Housing Act in 1934, and Title VI (a war emergency
measure) pertain to housing. Very few of the projects discussed in
this book were insured under Title I. Pioneer Homes in Watsonville,
California, is an exception. Title II may be summarized as follows:
TITLE n, SECTION 203. Mortgages on one- to four-family houses,
new or existing, are insured under this section. Valuations are based on
Financing Housing Co-ops 33
long-term economic soundness. They may be defined as "stable valua-
tions" based on the term of the mortgage.
In the case of new construction approved by the FHA prior to the
start of construction, the maximum mortgage loan under Section 203 is
80 per cent of the FHA-valuation, but cannot exceed $16,000. The
maximum term of the mortgage is twenty-five years, and the maximum
interest rate is 4^ per cent plus J of 1 per cent mortgage loan insurance.
There are exceptions in the case of new, single-family homes for
owner-occupancy, approved by the FHA prior to the start of construc-
a. A loan of $6300 or less, may be up to 90 per cent of the FHA-
b. A loan up to $9500 may be 90 per cent of the FHA-valuation on
the first $7000 and 80 per cent of the balance, up to $11,000, (the
appraised mortgage value).
c. A loan of $6000 or less may be up to 95 per cent of the FHA-
valuation, and for a term of thirty years.
The table given on the pages following this discussion explains the
manner in which Title II, Section 203 operates with respect to new,
single-family homes for owner-occupancy, with appraised mortgage
values of $7000 to $15,000.
In the case of existing construction mortgaged under this title and
section, the maximum loan is 80 per cent of the FHA-valuation, the
maximum term of the mortgage is twenty years, and the maximum in-
terest rate is 4^ per cent plus ^ of 1 per cent mortgage loan insurance.
TITLE H, SECTION 207, Multi-family rental housing. Amounts: the
FHA-insured mortgage loan for private housing including co-opera-
tives cannot exceed $5,000,000 or more than 90 per cent of the es-
timated value of the property when the proposed improvements are
completed. The term of the mortgage loan for non-profit and co-opera-
tive ownership corporations is forty years. The maximum interest rate
is 4 per cent plus \ of 1 per cent mortgage loan insurance. The maxi-
mum mortgage for non-profit corporations has recently been increased
to $8100 per family unit or $1800 per room.
TITLE vi, SECTION 603. Mortgages on new, one- to four- family
houses for both rental and sale were insured under this section. It
expired April 30, 1948.
TITLE vi, SECTION 608. Mortgages on multi-family rental projects of
eight or more units were insured under this section. It expired March
31, 1949, but it may be renewed.
34 Get Your Own Home the Co-operative Way
Under the GI Bill of Rights the Servicemen's Readjustment Act
the Veterans' Administration may guarantee or insure a portion of the
mortgage loan made by a financial institution to a veteran. The loan
may be as much as 100 per cent of the property value established by
The provisions of Section 501 (of the GI Bill of Rights), as they
apply to one-, two-, three- and four-family structures owned by individ-
ual veterans, permit the guarantee of a maximum of 50 per cent of the
loan, but not to exceed $4000 per dwelling unit per veteran. In Decem-
ber, 1945, the act was amended to allow the mortgage lender to adopt
an insurance plan instead of a guarantee of part of the loan. The
maximum interest rate permissible on such loans is 4 per cent, and
the maximum term of the loan is twenty-five years. The purchase price
or cost of the property cannot exceed the VA-appraisal value.
In April, 1947, two plans were announced to provide basic formulas
for the financing of large, multi-unit housing projects for veterans,
under the GI Bill.
Under one of these plans, each participating veteran acquires title
to his proportionate share of the property. The veteran receives exclu-
sive right to occupancy of the designated apartment and the right in
common to the use of project facilities, and he enters into an agree-
ment for the management and the maintenance of the property.
The second plan provides for veterans to form a corporation which
holds title to the property and assumes responsibility for the mortgage.
The corporation, in turn, sells stock-membership certificates to the
participating veterans, entitling each veteran to a perpetual or long-
term lease on a designated apartment and to use of the community
facilities. The corporation provides management and maintenance and
assesses the tenants proportionately.
The lender financing the project receives a Government guarantee
from the Veterans' Administration covering 50 per cent of the mort-
gage liability of each participating veteran, up to the legal maximum of
a $4000 guaranty for each veteran occupant, as provided by the GI
Combined FHA- and VA-financing involves combining a first loan
insured by the FHA under Section 203 of Title II of the National
Housing Act, with a second loan guaranteed by the VA under Section
505 of the Servicemen's Readjustment Act. Under this combined plan,
it is possible for veterans to borrow as much as 100 per cent of the
VA-appraisal value of the house.
If the first loan is insured by FHA under Section 203, the maxi-
Financing Housing Co-ops 35
mum mortgage may not exceed 90 per cent of the first $7000 (ap-
praised valuation), and 80 per cent of the amount in excess of $7000,
on homes up to $11,000 (appraised valuation); and straight 80 per
cent on homes in excess of $11,000, but not exceeding $20,000
which would mean a maximum mortgage of $16,000. The second loan
(VA-guaranteed) may not exceed 20 per cent of the VA-appraisal or
cost, nor in any case may it be more than $4000. The two loans com-
bined may not exceed the purchase price of the property or the VA-
It is well to remember that when 90 per cent mortgage loans are
obtained under Section 203, all plans and specifications must be sub-
mitted to the FHA prior to beginning construction.
Veterans in several of the housing co-operatives discussed in this
book were able to obtain 100 per cent financing not always by the
same means. Examples are: the American Legion project in Charlotte,
North Carolina; the Larchmont Veterans' Building Corporation in
Larchmont, New York; and the Homeless Veterans, Inc., in Salt Lake
While it seems like a wonderful idea to be able to acquire a home
without making much of a down-payment, the fact remains that the
smaller the down-payment or equity, the higher the monthly charge.
The larger the down-payment on the house, the better, not- only be-
cause it reduces the monthly charge, but because it solidifies the mem-
ber's interest in his house and in the development, and provides the
corporation with working capital when it needs it most. However, it
is always desirable that a member mortgagor have a dependable income,
and that he have additional liquid reserves.
Some cash working capital is required no matter under which plan
the development operates. Generally, this amounts to about 3 per cent
of the estimated cost and is used to pay taxes, insurance premiums,
certain organizational expenses during the construction period, and to
cover pre-occupancy expenses. If the project is to be built under an
FHA-insured mortgage, funds will be required to cover taxes, hazard
or liability insurance, mortgage insurance premiums, and loan closing
Provided the land does not absorb all the first down-payments,
the remainder of the down-payments or equity may be used as work-
ing capital. If land costs absorb all the equity, additional cash will have
to be collected from members to provide the working capital. Many
housing co-ops start out with too little cash on hand and then find
they are unable to meet current bills because money has a habit of go-
36 Get Your Own Home the Co-operative Way
ing out faster than it comes in. The co-op will get off to a good start
with a good-sized equity down-payment.
7. Commitments for the houses. Members of the organization should
commit themselves to lease or purchase a unit of a particular size or
type at an early stage in the planning of the project. The commitment
must be tentative, for the cost of producing the units and the monthly
charges will not be known at the time the commitment is made. The
organization should take precautions to ascertain that the member will
be able to meet his monthly charges out of his current and anticipated
income without difficulty and, of course, should not encourage a mem-
ber to assume more than he can carry.
Most of the housing associations set up membership selection com-
mittees or "screening committees" during the early weeks of a mem-
bership drive. The sole purpose of such groups is to find out, by means
of a questionnaire, if the applicant will be able to carry the financial
obligations he seeks to assume.
8. Equity requirements. It should be possible to determine the ap-
proximate equity required from members and to collect a substantial
down-payment or share money from each individual. In the case of
the corporation, "equity" refers to the difference between the amount
of the mortgage and the total cost of the completed project. This dif-
ference is made up of the capital stock outstanding, cash, land-value,
and any paid-in surplus. In the case of the individual member, the
equity is represented by his down-payment. In either instance, the
equity represents the amount contributed by the members. In most co-
operatives, it is understood that the individual's equity increases each
time he makes a monthly payment and that his mortgage indebtedness
is thereby reduced.
On a twenty-year loan, under the level-payment plan, the indi-
vidual's equity is increased by half of the original loan by the end of
thirteen years, minus the amount which must be charged for
The cash for the equity financing is raised through the purchase of
shares by members of the association. A subscription agreement is
signed by each member, binding him to the purchase of a stated
amount of the shares or debentures of the corporation. A sample share
subscription agreement may be found in the appendix of Bulletin No.
858, published by the U. S. Department of Labor and obtainable from
the Superintendent of Documents in Washington, D. C, or from any
of the regional co-operative wholesales, for twenty cents. Some of the
corporations term the shares "members' interest." In any case, the
Financing Housing Co-ops 37
shares, the equity, or the member-interest constitute the same thing
How big should the down-payment be ? In the case of a large rental
type project such as an apartment house, the member's equity must
equal the equity required by the corporation for the apartment the in-
dividual is to lease. The amount of that equity will be determined by
the size of the mortgage. The larger the mortgage, the smaller the
In the case of dwellings individually owned, the down-payment is
usually 10 per cent of the total cost of the house and the improved
lot, that is, if a 90 per cent mortgage is planned. If, on the other hand,
an 80 per cent mortgage is secured, then the down-payment must be
at least 20 per cent of the total cost. If a 60 or 65 per cent straight
bank mortgage is obtained, then the down-payment must be 35 or 40
per cent of the total cost.
In any case, the down-payment should be sufficient to cover the cost
of the lot and its improvements, including the installation of roads,
sewerage, and water.
As a general rule, the required equity or down-payment should be
paid in full before construction starts. Members unable to pay the full
amount of the equity at first, sometimes are allowed to pay on install-
ments. If the co-operative is formed long enough ahead of time, the
equity can be built up month by month so that members will have suffi-
cient equity to make the necessary cash contribution when construction
starts. In such manner did each member of Usonia Homes, Inc.,
White Plains, New York, build up a $2000 equity over a period of
9. Buying the land. Purchase the property as soon as feasible. Be-
fore financing can be arranged and construction begun, the association
must demonstrate outright ownership of the land, or must produce a
contract for the use of the land (a "ground lease"). If the land is
leased, the terms of the lease must extend beyond the terms of the
mortgage, to protect the lender, and should exceed the estimated physi-
cal life of the improvements (buildings) on the land, to protect the
association. Taking title to the land is the most common method of
acquiring control. Remember that the title must be searched to see if
there are any mortgages, liens, or assessments against the property.
10. Construction loans. The construction loan, sometimes called a
building loan, is of temporary duration. It is for the purpose of financ-
ing the physical construction of the properties and generally terminates
after the completion of the structures. Not all mortgage lenders engage
38 Get Your Own Home the Co-operative Way
in this type of financing. Some are prohibited by law and others are
not equipped to assume the responsibility which construction lending
On the other hand, some financial institutions making permanent
FHA-insured mortgage loans also make construction loans, and often
the same mortgage instrument may serve as both construction and
permanent loan, with a minimum of legal and other expenses. Such
a financing plan could apply to the type of joint project in which con-
struction and financing proceed on an individual structure basis with
the association assuming only general planning and management func-
The Reconstruction Finance Corporation will participate with banks
in loans for financing builders. The amount of working capital which
the builder must provide and the terms of the loan will be established
by the RFC upon the merits of each individual case. Non-profit cor-
porations are not eligible, however, for RFC loans, although a private
builder undertaking a project for a non-profit corporation may be
eligible for such loans. RFC loans are of a short-term character, suit-
able for construction loans but not for permanent financing. In some
instances, the RFC Mortgage Company, a subsidiary of the RFC, may
make a permanent loan at commercial terms, provided: private financ-
ing is not available, the property is sound, and the Association has
sufficient equity to assure a solvent operation.
When mortgage-lending institutions will not or cannot make con-
struction loans, it is necessary to arrange separate financing for the
construction of the buildings. Almost any financial institution that
makes FHA-insured loans (and most of the savings-and-loan associa-
tions) will also make building loans. The members of the Larchmont
Veterans' Building Corporation in Larchmont, New York, constructed
their homes on individual building loans which were assigned td the
In the event that construction loans may not be available, the mem-
bers might raise a revolving fund by the purchase of additional stock
or by depositing funds with their association to build the various dwell-
ings. Then, as each building was placed under the first-mortgage financ-
ing, the association's revolving fund would be repaid.
11. Permanent financing. When the time arrives to decide the per-
manent type of financing best suited for the project, it is advisable to
have the full membership, or at least the board of directors (rather
than just the finance committee), make the final decision. Members
may wish to review the various financing plans available; to discuss
Financing Housing Co-ops 39
the advantages and disadvantages of a blanket mortgage covering the
vholc number of dwellings, with title held by the co-operative; to con-
sider the advisability of inclusion of a release clause which would pro-
vide for the releasing of individual dwelling units from the blanket
mortgage as they are paid for; and to consider the arguments in favor
of homes individually financed and mortgaged.
The finance committee should submit to members: recommendations
on the types of financing, the types of mortgages, and the particular
institutions offering the best financial terms. It might be pointed out,
also, that if an individual wishes to accelerate payment of his mortgage
faster than the rate decided on for the project, he is better off with-
drawing and re-mortgaging his own property.
12. Mortgage reduction. The method of mortgage reduction
(amortization) and the provision for reserves are two important financ-
ing steps which every housing co-operative must consider. There are
two main plans under which mortgage loans may be repaid. The first,
called "the declining-total-payment method" (known also as "the
fixed-payment-to-principal-plus-interest method"), enables rapid liqui-
dation of indebtedness during the earlier years of the mortgage. Under
this plan, the monthly payment on the principal remains constant
throughout the life of the mortgage, while the interest charge declines,
since it is computed on the outstanding balance of the debt. Thus, the
total monthly payment of principal-plus-interest declines as time goes
on, permitting a progressive reduction in the member's monthly pay-
ments. As a precaution, however, the monthly payments may be main-
tained at the original levels, using excess to prepay the mortgage or
build up reserves.
The second plan is known as the "level-payment" or "level-annuity"
plan, under which the total monthly payment remains constant
throughout the life of the mortgage. This method reduces the mortgage
principal little in the early years, as a large part of the payments in
those years goes for interest.
The declining-total-payment method has one advantage in that the
total interest payment made in repaying the loan is somewhat reduced.
The level-payment plan, on the -other hand, has two main advantages :
(1) the individual knows exactly what his monthly payment will be
over the period of the loan, with the exception of fluctuations in taxes;
(2) the plan provides the smallest monthly payment for the greatest
amount of mortgage. Under section 203 of Title II, the FHA requires
the use of the level-payment plan. The VA leaves the method of pay-
ment to the lender.
40 Get Your Own Home the Co-operative Way
One more point to consider is the term of the mortgage. In housing
co-operatives where there are a good number of middle-aged members,
it is wise to keep the period of amortization as short as possible, so that
the mortgage principal is paid before the principal earner in the family
When the question of building up reserves is discussed, the mem-
bers might consider a plan whereby the stock subscription required of
each member is increased from 5 to 10 per cent above that actually
needed for the financing. The additional paid-in shares can be used to
prepay the mortgage and to provide an emergency financial cushion.
Several housing associations have built up separate small emergency
or contingency funds which provide "future security" for their mem-
bers. Under the plan, each member pays in $2 a month to a trust fund
against which he may draw in times of sickness or unemployment, to
meet his monthly payments.
13. Applying for loans. Before applying for an FHA-insured loan,
the Corporation should be certain it can meet the primary require-
ments which are : ( 1 ) evidence that the applicant will be able to secure
clear title to the land prior to the closing of the permanent mortgage;
(2) demonstration of its ability to raise the required working capital;
and (3) commitments from a sufficient number of members to enable
the project to operate without default on its financial obligations.
14. Contracting bids. Solicitation of bids from contractors and a
decision on the type of contract to be used, is the next step. There are
three major types of contracts: (1) "cost-plus-a-percentage-fee," (2)
"lump sum," and (3) "cost-plus-a-fixed-fee" with a stipulated maxi-
/The first type is not desirable for either co-operative organizations
or for individuals with limited resources. In this type of contract, there
is no "ceiling" on the total cost. Moreover, the contractor has no in-
centive to keep costs down, since his fee (usually 10 per cent of cost)
increases as costs increase.
The second type, known as the "lump-sum" contract, would be
more desirable, since the co-operative would know in advance exactly
how much the whole project or the individual house would cost. It
has one drawback. Any economies in construction go to the contractor
and not to the co-operative. Careful periodic inspections would thus be
necessary to make sure that the costs were not reduced at the expense
of the quality. During the past few years of uncertain materials costs
and rising labor costs, builders have been reluctant to negotiate fixed-
Financing Housing Co-ops 41
The third type, the "cost-plus-fixed-fee," with a guarantee upset or
maximum price, offers the co-operative several advantages. In this type
of agreement, the contractor agrees to build for the actual cost of the
materials and labor plus a stipulated fee. He further agrees to charge
the association no more than the amount designated in the contract re-
gardless of the cost actually incurred.
Under such an arrangement, the association knows the maximum
construction cost in advance. Any savings in construction may be re-
turned to the co-operative or may be divided between the contractor
and the co-operative, depending on what arrangement the latter is
able to make.
The "cost-plus-fixed-fee" type of contract meets with FHA ap-
proval, since the FHA requires that the construction be performed
under a contract with a maximum price, if construction advances are
to be insured. In large rental projects, in some instances, construction
advances can be insured, step by step.
In selecting the contractor, it is important that one be chosen whose
financial standing is sufficiently good to enable him to obtain adequate
credit from suppliers of building materials, and to gain acceptance by
a surety company for the writing of performance or completion bonds,
when such are required.
In a performance bond, the surety company agrees to indemnify the
owner against loss occasioned by, the failure of the builder to perform
and complete the building contract according to the terms and speci-
fications, and free and clear of any mechanic's lien. A mechanic's lien
is a recorded claim made by a workman or a supplier against a prop-
erty or building. In the case of a house under construction or a
house constructed, it is a bill the builder hasn't paid. States differ in
their interpretation of the laws governing mechanic's liens.
In a completion bond, usually required on all large projects, the
surety company agrees to indemnify the lender or lessor (one who
leases) against loss occasioned by the failure of the builder to com-
plete the construction contract (and free and clear of any mechanic's
liens) within a specified time for completion, and/or the owner's
failure or inability to deliver title to the property free and clear of
any and all encumbrances, except for the lender's lien (the mortgage) .
In case a completion or performance bond is not executed, the con-
tractor should have sufficient liquid assets to set up a trust account,
satisfactory to the mortgagee who makes the loan, to insure completion.
In the case of the Veterans' Building Co-operative of New Brunswick,
New Jersey, which went into receivership in the spring of 1948, neither
42 Get Your Own Home the Co-operative Way
a performance bond nor a completion bond was executed. When
prices ran too high and completions were too slow, no one was
15. Preparing the final by-laws. The by-laws supplement the arti-
cles of incorporation, otherwise known as the charter. They should
specify in detail the regulations and procedures under which the or-
ganization is to operate. They should state how the board of directors
is to be elected usually by the members and should stipulate the
directors' duties; state how the officers are to be selected, and their
duties; detail the types of committees; and the voting rights of the
members. In addition, the by-laws should contain terms for redeem-
ing the equity of a withdrawing member, and the conditions govern-
ing the business functions of the corporation.
A model set of by-laws for a co-operative housing association is
contained in the appendix of Bulletin No. 858 of the U. S. Bureau of
Labor Statistics. There is nothing, of course, to prevent an association
from drawing up a preliminary set of by-laws before this stage, if
16. Monthly payments. It should at this time be possible for the
Corporation to decide the exact amounts of monthly rentals or monthly
charges, now that costs have been computed and the amount and terms
of the mortgage determined. Development costs, construction costs,
and mortgage costs, must all be known before trying to figure, with any
degree of accuracy, the real estate taxes, corporate and other taxes,
allowances for vacancy and rental losses in a rental project, and the
reserves for replacements and repairs. If the project consists of single-
family dwellings, individually owned, the debt service, taxes, and in-
surance charges are billed directly to the owner. The only charges to
be pro-rated would be those paid by the organization.
Monthly charges in a project where houses or apartments are co-
operatively held will include fixed charges and operating expenses. The
fixed charges cover: interest on share capital, if any is to be paid;
interest on any bonds, preferred stock, or debentures issued by the as-
sociation; interest on mortgage indebtedness, amortization payment at
least as large as the depreciation on the property (otherwise the shares
lose their value) ; taxes; mortgage insurance, if FHA-insured; and fire
and liability insurance.
Operating expenses vary according to the type of dwelling. They
may include: wages of janitors, helpers, office and administration ex-
pense; cost of fuel; cost of electricity and power; cost of water; re-
pairs; renovating, painting and so forth; elevator expense; cost of
Financing Housing Co-ops 43
garden; insect-extermination expense; legal and accounting fees; mis-
cellaneous operating expenses; and cost of equipment and supplies.
Monthly charges in a project where the houses are individually
owned will be figured in the same manner as if the individual lived
on a side lot by himself and not in a co-operative community. The main
difference is this: since the houses built co-operatively usually cost less,
the monthly charges should be correspondingly less. The cost of operat-
ing the community and the cost of improving and developing the
common lands may be raised: by a separate monthly charge; by a
monthly payment included in the regular monthly charge; by special
assessments levied when the need arises; or by the use of surplus or
savings accruing from the operation of community commercial facilities.
How large a financial "load" should one assume? How much should
one pay a month? These are questions which the incoming member
must decide and which the Corporation must help to answer. It gen-
erally has been conceded that a family should not buy a home costing
more than two and a half times its annual assured income. On this
basis, the family with a $5000 income should not pay more than
$12,500. More recently, housing economists have stated that the
figure should be kept to twice the family's income, which would mean
that the house should cost not more than $10,000.
These same economists state that the monthly rental, or the monthly
charge for home ownership, should total not more than one-fifth of
the monthly "take-home" pay. This would mean that a family with an
income of $70 a week ("take-home") should pay not more than $60 a
month for its shelter.
To give prospective home owners an idea of the monthly carrying
charges on FHA-insured homes in the $7000 to $15,000 price range,
the tables on the following pages are presented.
More favorable mortgage arrangements for co-operatives would
have been possible under the original provisions of the Wagner-
Ellender-Taft Bill. One section of the bill, proposed as an amend-
ment to the National Housing Act, provided for specific Federal as-
sistance to nonprofit mutual ownership housing corporations, raising
the insurable percentage of the appraised valuation of the housing
unit, and lengthening the term of the mortgage.
A tax exemption of $1000 on the assessed value of the property is
allowed veterans in many states. Thus, if a veteran owns a house as-
sessed at $9,000, he pays taxes on only $8000. If his wife also is
a veteran, the couple may be entitled to $2000 exemption. Disabled
veterans, in many states, are allowed still greater exemptions up to
44 Get Your Own Home the Co-operative Way
$3000 in Connecticut, depending on the extent or degree of dis-
ability. Since some states allow nothing, it would be well for the
veteran to check the law in his own state before figuring out his
The town property taxes and the fire insurance premiums listed in
the accompanying tables are "estimated," since the tax rate will differ
from one town to another and from one state to another. Likewise,
the fire insurance premiums will differ, depending on the locality and
on the type of house insured.
Note: New provisions of Title II, Section 203 stipulate that:
1. A loan of $6300, or less, on single-family for owner-occupancy,
may be up to 90 per cent of FH A- valuation.
2. A loan up to $9500, on single-family for owner-occupancy, may
be 90 per cent of FHA-valuation on the first $7000, and 80 per
cent of the balance up to $11,000.
3. A loan of $6000, or less, on single-family for owner-occupancy,
may be up to 95 per cent of FHA-valuation and for a term of
The above table and the three provisions listed herein pertain
to new construction approved by the FHA prior to the start of
17. Leases and purchase contracts. The lease or purchase contract
outlines the principal conditions of membership, of occupancy, and of
withdrawal. Bulletin No. 858, published by the U. S. Bureau of Labor
Statistics, contains a model lease for a co-operative housing project. A
purchase lease might include: (1) the time for fulfillment of the con-
tract and the terms of payment; (2) the conditions under which the
occupant may terminate his membership or transfer his property
interest; (3) the provisions whereby the organization may repurchase
the property interest of a member; (4) the services provided by the
organization and the price of certain repairs and services.
18. Equity. The required equity should be paid in full before
construction. The co-operative should avoid being placed in the position
of having insufficient funds to meet its necessary expenses. If a member
is not able to fulfill his equity obligation in time, the association may
wish to arrange an extension of credit through a bank or credit union,
on the member's personal note, without obligating the association in
19. Construction contracts. The construction contract may now be
closed. This contract must be satisfactory to the mortgagee or lender,
and to the FHA, if the loan is to be eligible for insurance. Plans and
Financing Housing Co-ops
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46 Get Your Own Home the Co-operative Way
specifications for the improvements are a necessary part of the con-
tract. Most mortgage lenders require that provision be made in the
contract for inspection of the construction by their own representatives,
especially if a large loan is involved.
20. Construction loans. If provision has been made for a construction
loan, the advice of a competent attorney, experienced in the con-
struction and real estate fields, should be obtained prior to the execu-
tion of any legal instruments.
21. The permanent loans should be executed after construction is
The foregoing outline is offered to help you over the rough spots,
and not as a guidebook to successful financing. Individual associations
may wish to change the order of the steps as they are given here,
to elaborate on some, and to include others. It has been the object
of this chapter to present housing co-operatives with as much helpful
information as possible and to present it simply. The data has been
assembled from various sources, including the National Housing
Agency, the Federal Housing Administration, the Veterans' Administra-
tion, and the Bureau of Labor Statistics of the U. S. Department of
The following are some of the pamphlets which housing co-opera-
tives will find helpful when confronted with the problem of financing a
development: "Mutual Housing," published by the National Housing
Agency, Washington, D. C.; "Organization and Management of Co-
operative and Mutual Housing Associations," Bulletin No. 858, U. S.
Department of Labor; and "Non-Profit Housing Projects in the United
States," Bulletin No. 896, published by the U. S. Department of Labor.
The first costs fifteen cents; the second, twenty cents; and the third,
twenty-five cents. All three are obtainable from the Superintendent
of Documents in Washington, D. C.
Bryn Gweled, Pennsylvania
A few miles from the somber city of Philadelphia with its cramped
streets, raucous markets, and milling people is a charming bit of
Welsh countryside with smooth meadowlands and grassy slopes, and
etched against the Lincoln green of wooded hills are the mono-pitch
roofed homes of Bryn Gweled, a co-operative community of white
With but little difficulty, I could see again the slopes of Plynlimon
Mount in North Wales, the stark cattle, black faced, outlined on the
steeps, the Welsh mountain sheep white puff balls against the grass-
But I was in Pennsylvania, not Britain, in Bucks County, not Mont-
gomery, and the thick fields and oak woods before me were Bryn
Gweled and not Llanidloes, and the woman beside me was a minister's
wife bent on digging out the dockweed and the dandelions that were
chocking her petunias.
"We're plain people," said Mrs. Dewees Singley, suspending her
weeding operations for the moment to explain. "Don't ask too much
of life. Sort of feel that a lot of trouble in this world is caused by
greed. We just want decent homes, decent communities in which to
bring up our children. Not all the frills, not all the latest fashions, but
good things and we're willing to put forth a little effort of our own
to get them."
Plain people they may well be, with no hankering for frills, but
they have succeeded nevertheless, in unifying in their homes the most
modern of architectural ingenuities, the most progressive ideas in
design. There are sun decks, solar playrooms, glass block kitchens,
radiant heating under the floor, panel heating in the baseboards,
studio living rooms, picture windows, steel sash, copper hearths, rain-
tray cooled roofs, sun control overhangs, sliding closet doors, cement
slab floors, concrete joists, dual purpose rooms, two level plans, clere-
48 Get Your Own Home the Co-operative Way
story ventilation (tiny windows above eye level), not to mention
root cellars, television, radios, and underground electric and telephone
Not all the modernizations are incorporated in one house, to be
sure, but each has something to offer, and all were built at costs well
below current market prices, because the members contributed thou-
sands of hours of their own labor in the construction of their homes.
A good many of the homesteaders are Quakers, but membership
is open, and there are no bars to race, creed, or color. Houses are in-
dividually owned, but the land on which they stand is held by the
Co-operative, Bryn Gweled Homesteads. Individuals receive a lease at
the time of membership.
Settlers include a doctor, two ministers, three artists, an architect, a
buyer, two student counselors, two teachers, an accountant, a manu-
facturer of sweeping compounds, three social workers, three educators,
two draftsmen, a tool designer, a physicist, three engineers, and a
Sitting on the Singley porch overlooking 240 acres of beautiful
hill and dale, and listening to the stories of these pioneers who lived
in cellars while they built their castles, the name Bryn Gweled, which
is Welsh for "Hill of Vision," took on double meaning.
"This was a real co-operative from the start," said Mrs. Sarah
Ramberg, wife of the physicist. "Most of us commenced with little.
We built the cellars first then roofed in, living underground you might
say, until the upstairs was finished. We kept one cellar ready for any
new family. That way we saved paying double rent."
We walked down the graveled path to the home of a "cellar dweller"
absent at the moment. The excavation, one end of which was at ground
level with full windows, was the present home of a father, mother,
and three children. Curtains walled off the bedrooms. Plumbing, a
partial bathroom, heater, kitchen stove, and sink made the place livable.
"Not exactly royal," said Mrs. Ramberg, "but it could be lots worse.
This is the way many of us started. Being right on the site made it
easier to utilize all spare hours in working on the house."
The Ramberg house is a cinder block structure on two levels to con-
form to the site slope. Flat topped, gray as slate, it seems to grow out
of the hillside. Integration is further accentuated by the terrace doors
on the side which occur at points where floor level and grade meet.
The block walls, unfinished except for waterproofing, are capped
by a built-up roof with wide overhangs. Blocks were also used to con-
Bryn Gweled, Pennsylvania 49
struct the chimney and fireplace. Some of the interior walls are block
while others are paneled. In the cement slab which forms the floor
are the radiant heating coils.
The model kitchen is designed with rows of glass blocks above
the counters, thus lighting the working spaces and eliminating the con-
fusion of grabbing a beer opener when an egg beater is desired.
One side of the living room adjacent to the row of picture windows
across the front of the house is plastered. A large porch is placed for
view. A snug home any way you look at it.
The whole community is built on a hillside with every house except
one boasting a flat, shed, or inverted roof, often on two levels. Land
has been cleared, plots graded, a swimming pool built for the children.
It looks far different from the tangled bramble and poison ivy den
which greeted the newcomers in 1939.
In the fall of that year, three Philadelphia families, the Newtons,
the Wilsons, and the Pottses, drawn together through the common
desire to move out of the city, talked over the possibility of forming
a community of their own in the country. Seeking ideas, they went
to see Ralph Borsodi, economist and exponent of a decentralized com-
munity organization movement and originator of the School of Living,
Suffern, N. Y.
After visiting Borsodi's "productive homesteads," the Philadelphians
were sure such a community was just what they wanted. They were
not sure, however, that they wanted to go "all out Borsodi," for they
veered away from the idea that the community should be self -sufficient
and discourage outside work.
Each individual preferred to retain his present employment, relegat-
ing farming in the new community to second place rather than first.
In such manner did the plan develop. -
Meanwhile the three original families joined forces with a group
led by Herbert Bergstrom, head of a south Philadelphia settlement
house, and set out on a hunt for land.
There was much for sale but prices were high, so the families
settled for 240 acres in Southampton township, a piece of property
notable chiefly for its sour meadows, brambled slopes, rotting out-
buildings, and tangled woods. Only the most imaginative could visualize
the beautiful country which had intrigued the Welsh of Bucks County,
a century before.
But it had possibilities and a breath taking view from any vantage
point. It was just twenty miles from Philadelphia, and not much more
50 Get Your Own Home the Co-operative Way
than a mile from three shopping towns: Feasterville, Churchville, and
Southampton. Moreover it cost only $18,000, which, at $75 an acre,
was cheap enough.
No one had the $18,000 necessary, so at the first meeting, December
11, 1939, each family was asked how much it could advance toward
the total. Within fifteen minutes the whole amount was pledged.
And how was this money to be repaid members? It was decided to
issue certificates of indebtedness to cover the cost of the land, the
building of the roads, and the installation of the utilities. These certif-
icates, to be held by community members and interested outsiders,
would bear four percent interest and would be redeemable upon six
During the next several months, weekly meetings of the group were
held to work out details and purposes of organization and member-
ship. On May 20, 1940 Bryn Gweled was incorporated as a non-
profit association under the laws of the State of Pennsylvania, without
issue of stock.
The first annual meeting was held June 9, at which time the initial
twenty-six families entered the second phase of their financial pro-
gram and prepared a plan which would carry them through the
development period until such time as the community reached its
operating maximum of seventy families.
At this meeting and at each annual meeting thereafter, the total
budget for the next twelve months was computed and divided by this
operating maximum of seventy, in order to arrive at a figure which
would be the amount of a monthly assessment against each family.
These assessments, which range from $9 to $11, depending on land
holding, include interest on community indebtedness, amortization of
the capital, and the county taxes. They vary each year with the budget.
Now it was quite obvious to the Corporation that until the level of
seventy members was reached, the total assessments would not cover
disbursements. To bridge the gap, an additional "special assessment"
was made on every member. For his special assessment, each member
received a non-interest-bearing certificate of indebtedness. It was
planned that these certificates would be refunded when the initial
development stage was over. In this way, the Corporation could meet
its operating expenses with an incomplete membership and avoid
In July, 1940, purchase of the land was completed and the title
was transferred to Bryn Gweled Homesteads, Inc.
In the weeks that followed, evenings were devoted to laying out lot
Bryn Gweled, Pennsylvania 51
lines, planning the community land, estimating road costs and im-
provements, and figuring on water and sewerage installations.
In the winter the members tackled the problem of bringing electricity
and telephones into the property. They didn't want poles strung across
their green hills, but the cost of underground conduits was so high
it seemed out of reach. Then Gordon Fredendall, one of the members
who was an electronic engineer, suggested that if the members did part
of the manual labor, they could possibly bring the figure down to a
A plan was worked out with the Philadelphia Electric Company and
the Bell Telephone Co. whereby members would dig and back-fill the
ditches. In the final reckoning, Bryn Gweled spent only $125 on the
installation of underground electric and telephone cables. At least
$2,000 additional expense was saved because the homesteaders hired
a mechanical ditch digger to excavate the trenches. They also installed
the conduits and back-filled the ditches. No mean gesture from a
group of gentle-handed individuals many of whom had never seen a
pickax except in a store window !
Other development costs were kept at a minimum through the efforts
of members who turned night into day and week ends into shifts,
clearing the brush, battling the poison ivy, banking the slopes to check
erosion, digging manholes, planting trees, and rough-grading the roads.
In May, 1941, lots were chosen, first excavations made, wells drilled,
septic tanks installed, basements poured and picnics engineered by
the women "to make work taste better." In October, 1941, the first
family moved into a cellar.
The organization of Bryn Gweled Homesteads includes a board of
directors, officers, and various standing committees, including those
concerned with publicity, community activities, site planning, and
The membership committee invites applicants to visit Bryn Gweled,
talk with the members, and attend meetings. The community picks its
members with care. There aren't many "ifs and buts," yet Bryn
Gweled wants to make sure that families will be congenial and work
together. While members need not have a common background, it is
deemed essential that they have some similarity of interests, if only in
the joy of growing big onions.
Racial, political, and religious tolerance are firmly integrated in
Bryn Gweled's community character. Applicants are asked to sign a
questionnaire, one portion of which reads :
"There may be German, English, Italian, Chinese, Russian, Negro,
52 Get Your Own Home the Co-operative Way
Jewish, Japanese and other members living on the Homesteads. Does
this meet with your approval for such things as eating with them,
swimming with them and working with them co-operatively?" If the
prospective member feels he is unable to sign such a statement, he
is given his hat and speeded on his way.
Applicants are admitted only after an affirmative four-fifths vote
of the entire community. Incoming residents pay a membership fee
of $50 which is not returnable.
The first pleasant task is the selection of the two-acre plot on which
the new home will be erected. Title to the land remains with the cor-
poration, the individual being given a ninety-year lease instead of a
deed. Houses are individually built and financed, and each family
has title to its home subject to certain restrictions in regard to sub-
letting, sale, and inheritance.
No house may be sublet for more than a year without community
permission, nor may the house be sold to, or inherited by, non-
members. Individuals wishing to sell must offer the Corporation first
rights to purchase at a fair price or to accept a new owner. Children
cannot inherit a house but may be voted into membership.
The 240 acres of land offer a variety of home sites. The property
is T-shaped, tied together by a macadam road based by the home-
steaders with the help of a rented bulldozer. Surfacing was done by a
contractor at a cost of $5000. Difficulties in construction may be
gauged by the fact that the acreage includes three hills, two streams,
wooded patches, steep slopes, meadows and marshes.
The gentle slopes were plotted into eighty lots of two acres each
for individual building sites. The site planning committee assisted
members in placing and planning their homes. While no particular
type of architecture was dictated, most of the members leaned toward
a version of the typical Pennsylvania Dutch farmhouse.
But the three architects who joined the community as members
Paul Beidler, Robert Bishop, and Walter Robinson had other ideas,
and by lecturing and showing pictures of famous modern homes, they
finally convinced members that they should be as progressive in their
houses as they were in their social ideals. With these sentiments, a
fourth architect, Cornelius Bogert, concurred.
All but one member was convinced. He built a two-story Colonial
house high on the hill. It looks a little out of place, especially as
most of the others are low, flat-roofed structures with a unity based on
their fitness to the land. Most of the houses utilize large amounts of
Bryn Gweled, Pennsylvania 53
glass, brown stained wood, and cinder blocks; yet they diverge as widely
in character as do the personalities of their owners.
Inevitably there were troubles when the homesteaders sought to
foist their new ideas on the local builders. Some of the homesteaders,
acting as their own contractors, solved the problem by subletting to
several contractors. Thus Gordon Fredendall, an engineer, hired a
separate contractor so that he would not have to change from panel
to hot-air heating, which was the only system his builder "understood."
The large amount of labor incorporated in the houses by the
owners including masonry work, carpentry, plumbing, electrical work,
roofing, painting, and landscaping brought down the costs materially.
Actual comparisons therefore are difficult. Houses ranged from a figure
of $7,000 to $13,750.
The Lampe's house cost $12,000. Chester Lampe is a high-school
science teacher, and his wife, Mary, is a dental technician. They saved
an additional $2,000 above the $12,000 through their own work, which
included general contracting, some minor excavating, building retaining
walls, stone steps, pointing bricks and stone work, painting, laying
concrete floors in the basement and garage, constructing book shelves
and storm doors, laying a 120-foot under-drain for the basement,
constructing a leaching pool, and landscaping the property.
The Lampe house is built on a hill with a gradual slope to the
north, selected with a view to incorporating existing old stone walls
into the plan. Included are two bedrooms, living-dining room, study,
kitchen, bath and garage.
Solar south walls are open to sun and view. The large living room
is partially divided by a partition which projects around the study
area. Windows in the living room, kitchen, and one bedroom open
onto a walled sunken garden in the rear.
The house is built of stone, the portions above the windows being
framed and finished in horizontal boarding. The roof has an inverted
pitch (in reverse position) with wide overhangs. On the interior,
all masonry portions have been left exposed while framed portions
are plastered. In the basement, Lampe has a workshop complete to
electric kiln and pottery wheel.
Al Schroeder, an electronic engineer, incorporated a water-cooled
roof in his home. A shallow pool covers the one story house so that
there is a four inch sheet of water to repel summer heat. In winter the
water is drained and the black composition surface absorbs heat from
the sun's rays. This house is built of stone; windows are steel sash;
54 Get Your Own Home the Co-operative Way
and the interior includes a large work room which houses a television
Joe Diano, a stained glass artist, laid his own floors, put on redwood
siding, installed rock wool insulation, and added paneled walls and
ceilings. In this instance the contractor took the house only as far
as the sheathing stage.
The Singley house, which cost $7,000, is the smallest of all, yet
includes a living room, kitchen, laundry, heater room, four bedrooms,
and bath. It is on two levels with living and master bedroom facing
south and opening onto a deck which runs the full length of the
house. The. construction is cinder block with the upper section finished
in horizontal wood siding.
The Morris home, on a more grandiose scale, cost $13,750 and in-
cludes a large living-dining room, L-shaped, an enclosed terrace
porch, a streamlined kitchen, sliding closet doors, sliding storm and
screen sash, clerestories for cross-ventilation and added light, wood-
paneled rooms, four bedrooms, study, storage, and a garage "large
enough for square dances."
A beamed studio room, copper hearth and heatilator, and recessed
lighting which Elliston Morris himself installed, fascinate the prospec-
Homesteader Morris came down off his sundeck to show us around
and point out the concrete retaining wall he'd built, the irrigating
system he'd installed, and the new overhang to the south. He surveyed
"It's solid, I can tell you that," he thought out loud. "It won't
fall down or crack up. No frills, of course. We're plain people."
' Ray Newton, social worker with the American Friends Service Com-
mittee, collaborated with his wife in putting the finishing touches on
their house. He is very proud of his second-story sundeck with fire-
place, and Babette thinks just as much of her modern kitchen with
separate lights over each working area.
Each homesteader put in a certain amount of labor on his own
house, some more than others. Thomas Michener, draftsman, was
his own contractor and saved half the cost of the house by taking time
off between jobs and building the unit with the aid of one carpenter.
Neighbors helped each other in the construction of the homes, and
they worked together in the development of the common property.
Groups shared ownership of the orchard sprayer, the power cultivator,
the pressure cookers. There was co-operative buying in the purchase
of vegetable seeds, berry bushes, and fruit trees. In the early years of
Moving from dilapidated huts
fronting on sewers (above) to five-
room houses and fruit farms (be-
low) changed the lives of fifty
mining families in Granger, Iowa.
Their new homes cost them $17.50
8 1 1
Bryn dueled, Pennsylvania 55
the Co-operative, the homesteaders organized a community pigpen. It
had netted each member half a pig by the time rationing ceased and
negated the need for such a service.
Once, one of the men brought back three hundred pounds of fish
from the Philadelphia wharves. It was divided and placed in the com-
munity's frozen food lockers in a near-by town.
The women in the community co-operate in shopping expeditions,
in caring for each other's children, in community sewing groups, and
sometimes in window-washing bees.
Nor is the social program disregarded. There is group singing at
the Fredendalls' (they have a pipe organ) ; picnicking in the woods;
folk dancing at the Morrises', and television entertainment at the
Schroeders'. The Corporation is now developing a community center
building which will be used for meetings and social activities and
will probably incorporate a nursery, guest rooms, and a dance hall.
The Homesteaders are well satisfied with their life and their com-
munity. But will their children be of the same mind when they reach
adolescence ? Only time can tell.
The development, admirably suited for adults who enjoy the semi-
isolation which their country community offers, may not appeal to teen-
agers for that very reason. Twenty miles from the city, it is also an
automobile ride to the nearest markets, post office, school, and churches,
and five miles from the nearest movie in Hatboro.
As for the disappointments, the homesteaders feel that they have
not saved as much money as they might, had they been able to buy
all their materials co-operatively. Since each built at a different time
and on an entirely different plan, such savings were not to be
As a co-operative experiment, . Bryn Gweled is a success. Certainly
the members achieved much together which they could not have
achieved alone, and they were able to build far better houses at much
less cost under the co-operative self-help plan than any one of them
might have managed by himself.
The project is growing, slowly but with certainty. Thirty families
form a solid base for Bryn Gweled's future security. Stone by stone,
brick by brick, these families are building their homes and their com-
Mutual Housing Association, California
Perched on the cactus-ridden ridges of Kenter Canyon in Los
Angeles, is the only luxury housing co-operative in the United States,
the only Shangri-La, the only mountain-top community built like a
modern version of a medieval fairy tale.
Five hundred families, drawn together through common desire to
live in a community of their own planning, formed the Mutual
Housing Association Inc., with a membership comprised of doctors,
lawyers, stock brokers, college professors, manufacturers, office man-
agers, engineers and accountants.
Houses of modern California architecture, flat-roofed, glass-sided,
with walled gardens, ranging in cost from $8500 to $25,000, are
being built along the summits of the steep slopes. The development
is called Crestwood Hills, a name which hardly does justice to the
wild beauty of the country. Of the 800 acres of hill and dale, only
250 acres have been subdivided. The remaining 550 are reserved for
park and picnic grounds, bridle and bicycle paths, and a swimming
pool in the depth of the valley.
The houses are to be individually owned, but the community in-
terests including the nursery school, parks, playgrounds, tennis courts,
bowling green, movie theater, pool, gas station, and shopping center
are to be run on a co-operative basis. While the community could
not set itself up as inter-racial because of the restrictive covenants
which bind all property in the exclusive Brentwood area, the mem-
bership is screened to exclude any who might have racial prejudices.
The community is a dream of co-operative planning. With no
financial worries the property was paid for in cash the members
have been able to give full play to their ingenuity and imagination in
the planning of homes and community lands. If a member wants a
house with four terraces and three levels on the edge of a craggy
Mutual Housing Association, California 57
knoll, he can have it. There are hundreds of variations from which
To reach the site, I traveled north of Hollywood, along Sepulveda
Boulevard into Tigertail Drive, residence of many celebrities. Passing
the green bungalow of screen star Lana Turner on the left, I turned
into a broad sandy road with the canyon country before me and the
Santa Monica mountains beyond.
The view from the ridgetops straight down to the sea was breath-
taking even though drifts of mist obscured the outline of the shore.
It did not obscure the beauty of the immediate landscape: the thin
sanded crags splotched with prickly cacti, the uneven roll from
summit to base of the chaparral, that medley of shrubs so closely
woven as to resemble a needlepoint pattern, with its gray coastal brush,
rusty mock heather and lavender sage, dappled by the bright green
of the tree tobacco, the white fleece of the coyote bush, the deep
red of the sumac's flat-packed fruit, and the dead yellow of the storax
sheaths, fair stripped by browsing goats. The mistletoe hangs high
in this part of the country, clinging to the empty branches of the
cottonwoods, and the poinsettias, common as clover, rear their woody
branches beneath the sad sweep of the eucalyptus trees.
Four musicians hankering for an acre and a pool where they might
live in peace and privacy, initiated the project. They found their
haven in the canyon country between Bel Air and Brentwood, and
told all their friends. That was in May, 1946. By August, everybody
and his aunt had visited the spot and announced intentions of settling
there. The group of prospective homesteaders increased so rapidly it
was decided to form a non-profit corporation along co-operative prin-
ciples and to buy sufficient acreage to build a planned community
for 500 families.
Property values in this section of the country are high, but by
purchasing a large tract of land, the corporation was able to acquire
800 acres for $300,000, which brought the cost down to $375 an
acre. Improvements, including the grading, roads, landscaping, water,
sewerage and electricity, were estimated at $700,000, making a total of
$1,000,000 for the developed land.
Each member, on acceptance, was required to make a $2000 deposit.
This initial payment by 500 members gave the Corporation a bank
balance of $1,000,000. Cash was paid for the land. Later, the original
owner accepted a mortgage for $100,000 on the 550 acres which are
to be held as common land. It is planned to pay off this mortgage
from income derived from the community center. While development
58 Get Your Own Home the Co-operative Way
costs will run 25 per cent greater than anticipated, there will be no
additional assessment on membership. The increased expense is to be
absorbed by pricing the lots at $2200 to $2600.
When a member joins, he must pay $25 for a membership certificate
and is thereby entitled to one vote in the Corporation. Applicants must
fill out an exhaustive form, eight pages in length, listing their assets,
liabilities, personal references, credit references, insurance holdings,
annual earnings, annual expenses, type of business or position, and
estimated "net worth."
To help members decide on the size of their house and its ap-
proximate cost, the Corporation suggests that they figure $8.50 for
every square foot of living space. In a minimum house of 1000 square
feet, the cost would be $8500, exclusive of lot. To this amount must
be added $500 for landscaping.
Careful planning with minute attention to detail has marked the
project from its inception. It has paid dividends. Each step has been
analyzed, dissected and scrutinized, before any final decisions have been
made. Consequently, there have been few setbacks.
The first big project was the road. Ten tractors carved out 7 miles
of it through the hills. The contractor was paid by the day for his
tractors and operators. No engineer was used.
Installation of city sewerage and water lines was next. Crestwood
property presents difficulties since lines must be carried to a height of
1600 feet, almost twice the present height of city utility elevations.
Design of the entire project is in the hands of four men well known
in the field of modern architecture: Whitney R. Smith and A. Quincy
Jones, architects; Edgardo Contini, engineer; and Garrett Eckbo, land-
scape architect, who is assisting in the site planning. Aiding Eckbo are
Robert Royston and Edward Williams.
The landscape architects are under agreement to design the con-
struction of the parks and playgrounds, game courts, swimming pools,
bowling greens, bridle paths, bicycle paths, picnic grounds, walks,
ramps, terraces and trails. They must plan for fences, arbors, outdoor
grills, and seats; and they must design the plant nursery and supervise
the planting in the wild life area, the planting and raising of fruit
and shade trees, and the breeding of small animals and fish. In
addition they must prepare a master plan covering the location and
types of trees to be planted on the residential plots. For these plots
they are required to design 20 different and original basic landscaping
plans to fit the basic house designs pf the architects. The landscape
architects, who work in partnership, will be paid $100 for each plan.
Mutual Housing Association, California 59
The landscape architects must also prepare 500 individual variations
of the basic landscaping plans, including 100 special variations of those
home sites of unusual shape, size or grade. For each of the 400
individual variations, the firm receives $15; for each of the special
variations, $50. Furthermore, the architects will be paid $200 for
each acre of landscaping designed for the community-owned land,
the $200 per acre to be paid on a maximum of 20 acres. And lastly the
landscape architects will receive a percentage of the market value of
all landscaping work done. When the agreement was signed, the land-
scaping firm was paid $2000. The balance is being paid the first of each
Lots average a 90-foot frontage and are about 100 feet in depth.
As all plots are along the ridge tops, none lacks a view.
Houses vary in size and design, the smallest offering 1000 square
feet of living space and the largest, twice that. California's modern
style of architecture is admirably suited to the difficult contours of
Crestwood Hills. While some of the 20 basic plans feature a compact
layout all on one floor, many of the homes are on two or even three
Exteriors will be of plywood, fir, or gum, waterproof resin-bonded,
with stucco where desired. There will be no plaster; all interior
partitions are to be of plywood. Living quarters will face away from
the road. Large glass areas are designed to take advantage of the view
and harmonize outdoor with indoor living. There will be no cellars;
the houses are to be erected with concrete slabs on grade. Large fire-
places, storage walls, big rooms opening one into the other, and roof
overhangs to take advantage of sun in the winter and shade in the
summer are "musts" in every plan. Patios, porticos, carports or garages,
and fences, walls or hedges for privacy, will reflect individual mem-
bers' needs and desires.
So that members may examine the various types of houses before
they make their choice, the architects are building 4 model homes
at the north end of the city on contours similar to those of Kenter
Houses will be financed individually. Veterans who are able to
obtain full financing are entitled to a return of the first payment of
$2000 made to the Corporation.
A member who finds it necessary to withdraw from the Association
will receive either the book value of his proportionate interest in the
net worth of the Association as determined by the semi-annual audit,
or the total sums paid by him to the Association whichever is less. If
60 Get Your Own Home the Co-operative Way
he wants to sell, he must give the Association 60 days' notice and the
option to buy or designate a buyer. Value of the house and lot will be
determined by a board of three licensed appraisers.
In one corner of the property is a 15-acre nursery boasting $50,000
worth of orchids. The Mutual Housing Association hopes the city
of Los Angeles will purchase it at some later date and there erect a
school large enough to take care of the children of Crestwood Hills.
For the time being, they will be transported into town by bus.
Commercial interests have been quick to see the possibilities of the
community. The Board of Directors has already been approached by
the owners of a riding school who would like to start a co-operative
project on the property, and by the operators of a motel who think
the new residents will have plenty of guests and should have a place
to board them.
Business of the Mutual Housing Association is conducted by a
general manager, full time, and several salaried clerks. There is an 11-
member Board of Directors, each of whom receives $250 a year. Be-
sides its administrative functions, its supervision of the advisory com-
mittees on budget and finance, architectural landscaping, and public
relations, the Board fosters the activities of the Commercial Services
Committee and the Member-Relations Committee.
The Commercial Services Committee governs the installation of
restaurant and catering services, wearing apparel shops, the drug store,
auto service, house 'furnishings, appliance and hardware shops, laundry,
dry cleaning, and beauty shops and the credit union.
The Member-Relations Committee has charge of organized recreation,
community work projects, the hobby and work shops (which are to
include photography, ceramics, and woodwork), the amusement areas
(including motion pictures, drama, music and arts), the social activities
(parties and dances), the library and historical records, and the educa-
tional activities (which will include a pre-school for children and an
adult education class in co-operatives) .
Funds for running the community activities, for transportation, and
for the maintenance and improvement of the property, will be raised
either by a series of assessments on the membership, or by means of a
revolving fund such as is utilized by the California Co-operative Fruit
Growers' Association, wherein each member pays in $10 a month for
10 years and then withdraws like amounts for the next 10 years.
The Corporation believes it has saved members 50 per cent in the
cost of the development of the lots by purchasing the raw land and
installing utilities for the whole community in one operation. And
Mutual Housing Association, California 61
there are other savings. Professional fees were reduced by planning all
the homes at once and dividing the cost among members. Mass build-
ing and the repetition of certain designs should also result in consider-
able savings. Furniture and appliances will be purchased by the Associa-
tion in wholesale lots or at reduced costs through the Associated Co-
operatives, Inc. in Oakland, California.
Unique in the annals of co-operative housing is a savings plan orig-
inated in the Mutual Housing Association. It involves a 10 per cent
"kick-back" of salaries into the co-op coffers. The manager, the con-
tractor and the engineer have all agreed to the plan.
Amalgamated Housing, New York
Pioneering in large-scale housing developments, the Amalgamated
Clothing Workers of America has sponsored the erection of 1,753
apartments in Manhattan and the Bronx, New York City. The first,
built in 1926, remains, after twenty-three years, America's model in
low-cost co-operative housing. The last, constructed in 1948, follows all
the Rochdale principles which contributed to the success of its sister
The desire of a small group of workers in the ACWs credit union
to provide decent homes and freedom from fear of eviction for
members of the needle trade who were living in lower East Side tene-
ments, plus a housing shortage with its accompanying high rents, were
factors responsible for the development of the first undertaking. Seven
projects were launched: three by the Amalgamated Housing Corpora-
tion in the Bronx, two by the A. H. Consumers Society, Inc. in the
Bronx, one by the Amalgamated Dwellings, Inc. in Manhattan, and
one by the East River Co-operative Apartments, Inc., now known as
the Hillman Housing Corporation, in Manhattan.
In no case were union monies used for construction. However, to
help the first projects in their initial financing, temporary loans were
made by the Amalgamated Clothing Workers' Credit Union, the Amal-
gamated Bank of New York, the Amalgamated Bank of Chicago, and
the Amalgamated Center. All of the projects were developed by the
same group and under the same leadership Abraham E. Kazan. Mr.
Kazan, who is president of the Amalgamated Housing Corporation,
vice-president of the Hillman Housing Corporation, and president of
Amalgamated Dwellings, Inc., organized all the projects and is still
The eight buildings erected by the Amalgamated Housing Corpora-
tion in the Bronx and the two built by the A. H. Consumers Society,
Amalgamated Housing, New York 63
Inc. in the Bronx, stand together on a triangular tract of land overlook-
ing Van Cortlandt Park.
The first six buildings erected by the Amalgamated Housing Corpora-
tion in the Bronx in 1926 and 1927 are Holland brick in mixed colors,
walk-up type, five stories high. Deed restrictions prohibited the erection
of an apartment house on the site. In the compromise effected to make
the building of the apartment possible, the AHC agreed to eliminate the
The two buildings erected by the Amalgamated Housing Corporation
in the Bronx in 1929 and 1931 were also of Holland brick, six and
seven stories high with elevator service. They are known as Buildings
No. 7 and 9 because Building No. 8 was not erected until 1948. The
two built by the Consumers Society (now transferred to the Amal-
gamated Housing Corporation) on the same site, known as Buildings
No. 10 and 11, were of domestic red brick, two and three stories
high. The total of ten buildings forms a rectangle covering half the
ground, with gardens occupying the other half.
The Amalgamated Housing Corporation was the first limited-divi-
dend company to operate under the jurisdiction of the New York
State Housing Law. The advantages of complying with the terms of this
law were several. First, there was a twenty-year exemption from local
taxes on "improvements," which, of course, include any buildings. Since
the cost of the "improvements" usually figures out to about six times
the cost of the land, it is easy to see the savings that should result.
In this instance, the Amalgamated Housing saved nearly $30,000 a year
or $2.11 per room per month. In return for the exemption, the
Corporation agreed to limit rents to $11 a room. Other .advantages of
operating under the State Housing Law included exemption from
franchise, income, mortgage, recording, and other state taxes.
The first six buildings constructed by the Amalgamated Housing
Corporation cost a total of $1,970,000, of which $315,000 was ex-
pended for land and $1,654,359 for the erection of the buildings.
Construction cost averaged $1,437 per room or thirty-nine cents per
cubic fpot, including the basement space. There are 319 apartments
totaling 1,256 rooms. A twenty-year mortgage for $1,200,000 was
obtained from the Metropolitan Life Insurance Company with interest
at 5 per cent, instead of the then usual 5J per cent, which saved the
Corporation $97,865. Payments by the tenant members at the rate of
$500 per room and the sale of 6 per cent preferred stock to tenants,
union members, and friendly organizations, provided funds to meet
the remainder of the construction cost.
64 Get Your Own Home the Co-operative Way
The seventh house, built by Amalgamated Housing in the Bronx in
1929, cost $1,003,021. Building No. 9, erected by Amalgamated Hous-
ing in the Bronx in 1931, cost $570,000, as detailed in the table on
the pages following.
The first apartment building erected by the A. H. Consumers Society,
Inc. in the Bronx in 1941, and known as Building No. 10 in the series
erected on the same site, cost $180,447. The second building, called
No. 11, built in 1947, cost $271,651, as detailed in the table on the
pages following. This building was limited to veterans of World War
II. Nearly 70 per cent of the original tenant co-operators in all the
Amalgamated buildings still live in the project.
In 1948, all the Bronx projects were re-financed, including the first
six buildings, and Buildings, 7, 9, 10 and 11, with a mortgage loan for
$6,500,000 obtained from the Bowery Savings Bank at 3J per cent
interest. The loan covered Building No. 8, under construction, and
other buildings to be erected. Note that Buildings 10 and 11, built by
the Consumers' Society, are included. These buildings have now been
transferred to the Amalgamated Housing Corporation.
Membership in the Amalgamated housing developments was not
limited to any one trade, nor to unionists. However, preference has
been given to wage earners, members of labor unions, and to those
who could be included in the "moderate" income group. In the Bronx
Buildings, applicants were required to raise half of the investment,
while the rest could be met with a ten-year loan from the Amal-
gamated Bank in New York City. The Jewish Daily Forward, a labor
newspaper in New York City, deposited $150,000 in the bank to cover
Members wishing to move from the property experience no difficulty
in redeeming their shares. Reserves for the redemption of those shares
have been built up through the years by contributions by the residents
of half their patronage refunds from the Amalgamated Housing
Corporation. In the spring of 1948, these reserves totaled $236,616.87.
Patronage refunds apportioned among the members as a result of the
economical operation of the project during the year 1945-1946 totaled
Community projects in the Bronx apartment development include:
a day camp employing seventy counselors, a pre-school nursery, folk
dancing, book reviews, classes in current events, children's dancing and
nutrition, and Sunday morning forums on topics of general interest.
Co-operative business activities other than housing include: distri-
bution of milk and electricity, running a laundry service, operating
Amalgamated Housing, New York 65
a food store in the development, making loans to new applicants una-
able to raise the required investments, and purchasing the stock of
outgoing members in cases where there are no new applicants to take
the places of those who want to leave.
As far as the co-operative operation of the development is concerned,
all the Amalgamated projects are run in the same manner. Every co-
operator has one vote. The co-operators elect a board of directors, the
house committee, and special executive committees such as the Camp
Committee which operates the summer day camp for children.
In Manhattan, the Amalgamated Dwellings, Inc. erected an apart-
ment house in 1930 covering a square block bounded by Grand, Sheriff,
Broome, and Columbia streets. The structure, six stories in height,
contains 236 apartments with a total of 930 rooms. There are eight
automatic elevators. The high cost of the land cut down the size of
the landscaped court which occupies only 40 per cent of the grounds,
the buildings occupying 60 per cent. Rental charges for the apartments
run about $12.50 per room.
Financial assistance for the Amalgamated Dwellings in Manhattan
was undertaken by Aaron Rabinowitz, member of the State Board of
Housing at the time, and Herbert Lehman, then lieutenant governor.
The two sponsors advanced $800,000 during the construction of the
project, although the actual work was carried on by the union group.
Cost of the downtown building was $1,064,713, which averaged
$1,272 per room and about thirty-eight cents a cubic foot. The price
of the land $445,287 was high, bringing the total cost of the de-
velopment to $1,520,000. It was financed by a mortgage loan of $960,-
000 from the Bowery Savings Bank for ten years at 3^ per cent in-
terest, plus $60,100 from the sale of debenture bonds. The remainder
consisted of members' down payments. The bank mortgage was re-
newed at the end of ten years. Amortization is at the rate of 2j per
Through the generosity of the sponsors, who deposited $350,000
in the Amalgamated Bank of New York, applicants were able to ob-
tain loans up to 70 per cent of their required equity investments.
The Amalgamated Dwellings Co-operative Services, Inc., whose
stockholders are identical with the stockholders in the Amalgamated
Dwellings, Inc., carries on the business activities of the project, includ-
ing the distribution of milk and electricity.
The East River project, now known as the Sidney Hillman project,
was undertaken under an urban redevelopment law, the purpose of
which is to facilitate slum clearance and reclaim blighted areas. The
66 Get Your Own Home the Co-operative Way
Hillman Housing Corporation sponsored the erection of three twelve-
story buildings containing eight hundred apartments and a total of
3,047 rooms. The project, commenced in 1947, covers eight blocks
abutting the Amalgamated Dwellings' project on Grand Street in Man-
hattan. On the northwest corner is a playground and on the northeast
corner, Public School No. 110. Buildings occupy 25 per cent of the
land area, the rest being devoted to gardens and courts.
A mortgage was obtained from the Mutual Life Insurance Company
for twenty-five years at 3J per cent interest. The insurance company
limited itself to a loan not to exceed $5,600,000, or 80 per cent of the
estimated cost of $7,000,000. A year after the first estimate was made,
it was believed the cost would run close to $9,000,000. Sponsors
raised 20 per cent of the initial estimated costs through the sale of
stock or debenture bonds to applicants for apartments. The prospective
member subscribed for stock or debentures in the corporation at the
rate of $600 per room. Of this amount, $100 was paid at the time of
application and the rest by the time construction was complete. The
average room rent was set at $15 a room. No rent refunds or rebates
were expected during the first five years. All savings were to be applied
toward the reduction of the mortgage indebtedness.
The cost per room was estimated at $3,000, more than twice the
cost per room in the first six buildings erected by the Amalgamated
Housing Corporation in 1926. The land cost $1,800,000 and the build-
ings were expected to cost $7,200,000, bringing the total to the $9,-
000,000 figure previously given. It was estimated that the cost of
the Hillman project would run as high as eighty-eight cents a cubic
foot. The first project erected by Amalgamated cost thirty-nine cents
a cubic foot.
The City agreed to accept the previous assessed value of the land as
the tax base. The value of the improvements that is, the buildings
and any improvements to the land was to be exempt from taxes for
twenty-five years, after which the Co-operative will pay taxes on the
full assessed value. The return on the investment is limited to 6 per
cent of the actual cost of the project.
In this development, the level annuity plan of amortization is en-
forced, under which the total monthly payments remain the same, but
with an increasing amount of each payment being applied to the prin-
cipal to reduce the mortgage liability. As the mortgage is reduced, the
equity of "paid-in" monies of each member is correspondingly in-
The phenomenal success of the co-operative building projects under-
Amalgamated Housing, New York 67
taken by the Amalgamated Clothing Workers of America gives cre-
dence to the hope of the sponsors that it will be possible to extend
the Sidney Hillman project as far as the Franklin D. Roosevelt Drive
on the East River.
Abraham Kazan, who has been the prime mover in all of the hous-
ing projects, is a firm believer in building the co-operative way, point-
ing out that it builds homes for members at cost, engages the interest
of members by imposing responsibility, establishes a close bond among
the occupants, tends to make a tenant a self-respecting citizen, devel-
ops ideas of self-government, and, finally, requires no cash subsidy
from state or nation.
There are other co-operative apartment house projects in New York
City worthy of mention. One of them is Farband House at 2925
Mathews Avenue in the Bronx. The building, which contains 130
apartments, was erected in 1928 at a cost of $682,000. Minimum
down payment per room was $400.
In Chicago, the Frederick Douglas Co-operative Homes Association
owns a thirty-six apartment house building erected at a cost of $300,-
000. The four-room apartments cost $7,260 to $8,000 with an aver-
age monthly charge of $55, and the five-room apartments cost $8,500
to $9,500 with an average monthly charge of $65. The thirty-six mem-
bers own the Association; the Association owns the Building; and the
Co-operative is operated by a board of directors elected by the mem-
bers. Each applicant, upon joining the Association, received a member-
ship certificate and a "perpetual ownership" contract for his apartment.
The hundreds of other co-operative apartment house projects found
in the large cities of the United States range from the true Rochdale
type to commercial "co-ops" which in extreme cases represent a method
of selling high-priced housing for the greatest possible profit.
There are undoubtedly many apartments organized under limited
profit circumstances that make co-operative ownership a better buy
than the commercial "co-op." In some of these, members have little
part in the management of the housing. In others, they may have pur-
chased title to an apartment, rather than a share in the co-operative.
The following are some of the co-operative ownership projects in
New York City some of them completed, some under construction,
a few still in the planning stage. They include both true co-ops and
They are: Great Oaks in Riverdale, Bronx, with six hundred apart-
ments ranging in cost from $13,500 to |24,000; Riverdale Towers,
also in Riverdale in the Bronx, with 106 apartments ranging, in
Get Your Own Home the Co-operative Way
Amalgamated Housing Corp.
1926-1927 Six Bldgs.
1929 Bldg. No. 7
under New York
Van Cortlandt Park
and Jerpme Park
1931-1932 Bldg. No. 9
1948 Bldg. No. 8 under
Formerly Consumers' So-
ciety Inc. now trans-
ferred to Amalgamated
1941 Bldg. No. 10
Now under State
Van Cortlandt Park
and Jerome Park
1946-1947 Bldg. No. 11
Amalgamated Dwellings Inc.
ized under New
York State Hous-
Broome and Co-
Hillman Housing Corp.
Formerly East River Co-
operative Apts., Inc.
Broome and Co-
Amalgamated Housing, New York
Cost of Project
1926-1927 six bldgs.
All five stories high.
Walk up. Made of
Buildings cover one
half of property
for $500 in stock for
each room, meeting
half the investment
in cash and the rest
by loans through the
of New York
$1,970,000 total cost
1,654,359 for six bldgs.
315,000 for land
1,437 per room
39* cu. ft.
The first six buildings
financed by $1,200,000
mortgage for twenty
years from Metropoli-
tan Life Insurance Co.
at 5 per cent interest.
Remainder of cost was
financed from tenant
payments and sale of 6
per cent preferred stock
Building No. 9 was
financed by a mortgage
loan for $380,000 from
the Metropolitan Life
Insurance Co. at 5 per
cent interest. Rest from
In 1948, all the Bronx
projects were re-
Bldgs. No. 1 to 6.
Bldgs. No. 7, 9, 10 and
11 (the latter two for-
merly belonged to Con-
sumers' Society), Bldg.
No. 8 now under con-
struction and other
buildings planned. The
new mortgage for
$6,500,000 was ob-
tained from the Bowery
Savings Bank at 3i per
$1,003,021 Bldg. No. 7
1,322 per room
41 T W cu. ft.
1929 Bldg. No. 7 and
1931 Bldg. No. 9 are
seven and six stories
high of Holland
Buildings cover one
half of property
$ 570,000 Bldg. No. 9
Two and three stories.
Domestic red brick
Buildings cover one
half of property
Investment of $500 in
each room required
for Bldg. No. 10 and
$600 for Bldg. No.
11. Corporation ac-
cepted part in notes
payable over period
of years and part in
$ 165,513 Bldg. No. 10
14,934 for land
257,651 Bldg. No. 11
14,000 for land
3,000 per room
One building, six and
seven stories high
Building covers 60
per cent of property
Investment of $500 in
each room required.
Member able to bor-
row up to 70 per cent
$1,520,000 total cost
1,064,713 for bldg.
445,287 for land
1,272 per room
38* cu. ft.
$960,000 mortgage ob-
tained from Bowery
Savings Bank for ten
years at 3i per cent
interest. $60,100 ob-
tained from sale of
debenture bonds and
rest of cost came from
members' down pay-
ments. Mortgage was
renewed for ten years.
Amortization now 2i
Three buildings of
red brick. Twelve
stories high. One
Buildings cover 23
per cent of property.
Applicants required to
put up $600 in cash
for each room de-
$9,000,000 total cost
7,200,000 for bldgs.
1,800,000 for land
3,000 per room
88* cu. ft.
$5,600.000 mortgage ob-
tained from Mutual
Life Insurance Co. for
twenty five years at 3i
per cent interest. Amor-
tization at rate of 2}
per cent. Twenty per
cent of estimated cost
raised by sale of stock or
debenture bonds to ap-
plicants for housing.
70 Get Your Own Home the Co-operative Way
monthly charges from $84 to $129 per apartment; Bell Park Gardens
in Bayside, Long Island, which plans eight hundred family garden
apartments to cost $8,280 to $11,031 per unit; (this is a limited-
dividend project under the sponsorship of the New York State Divi-
sion of Housing) ; Group Homes which plans the conversion of a ten-
story building on Riverside Drive into small apartments for tenant
owners; a small apartment house on East 84th Street occupied by eleven
veteran families; a nineteen-story penthouse apartment on Fifth Ave-
nue which includes 162 suites and ten doctors' offices; an eighteen-
story penthouse apartment on East 66th Street; a twelve-story pent-
house apartment building on East 71st Street; and several apartment
houses in Jackson Heights, Queens. There are two in East Paterson,
New Jersey: the Elmwood Co-operative Apartments, Inc., and the
Park View Co-operative Apartments, Incorporated, which were orig-
inally sold at about $3,300 per room under speculative auspices.
Before purchasing in any of the above co-operatives, a prospective
tenant should carefully investigate and analyze the set-up. Some em-
body plans or defects which may jeopardize or wipe out the purchaser's
"You're crazy to work like that. You'll never own those houses.
Wait and see. You'll be back in your shacks." So jeered the neighbors
as a struggling little group of miners in south-western Pennsylvania
ditchdug and hauled, sweated and sawed, mixed and mortared, dog-
gedly determined to complete the job they had started building their
Today, fifty miners in the co-operative community of Penn-Craft at
East Millsboro own two-story stone houses, complete to streamlined
kitchens, built-in showers, oak floors, and central heating. And their
costs are just $13 a month.
Back aches and brawn built the houses not money. The houses
were valued at $6,000 when finished. They could not be duplicated
now for twice that amount, if built conventionally, yet the cash cost to
the miners was only $2,000. That was for land and materials. The
labor was their own. Each house represents about 3,500 hours of man
labor, worked out in off days, spare time, and Sundays. On a basis of
eight hours a day, six days a week, it would take one man a year and
five months to build his house. Actually, many of the houses were
three years in the building, because the miners were unable to work
steadily on them. They had jobs at the bottom of a coal shaft that oc-
cupied some of their waking hours.
Would you do it? Would it be worth that much to you? It was
to these miners. For years they'd lived in a collection of shacks in
Fayette County shacks without water, without electricity, with dirt or
stone floors, with yards fronting on coal-dusted alleys. It was no
novelty for them to work with their hands. All they needed was in-
spiration, direction, supervision, and the cash. The American Friends
Service Committee provided all four.
The miners formed study groups, learned how to drive nails, mix
mortar, lay sewer pipes. One stone mason and one carpenter instructed
72 Get Your Own Home the Co-operative Way
and supervised. The houses were built with the labor of two skilled
and fifty unskilled workers.
The community now includes not only the original fifty houses,
each with two acres of land planned for vegetables, fruit, and poultry;
but also a co-operative food store with five hundred frozen food lockers,
a community center for educational entertainment activities, and
a sweater knitting mill which the miners also built.
Across the road is the Krepps Farm, Penn-Craft's Project No. 2. A
tract of 165 acres, it has been divided into fifteen sections of ten acres
each. Five of the new members now building are sons of the home-
steaders in Project No. 1.
Half a mile from the Krepps Farm is the Taylor Farm of 250 acres,
which will be Project No. 3 as soon as the second homesteading ex-
periment is complete.
To reach Penn-Craft, I had to take a complicated seventy mile trip
from Pittsburgh to Brownsville, to East Millsboro, and then down
into the valleys of the Blue Ridge Mountains. Leaving behind the
Smoky City's five hundred churches, busy pickle factories, noisy steel
mills and meat packing plants, the bus rolled steadily south through
town after town, each a duplicate of the last, each with the same grimy
little houses and false-fronted stores plastered with chewing tobacco
signs and health food ads. Then suddenly we rounded a curve and
came upon the great Monongahela.
Broad and sluggish as it meandered nonchalantly through the hills,
the river was picturesque even in the winter drizzle which glistened
on its stony sides and half-obscured the tiers of tenements, gray slate
and brick, on the far shores. Surface skiffs skimmed the waters around
the white paddle tug boats and long lines of barges black with coal;
then raced the freight trains along the banks, to disappear in a blanket
of mist. Hemmed by green hills, edged by gray flats and yellow-lighted
factories, crossed by myriad bridges, it is an intriguing river.
Forewarned by colorful stories of what the miners had done to the
bit of ragged countryside they'd developed, I was yet unprepared for
the beauty spot into which we drove through the rain. On either side
of the road the land rolls high. Atop these summits were the homes,
sturdy structures of gray fieldstone with white gabled ends and sweep-
ing roofs of slate. Planted evergreens stood by the doorways and
marked out the neat gardens. The poultry houses and barns had each
been integrated with the home of its owner and with the buildings of
the whole community. It did not seem possible that miners, tradition-
ally tied to tin roofs and tumbledown shacks, could have achieved such
a model village!
Penn-craff, Pennsylvania 73
In 1937, when Clarence Pickett, Homer Morris, and Stanley Hamil-
ton, members of the American Friends Service Committee, conceived
the idea of a self-help housing project, the miners were living in hope-
less squalor. Only half the mines in Fayette County were operating;
most of the men were on but two days a week; and a quarter of them
were drawing "relief money." Their children were suffering from
malnutrition; their wives were sick and discouraged; and their own
morale was as low as the dirt sills across which they dragged weary
feet each night.
The miners were paying $10 a month for their shacks. The Friends
believed that, by paying $10 a month plus $3 for taxes and insurance,
a miner could amortize a $2,000 loan at 2 per cent in twenty years.
Under a co-operative arrangement, with the miners supplying labor to
build their own homes, such a plan would be practical.
Would the miners be interested? The idea spread like wildfire.
More than two hundred families evinced a desire to take part. Thus
encouraged, the American Friends purchased an abandoned farm of
two hundred acres in Fayette County, advancing the money from a
$230,000 fund of grants and gifts, which included an $80,000 grant
from the U. S. Steel Corporation.
Work groups were formed and .financing plans made. It was ex-
plained to the miners that within the $2,000 figure, the cost of the
land, the roads, the public utilities, and the outbuildings must be fi-
nanced. The amount of the cash expendable for the house thus shrank
from $2,000 to $1,700.
Classes started. Under the supervision of the two skilled workers,
the men learned cellar construction, roof framing, and plumbing in-
stallation. Quickly they acquired new skills and initiative.
The job was no cinch. The place was overrun with underbrush and
brambles. Before the first cellar was dug, the land had to be cleared,
roads built, water and sewer lines laid. Of the two hundred families
that had first applied, many dropped out. The work was too hard or
the project too long drawn out. As A. Hurford Grossman, of the Phila-
delphia Friends' Office, phrased it, "No man on trial had to be re-
jected. The weak ones rejected themselves." But fifty stuck it out. They
were a representative cross section of the coal mining population:
Welsh, Poles, Rumanians, Russians, Syrians, Italians, Germans,
Negroes, Croatians, Slovaks, English, Americans and even one Ameri-
The miners arranged their hours on a workmanlike basis. Each man
kept a time card recording the number of hours he put in on his own
house, as well as the number he put in on the houses of his neighbors.
74 Get Your Own Home the Co-operative Way
The man with the largest number of hours to his credit was given
first consideration when it came time to decide whose cellar should
be dug next. Labor was swapped on an equal basis. That is, if a man
dug ditches for five hours, he was given the same credit hours as the
man who painted for five hours. No worker was criticized for lack of
skill; but if he loafed, he was subjected to a torrent of upbraiding by
the others, sufficient to force him into a semblance of streamlined
efficiency or out of the community.
Poultry houses were built first. In these, the miners and their fam-
ilies lived some of them for two years until their own homes were
finished. Big families added a brooder house to the poultry house to
provide sufficient bedroom area. So solidly were the chicken houses
constructed that many are still being used for homes this time to
house returning GI sons and their brides. One way to solve the hous-
The men learned to work together, how to get along together, re-
gardless of race, creed or color. And the boys took a hand. When
they achieved some proficiency in swinging hammers and sawing
planks, they were incorporated in the work crews and credited with 75
per cent of a man-hour.
Several houses were built at the same time. It was easier to handle
the project that way because it meant that at no time need any crew
be idle. The carpenters worked on Job No. 3, the plasterers on Job No.
2, the plumbers on still another house. And so it went..
The American Friends Service Committee found ways and means
of cutting costs. In the matter of sand alone, $180 was saved on each
house. David Day, Penn-Craft's first manager, bought a crusher and
a tractor and showed the miners how to make their own sand at a
cost of fifty cents a ton instead of the usual $3. The workers even
made their own window frames, reducing the cost from $15 to $2.50
and thus saving $100 on each house. By using narrow widths of
flooring "mill throwouts" they saved another $60 on each structure,
and because they were willing to buy bathtubs with legs instead of the
built-in variety, they were able to chalk up another $33 economy for
each homesteader. Someone conceived the idea of unscrewing all the
legs and blocking in the tubs to resemble the women's "heart's desire";
so everyone was happy.
The miners made their biggest saving in the choice of construction
materials. By trucking sandstone from nearby quarries, and collecting
field stone from the old walls on the farm and from abandoned coke
Penn- craft, Pennsylvania 75
ovens, they were able to build stone houses much cheaper than they
could have built frame structures.
The stone walls were built with a minimum of labor. Under David
Day's direction, a system of movable forms was devised which en-
abled the workers to "pour" a wall in short time and then transport
the forms to the next house where they would be used over again.
Since little hand work was utilized and less supervision, it was pos-
sible to save $200 on each structure.
In the spring of 1938, the first family moved in; and by the mid-
dle of 1943, all fifty were installed. By the summer of 1948, ten of the
homesteaders had paid off their obligations to the American Friends
and owned their houses free and clear.
Most of the houses contain six or seven rooms with approximately
eleven hundred or twelve hundred square feet of floor space. An archi-
tect was hired to draw five plans, and variations of these basic arrange-
ments were designed to suit individual needs.
Remember the old Welsh pictures of the weary miner, after an
exhausting day, stretched out in his stockinged feet, on the old bed-
stead in his one-room shack? Nothing like that at Penn-Craft. The
head of the family enters the basement, takes a shower, and changes
to clean clothes before entering the living part of the house. There
is no place for coal-dusted workclothes in the cretonned living room,
or in the modern white kitchen where his wife is beating up the pan-
cake batter in the new electric mixer.
One of the first owners refused to accept his deed because it referred
to him and his wife as "tenants by entirety." It was useless to explain
that in Pennsylvania that was the legal term for "owner." He'd have
none of it. He'd been a tenant all his life and now, God willing and
the money in hand to make it so, he meant to be an owner and noth-
ing but !
Disregarding advice, the homesteader sent the deed back to the
American Friends Service Committee in Philadelphia, and asked for a
change in terminology. On receipt of the "corrected" deed, which now
read "owners with survivorship," he took it to the county court house.
The officials refused to accept the document. Chagrined, the miner re-
turned the deed to Philadelphia, accepting his role of "tenant by en-
A few of the houses have been sold yet there seems to be little de-
sire in the community for profiteering. As A. Hurford Crossman
points out, "A self-help project does not have the tendency for specu-
76 Get Your Own Home the Co-operative Way
lation that a normal community faces. When a family has put over
three thousand hours of hard labor into the building of a home, that
home no longer represents a speculative investment. The family's life
is built into it, and the owner, therefore, has no temptation to sell for
The miner's hope of being able to save $3 a month the difference
between his old $10 rent and his new $13-a-month carrying charge
has been realized through the produce from his garden. It was esti-
mated that the fifty families had spent $25,000 a year for perishable
foods, or about $10 a week apiece. A goodly portion of such food is
now grown right in the backyards. Acreage at Penn-Craft is utilized
in two ways. Each homesteader owns two acres on which he raises
berries, vegetables, and poultry. The rest of the land about 110 acres
is operated as a commercial farm. One of the tenants, Bill Baum,
rents the property from the American Friends on a three year lease at
$250 a year. The dairy of thirty cows provides milk at several cents
less than the local market price; and hogs, slaughtered on the farm,
provide pork at seven to ten cents a pound below current prices.
Greatest help to the housewife is the Co-op store, which was started
in a cow shed with a capital of $25 and now grosses more than $100,-
000 a year. The new stone building has five hundred frozen food
Early in 1939, the homesteaders started a new project. Beset by fre-
quent strikes and layoffs, they thought it best to provide a supplemen-
tary source of income. Result: a knitting mill which has been turning
out six thousand dozen sweaters a year. Gross sales are $400,000 yearly
and total wages are $120,000 yearly. The building is stone, and it, too,
was erected by the miners, each man donating one hundred hours of
labor. There are seventy employees, thirty from Penn-Craft and forty
from neighboring communities, who work under the direction of
Superintendent Louis Gallet. Mr. and Mrs. Gallet left Austria just
before the Nazi purge. Gallet, a knitter by trade, introduced imported
hand-knitting machines and is now operating and buying the mill
property. Two additions have been made to the structure since it
started. Employees subscribe to a benefit fund over which they have
complete control. In the planning is a credit union, which will in-
clude not only workers in the mill, but also any of the homesteaders
who may want to participate.
Heart of activities at Penn-Craft is the old farmhouse which has
been remodeled into a community center. Here are the library, the club
Penn-craft, Pennsylvania 77
rooms, a hall for dancing, and indoor games. Activities include the
Mothers' Club, a baby clinic, a maternal health center, a nursery school,
a girls' club group, a Scout group, a baseball team, a hobby club, the
Young People's Council, lectures on parenthood, husband's nights, and
health talks. Special rates for tonsil operations have been arranged by
the co-op. Membership in the center costs $5.
A new community center will be built when the Penn-Craft Rec-
reation Co-operative is incorporated and can hold property. At that
time, the American Friends Service Committee will deed the com-
munity hall, the baseball grounds, and land for a shopping center to
the Co-op. The Co-op will thereupon enlarge the scope of its activities
by building a new hall for dances, roller skating, and bowling, and by
providing store space to be leased on a concession basis for shoe-re-
pairing, hairdressing, and barber shops.
The new Co-op will be independent of the Penn-Craft Co-opera-
tive Association which runs the store, the feed business, and the frozen
food locker plant.
It was inevitable that the success of the first project should give rise
to a second; and while Project No. 2 differs in a great many respects
from the first, it offers wider scope for experimentation than the orig-
inal development. It is being built on a tract of land 165 acres in
size, a stone's throw from Penn-Craft. The property has been divided
into lots averaging ten acres, and each individual will manage his own
farm. There will be fifteen homes when the development is complete.
It has become increasingly apparent to the Friends Service Commit-
tee that the day is not far distant when most of the coal shafts in the
vicinity will "run out," leaving the miners with no means of liveli-
hood. The best replacement would seem to be agriculture, since the
land is fertile and can well support mixed farms devoted to truck
gardening, fruit growing, and cattle raising.
To convert miners into farmers is a job in itself, but the success of
the first project, wherein the miners learned to raise at least enough
produce for their own families, encouraged the American friends to
try a second project on a larger scale. That the idea appealed to the
miners may be seen in the rapidity with which the second project is
taking form and in the enthusiasm with which the individuals are
building their houses and planning the development of their ten acre
plots. One of the new homesteaders already has his entire acreage set
out in young fruit trees.
Costs have advanced alarmingly since completion of the first proj-
78 Get Your Own Home the Co-operative Way
ect. Nevertheless, the new homes will be built at a price far below
the current market figures, mainly because most of the labor will be
supplied by the miners themselves.
Materials will cost about $4,500. Add to this, four thousand hours
of labor at $1 an hour and you have a total cost of $8,500 for a struc-
ture which would easily bring $13,000 in the open market. Labor is
exchanged under the same plan followed in Penn-Craft's first project.
Those homesteaders who are engaged full time in outside employment
hired skilled mechanics to help. Penn-Craft enjoys amicable relations
with all unions.
Most of the houses will have six or seven rooms and full cellars,
and most of them will be built of cinder blocks made on the property.
Penn-Craft owns four hand-operated cinder block machines which
were purchased at a cost of $60 apiece. At the time, supply companies
were charging fifteen cents each for the blocks. The co-ops made their
own for eight. The blocks are waterproofed after erection with
Thoro-Seal and then stuccoed or painted white. One house has utilized
block for the first story and finished the second in brick veneer. Two
others are of frame construction, stone veneered.
Interior partitions are of rock lath and plaster, painted or papered.
Kitchens include built-in cabinets, electric stoves, and washing ma-
chines. Homes are heated by a hot-air system, coal fired.
Much of the wood used in the houses was cut out from the Taylor
Farm, Penn-Craft Project No. 3, a half-mile distant. Cherry, ash,
beech, maple, and walnut are in abundance. John Kellam, manager at
Penn-Craft, told me there were at least 30,000 board feet of floor-
ing in standing timber on the Taylor Farm and another 30,000 feet
which could be converted into two-by-fours, two-by-sixes, and two-
Flooring is kiln-dried, tongue and grooved at Scottsdale Wood
Products Co. in a neighboring community. Since Penn-Craftsmen can-
not bear to waste anything, a good deal of the flooring is in narrow
widths, one and a half inches, so that the last sliver of hard wood
can be used. It makes surprisingly durable floors.
Savings have been effected through the use of Army surplus doors;
and while some of the members made their own window frames, sev-
eral of them purchased Truscon steel casements.
Nothing was spent on architects. House plans, acquired from the
Farm Security Administration, were "cut to fit the cloth" by Kellam.
"A good deal of the fitting was done right on the job," laughed
Kellam. "Houses were going up so fast I couldn't keep ahead of them.
Penn-craft, Pennsylvania 79
However, we have one consolation. If mistakes are made, they can
be corrected at little cost beyond our own labor."
The houses in both Project No. 1 and Project No. 2 have septic
tanks. Water is purchased from the General Water Co. on individual
meters. The proximity of water supply lines was a prime reason for
choice of the property. A second reason was the fact that county and
town roads are so located as to touch every homestead, and the houses
can be built along these roads.
A number of roads had to be constructed through the first project,
and each homesteader was charged a proportionate share of the cost.
Eventually the Town will take over the maintenance of these highways.
Under the financial plan set up for Project No. 2, homesteaders may
borrow up to $4,000 from the American Friends Service Committee
for the duration of the construction period at 4 per cent interest. This
figure must cover cost of house, land, share of the water system, and
a proportion of the project manager's salary. The contract states that
within one year after occupancy the homesteader must refinance with a
bank on a mortgage basis so that the money loaned him may be re-
turned to the Friends' revolving fund, ready for use in the develop-
ment of the next project in this case the Taylor Farm. If he is unable
to secure a mortgage, however, the Friends will carry him until he can
arrange his own financing.
The monthly payment is not fixed, as it is in the usual plan based
on the number of years of amortization, but varies according to the
monthly earnings of the individual. Thus John Jones, earning $90 a
month, will pay $10 a month on his loan; while John Brown, earning
$217 a month, will pay $40. In each case the monthly payment in-
cludes payment on the principal, interest, taxes, and fire insurance.
This idea of "variable payments" was adapted from a plan developed
by the Farm Security Administration.
The Friends feel that when the educational process in community
co-operation has sufficiently developed, it should be possible for the
project manager to withdraw. In other words, there ought to be a
time at which it can be said that the people have been rehabilitated.
"People are not re-made overnight," said A. Hurford Grossman,
"and to inculcate the true spirit of community living, co-operative or
otherwise, is not a short-time problem. In fact, I have many times ex-
pressed the real hope of Penn-Craft as being woven around the second
and third generations. The fact that five of the second project families
are sons of the first project homesteaders indicates some success in this
80 Get Your Oivn Home the Co-operative Way
"It is certainly a fact that these young people have a different out-
look on life and probably a sounder basis for developing character
than these same people would have had, had they been brought up in
the mining patch.
"The difference between renting from the Company and owning
one's own home is far greater than the physical difference between
the stone house and the mining patch hovel.
"It isn't so much the comfort of the new way of life as it is the
philosophy. Now, when a youngster breaks the window in his house,
he fixes it because it is his house. He doesn't pass the buck on to the
landlord who is his enemy to begin with, at least in his own mind.
From his parents he learns a pride in ownership. From his life in the
community he develops a sense of responsibility. He is the second step
forward in the process of rehabilitation of the family."
Anders staggered into the student house, a load of dirty dishtowels
in his arms, and called out to the girls studying at a round table by
the open window:
"How's about a little soapsuds on these utilities?"
"Not a bad 'idea," commented Manager Muriel, inspecting the sad
linens. "What's the swap?"
"I'll be over right after math to cut your lawn, I swear it!" said
Anders, retreating backwards through the doorway with upraised
Exchange of labor is one of the features of the planned program of
the Students' Co-operative Assoc. Inc., of the University of Washing-
ton at Seattle, which has helped make this co-op one of the largest
student housing groups in the country, owning seven of its ten houses,
with assets of $88,000.
The Association has developed out of the mutual self help of 2300
past and present members, drawn from all parts of the United States
and Canada, France, Norway, Denmark, India, Egypt, China, and
Starting with twenty-seven students who invested $10 each in an
idea which they hoped would provide them with a place to live so they
might finish school, the SCA has grown during fourteen years of co-
operation to the point where its houses are filled, a waiting list
lengthens, and plans are being completed for the erection on co-op
property of a brick dormitory to house 180 men and women at a cost of
From a central kitchen, the Association serves four hundred stu-
dents three meals a day, caters for teas and dinners, and fills its frozen
food lockers every year with thousands of quarts of fruits and berries
picked by members.
Not content with housing its own countrymen, the SCA has gone
82 Get Your Own Home the Co-operative Way
farther afield, and for the second year is offering foreign students
robm-and-board scholarships on a co-operative basis.
From its inception, the SCA has been on its own. Students started
it, developed it, nursed it through the depression years, paid for each
house out of their co-op savings and membership fees, and formulated
those policies which spelled success. There, has been no outside finan-
cial help not a gift, not a sponsored dollar. The accomplishments are
tangible evidence that a group of young people, blessed with the right
leadership and a willingness to work together, can organize and oper-
ate a going business concern.
Co-operation pays. Three hours a week at the dishpan or on the
nether end of a broom, plus a membership in the SCA, enable a stu-
dent at the University of Washington to obtain room and board for
$1.57 a day. Those at the school who toil not, neither do they spin, nor
belong to the co-op, pay $2.20 a day.
Walter Honderich, an engineering student with an idea, provided
impetus for the start of the student co-op. In the depression years of
1933, there were many at the University so pressed for funds that they
were forced to consider leaving. Honderich gathered together twenty-
seven of these young men and each put up $10 to purchase food and
to rent the first co-operative house, now known as Macgregor.
The organization was run on a cost-sharing basis with assessments
made each month to cover estimated expenditures. It grew rapidly, the
members assuming more and more of the responsibilities of the mana-
ger, Honderich, until today SCA is run entirely by the student direc-
tors. The board of nine determines policies, makes final decisions on
all operations, and hires four non-student employees the manager,
the food supervisor, the assistant, and a part-time dietitian. Working
with the student board is an advisory board with no voice, which in-
cludes a professor at the University, a business manager, a public school
superintendent, a chemist, a master in arts and sciences.
Each co-op house is governed by its own board of directors, elected
by the members. The members, in turn, elect the overall SCA board.
By the second year of operation, membership in the SCA had in-
creased to such an extent that it was necessary to expand into seven
houses in order to prevent a number of small co-operatives from
springing up all over the campus.
The Students' Co-operative Association was incorporated August 30,
1935, under the laws of the State of Washington, with authorized
capital stock of $40,000, to include three hundred shares of common
stock at $1 each and 39,700 shares of preferred stock at $1 each. The
Seattle, Washington 83
Association adopted a Rochdale plan of operation with no restrictions
as to race, color, or religion.
The following year, the Neitro Sanitarium was purchased for $6,000
and converted into the "Brooklyn Unit." Modernizing and furnishing
the house cost $4,000.
In the summer of 1936, an old garage was acquired and the Central
Kitchen and Co-op office established in its present location, 1114 East
45th street. Rent is set at $100 a month. Students hope this figure will
continue indefinitely since it would cost $6,000 to erect a suitable
In equipping the kitchen, the SCA saved money by purchasing a
number of Navy cooking utensils. As modern a unit as could be found
in any streamlined restaurant, the kitchen includes a steam table de-
signed by a student engineer, two cooking vats, a large pressure cooker,
electric stoves, power mixer, two walk-in coolers, a quick-freeze unit,
first of its kind in Seattle, and an ice cream freezer. Between twelve
hundred and thirteen hundred meals are served each day. Deliveries,
timed to fifteen minutes to keep the food hot, are handled by students
working part-time in the kitchen.
Nettie Jean Ross, a gray-eyed red head, pushed aside a degree in
bacteriology three years ago to take charge of the Students' Co-opera-
tive Association as secretary-manager. She is the heart of the organiza-
tion. When I asked her how she came to switch from microscopes to
mastermixes, she answered quite simply:
"I'm more interested in people than bugs."
Nettie is on the receiving end of a good deal of teasing by students
who tell her she better marry before it is too late. But she only laughs
and says she wants to see the new SCA dormitory erected before she
leaves. The secretary-manager is paid $250 a month plus meals, figured
at $30, making a total of $280.
At the present time there are 270 students in the Co-operative with
twelve hundred more, all past members, in the Alumni Association
which was formed in June, 1945.
When joining, each member buys $5 worth of stock, non-interest
bearing and not refundable, and is entitled to one vote in the corpora-
tion's business. In the early years, membership cost $15 but the figure
has since been reduced to the present $5.
Those dormitories hiring house mothers pay $100 a month and
board. Student house managers get $50 a month and board. While
most of the men's units started with house mothers, the males shortly
decided to do their own managing and save the money.
84 Get Your Own Home the Co-operative Way
Both men and women students put in three hours a week at some
household duty washing dishes, cleaning house, waiting table, or in
the garden. Frequently the houses swap labor, the boys serving at
meals in return for shirts expertly ironed and suits pressed.
A good many of the students hold part-time jobs either on the
campus or downtown, working as clerks, waitresses, dishwashers,
garage mechanics, gardeners, librarians, or baby sitters. Clerical work
at the University pays $.65 an hour, but baby sitting pays $.75.
The co-op houses are something more than dorms. They contain
clubrooms, social halls, libraries, and shops selling soaps, toothpastes,
school supplies, and cosmetics at cost. These shops not only break
.even, they save money, applying the funds to new draperies, new rugs,
or perhaps a record changer or a radio for the house.
Most wonderful of all, there's a snack kitchen in every co-op house
where students can dig in between meals and refuel on milk, peanut
butter, and Dagwood sandwiches, and all for free.
In 1946 increased enrollment, caused by the influx of veterans,
forced the SCA to purchase two more houses, each with a capacity of
fifty men, bringing the total number of houses owned or leased by
the Corporation to ten.
How did a little struggling student co-op manage to acquire so
much property ? Let's see how they did it.
The first house, Synadelphic A on 16th street, (Synadelphic in Greek
means "co-operative sisters") was purchased in 1940 at a cost of
$8,000. The students were fortunate in that the owner was Mrs. Bertha
K. Landies, former mayor and widow of a geology professor, who
was much interested in the co-op. She asked no down payment and no
interest on the total, which was to be paid at the rate of $75 a month.
All but $2,300 has already been paid.
The second house, Macgregor A on 22nd street, was bought in con-
junction with Macgregor B, next door, in the year 1941 at a cost of
$9,000. The units are named after the house mother, Mrs. Nell Mac-
gregor, a writer. The two houses have a combined capacity of sixty-five
students. The co-op made a cash down payment of $1,000, agreeing
to pay off the balance at the rate of $125 a month. Both units are now
The fourth house, whose name Rofcre has proven a tongue twister
to visitors, was bought in 1943 for $11,000. When the students took
option on this unit two years previously, the price asked was $8,700.
After some argument, the co-op acquired it at just that price, buying
it outright. There was already a mortgage on the place which had to
Seattle, Washington 85
be paid off as originally written, $50 a quarter. Today, not a cent is
The word Rojcre is made up of the first letters of "Robert Owen,
Founder of Co-operatives in Rochdale, England," and is pronounced
Rah- ff -cray.
Rofcre B, next door to Rofcre A on 18th street, was purchased in
1945 at a cost of $13,000. The co-op was able to pay down $7,000
in cash and to acquire a bank mortgage for $6,000 at 4 per cent, to
be paid off at the rate of $120 a month. Some $3,600 is still owing.
Rofcre A houses twenty-five students and Rofcre B, thirty-five.
The two houses bought in 1946 were Macgregor C and Mavrick,
the" latter named after Lt. Tommy Mavrick, killed in the death march
on Bataan. Macgregor C, which houses twenty-five students, cost
$23,869. A down payment in cash of $11,369 was made and a bank
mortgage for $12,500 acquired which had to be paid at the rate of
$200 a month. The co-op is still $8,008 in debt on this proposition.
Mavrick House cost $14,825. A down payment of $6,325 plus a
bank mortgage, of $8,500 evened that score. Charge per month, $150,
with $4,462 still owing. Mavrick can accommodate twenty-five stu-
That accounts for the seven houses purchased by the co-op. All of
the mortgages were written in such manner as to permit the students
to pay them off as fast as they were able.
The three other houses run by the co-op are rented. Synadelphic B
on 16th street, which can take care of twenty-five students, rents for
$100.62 a month. Sherwood House on 17th street, which accommo-
dates twenty-five, rents for $166.75 per month. "I" House, the old
International House of the YMCA, known as the Little United Na-
tions, houses thirty-two, and rents for $175 a month.
There are no plans to buy any more houses, nor to spend further
funds on the present ones. The SCA is anxious to hang on to its sav-
ings until such time as the new dorm can be built.
Renovating old houses is an expensive proposition. Nettie Ross
pointed out that in one instance the SCA had to pay $4,000 for rewir-
ing three houses.
For how long can the co-op stall the improvements demanded by
the city health and fire departments? The fire department wants all
staircases enclosed and the health department insists there should be
one bath for every eight students, whereas the present ratio is one bath
for every eleven.
It was a marvel to me how any organization operating on such a
86 . Get Your Own Home the Co-operative Way
slim margin could save enough cash to make a down payment on one
house, let alone half a dozen. But according to the young manager,
the payments were made from moneys accruing from membership
fees, room rents, and savings in the kitchen possible because of low
overhead, economical operation, and extras from outside catering.
There were other small revenues from various sources, including
income interest, cash discounts, patronage refunds, service charges,
garage rental, forfeited room deposits, and two large windfalls. The
first was a $4,000 check received for the sale of the "Brooklyn Unit"
acquired early in the co-op's history. The house was sold when a
number of its members were called to service at the outbreak of World
The second large receipt came from the U. S. Government and
totaled $8,000. The SCA paid taxes on its holdings for the years 1941,
1942, 1943, and 1944. Then the Government declared the property
exempt as a social institution and returned the moneys.
It is noteworthy that while the book value of the buildings, exclu-
sive of furnishings, is set at $47,000 and the lots are valued at $17,500,
an insurance adjustor last year put a replacement value on the build-
ing of $225,000.
To give other student groups a better idea of what it costs to run
a college housing co-op, and what percentage of the whole each item
represents, I have included the last operating statement of the Seattle
group. It covers a period of fourteen months.
The Students' Co-operative Association draws no line at race, creed,
or color. During the past year there were in the membership, three
Negroes, six Nisei, and eight students from India.
Foreign students are welcomed. Each year the association offers one
room-and-board scholarship. It costs the co-op $360. Bjorne Stiansen
of Norway was the first to come under this plan. A student in aeronau-
tical engineering, he was admitted to the school on a U. of W. schol-
arship. Stiansen made expenses while studying, by working in a lum-
ber camp in his spare time. Dick Oesterman of Denmark was the
second applicant. He registered in journalism and gained practical
knowledge and pocket money by working part time on one of the
Relatives and friends of the foreign students are not forgotten. One
day a week the co-oppers drink no milk. The money saved, amounting
to $40, is used to purchase four CARE packages, each containing
twenty-five pounds of food, which are sent overseas.
The SCA does not confine its co-operative spirit to the campus.
Ezra Stoller: Pictorial Services
Contemporary modern architecture features the houses built by a
co-operative group on the top of Snake Hill, Belmont, Massachusetts.
This is the home of Harry B. Wissmann.
STUDENTS' CO-OPERATIVE ASSOCIATION
Operating Statement, July 1, 1946, to August 31, 1947
Room and board, own houses $127,244.93 86.54%
Board, University residences 13,466.66 9.16%
Miscellaneous revenue 6,320.61 4.30%
Total Revenue Received $147,032.20 100.00%
Food expense own houses. 48,361.17 32.89%
Food expense University residences 8,311.34 5.65%
Salaries and wages 33,103.61 22.52%
Payroll taxes 1,412.05 .96%
Delivery expense 973.20 .66%
Supplies own houses 4,539.58 3.09%
Supplies University residences 144.70 .10%
Laundry 1,118.48 .76%
Fuel 4,301.90 2.93%
Electricity 2,859-13 1.94%
Water 792.13 .54%
Gas 1,331.32 .91%
Repairs and maintenance 9,437.57 6.42%
Rent expense 8,583.81 5.84%
Depreciation expense 9,295.12 6.32%
Insurance 1,355.60 .92%
Property taxes 1,986.76 1.35%
Capital stock tax
Legal and auditing 491.98 .33%
Interest 918.67 .62%
Telephone 1,717.36 1.17%
Advertising and publicity 1,505.67 1.02%
Dues, subscrips., donations 93.71 .06%
Newspapers 199.81 .14%
Key expense .22
Bad debts and collection expense 38.84 .03%
Miscellaneous expense ' . 283.65 .19%
Total Expense $143,079.26 97.31%
Net Margin 3,952.94 2.69%
When the Group Health Association in Seattle was struggling to gain
a firm financial footing, the co-op purchased a $500 bond.
Many of the co-ops hold membership in the Group Health which
now lists twelve hundred members, has a staff of eighteen doctors,
and owns a fifty bed hospital.
88 Get Your Own Home the Co-operative Way
The SCA belongs to the Pacific Coast Student Co-op League, which
includes co-operative groups in the University of British Columbia at
Vancouver, Montana State University, Oregon State University, the
University of Oregon, the University of California in Los Angeles,
the University of California, Washington State College, and the Uni-
versity of Washington.
The Students Co-operative Association also belongs to the North
American Student Co-op League with headquarters in Chicago. Mem-
bership in the Pacific group costs the SCA ten cents per member per
year, while membership in the national group costs fifteen cents per
member per year.
Racine, Wisconsin, is a city of 76,000. Located on Lake Michigan
at the mouth of the Root River, it is a humming manufacturing center,
adjacent to the cheese and butter country. Many of its population are
employed at the Case Co., famous for its plows or on the assembly
lines of the farm machinery factories. Johnson wax is made here. So
are automobile and house radiators and power lawn mowers. The
average annual wage is $4015 one of the highest averages among
If a visitor asks who lived in Racine before the Danes arrived, the
answer is always the same: "No one. Racine was in Denmark." More
than half the people in Racine are Danish. Many of them belonged to
the local co-ops in Denmark and hence find it quite natural to form
and join co-operatives in their new homeland. In their newest co-op
they are building 372 houses on 112 acres of land.
In June, 1945, two months before VJ Day, members of District
Council No. 8, United Auto Workers, CIO, in session one summer's
night, became involved in a discussion of the local housing shortage.
Someone asked: "What happens when the boys come home?" That
meeting eventually led to a plan of action. A housing committee was
organized within the Council, the UAW put up a "kitty" of $100 to-
ward expenses; and the Housing Committee and the Education Coun-
cil of the UAW were asked to work together to "see what you can do."
The $100 was used to publish a leaflet which exposed the profiteer-
ing in private housing in Racine and suggested, in its place, a co-
operative housing development. The Racine Consumers Co-operative
offered to help, and through its educational field man, Hans Schmidt,
gave assistance in gathering names of interested consumers.
Racine already had a co-bperative credit union, a co-op store, and
a co-op filling station all well supported by the population. Many
of the members of these co-operatives were interested in getting a
home and preferred to do it the co-op *way, if it were possible.
90 Get Your Own Home the Co-operative Way
That fall, the Racine Co-operative Homes Association was formed.
A steering committee was set up and the Association decided to finance
its own promotion. Its independence of other organizations was thus
established. However, this did not prevent other union groups from
extending a helping hand. Both Local 172, UAW-CIO, and Local 195
of the A.FL Blacksmiths contributed funds.
Membership in the Association included a wide diversity of occu-
pations, with factory workers and farmers outnumbering the other
classifications. There were a good many white-collar workers, including
clerks, superintendents, chemists, and metallurgists; eight school
teachers; four firemen; and two policemen. . The average age of adults
was thirty-five years; the average number of children to a family was
three. Membership was not inter-racial.
Hugh Reichard, director of the Education Council of the UAW,
was elected president. He has been the "mother" of the organization
from the beginning, nursing the project through its aches and pains,
constantly figuring ways to cut costs.
In March of 1946, the Association received its corporate charter,
adopted by-laws, and elected a board of directors. Capital stock of the
corporation was listed at $40,000. At the time of incorporation, there
were just 100 members. The membership fee was set at $10, not re-
turnable. Each member had to buy a minimum of six shares of com-
mon stock at $25 a share. One vote was granted each family unit, re-
gardless .of the amount of stock held. No proxies were allowed.
Houses are individually owned, the title being transferred to the
member on completion of the unit. Common land is held co-operatively
and the community projects such as shopping center, filling station,
garage, ball fields, recreation grounds and community hall are to be
operated by the Racine Co-operative Homes Association.
To assist in the construction of the project, the Association hired
Robert L. Pine and Associates of Dayton, Ohio. The Pine firm has
guided several other large housing projects at fees running about 5
per cent of the total cost.
The next step was to purchase the land. After examining several
pieces, the Association chose a property adjoining the city limits, with
a bus line passing the property and a public school across the street.
City water and sewerage were available and the land fronted on a
paved road. Through the efforts of Attorney Jack Harvey, the property
was annexed to the city and thus became entitled to all benefits. The
Association named its development Green Crest.
The tract, 112 acres in all, cost $50,000. Half the amount was paid
Racine, Wisconsin 91
in cash from monies accruing from membership shares and partial
down-payments. A mortgage for the other $25,000 was acquired from
the West Racine Bank for a period of one year at 4 per cent interest.
The mortgage was paid in full at the end of six months from funds
supplied by new share money and partial down-payments.
A short time later the Association sold 5 acres of land to the Bishop
of Milwaukee to be used for the erection of a Catholic church and
parochial school on the property. Another area, similar in size, is be-
ing held for a Protestant church, possibly Lutheran.
In Racine, the average lot is 40 feet in width. But in Green Crest
there are none narrower than 60 feet. William A. Dean, Chicago land
planner, plotted 372 home lots, averaging 60 by 125 feet and leaving
ample space for parks, playgrounds and commercial areas. The cost
of the unimproved lot was estimated at $115 and that of the developed
lot at $750. The difference, $635, was broken down into development
costs as follows: $200 per lot for water, $200 for sewerage, $135 for
sidewalks, and $100 for roads. Subsequently, the FHA placed a loan
value of $1000 on each lot.
In the center of the property, 4 and f acres of oak-forested land have
been set aside for a park. This area has been deeded to the city of
Racine which will maintain the property and co-operate in the in-
stallations of those features which the co-operative finds desirable.
The Association and the city are also co-operating in the building of
the roads. The city furnishes 5J inches of crushed rock and ^ inch of
stabilizing material, and the Association finishes off with a black tar-
red top. On satisfactory completion of the roads, all of which must
have a 50 foot right of way, the city will take over and maintain them.
When plans were firmly in hand, the developers, Pine and Asso-
ciates, moved in, assisting in the organization of the group, in the
financing, engineering, contract negotiating, construction, landscaping,
and finally the disposal of the dwelling units to the individual owners.
To keep construction costs at a minimum, a good deal of on-site
fabrication was planned. To that end, a power saw was set up in the
dairy on the property, and all winter long the carpenters milled doors,
windows, frames, cornices, trim, gable ends, and even staircases.
Plumbing pipes, wash basins, sinks and bathtubs were stored in the
corn crib. The chicken house provided adequate storage for paints,
varnishes, plasters and cement; while the vegetable storehouse served
as shelter for both air- and kiln-dried lumber.
In the old farmhouse, the contractors tacked blueprints over the rose-
flowered walls in the living room and covered the violets in the dining
92 Get Your Own Home the Co-operative Way
room with sketches of the eight basic types of homes from which the
would-be owners might choose.
Architectural styles vary from Cape Cod and Colonial to California
contemporary, solar and contemporary modern, with a Normandy in-
cluded for good measure. Many of the homes are one-story, but there
are a number of story-and-a-half and several two-storied structures.
Some have flat roofs; some have gables; some have gambrels.
Estimated costs of the first 25 houses ranged from $8200 to $9200.
Most popular was a two-story house in the top price bracket which had
three bedrooms upstairs. First excavations were made in December,
1947. By mid-winter 8 houses were finished and 21 basements made
ready for superstructures in the spring. Six months later 25 houses were
All lots in the development are numbered and the various types of
houses so plotted that no two alike are in any line of vision. Skillful
placement of the, houses flat roof and gable, Colonial and modern
gives the project the appearance of any other suburban community
where each resident builds the kind of house he likes best.
The member, in picking out his lot, makes his selection with an eye
to the type of house that has been allotted the particular square of
property in which he is interested. If he doesn't like the house designed
for his lot, he must find another lot which meets his requirements, both
as to location and style of house designated.
Houses are of frame construction with cellars 7 feet 9 inches in
depth. Cellars are waterproofed in keeping with FHA specifications.
Either Insulite or Rock Wool is used for insulation. Water pipes are
copper. A gravity-feed, hot-air heating system is serviced by either
coal or oil. At one time consideration was given to the installation of
a central heating plant for the community, but the idea was shelved
when members voted for individual heating plants.
Kitchens are equipped with sinks and wooden cabinets. Electric
stoves are being purchased co-operatively. Floors are of oak, maple or
birch hardwoods, with linoleum or asphalt in kitchen and bath. There
is a built-in tub in the bathroom. Closets are in every room and there
is storage space in the cellar and in the scuttle butts, which can be
reached through a trap door into the attic. Most of the houses will be
clapboarded or cedar shingled, with asphalt shingles on the roof. While
many of the homes are being painted white, the roof colors vary.
How do you get a house? What do you have to do? How much
must you pay down? When do you own it? These and a dozen other
Racine, Wisconsin 93
questions were bandied over back fences and across kitchen tables for
weeks before the Racine co-operators were ready to begin operations.
Well, let us take Jan Johnson for an example. He was interested in
a flat-top overhang, one-story house with three bedrooms, living room,
kitchen and bath, listed at $9000.
Jan joined the Racine Co-operative Homes Association, paying his
membership fee of $10. This, he understood, was not returnable, but
was to be used for the Association's overhead. Next, he bought his six
shares of common stock in the corporation at $25 a share, or a total
of $150. Now, he made a partial down-payment of $300 in cash on a
house and lot and was ready to select his dream bungalow.
From that point forward, Jan had little to do except watch his dream
take shape. The Association took over, built the house, painted it in-
side and out, tried the water faucets and the doorknobs and then called
Jan in to "examine and familiarize himself with the conditions of said
premises prior to occupying same," in the words of the option-to-pur-
Jan may not like the house, after all. Or perhaps conditions have
changed and he finds that he must move to another job or another dry
and will not be able to live in the co-operative community. In that
event, he will not be more than $25 out of pocket. Jan will lose the
$10 membership fee, but he will get back the $150 he paid in for six
shares of common stock in the corporation. He will also get back $285
of the $300 down-payment he made on his house and lot. The balance
of $15 will be retained by the Association to cover the cost of "FHA
However, Jan may not get his money back the same day he decides
not to move into the new house. The Association reserves the right to
tell a departing member he must leave his money tied up in the house
until someone else buys the unit.
On the other hand, if Jan likes the house, is prepared to go through
with the deal, and waits only the day when he may move in, bag and
baggage, then he completes the down-payment and assumes full finan-
cial responsibility, with the title and the mortgage in his own name.
Jan has been told that the total cost of his house and lot will be
$9000, and that this figure covers the expense of all improvements as
well as the fee of the development firm. There will be no other assess-
ments. He is reminded that he must make a total down-payment in cash
equal to 10 per cent of the cost of his house ($900), and that he can
then obtain a 90 per cent FHA-insured mortgage for the balance. Since
94 Get Your Own Home the Co-operative Way
he has already made a down-payment of $300, there remains only $600
to be paid in cash. When he pays that, his individual mortgage is re-
leased from the blanket mortgage which covers the entire property.
This blanket mortgage was secured by the Corporation under Title
VI of the National Housing Act. It is a ninety per cent FHA-insured
mortgage on the Green Crest Development for twenty-five years at 4
per cent interest plus -J of 1 per cent mortgage loan insurance. The
loan was made by two insurance companies.
When Jan signifies his intention of accepting the house built for
him, the Association delivers to him a general warranty deed covering
the house and lot, transfers the mortgage loan to his name, and notifies
him that he may move into his new home.
At one time the Racine Co-operative Homes Association considered
following the example of another co-operative community, wherein the
houses are individually owned but the land on which they stand is
held by the Corporation. But the members voted for the individual
ownership of both lot and house.
Now what will Jan's house cost him per month? If he obtains an
$8100 FHA-insured mortgage for 25 years, the amortization of the
principal plus the interest plus the mortgage loan insurance, will
amount to $45 a month. Add to this about $1.50 for fire insurance, $8
for taxes, $2 for the trust fund and $2 for the running expenses of
the Co-operative and you have $58.50 per month. So much for Jan's
expenses, provided the house does not cost him more than it was ori-
ginally figured. Taxes in the district run about 29 mills. A low assess-
ment would, of course, reduce the apportionment for taxes.
The $2 allotted to the trust fund is to provide security against the
future. In times of unemployment or sickness, the member is permitted
to draw against the fund to pay the monthly charges on his house, up
to the amount of the equity (money paid in) he has in his house.
The $2 assessed to cover the cost of operating the Association will
be used to foot the bill for the manager and secretary to be hired when
the development is complete.
The $150 which Jan paid for his six shares of stock will be used to
develop the co-operatively held property and to run the community
Several lots fronting on the main road have been set aside for com-
mercial buildings. These include a shopping center, a gasoline station,
and a garage. The Co-op will erect and own the buildings and will
lease them to consumer co-operatives. Over the store there will be a
community hall to be used for canning co-ops, quilting groups, dances,
Racine, Wisconsin 95
movies and meetings. The community hall may be rented to outsiders
when not in use by members. Funds so received will be used for com-
There will be no special assessments against the members, unless
the funds for community activities are not sufficient to cover co-opera-
tive enterprises such as the development of a ball field or tennis court.
The owner must keep his house and grounds in repair. If he fails,
a warning by the board of directors will be followed by action through
the mortgagee. In extreme cases, legal action may be taken to force
Co-operative life insurance, co-operative automobile insurance, a
credit union, and a group health plan, also co-operative, will be avail-
able to all members of the Association.
If Jan finds it necessary after a period of time to sell his home and
move out, he may transfer his holdings only to a member of the As-
sociation, approved by the Board of Directors, or to an outsider ac-
ceptable to the Board of Directors, who is willing to become a mem-
ber of the Association and abide by the by-laws and agreements. There
is no stipulation as to sales price. Jan is entitled to "get what he can"
for the property.
Does co-operative housing effect savings? The Racine Co-operative
Homes Association figures it lowered initial costs of the development
in the following ways:
1. The land was purchased "wholesale" in one plot.
2. There was just one surveyor's fee.
3. Land planning and development was done all at once at a mass
4. The architect's fee was lowered to 1 per cent of the total cost.
5. The contractor cut his estimate per unit, figuring that he could
save both on labor costs by organizing the work on 372 houses under
a planned program, and also on multiple purchases of materials and
6. Savings were made in financing fees and interest rates on the
basis of a mass project of 372 houses.
However, mounting prices, special sized windows, and custom de-
signs contributed to increases ranging from $500 to $2000 per house
above the original estimates.
The Racine Co-operative Homes Association is still seeking .ways
and means of building homes for the bulk of its membership in the
$8000 to $9000 price class.
San Jose, California
Sixty ex-servicemen own homes at Aquino Park, Campbell, near San
Jose, California. When the project is finished, 80 cottages will stand
on the 30-acre tract developed under the direction of Valley Homes,
Inc., a veterans' co-operative housing development.
The snug little community is concrete evidence of the perseverance
of those who live there. The road to realization wasn't lined with
peach and prune blossoms. There were plenty of rocks and rubble. But
the veterans were determined to build homes, even if they had to
erect them on their own. They hurdled every obstacle with the same
tactics: "If one thing doesn't pan out, try another."
There was the lumber that never came through; the loan that didn't
materialize. There were the creditors who hounded them constantly;
the plans that wouldn't jell; the windows that warped; the doors that
wobbled; the plumbing that went in upside down; the roofs that devel-
oped queer angles.
They bought a piece of land on a shoestring; financed it through
sheer audacity; designed their own homes when the architect failed to
meet their needs; begged and borrowed money when the banks looked
askance at their self-help plans; fought back stubbornly when the
unions objected to their swapping labor with neighbors, and ended by
completing the project themselves.
San Jose lies in the fruited Santa Clara Valley, which produces 80
per cent of the world's prunes. The city is 50 miles south of San
Francisco, has a population of 60,000, and houses four colleges:
University of the Pacific, M. E., State Teachers' College, College of
Notre Dame, and St. Joseph's College. There are woolen and silk fac-
tories, lumber mills, tanneries, iron foundries, machine shops, and
canning establishments within its boundaries.
Valley Homes veterans are a representative cross-section of the com-
munity clerical workers, factory employees, salesmen, merchants,
tradesmen, electricians, carpenters, and plumbers.
San Jose, California 97
No one on the West Coast seemed much interested in the co-opera-
tive aspects of the project when I asked for information. I was told
"It's just a commercial proposition." The reverse was true, as I dis-
covered when I persisted in making the trip to see for myself.
This is what happened. In the beginning, the vets sold lots on their
tract; then as construction on the houses progressed, they spent more
and more time on carpentry work and less and less on looking for
customers. A real estate firm agreed to sell the last few remaining lots
on a $95 per lot commission. That was the "commercial" aspect.
In Valley Homes I found a tight-knit community with more co-
operation between members than was evidenced in a good many of the
more publicized co-operative housing projects. John helped Nathan
hang his doors. Nathan helped John dig sewer lines. Both assisted
Ben in shingling his roof. And so it went.
Why did this community prosper when so many other veterans'
projects have fallen by the wayside? Because the men and women in
the group started with the determination to see the thing through no
matter what unforeseen difficulties bogged their footsteps; because
they were willing to help themselves and waited on no one; because
they counted every penny before it was spent; because they eliminated
expensive offices, clerical help, and illustrated brochures.
The houses were built with varying degrees of self-help. In some
cases the veteran contracted only for the interior finishing. In others,
he took on the job when the builder had completed the shell of the
house. In a few instances, the ex-serviceman constructed the unit from
start to finish. One member saved $3000 by doing his own contracting
and carpentry work.
Provision has been made for a co-op store, park, and playground.
Schools, buses, and shopping centers are near at hand. The dark clouds
of troubled finance have taken on a rosy hue. The property mortgage
papers were burned just a year and a half after the loan was made.
The story is a good one.
In October, 1945, a small group met to discuss the housing situation.
Some of the couples were living with in-laws; others existed in
doubled-up quarters; many had nothing better than two rooms and a
gas ring. Far into the night they argued, until one of them clamored:
"Look here. We've done enough talking. Why don't we do something?
We've got to get homes. No one is going to give them to us. We've
been on the receiving end of a lot of hurrahing but little else. If we
could build our own shelters in Bataan and Burma, we can build them
here. While everyone is telling us it can't be done, we'll just saw and
saw and saw." Which is just what they did.
98 Get Your Own Home the Co-operative Way
Securing an option, without any deposit, on the land they wanted,
the group incorporated under the general corporate laws of California,
non-profit, for $12,000, with 80 shares at $150 each. The owners
asked $32,000 for the land. Banks would offer only a 60 per cent
straight mortgage on the property a total of $19,200. The vets needed
the entire $32,000. They conceived the idea of raising the valuation
of the property, on paper, to a point where 60 per cent of the total
would net them the necessary $32,000.
To that end they listed all estimated improvements and expenses,
and all estimated income items in this fashion:
ESTIMATED COSTS OF VALLEY HOMES, INC.
Land purchase $32,000.00
Streets and paving $9,500.00
Water lines, refundable 5,200.00
Surveying and engineering 1,000.00
Legal fees 300.00
Architectural services 4,000.00
Financial expense 500.00
Title and insurance 500.00
Administrative and miscellaneous | 1,000.00 22,000.00
ESTIMATED INCOME, VALLEY HOMES, INC.
Memberships, 80 at $150 each 12,000.00
Sale of crops, apricots and prunes 1,500.00
Sale of house on property 1,500.00 3,000.00
Refund, water deposit 5,200.00
Sale of lots to members, 80 at $450 each 36,000.00
Total estimated income $56,200.00
The veterans figured their development costs well just how well
may be judged by a perusal of their financial sheet as it appeared a
year and a half later. I have included it at the end of this chapter.
Sixty per cent of $54,000 is $32,400, or more than the Valley
Homes needed. The figures made a presentable picture. Calculations
were simple enough. It was a little more difficult to convince a bank
that the risk was a good one, especially as banks are loathe to loan
money on property which can show only "paper" developments.
After several turndowns, the veterans found a resident in a nearby
San Jose, California 99
community who was willing to take a chance. He offered them a
$32,000 mortgage for one year at 5 per cent, provided they would
agree to raise an amount equal to half the mortgage money as a guar-
antee of good faith. This they did by putting up $12,000 comprised
of 80 membership fees at $150 each, plus $4000 in small loans offered
Less than a year later, the loan was refinanced and an additional
$5400 acquired; but by that time the vets were on their feet in fact
some of them were already settled in their new homes. The mortgage
loan on the land was paid in full a year and a half after it was made.
The property was laid out in 82 lots, 80 for homes and 2 for a
future store. In addition, 2\ acres were set aside for a park so planned
that no road skirts its borders. It can be reached only by footpaths
between the gardens. A community clubhouse, playground, and pool
are also planned. A trained nurse who will take care of the children
of those mothers who want to go shopping or have to work is also on
the program for the future.
Membership fees are $150, $100 of which are set aside for improve-
ments and development of the property. In addition, the corporation
may assess its members up to $100 a year for maintenance and im-
provement of the common property. Profits from the store are ex-
pected to pay any other corporation expenses. Valley Homes Inc. will
both own and run the co-op store and the co-op gas station.
The cost of an average developed lot 73 by 150 feet was $650 with
closing fees running about $22. After purchase, the veteran was al-
lowed 90 days in which to arrange financing. The ex-servicemen
financed in various ways. Some obtained 80 per cent FHA-insured
mortgages, others secured VA-guaranteed mortgages up to $4000,
several received bank loans while a few obtained private loans or paid
There is city water on the property but there are no sewerage lines.
Each house has its own septic tank figured at $300 and included in
the total cost of the house. City sewerage may be available in five years.
No vet may sell his house within a year unless he first offers it to the
Corporation for a period of 30 days at the price he paid for it plus "a
reasonable allowance for any construction or improvement." If at the
end of 30 days the Corporation decides it does not wish to buy the
house, it will accept any purchaser who qualifies for membership.
This is not an inter-racial community. It is a true co-operative in so
far as each member is allowed but one vote, regardless of stock held.
There were some immediate cash returns on the property. A harvest
100 Get Your Own Home the Co-operative Way
of prunes, apricots and grapes brought $2000. An old house, moved
later to another location, was sold for $1500 $980 net.
With mortgage commitments settled, the road and water plans in
the making, members turned their entire attention to the construction
of the homes.
Early in the transactions, an architect was hired to design 80 red-
wood rustic houses on a basis of $50 for each set of plans. Payments
were to be made as follows: one-third on signing the contract, one-
third when construction began, and one-third when construction was
complete. Most important, the architect agreed to find a contractor
who would build the houses at a price the vets could afford.
The architect progressed rapidly with the plans, but not at all with
the contractor. When wasted time dragged dangerously close to a
year, the veterans abruptly dismissed the architect, agreeing to pay
for the 72 plans drawn, and set about finding their own builder.
Most contractors in the vicinity asked $10 a square foot. One asked
$11, even though the entire project of building 80 homes was offered
him. Subsequently, the Valley Homes members found three builders
who would tackle the job for $8.50 a square foot on an individual
house basis, with a promise of lower costs if 10 or more houses were
built at the same time.
Further savings were anticipated in the mass purchase of materials,
either in the wholesale market or through the Associated Co-operatives,
Inc., Oakland, California, in which Valley Homes has membership.
Cost to the Corporation is $50.
Most of the houses are cottage-type, a story and a half high, with
hip or gable roofs. Five are erected on 6-inch concrete slabs, while the
rest have cement foundations 2 feet high. Exteriors are in redwood,
stucco, or brick veneer, with roofs finished in asphalt or wood shingles.
Interior partitions are wood or plaster board, which is painted or
stuccoed. Ceilings are Celotex. Stoves are electric. All outside doors are
metal weatherstripped. Provision for storage space has been made in
the garage. With the exception of the concrete slab units, which have
radiant heat, most of the cottages utilize wall heaters supplied by
natural gas. Many also have fireplaces with heatilators.
Houses range in cost from $5000 to $12,000. These figures include
the vets' self-help labor hours. In some instances, the contractor built
the house from start to finish. In others, under an arrangement with
the veteran, he erected only the shell, the vet taking over the job at
this point. On a number of the houses all of the labor with the ex-
ception of the concrete work, was done entirely by the members.
San Jose, California 101
So long as each veteran confined his activities to his own house,
there was no argument with organized labor. But as soon as he com-
menced to swap his labor with that of his neighbor, there was dissen-
sion. In several instances, the union issued an ultimatum "that the prac-
tice must stop or else!"
"Rats!" was the characteristic answer of the veteran. In which case
the union men walked off the job.
A number of the plans drawn by the architect were used, but many
of them proved too elaborate and were redesigned by the members.
Some of the co-operators started with a small basic unit, planning to
add to the house as finances permitted. There was Ted Balgooyen, for
instance, who taught in the Navy U-12 program during the war and is
now an instructor in speech and drama at State Teachers' College.
Balgooyen's lot cost him $950. He paid $550 in cash and the rest
at the rate of $50 a month. His house and carport cost him $2243
which included a first mortgage for $1600 obtained from the Surety
Building and Loan Co., a second mortgage for $400 from Valley
Homes Inc., and the rest in cash. These figures do not include the cost
of the lot or the self-help but do include the cost of the carport $400.
Balgooyen erected a redwood rustic bungalow witn a slant roof, con-
taining 485 square feet. This unit will become the wing of a U-shaped
"I did all the labor on this house except the plumbing and the con-
crete and electrical work," said Balgooyen. "Didn't know much about
building. Just watched the others and pitched in. Took me five months
of week-end work to finish the job. I figure the house cost me $3.80 a
square foot and the carport, $2 a square foot."
Ellis A. Rother, former mailman in the USNR, who is now a train-
ing officer in the Veterans' Administration, financed his home with a
$4000 VA-guaranteed loan and a $4500 mortgage from the Surety
Building and Loan Co. The $8500 cost of the house includes $500 paid
for hired labor but not the cost of the self-help labor contributed by
Rother. Rother, acting as his own contractor, built a contemporary
modern house of 6 rooms, 1000 square feet in size. He subcontracted
the concrete work, and the electrical wiring, and hired a carpenter
part time. The remainder of the work he did himself, exchanging labor
with two others on the property. He bought all his own materials.
When asked where he learned how to build a house he merely said
"Picked it up."
Steven B. Anderson, a radio instructor in the Coast Guard during
the war, was also his own contractor. Anderson paid $675 in cash for
102 Get Your Own Home the Co-operative Way
his lot and $7825 for his house, making a total of $8500. He obtained
a mortgage for $4000 from the Surety Building and Loan Co., $2500
from his mother-in-law, $1500 from his mother and $1500 in cash
from his own funds. This makes a total of $9500, meaning that Ander-
son still has $1000 in reserve. The $8500 figure includes $550 ex-
pended for hired labor but does not include the cost of Anderson's own
labor. The vet figures he saved $3000 by doing most of the work him-
self or with the help of neighbors. The "hired labor" included that
necessary for the rough plumbing and the concrete work. His home
is a redwood rustic house of 5 rooms, 1060 square feet in size. The
frame is on a concrete slab containing radiant heating lines. Interior
walls are of sheetrock with redwood trim. The roof is of thick butt
shaker shingles. The house took him 14 months to build, working
Del Lucot, chairman of the board of directors of Valley Homes,
Inc., was able to obtain a bank loan of $9400 with a VA-guarantee
for $4000, to build his house. Lucot, with the 12th Army group in
France during the war, is now a state auditor. A contractor asked
$10,400 to handle the job, but Del completed a number of operations
himself, putting up siding, installing electric wiring, painting, varnish-
ing, installing closets and shelves practically all the finishing work.
All of which brought the actual cost down to $8600. Savings were
sufficient to enable Lucot to present his wife with an all-electric kitchen,
complete to dishwasher, stove, refrigerator, garbage disposal unit and
washing machine. Cost $900.
The house contains living room, dinette, three bedrooms, kitchen,
bath, laundry, and garage with storage space. The end result of Lucot's
creative work on the interior of the house is charming. Unlike the other
houses in the development, all interior walls in the Lucot house are
wood, generally knotty pine, finished in pastel stains, shellaced and
waxed buff in the halls, natural in the living room, and cloud blue in
the master bedroom. The bathroom, finished in cream tile, features a
double-sided linen closet open to both bath and hall, a washbowl en-
cased in closets and a step-help for Baby Joanne. It took Lucot and his
wife three months to finish the house, working nights and week-ends.
Mrs. Lucot, seated by the triple windows which overlook the terrace,
Joanne and the dog at her feet, disclaimed any leadership in the pro-
ject. Finishing a round of tatting she said: "Del's just wonderful with
his hands. He can do anything he sets his mind to."
San Jose, California 103
"There's no secret to it," said Del. "In the Boy Scouts I learned
to be handy with tools. On this job when I came up against some-
thing I didn't know how to do, I found there were plenty to ask and
willing to show. I helped three others wire and shingle their houses in
return for their assistance on my place."
"And how did the unions like that?" t asked.
Lucot just grinned: "I finished the job, didn't I?"
During the development of the Valley Homes project, Steven
Anderson served as manager at $3 an hour with the understanding that
his charges would never total more than $100 in any one month. When
the development is complete, no manager will be needed.
Valley Homes, Inc. has no further financial worries. Estimates of
expense made in the beginning so closely parallel the list of expenses
tallied near the end of the development as to be almost incredible. Com-
pare the figures given earlier in the chapter with those listed below,
which cover a period of 18 months, and you will agree that the vets
figured better than they knew.
Land purchase $32,000.00
Paving of streets 9,318.86
Architect's fees 3,600.00
Commissions to realtors 925.00
Crop expense, prunes 228.64
Insurance and bonds 251.11
Legal fees j. 1,141.85
Office expenses 183.70
Organization, general 1,623.25
Taxes and licenses 588.90
Title expenses 436.40
Treasurer's expenses 285.00
Manager's salary, 18 months 1,695.00
Net costs to date $55,765.50
Sale of prune crop $ 2,000.00
Sale of house and barn 980.00
Interest received 112.33 3,092.33
104 Get Your Own Home the Co-operative Way
Expected revenue from lot sales
80 lots at $650 average price 52,000.00
Less: selling costs on 19 lots at $120 which in-
cludes $95 commission and $25 for revenue
stamps, etc 2,300.00
Memberships, 80 at $150 12,000.00
Total revenue, net $61,700.00
Less: costs to date 52,700.00
Balance for expenses and
further development of tract $ 9,000.00
This analysis does not take into consideration any costs of, or bene-
fits from, the 2 -acre park and the two commercial lots. These will be
assets of the Corporation in addition to the $9,000 balance shown
Snake Hill, Massachusetts
In the mountain fastness of Snake Hill, Belmont, Massachusetts,
live nine families unperturbed by the fact that their co-operative com-
munity of contemporary modern houses is considered queer, outlandish,
or downright "red" by the neighbors.
The co-op group, one of the smallest in the country, originally con-
sisted of an architect, a lawyer, a chemist, a sociologist, a Harvard pro-
fessor, an artist, an accountant, a sales engineer, and an entomologist.
These individuals built flat-roofed houses in defiance of traditional
New England architecture, disregarded FHA when stipulations bid
fair to wreck the venture, carved a cracker jack road up their steep hill-
side when everyone said it couldn't be done, and completed their pro-
ject without making a single serious error. They are eminently satis-
fied with what they have accomplished.
In the middle of winter, with Boston struggling under two feet of
snow, the trip to Snake Hill seemed an impossible undertaking. Two
taxi drivers refused to make the attempt, but the third, surprisingly
optimistic, took on the job with alacrity.
"Nuthin' to it," said this individual. "Those fellers don't know the
district or they'd realize that Snake Hill isn't what it used to be. A
live-wire gang lives out there now. What do you suppose they did?
Years ago, nuthin' but nuthin' went up that hill in bad weather.
Not even a hearse. Then last winter the co-opers put steam pipes under
the road and now you can ride clean, high, and dry clear up to the
He was right, not only about the road which stood bare of snow
while 4-foot drifts walled either side of the passage, but also about
"the live-wire gang."
Nine years ago, Carl Koch, ambitious young architect with modern
ideas, was designing furniture for a living and dividing his spare time
between sketching chairs and tables and scouting the countryside for a
106 Get Your Own Home the Co-operative Way
piece of land on which to build a house. Restricted in choice because of
the necessity of being close to Boston and because he had limited
funds, Koch spent many a weary hour combing the congested environs
Eight miles from Boston, on the outskirts of Lexington, he found
"just the piece" a 7-acre wooded tract on a ridged and rocky out jut
above the housetops. Koch thought the site would appeal to a good
many of his friends, too. In due course he took fifty couples out to see
the hill. Some were entranced with the rugged beauty of the place and
saw in its inaccessibility a "haven." Others were frankly frightened
at the prospect of trying to man the heights in bad weather. Still others
disliked the proximity of a sanitarium to the property, fearing the in-
mates might at times stray from their 800-acre pen into the co-op
community. Several raved about the view, praised the location and its
possibilities, and said warmly: "Do save us a lot, and when your other
houses are up and we see how the road is going, we'll come in and
build." But they neglected to back up the request with cash.
Seven families finally agreed to go ahead with the project. They
held several informal meetings and decided to take an option on the
land. The property was owned by a builder who had been forced to
buy the rocky ledge in order to obtain another piece he needed for a
housing project. His selling price was $4500.
A hat collection provided $100 for a 60-day option. Then the group
took up ways and means of raising $4500 and tabulated figures on the
probable cost of road building, bringing water into the property, and
developing the lots.
A plot plan showing the acreage divided into ten lots, with seven
for houses and three for playgrounds, parks, a tennis court, and a
swimming pool, was submitted to the town. Each person was to own a
half-acre. The plan was accepted. Meantime two families dropped out,
but the remaining five divided the cost and paid for the property in
They found a contractor who would construct a gravel road for
$1000. This suited the pocketbooks of the members, but not the town
maintenance regulation which stipulated that the road must have a
forty foot right of way and a much more gradual grade than that
planned by the Snake Hill community.
It was decided to go ahead with the gravel road, to pay for its
maintenance within the community, and to rebuild it into a road ac-
ceptable to the town within ten years. A tarred surface was later added
Snake Hill, Massachusetts 107
to the gravel road at a cost of $500 subscribed by the members in an-
other "hat passing."
Getting water into the development proved a ticklish problem.
There were mains along the southern foot of the property, but the
water could not be brought up the hill because there wasn't sufficient
pressure. It was necessary then to figure on bringing the water down
from the north across the land of two neighbors, one of .whom de-
manded cash for the privilege of crossing his half of the road. The
controversy was settled when the town announced the right of way
belonged to the town and not to the property owner.
Optimistically, the co-op planned to lay electric cables and gas pipes
on shelves in the water main trenches. But the wives of the neighbors
rebelled. One of them sent an ultimatum: "The water is enough. I
don't want to be blown up in a gas explosion." So to keep the peace,
the members decided to do without gas and to bring in electricity by
Next came the problem of financing the homes. The group first
went to the local office of the FHA. The agency agreed to send a rep-
resentative. He arrived, took one brief look at the property, and said:
"Nothing doing. The proposition is just plain ridiculous."
Anxious to obtain FHA-insured mortgages if possible, the members
talked over the matter with Professor James Ford, Harvard sociologist.
He wrote FHA headquarters in Washington and apparently lit a fire
under that conservative office, for one of the officials hot-footed it up
to Snake Hill, climbed the rocks to the top, peered down over the ridge
to the main road far below, and then took the next train back to Wash-
ington. The verdict from federal headquarters was to the effect that
FHA could not consider the project unless the Snake hill Co-operative
was willing to construct a permanent road which would meet FHA
specifications. This, the co-op discovered, would cost $40,000.
Without wasting further time, the members of the little group ap-
proached local banks and mortgage institutions in search of financing.
They secured loans through Street and Company, a Boston mortgage
firm, and through the Newton Savings Bank. Several obtained mort-
gages for 65 per cent of the valuation, on 20-year terms at 4J per cent
interest. These loans could not be paid off under three years or faster
than 25 per cent a year. Two members were able to pay off in 4 years.
The Snake Hill Community was organized under a trust agreement
with all residents as members, sharing responsibilities, protection, and
benefits. Houses and house lots are owned individually, but the com-
108 Get Your Own Home the Co-operative Way
mon property is controlled and managed by the Snake Hill Trust. The
association is not incorporated. Assessments are levied against each
owner for taxes, for improvements, for utility costs, for road upkeep,
for liability insurance, for oil charges. The assessments are levied by
majority decision. Sometimes there is a meeting. More often, the mem-
bers gather in Koch's kitchen or Zerbe's living room and talk over
what ought to be done.
Most of the business is transacted informally yet the community
operates under very definite agreements. If all members decide to sup-
port a project such as a tennis court, the cost is apportioned evenly. If
one member drops out, the others take on his share. But under the
Trust Declaration, it is agreed that if the dissenting party sells his
house, the incoming member must assume his share of the cost of the
court. On the same basis, a swimming pool will be built. Interested
members will share the cost.
Odd jobs and ground improvements are accomplished now with
hired labor because members are engrossed in their own occupations.
"We work together whenever there is a particular project on hand,
but the work parties and picnics have been discontinued," said Koch.
"This is a small community. Houses are fairly close together. To
attain the privacy some of us need, hedges or fences have been placed
on property lines. We see each other frequently. We know what is
going on in the community. But I dare say there is less visiting than
there would be if our homes were farther apart.
The first five houses in the community were designed by Carl Koch.
Low, comfortable-looking houses with flat roofs, they suit the hilly
landscape. Exteriors are common fir boards, plastered inside. Window
frames are steel; floors are of pine or oak; heating systems are warm
air. Four inches of spun glass insulation was used on the roof and
one inch of Kimsul on the walls. Tobias Brothers of Arlington were the
contractors. By building the five houses at the same time, they figured
there was a 10 per cent saving in construction costs.
A single contractor handled the next three houses. Joseph Richard-
son was not an experienced builder at the time. A grandson of H. H.
Richardson, the architect, he built his own house and felt he knew
enough about the job to build others. Subsequent developments proved
he did. He and his clients worked out a special type of building con-
tract whereby an estimated price was agreed upon with the under-
standing that any savings would be divided equally between con-
tractor and owner. Likewise, any extra costs would be split, but split
three ways between contractor, owner and architects.
Snake Hill, Massachusetts 109
There were no losses. On the contrary when all bills were in, there
were savings of $100 to $500 on each house. Building costs ranged
between $7000 and $9000. (That was, of course, in 1941.)
Architects for these three houses were Koch, Huson Jackson, and
Robert Kennedy. The structures, unusual in design, are based on a 4-
foot module. Sections, composed of cement-coated fiberboard 1^ inches
thick are placed between redwood framing posts, 4 by 4 or 4 by 6
feet in size. Floors are made of 2 -inch tongue and groove planking.
Interior partitions, which are non load-bearing and so can be placed
anywhere the architect desires, are either of wood or the same cement-
surfaced fiberboard as that used for the exterior walls.
Karl Zerbe, an artist, has the largest house. Built on a steep slope,
the house is arranged on three levels, with the living terrace and heating
room on the basement level, two bedrooms, bath and shop on the
middle level, a living-room-dining area, porch, kitchen and studio on
the third level.
The house of Richard Kriebel, sales engineer, is also on three levels,
with a woodworking, carpentry and pottery shop on the basement floor.
There are four bedrooms in the house although the overall structure is
only 24 by 32 feet. Space is saved by eliminating walls between kitchen
and dining corner and between dining and living space.
Frank Lord, accountant, built a rectangular house on a flat site. A
sliding glazed panel opens half the wall of the dining space to a
corner porch. A combination heating system includes radiant coils in
the downstairs floor and hot water radiators upstairs.
The new road is a tribute to the ingenuity and determination of the
members to build a pathway to their haven on the hill. A succession of
severe winters convinced them that only a drastic modernization of
the road would make their community easily accessible at all times of
the year. So they tore up the tar and laid two rows of 1-inch wrought-
iron pipe 3 inches below the surface down each side of the road directly
under the car tracks. Half-way up the hill, they built a boiler house to
provide covering for a domestic hot-water heater. One large circulator
takes care of an 80-foot rise in the 750-foot length of piping. To widen
the road, surface it with macadam, and install the heating cost $7200,
of which $3200 went for the heating equipment. The first winter it cost
each family $20 to pay for the fuel oil. The system does not have to
operate all winter, but can be turned on or off at will. Prestone in the
pipes keeps the water from freezing.
Future plans call for expansion of the present property and improve-
ment of the common ground. When Gardner Cushman, lawyer member
110 Get Your Own Home the Co-operative Way
of the group, was asked how funds would be provided for the proposed
park and pool, he laughed. "To tell you the truth, I don't know," he
said. "In the same manner we acquired the other funds, I expect. Our
planning and provisioning are strictly informal. We meet, decide on an
improvement, figure out the assessment, then gather in the money. For
example, I have just collected $10 from each member to pay for the
fuel oil for the road, meanwhile warning everyone I'd be around for
another $10 as soon as we received the bills."
Palo Alto, California
Ladera (Spanish for hillside) is a middle-class community of four
hundred families earning comfortable salaries of from $4000 to $8500.
Many of the members are employed in San Francisco, which is within
easy commuting distance. There is a score of professions and trades
represented everything from a lawyer to a longshoreman. Included
are writers, teachers, businessmen, engineers, accountants, government
employees, carpenters, bakers, industrial designers, chemists, geologists,
retired army officers, college professors, airplane pilots, scientists, in-
surance agents, auditors, photographers, publishers, mechanics, nurses,
composers, architects, and a dentist.
Roads and utilities are installed and construction is proceeding. When
the development is finished, these people will not only be the possessors
of modern houses acquired at two-thirds the usual cost, but will also
have created an entire community, complete to stores and service centers,
parks and playgrounds, recreation centers, a school, and a chapel.
Three features mark Ladera: its wide diversification of community
interests; its plan for the inclusion of minority races; and its care for
the interests of children acres of wooded picnic grounds, a nursery
school and safe side-walks underpassing all road crossings.
What the Laderans have done, any other group might do. Not over-
night, of course. Creating a town takes time. Here are people who in
the beginning had little in common on which to build a co-operative
community except the desire to live in a place of their own choosing
The group made slow progress at first, partly because the acquisition
of the land took so long. Across many acres the weary homesteaders
tramped before the final site was selected. Once seen, no other would
do. I couldn't blame them. The site is only 4 miles from Palo Alto,
seat of Leland Stanford University, yet because most of the surrounding
land is owned by the college, it will always be adjacent to open country.
112 Get Your Own Home the Co-operative Way
Gentle grassy slopes, interspersed with wooded canyons and rock
gullies, provide sufficient variation to suit the most dissimilar tastes.
Some will build in the low meadows where cattle once pastured; others
will place their houses on the edge of the cliffs, where garden paths
will replace the trails hardened by the hoofs of many horses. Contour
is such that even though the homes will be fairly close together, a rise
of hill, twin live oaks, or a crest of yellow acacia trees will screen one
home from the other.
Under the name Peninsula Housing Association, the Laderans in-
corporated under the non-profit laws of California. The land, purchased
from the Joseph M. MacDonough estate, cost $155,000. The portion
acquired for Ladera was known locally as the Burke ranch and covered
258 acres. The price paid was almost double that originally asked.
Competitive bidding by real estate interests boosted the figure. At 'that,
the property cost the Corporation only $600 an acre, unbelievably low
for this part of the country. It has already increased 10 per cent in
As we stood knee deep in an alfalfa pasture on the summit of the
property, with San Francisco Bay before us, the wooded Santa Cruze
mountains to one side, and the Santa Clara fruit farms to the other,
Manager Hubert Hunter indicated a field on an adjoining hillside.
"There," he said, "is a site of two acres for which the commercial
developers are asking $8000. It has water, but no sewerage or other
Of the $155,000 purchase price, all but $50,000 was paid in cash
by the members. The latter amount was acquired on loan from a bank
for 5 years at 4 per cent interest. The Association paid off all but
$10,000 of this loan in less than two years. Development of the prop-
erty, including installation of water, sewerage lines, gas, and electricity,
building of roads, landscaping and engineering services, is figured at
$605,000. This amount added to the purchase price of $155,000
makes a total of $760,000, or about $2945 an acre.
Lots vary considerably in size. The average is 80 by 110 feet, but
a few contain almost 2^ acres. Prices for the developed lots range
from $1800 to $7000, depending on size and location. Appraisal value
of the "average lot" has been set at $2900.
What did the water system cost ? How much was paid for excavation ?
What of the sewers? The landscaping? The engineering? Did Ladera
have to "pay through the nose" for its hilly roads? These are the
questions would-be home owners always ask. The clearest answers are
in the Peninsula Housing Association's cost estimate. Here it is:
Palo Alto, California
Land Purchase $ 155,395.11
Direct labor by Pen. Hous. Assoc 2,500.00
Materials & expenses by PHA 5,000.00
Curbs and gutters 81,000.00
Excavation and fill 85,000.00
Pedestrian underpass 10,000.00
Sewers and outfall 151,729.00
Landscaping public-fee 3,484.00
Landscaping public-cost 71,110.00
County taxes 6,000.00
Interest bank loan 1,700.00
Interest certificates, 20% total 2,400.00
Pressure system 18,000.00
Power and Telephone Distribution 120,000.00
Average per Lot
Electrical and telephone lines are being placed underground, even
though this installation adds $400 to the cost of each lot. The added
charge is offset by an increased valuation of the property. Poles strung
across the property would be cheaper but would decrease the value of
the lots by 7 to 10 per cent.
The cost per lot for water service is $321, but the savings in water
charges over a period of years will in effect amortize the initial invest-
ment for the water system. Also, assurance has been received from the
California Water Service Co. that it will buy the operating water
company from Ladera at near cost if the Association wishes to sell the
system after the tract is occupied and members are consuming water.
The Menlo Park sewerage system, ending a mile from the property,
is being extended to meet the lines being laid by Ladera.
There are a number of "protective covenants" on the subdivision. The
most important decrees that members of racial minority groups will be
welcome at Ladera in the same ratio that they bear to California's total
population. No mining is allowed on Ladera property; no drilling for
gas or oil. Neither cows nor pigs may be kept in Ladera.
Ladera will retain its feeling of country spaciousness even after
114 Get Your Own Home the Co-operative Way
completion. While houses, roads, and community areas will occupy
two-thirds of the total acreage, the remaining third will be left un-
touched. Site plan- of the property includes curving or circular roads
with only two through thoroughfares. Sidewalks are placed, not along
the streets, but in a separate network with underpasses beneath the
road crossings, so that children living anywhere in the property can
reach the school without having to cross a single street.
An elementary school building in the center of the property is con-
templated as a basic part of Ladera. It would be operated under the Las
Lomitas School District and would take care of the 300 to 400 pre-
high school children in the community. The Sacramento Planning As-
sociation looks with favor on the plan.
Until a new high school is built to serve the southern part of San
Mateo county probably in Menlo Park Ladera boys and girls will
attend Sequoia High in Redwood City, with free bus transportation
provided by the county.
The Peninsula Housing Association hired two top-flight architects,
John Funk and Joseph Allen Stein, to design the development. The
contract between PHA and the architects provides that Funk and
Stein must do a great many things other than draw doors and windows.
First, they must negotiate the contracts with their collaborators: Nick
Cirino, civil engineer; James Gayner, mechanical engineer; and Garrett
Eckbo, Robert Royston, and Edward Williams, landscape architects
the same firm that planned the canyon country development of the
Mutual Housing Association in Los Angeles.
In addition, the architects agreed to develop the site plan for Ladera
in collaboration with Eckbo, paying for his services from their fee;
to design 13 basic dwelling unit-type plans with 7 variations of each
plan; to develop methods of prefabrication, sub-assembly, and mass
production for assembly line technique and economy of construction;
to supervise the project during the construction period; to provide cost
surveys, furnish an office, employ draftsmen and other necessary profes-
sional and clerical personnel; to furnish their own transportation in
and about the Bay area. For all of the above services, the architects
receive a fee of $40,000, payable at the rate of $1500 a month. They
also receive office overhead expenses of $500 a month plus reimbursable
expenses which include draftsmen's and technicians' salaries (limited
to $3000 a month) workmen's compensation insurance, social security,
and old-age benefit payroll taxes, travel expenses outside the Bay area,
and costs of blueprints or reproductions.
The civil engineering contract covers a design and working draw-
Palo Alto, California 115
ings with specifications of roads, paths, heavy grading, drainage, water
distribution system, and sewage collection system. The fee will be 5
per cent of the cost of the above work, estimated at $400,000. It also
includes a design and supervision of the sewage disposal plant, or out-
fall sewer, for a fee of 6 per cent of the cost of the work, estimated
at $50,000. Lastly, it covers the preparation of a subdivision map for
a fee of $500.
The mechanical engineering contract includes the design, working
drawings, and specifications for a gas distribution system, electrical
distribution system, street lighting, and fire alarm and telephone
facilities. The fee will be 3^ per cent of the cost of the work, estimated
The landscape architects agreed to make the design for landscaping
the public space and the community area for a total fee of $1250,
and to prepare 6 preliminary landscape designs for the basic dwelling
unit types for a total fee of $750.
Surely this imposing array of architectural talent should produce
some of the most beautiful homes in California. But those who, for
one reason or another, do not wish to remain as members can always
withdraw at small loss. The member, on joining, pays a $200 fee, $150
of which is returnable on withdrawal. The membership fee is a reim-
bursable account set aside as a trust fund. Disposal of the fund is
subject to future determination by the membership and the board of
A month after joining, the new Laderan invests $1000. Further
assessments are made at stated intervals determined by the board.
By the time the owner is ready to begin construction on his house,
he must have made the total investment in his lot and his share of the
community development. A veteran is entitled to a refund of his in-
vestment if he is able to obtain full financing for his house and lot.
If a member who has already built his house has to sell it, the As-
sociation provides as follows: "If you must move after Ladera is built,
you may sell your home just as you would in any other community
subject only to a first option to the Association to purchase." In this
case, assessments are returned without interest.
Houses will be individually financed. The subdivision plan has been
submitted to the Federal Housing Authority but members may not be
able to obtain FHA-insured mortgages. The Peninsula Housing As-
sociation has been given to understand there are three reasons for
FHA's likely disapproval: Ladera's racial policy, the co-operative set-up,
and the flat roofs. Like the banks, FHA presumably considers inter-
116 Get Your Own Home the Co-operative Way
racial housing a bad risk. Their objection to co-op set-ups is reported to
be their claim that community facilities and parks are never properly
maintained. No one can offer any explanation for FHA's rumored
aversion to flat-roofed houses in California.
The new houses will cost between $8000 and $15,000, with an
average of $10,000 figured on a basis of $8 per square foot of living
space. There are 91 plans and variations from which to choose. Mem-
bers who find none to their liking and wish to use a plan other than
the basic-unit type, or variations designed by the architects, may have
a house almost "made to order" if they obtain FHA approval and are
willing to pay an additional fee of from 4 to 7^ per cent.
Seven months of study preceded the final drawings on the first
houses. Eight-page questionnaires were distributed to the members and
the architects based their designs on the preferences indicated in the
answers. The feature most in demand was a stall shower. Consequently
showers were incorporated in all the homes. Next in the list of pref-.
erences was bigger bedrooms. So all bedrooms were designed to ac-
commodate twin beds without cramping. More kitchen space was third
on the list. . . . And so it went.
The California contemporary style houses designed for Ladera have
mono-pitch or flat roofs, large glass areas on the living side, terraces
to combine outdoor with indoor living, kitchens placed conveniently
near the service yards, children's rooms extended into outdoor space
Most of the homes will be built of California redwood on con-
crete piers or a concrete slab. There will be no cellars. The houses will
be so placed on the lots that the western sun won't have a chance to
glare through the kitchen windows in the late afternoon and blind
the housewife preparing dinner. In that way the architects hope to cut
down on the usual number of scorched pot roasts.
Local building codes require 1000 square feet of living space. One
of the smaller homes, estimated at $8000 to $9500 exclusive of lot,
has 1170 square feet of floor area and includes living room, dining
area, two bedrooms, kitchen, laundry, bath, and entry. It is placed
cornerwise on the 80 by 110 foot lot, so that the living areas and
terrace face away from the road. There is storage area in the single
A larger house, 1590 square feet, will cost $11,000 to $13,000
exclusive of lot, and will include living room, dining room, kitchen,
laundry, entry, three bedrooms, and two baths, with ample storage
space in the two-car garage. The lot is about one-fifth of an acre. Two
hundred houses are now under contract.
Palo Alto, California 111
Roofs will be tar or gravel with insulation beneath. Window areas
are large. Partitions will be of varied construction. Folding leather
partitions will be utilized in some of the units, particularly between
children's bedrooms which could be thus used as one large playroom
during the daytime.
Natural gas will be used for heat and hot water, but cooking will
be done by electricity. Stoves, dishwashers, refrigerators, laundry equip-
ment, and bathroom fixtures will be purchased at considerable savings
through Associated Co-operatives, Inc., in Oakland, California.
It is estimated that mass purchasing and construction will reduce
the cost of the homes by 15 per cent. Substantial savings should also
result from the use of the module unit of construction. By using a
standard unit of 3 feet 4 inches throughout the community, the builders
can cut all studs, reinforcements, joists, and the like in a mill on the
site. Costly hand sawing will thus be eliminated. Another unit that
will contain all window areas, French doors and ventilating units will
be assembled at the mill.
A large co-operative housing community, such as Ladera, offers many
opportunities for cutting costs. In addition to the short cuts previously
listed, the PHA cites a 50 per cent saving in purchase of the land, a 10
to 15 per cent saving in its development, and an architects' fee less
than half what it would have been if the houses were designed
A shopping center will be located in the center 'of the community.
It will include a market, frozen food lockers, gasoline service station
and garage, restaurant, drug store, barber shop, beauty shop, variety
store, medical and dental offices, movie theater, woodworking shop,
nursery, chapel and an auditorium. The Association will own the build-
ings and lease them.
There will be many smaller optional co-ops within the larger co-op.
Thus only those who are interested in horseback riding will be included
in the stable co-op and assessed for its upkeep. The same will hold true
for the swimming pool co-op and the nursery school co-op. A nurse-
maid and housemaid service is planned, members to draw on the pool
and pay for services by the hour. Gardening services will be provided
on the same basis. The members have also planned to organize a co-op
maintenance shop with carpenter, painter, plumber and electrician on
Management of the community will be in the hands of a board of
seven directors to be elected by the members and to serve without
pay. The paid staff will include a general manager, two office clerks,
and four outside maintenance men. Yearly salaries for these Seven will
118 Get Your Own Home the Co-operative Way
total about $27,500. In addition, both fire and police protection arc
Costs of maintenance, operation of the community projects, and im-
provement of the common land will constitute the usual upkeep ex-
penses that in an ordinary neighborhood are borne by taxes. These
will be met at Ladera by charges in the nature of taxes or assessments
approved by the members.
It is not difficult for members to appreciate the dollar-and-cents sav-
ing they make by belonging to a co-operative group, or the fact that
they own homes in beautiful surroundings at two-thirds the usual cost,
or that they have an equity in acres of parks and playgrounds as well as
an interest in the many co-operative businesses in the development. But
the initiators of the project list an even greater gain: "We try to
stress the idea that the kind of community that results is even more
important than the amount of money saved. We're not just selling
houses. We're selling the idea of co-operative living."
This is the home of Chester Lampe, in the co-operative
community of "white collar" workers in Bryn Gweled, Feasterville,
Pennsylvania. Excavating, road work, and ditch digging by the mem-
bers lowered the cash outlay necessary for the houses, which ranee in
price from $7000 to $13,750.
i :: J *r
Low rent is one of the pleasant features of the Greenmont
Mutual Housing development in Dayton, Ohio. The one-story units
pictured above cost $27.50 a month.
Some people use a golf course for making business and social con-
tacts; others, for the pursuit of their favorite recreation; but down in
Maryland, forty minutes from downtown Washington, enterprising
homebuilders utilized a golf course to underwrite the administrative
costs of their balanced community.
Mapping out their development across the 124 acres of the Bannock-
burn Golf Course, the Bannockburn Co-operators, Inc., planned the
construction of the first houses around the rim of the property, post-
poning the development of the interior for a later date. By so doing,
they left the course and the golfers undisturbed, collecting from the
latter $8,000 yearly rental, sufficient to foot the bills for carrying
charges, administrative and organizational costs.
The complete community will serve five hundred to six hundred
families in single dwellings, garden duplexes, and park apartments.
Plans encompass a neighborhood shopping center, school and play-
ground, clubhouse and swimming pool, nursery, community building,
tennis courts and parks. It is one of the few co-operative developments
in the country to which the term "balanced community" may be rightly
applied. The initial plan to retain title to all land and buildings in the
Co-operative was changed to provide for individual ownership of the
homes, partly because of the difficulty in obtaining financing under the
co-operative arrangement, and partly to assist members in their income
tax obligations (they could deduct real estate taxes from their taxable
income under the individual ownership plan) .
The dream simmered for four years. In 1944 there were many
people in crowded Washington who yearned to get out of the city and
move their families into rural surroundings. Take the Martins, for in-
stance. Each night when John came home from his office in the
Pentagon, he and his wife sat down at the bridge table in their three-
room apartment and played their favorite game not with cards, but
with pencil, paper, and house plans.
120 Get Your Own Home the Co-operative Way
The house would be small, one story in height, designed along simple
lines but with plenty of room for living, separate bedrooms for the
children, a real kitchen with a back door, wide windows in the living
room, perhaps a terrace, and of course a garden.
Well, that might be possible even in Washington, but the Martins
wanted something more than just the house. They aspired to sur-
roundings that would satisfy their desires for country living, city
proximity, safe play places, school and shopping facilities, a neighbor-
hood and neighbors to their liking.
Where to find such a community? In the phraseology of their chil-
dren, it was just something "out of this world." The Martins were not
alone in their dreams. They had friends who thought as they did. On
week ends the couples toured the outskirts of Washington, looking,
always looking, but never finding just what they wanted. A real estate
operator sized up the situation by saying:
"That kind of community just isn't. You'll have to make that to
order." Slowly the idea took shape. Why not? Why couldn't you plan
a community as you'd plan a house placing the school and stores
just where you wanted them, building big houses and small, allotting
plenty of space for safe areas for the children, planning for tennis
courts and ball fields where the adults could relax after the dishes were
done, and a community house for social activities and the business of
Yes, why not? There must be many others who wanted the same
things. The first step would be to organize and formulate a plan.
So it was that in May, 1944, a group of families got together and
formed the Group Housing Co-operative under the sponsorship of the
Potomac Co-operative Federation.
The new Co-op had wide vision. Its program included not only
study of the theory and practice of co-operative housing, but also
the establishment of co-operative housing communities in various parts
of greater Washington.
Membership was open to anyone who subscribed to the principles
and objectives of the Group Housing Co-operative. The new board
of directors decided that membership in the GHC would be a pre-
requisite but not a guarantee of membership in any housing com-
munity that Group Housing might develop. Eventually the roster of
GHC will consist of members of the various housing communities it
has developed and other individuals interested in supporting the idea
of co-operative housing.
About the time the new Co-op was formed, a group of architects
Bannockburn, Maryland 121
and planners, under the sponsorship of the National Housing Agency,
designed in great detail plans for the development of a hundred-acre
site in Washington.
"This plan furnished a spark to our interest and gave content to the
talk of housing which we had indulged in," said Mary Fox Herling,
president of Group Housing Co-operative and of Bannockburn Co-
operators, Inc. "It gave concrete expression to what many of us had
been thinking, and demonstrated how a far better neighborhood than
most home owners now live in could be created by planning in ad-
vance for a community large enough to provide housing for families
of varied needs and diversity of incomes, through different dwelling
types." Mrs. Herling then went on to explain that her group hoped
to establish a co-operative housing development that would include
apartment houses, garden apartments, row houses, and detached homes,
together with large park areas, and areas for educational, recreational
and commercial facilities.
There you have in a nutshell a description of a "balanced com-
For two years, members of the Group Housing Co-operative met
regularly and discussed plans and prospects. They invited architects
and community planners to speak at their gatherings. They studied
other planned communities such as Forest Hills, L. I. and Mariemont,
Ohio. The} looked into the manner of operation of such co-operative
developments as the Amalgamated Housing projects in New York City.
Quite early, the members of the little group realized that until
they had a definite site they could not hope to attract sufficient members
to enable them to buy property suitable for large-scale development.
Weeks of scouring the country produced five sites, and an architect
one of those who had worked on the NHA plan was hired to study
the locations. Meantime, a series of eight fortnightly seminars on hous-
ing was arranged and the meetings were opened to the public.
As a result, when the board was ready to report on sites, member-
ship had grown to the point where it was practical to consider buying.
Now all the Co-op needed was a proving ground for its ideas. Then
opportunity knocked with a club.
The Bannockburn golf course, which had been taken over by the
Potomac River Naval Command and operated as a service recreation
center during World War II, was put up at public auction. This piece
of property, just beyond Glen Echo in Montgomery County, Maryland,
had already been selected by the members as the ideal site for the
development of their balanced community.
122 Get Your Own Home the Co-operative Way
The acreage offered both smooth slopes for building and wooded
tracts for recreation grounds. Water and sewer facilities were available.
Bus service was handy. There was plenty of room for five hundred,
even six hundred families.
Then appeared Difficulty No. 1. While the majority of the co-
operators wanted to buy the site and to start raising money for the
down payment, a few of the members who had been clamoring
loudly for action, suddenly decided they were not ready to go ahead.
To make matters worse, those who wanted to purchase the property
became worried about investing substantial sums of money in the
project, if decisions on its development were to be made by members
of the organization who had no participating interest in the property.
In order to protect the interests of those who wanted to invest in
the site, an arrangement was made with Co-operators Properties, Inc. (a
District of Columbia co-op, set up some years ago to own properties
used by co-ops) to act as trustee and receive funds for the purchase
of the specific site.
The agreement, entered into by the Trustee, the individual sub-
scribers, and the Group Housing Co-operative, gave GHC a nine
months' option on the property if it was secured, and set forth the
rights of the subscribers. Within ten days, $55,000 was raised. In all,
190 members subscribed.
Cash in hand, representatives of the Group Housing Cc :>p attended
the auction of the Bannockburn Golf Club on April 6, 1946, and suc-
cessfully bid in the property at $193,000. The co-operators made a
down payment of $50,000 and the former owners of the property,
Messrs. Shinners and Dreslin, took back a purchase money mortgage of
$143,000 at 2 per cent interest payable in three annual installments. The
low interest rate was the result of an arrangement between the
mortgagee and the mortgagor, whereby the co-operators agreed to figure
the amount of interest which would have been paid at 5 per cent,
and the difference between the 2 per cent rate and the 5 per cent
rate was included in the purchase price. The mortgage has since been
paid in full and the property is free and clear.
Within a week after the co-ops bought the property, they were
offered $50,000 more for it than they had paid. But they had no
intention of letting go. They were too happy that they had been able to
acquire the property. In fact, many of the members felt that had it
not been for the auction, which galvanized the group into action, they
never would have raised the money to purchase anything.
Bannockburn, Maryland 123
On August 2, 1946, Bannockburn Co-operators was incorporated
under the laws of the State of Maryland, as a non-profit corporation
with an authorized capital stock of $100,000 divided into 100,000
shares at one dollar each.
The Group Housing Co-operative now assigned its option to the
new corporation, by-laws were prepared, and a resident selection com-
mittee commenced the work of choosing residents from among those
who had applied but were not original subscribers. The Group Housing
Co-operative remained as the parent organization with the object of
developing other co-operative housing projects, as it had fostered
Bannockburn Co-operators, Inc.
The next step was the planning of the development. Bannockburn
co-operators had firmly in mind the fact that they wanted a "balanced
community," so the choice of architects was made with care. Rhees
Burket, Joseph Neufeld, and Vernon DeMars were retained to study
the site and recommend the best possible use of the property. Their
fee was set at 4 J per cent of the total cost of the development, estimated
at between $6,000,000 and $7,000,000.
The planning presented one major problem: since the area was
zoned for single-family dwellings, it would be necessary for the Co-
operative to ask for a re-zoning of forty acres in the interior of the
property, in order to include apartments in the plan.
In anticipation of a possible rejection by the Montgomery County
Zoning Commission, the architects prepared two plans, the first de-
signed for duplexes, apartments, and single dwellings; and the second
restricted to one-family houses.
In the re-zoning plan, 350 single-family dwellings were placed in
the strip of land, 150 to 250 feet wide, which rims the property. They
were widely spaced, in character with the surrounding neighborhood.
In the interior, seventy-five units in garden duplexes and semi-detached
houses and 150 units in three elevator apartment buildings, were
Because of the concentration of families in the apartments, sufficient
land could be set apart to provide thirty acres of parks with recreational
facilities, including the swimming pool, tennis courts, and ball fields.
Five acres were reserved for a school. The shopping center, to cover
almost three acres, was located near the front of the property, screened
from adjacent residences by trees and hills.
Since zoning restrictions confined the number of families per acre to
six, the Bannockburn co-operators offered to enter into an agreement
124 Get Your Own Home the Co-operative Way
with the county commissioners to hold the over-all density on the 124
acres to five families per gross acre.
The alternate plan, proposed by the architects if the zoning board
rejected the first, called for a planned community of single-family
houses in a variety of sizes to meet specific needs, with larger lots than
the permitted minimum, but a smaller acreage than first planned for
Four months' work on the site and a scale model resulted in a plan
characterized as "inspired" by Hugh Pomeroy, Director of Planning for
Westchester County, New York. The "inspired" plan was presented to
the Montgomery County Zoning Commission and promptly denied.
Opposition of neighboring property owners was the only reason given
for the rejection.
The denial was hard to understand. .The Chicago Planning Com-
mission has accepted the principle of such a balanced community be-
cause it permits a neighborhood development adequate to support
shopping facilities while avoiding overcrowding. In Europe, such
planning has already been successfully applied. Reviewing the Ban-
nockburn plan, the Maryland National Capital Park and Planning Com-
"These petitions are not the ordinary, run-of-the-mill zoning amend-
ment petitions generally presented to the District Council for its con-
sideration. Rather, they embody together a challenging and thought-
provoking proposal to create a complete community, having certain
characteristics and features which its proponents believe to be eminently
sound from a planning, social, and economic standpoint. . . .
"Regarding regional benefits, it can be pointed out that the planned
community is a stabilizing influence. This dispersal of apartment dwell-
ings for those who use them, in small groups through large scale
developments and by controlling the overall density, keeping it at or
near those established in one-family areas, will prevent in a large
measure the ill-founded land values which result from speculative
large-area apartment house zoning.
"The planned community also promotes the orderly development of
the region and makes it possible to plan and program community
facilities without having these plans upset by unexpected and unjustified
increases in potential density because of too much of a concentration
of apartment house zoning."
Not discouraged, the Bannockburn Co-operators made a second ap-
plication for re-zoning. Meanwhile, they turned their attention to the
development of a "pilot" area of twenty-four single dwellings on a
small tract of eight acres on Wilson Lane. From this pilot project it
Bannockburn, Maryland 125
is hoped to crystallize Bannockburn's views with respect to design and
also to verify the accuracy of plans for the detailed building.
Membership in Bannockburn topped the 250 mark in 1948. Ap-
plicants must first obtain membership in the Group Housing Co-
operative, agreeing to purchase two shares of capital stock for $5 each.
Following acceptance in GHC, the applicant wishing to live in Ban-
nockburn completed the first step by sending in a check for $205. This
covered purchase of five shares of capital stock at $1 each in Ban-
nockburn Co-operators, Inc., plus a $200 deposit to be held in a
separate account until acceptance as a member. A payment of $300 in
addition to the deposit was then required to apply toward financing
the land cost and the initial development of the site.
A second payment of $500 was required of all members in 1948.
This brought to $1,000 the amount paid in by each member toward
the required down payment on his house and lot. It was anticipated
that each member must invest about 20 per cent of the cost of his
dwelling and property. Members include professional or administrative
workers in Federal Government agencies, businessmen, and individuals
employed in the national headquarters of educational, business, and
The community is operated through a board of eleven directors
elected by the members. The board conducts the business of Bannock-
burn and supervises the community activities. Title to all common land,
the parks and the playgrounds, the shopping center, the clubhouse and
swimming pool remain in the Co-operative. The $60,000 clubhouse,
built for the golfers, and part of the initial purchase, has become the
Community Center for Bannockburn Co-operators, Inc. Separate, small
co-operatives, operating under the board of directors will run the
swimming pool, tennis courts, nursery school, and other projects
planned for the community. These small co-operatives will enroll as
members only those interested in the particular project. Thus only
those who play tennis would enroll in the tennis court co-op and only
they would be assessed for its upkeep. Assessments for the improve-
ment and maintenance of the common lands will be made monthly on
Houses in the pilot project range in cost from $15,000 to $25,000,
with a few, more standardized models, in the $14,000 class. The
structures in the first price group include: aluminum coated reflective
insulation in walls and bat type vapor seal in ceilings, aluminum
window frames and screens, bronze weather-stripping on the doors, oak
floors, plastered interior walls, tiled bathrooms, copper water piping,
high studio ceilings in living rooms, indirect lighting trough in all
126 Get Your Own Home the Co-operative Way
living rooms, large window wall with roof overhang, decks or terraces
(for every house) accessible from the living room, dining alcoves,
kitchens with sinks, closets, cabinets, electric refrigerator and exhaust
fan, laundry provided with laundry trays; gas fired automatic heating
system, recreation rooms in those houses with basements, waterproofed
foundations, copper flashings and aluminum downspouts and gutters.
The more standardized models in the lower price class eliminate a few
of the more expensive items listed, such as high studio ceilings, sun
decks or window walls. The prices given include the cost of house,
lot, and all utilities.
Estimates of the approximate monthly costs on the houses run some-
thing like this:
tion, Interest tion, Repairs
Bannockburn is a large project. The total cost of homes and com-
munity facilities is estimated at between $6,000,000 and $7,000,000,
which is big business any way you look at it. Co-operative housing
groups planning similar projects will be interested in Bannockburn's
tabulation of receipts and expenditures as of March 31, 1948. Figures
given below cover the entire period during which the co-operators
worked on the housing project, including a small portion of expenses
involved in organization and promotion prior to the purchase of the
property on April 6, 1946:
WE HAVE RECEIVED:
Share capital $ 1,255.00
Equity capital 208,853.33
Rent from golf course.
Notes payable balance, loans from members ....
Exchange checks balance
Owed to Group Housing Co-operative
WE HAVE PAID OUT:
Administrative and organizational expenses:
Payroll taxes 212.05
Legal and auditing 1,511.85
Corp. Trust Co 152.50
Office rental 936.83
Travel expense and other 367.71
Meeting hall costs 275.48
Credit checking 289.63
Printing, mimeo., off. supplies, postage, etc... 1,795.88
Dues and subscriptions ....". 7.00
Franchise tax, for 1946 and 1947 80.00
Printing, mimeo., off. supplies, postage, etc... 3,566.72
Shares in Eastern Co-operatives Inc 25.00
Architects' fees 29,088.39
Quantity estimator 255.00
Site development 457.00
Consultant's salary 3,502.00
Travel expenses 182.00
Land, building, legal fees 193,605.12
Cost of carrying property:
Interest mortgage and notes pay ,4,844.80
Improvements and repairs 269.51
Cash in bank plus $20 petty cash $17,873.67
Less S. S. and W. T 356.50
It is interesting to note that all the administrative and organizational
expenses and all the costs of carrying the property, previously listed,
have been paid by income from the property, that is, the rental of the
On a wide stretch of farmland twenty miles west of Chicago, a
group of city residents has developed a community where all houses
and lands are held co-operatively, where children, chickens, and dogs
are welcome, and where there are no barriers of race, creed, or color.
Six families, including several faculty members of the Bethany
Biblical Seminary in Chicago, initiated the York Center Community
Co-operative in 1944. Six ranch-type houses have been built; twenty
more are in process of erection; and thirty-nine additional homes are
planned on the sixty-five acres.
Chicago, like an octopus with one dormant side, stretches its tentacles
to the north, to the south and east to Lake Michigan, but not to the
west. Crowded housing, packed business blocks, and choked thorough-
fares mark the three sides, but not the fourth. It is amazing to ride
for half an hour to the west of the seething center and find yourself in
rolling uplands containing farms some pf which are two hundred acres
When the faculty families commenced their search for land, they
looked only to the west. There they found ninety acres near Villa
Park, a bit of a country suburb, which is close to Lombard, Illinois.
' The York developers visioned a community of people of like hopes and
desires who would build their own homes and live and work together
in harmony. Rev. Jesse H. Ziegler, secretary of the Co-op, who is a
professor of sociology and psychology at the Seminary, puts it neatly:
"Our York Center Community Co-op started out of the concern
of a number of people of good will, mostly members of the Church
of Brethren, who wanted to move out of the city and have more living
space as well as the security of a small parcel of land to hedge against
the economic cycle.
"The Association rapidly welcomed into its membership representa-
tives of various faiths and races, but has attempted to maintain a
York, Illinois 129
high standard of membership in terms of moral and cmc fiber. The
people who are members include all types from truck drivers to col-
lege and seminary professors. There is a warm bond of fellowship
In my travels across the country I found that most of the co-opera-
tive housing developments which originated in a church group were
successful, not so much because the members belonged to one sect or
the other or to any particular sect at all, but because they had learned
to pull together in their church work and carried the co-operative spirit
into their housing community. I found this particularly true in the
Mormon settlement in Idaho, in the Catholic community in Iowa, in
the Quaker developments in Philadelphia, in the Baptist groups in
North Carolina, and again among the Dunkards the Church of
Brethren in York.
The common ground need not necessarily be religious. It may be
provided by the profession to which the members belong, a union in
which they are working together toward the same end, or perhaps in
the collective beliefs and ideals which brought the individuals together
in the first place.
The York Center Community Co-operative was incorporated Decem-
ber 12, 1944, under the District of Columbia laws which provide
specifically for co-operative housing. Then the York Co-op applied for
registration under the Illinois laws as a "foreign firm." But the Illinois
Corporation Act provides that no corporation not-for-profit may issue
shares of stock or pay dividends, as is permitted under the D. C. law.
For that reason, the application filed by the York Co-op as a D. C.
corporation or "foreign firm" was denied by Illinois.
Application was then made for a charter under the Illinois law,
based on memberships which were to have a value equal to the value of
each actual establishment, with no provision for dividends. This was
accomplished under the General Not-For-Profit Corporation Act.
The by-laws of the new Association set forth specifically that the
general policy of the York Center Community Co-operative would
be governed by the Rochdale principles of consumer co-operation,
that is: 1 open membership; 2 one member, one vote; 3 cash trading
wherever practicable in consideration of the association's main purpose
of providing housing for members; 4 constant education; and 5 con-
tinual expansion. The fact that the community would be inter-racial
does not appear in so many words. But it is an actuality, for members
have been admitted regardless of race, creed, or color.
All land and buildings are held by the Co-operative. There is no
130 Get Your Own Home the Co-operative Way
individual title for the home owner. Instead of a deed to his property,
the individual holds a certificate of value in the Corporation amounting
to the value of his property. The member has a "perpetual use" right,
subject to certain conditions set forth in his contract with the Cor-
A member with sufficient cash available builds on his lot without
ever getting legal title to his property. A member without sufficient
capital obtains a mortgage in the following manner: The Co-operative
gives him a deed to his lot. The member gives back to the Co-operative
a quit-claim deed undated. The member then borrows from a bank,
conveying the lot to the lender as security for his loan. After the
mortgage is recorded, the member's quit claim deed is recorded, giving
the Co-operative the member's interest and the right to have title
reconveyed after the mortgage is paid.
Under this arrangement, the Co-operative is not a party to the
mortgage and hence not in a position to be involved in a deficiency
judgment. The Co-operative can lose only that one lot in case of default
in payments on the part of the member. But the Co-operative is in a
position where it can legally redeem for the member. By borrowing
from its surplus, or by arranging a private loan for the defaulting
member, it can save the member's investment or acquire the lot for
Many co-operatives make financing possible for their members by
obtaining one blanket mortgage for the whole project. The York Center
plan does not operate in this fashion, yet the Co-operative has done
much to make it possible for its members to get loans at a common
source on favorable terms, and much to make the needed loans small,
not only through its "trade labor" plan but through its plan for the co-
operative purchase, at wholesale rates, of building materials.
Those members without sufficient cash to pay outright the cost of
construction of their homes have been able to secure mortagages for
60 or 65 per cent of the valuation of the house and lot, at 4J or 5 per
cent interest. In obtaining the mortgage, each member has gone
through the process just described.
Members make a total down payment of $560 which includes: $10
membership fee which is not returnable, $50 on signing the member-
ship contract, and $500 payment on the building plot.
The ninety-acre farm in which the York Center Co-op was interested
was purchased from the Golterman estate for $30,000. On the property
were two houses, both saleable, which the members figured could be
translated into cash in a matter of months. With that idea in mind,
York, Illinois 131
they raised $20,000 among themselves and borrowed the remaining
$10,000 from the Villa Park Trust and Savings Bank, on a mortgage
loan for five years at 4 per cent interest. This amount was paid in
full at the end of two years.
With care the members mapped their plots. Of the ninety acres, ten
were written off as unsuitable for homesites. Five acres were subtracted
from the total when the large house on the property was sold, and
five more when the smaller house was deeded to a new purchaser.
This left the Co-op with seventy acres.
Lot No. 10, a rectangle 107 by 311 feet fronting on Roosevelt Road,
was set aside as commercial property to be used for the co-operative
store. Next, a protective green belt was plotted between a business
section privately owned, also on Roosevelt Road, and the community
proper. This piece, three acres in size, is being planted with trees to
serve as a screen. In the center of the development, 3J acres have been
allotted for the community park.
For the purpose of dividing the costs equally, the York Co-op
figured on the basis of seventy one-acre lots at $30,000. Roughly, that
would be $430 an acre, raw land. But the property had to be developed
before the final cost per lot could be figured. So the members tabulated
approximate estimates of what they would have to pay for roads, survey-
ing, utility installations, and legal fees as follows:
Cost of farm $30,000
From the $53,000 total, $15,000 was subtracted ($10,000 received
from the sale of the large house, and $5,000 from that of the smaller
one), reducing the "cost of developed land" to $38,000. Thus the cost
of each developed plot, including roads but excluding water or sewer-
age, would come to $543. Ultimately the average cost per lot was set
After the site plan was complete, another five acres of the property
was declared unsuitable for building, reducing the total acreage for
homesites to sixty-five acres.
Not all the lots are an acre in size. They range from one-half to
2^ acres. The lowest price is $330 and the highest, $705. If a member
132 Get Your Own Home the Co-operative Way
buys a lot which costs less than $550, the balance is returned to him
when the total costs of the roads and subdivision are met. If he buys a
lot which costs more than $550, he is required to pay the balance
when he selects a site.
The community had comparatively few financial problems. Develop-
ment costs were low a great deal lower than usual in a development
this size. True, these costs did not include water, which is always an
Under the direction of Ernest Olsen, professional engineer, members
did much of the work in figuring the relative costs and convenience
of three types of water systems: one well for each three families, one
well for each ten families, and a municipal-type system. The latter was
chosen and the membership voted that the cost must be limited to
$24,000, a figure that was later increased to $30,000. At a meeting
held to determine what the members would pay toward the water
system, pledges of payments plus loans totaled half the cost.
The membership also voted to assess each individual $400 to pay
for the system, the balance of the cost to be paid out of the Co-
operative's reserve funds. This money will be recaptured and returned
to the reserve when the co-operative community expands sufficiently to
utilize the water system to the extent of its full five hundred-family
capacity. Failing that, the Co-op could make its water facilities avail-
able to private owners in the area.
A well was drilled through the limestone strata which starts at ninety
feet and ends at three hundred feet below the surface. Most of the
pipes were laid in 1948; ten hydrants were installed, and a hand pump
for fire protection was purchased. Drilling the well cost $2,500. The
turbine cost $1,800.
The "water department" of the Co-operative received an unexpected
"surplus" of $7,000 from the accounting department. When the Co-
op figured its first expense sheet, $7,000 was listed for "miscellaneous"
expense. Only $1,500 was spent, resulting in a saving of $5,500. To
this was added $1,500, the difference between the expected cost of the
roads, $10,000 and their actual cost, $8,500. The total saved was placed
in the water account.
The Co-op was anxious to build the roads so that they would meet
the requirements of the county which would then "take over" the
maintenance. Six thousand feet of roads were finished, with a sixty-six
foot right of way and a twenty-foot finished gravel top. Only one error
was made, not by the Co-op, but by the contractor. Like the bus driver
who went berserk and ended up in Florida instead of Brooklyn, the
York, Illinois 133
road contractor suddenly detoured while excavating one of the side
roads, traveling across the corner of one of the residential plots. For
this misdemeanor, the Co-op withheld $1,800 and the contractor
promised to retreat from his position and realign the road as soon as
The problem of the third utility, sewerage, was solved through
the installation of septic tanks by each member on his own property
at a cost of $350.
Most of the houses erected are ranch type, with wide overhangs,
flat roofs, and a generous expanse of glass on the south or living side.
There is nothing in the by-laws which dictates that a man must in-
corporate any particular details in his design. However, he must not
plan a house which will cost more than $20,000, including cost of lot.
Some of those constructed with self-help labor cost $10,000 or less.
All plans must be submitted to Pace Associates, present architects for
the York group, before the first block is laid. Pace charges $6 an
hour. A member may hire an architect or draw the plans himself. If
the plans submitted have been drawn by an architect, chances are that
the bill from Pace will total not more than $12 or $18. On the other
hand, if the member himself has designed the house, the plans may
require a good deal of revision, in which case his bill from Pace As-
sociates would be higher. The requirement that the member must sub-
mit his plans to the architectural board before building is incorporated
solely for the purpose of preventing- the erection of any "monstrosities."
"The attitude we take," said Louis Shirky, a director of the York
Co-op, "is that a man only builds a house once in a lifetime. So why
not let him have it the way he wants within reason, of course."
Most of the homes are single story, flat-roofed, with wide projec-
tions over the picture windows or glass walls. Exteriors are finished
in clapboards (asbestos or red cedar shingles), brick, or Wisconsin
limestone. Some have aluminum casement windows. Plywood panels
are used for interior partitions, with ceilings of Celotex or Nu-Wood.
A few members are utilizing block walls, waterproofing the exterior,
painting the interior, and filling the air spaces with spun glass or
Owners who decided on radiant heat are using the new prefabricated
concrete floor slabs honeycombed for piping. Others have forced hot
air, oil fired. There is gas available, but it is quite expensive and most
of the members are buying electric stoves.
Few prefabs are planned, not because the Association has expressed
any disapproval, but because the unions in the Chicago district are
1 34 Get Your Own Home the Co-operative Way
generally opposed to them. Moreover, those prefabricated plans which
were considered by the Co-op would have been subject to so many
changes to suit the owners' varied tastes, that the ultimate cost would
have been exorbitant. One Sears-Roebuck prefab was built on a self-
help basis during the summer of 1948.
Members are permitted to live in temporary sections, garages, or
other outbuildings while their house is being erected. However, plans
for such must first be submitted to the Board, the exterior must be
suitably finished, all debris removed, and the grounds kept in order
during the building period.
From the beginning it was planned to incorporate a certain amount
of self-help in the construction of the houses. Under an agreement
with the building-trade unions, it was understood that there would be
no cash payments for the hours of labor exchanged between the mem-
bers. There was no objection from the union to the swapping of hours
on an even basis.
"Our meetings sound like a grain exchange," Shirky told me, "with
the members calling across to each other: 'If you'll show me how to
shingle the valley on my roof, I'll put in your drain pipes,' or 'How
about swapping me a few hours on some cement mixing in return for
some trench digging?' We have several members in our group who
have had some experience in building. They sure are in great demand,
and just as willing to give the other fellow the benefit of their knowl-
edge as if they were working on high-profit contracts. One of the first
members, Earl Landes, is a builder, and will construct six or eight of
the ranch houses."
To help the owner-builders save money on their purchases, the York
Center Consumers Co-operative has been formed to operate as a buy-
ing club for members only. Building materials are the first considera-
tion. Other services will be added later. Ultimately there will be a
manager who can supervise construction where necessary.
The Association has a number of co-operative features which will
terminate with the completion of construction and others which will
continue indefinitely. For construction purposes, a co-operative clearing
house has been organized, where labor of members may be traded on
a basis of time rather than skill.
Bills are handled co-operatively. Provision has been made for the
checking by the Corporation of tax and mortgage bills, and in some
cases they may be paid through the Corporation. Members who are
unable to meet their monthly installments because of illness or unem-
ployment will be helped. While no reserve fund has been set up
York, Illinois 135
specifically to provide such aid, the Corporation has what may be
deemed a "surplus" of $7,000 in the water system which eventually
will be recovered and could be used in emergencies.
Retention of property titles by the Association is a co-operative fea-
ture which will endure long after the homes are built. The purpose, of
course, is to enable the Corporation to exercise control over who shall
become members of the community and to protect the values for which
the community is founded. Members who find it necessary to withdraw
from the Co-operative and to sell their interests must give the Asso-
ciation six months' notice and a chance to buy-in the membership.
Value of the property will be determined by three appraisers, and the
Corporation will either approve a new buyer or purchase the property
The complete development will include a co-op food store, co-op
frozen food plant, co-op play park, nursery school, and community
house. Expenses of development and upkeep will be raised by assess-
ments. Members agree that the Association may determine the pro rata
share which each member shall pay for the operation of the commu-
nity and for community improvements or repairs. Failure to make pay-
ments when required is cause for expulsion.
Life in this co-operative community brings with it many privileges.
There are no bans on children, dogs, cats, chickens, or livestock, nor
on commercial pursuits. Members "may engage in proper remunerative
erideavors or enterprises in their homes provided, however, that the
Board of Directors may determine when any such enterprise or activity
is detrimental to the community."
It's a fine place for children. There are no through thoroughfares.
All the streets are curvilinear, with houses placed to the front of the
lot, so that the back portion forms an uninterrupted belt of farming
land. Children attend either the Lutheran parochial school or a con-
solidated school to which they are transported by bus.
It's a fine place for adults, too. The York Center Co-operators are
fortunate in the location of their property from the standpoint of both
transportation and taxes. The property is a mile and a half from Villa
Park, which is a railroad stop forty minutes from the Chicago Loop.
A good many of the members commute to Chicago. Others are em-
ployed close by. The community includes a wide range of trades and
professions in its membership: seminary professors, educators in the
American Friends Service Committee, photographers, clerks, carpenters,
truck drivers, mechanical engineers, accountants, teachers, a consulting
psychologist, a welder, a Post Office employee, an elevator operator, a
136 Get Your Own Home the Co-operative Way
minister, an architectural draftsman, an industrial engineer, a buyer
of cameras, an assistant bank cashier, an attorney, a housing manager,
a woodworker, a contractor, a wholesale grocery salesman, a machinist,
a timekeeper, a telephone line engineer, an office manager, a hotel
maintenance employee, a publishing house messenger, an elevated train
dispatcher, a floor covering mechanic, a magazine editor, a water com-
pany assistant foreman, a mechanic in the pyschology department of the
University of Chicago, an assistant in the vocational education and re-
habilitation department of Hines Hospital, and a Seminary dean. The
average income of the members is $3,500 to $4,500.
The York Center Community Co-operative has been subjected to
much criticism from other co-operatives on the grounds that: it was too
far out of Chicago for commuters; it was too close to Chicago for
farmers; its lots were too large; its lots were too small; its lots were
cut like slices of pie; its core of Church of the Brethren members would
dominate the organization; it is afraid to undertake co-operation in
joint financing and building; it is too radical in its co-operative hold
on the property; it is too radical in its racial policies; its leaders are
insincere on racial intolerance; it has no true co-operative program; its
houses are an anarchy of architecture.
Fortunately, the York members are not distressed by such contradic-
tory criticism. It has interfered neither with the co-operative spirit
within the community, nor with the erection of houses. Not forgotten
by them is the fact that the first section of the York Center Co-op was
designed to meet the needs of specific people and was not meant to
be all things to all people. Membership in a new section of ninety
acres will include a wider range of types and classes.
While other groups dream of Utopias on rosy clouds, the York
members build in block and stone on firm co-operative foundations.
Columbia, North Carolina
Eliza Jones drew herself to full height and with all the strength her
eighty years could muster quavered in the hushed schoolhouse. I got
five cents as says there ought to be a savings club in this here com-
That lone nickel started a string of Negro credit unions across North
Carolina, lit the Light of Tyrrell in the swampy country on the shore,
and provided the first funds for the co-operative community built by
the sharecroppers in Columbia, North Carolina. Farms were retrieved
from loan sharks; healthy mules replaced worn pack animals; a co-
operative truck garden was started; a sawmill purchased; and in the
space of a few years, thirty-four new and remodeled white-washed
bungalows supplanted the shacks which had housed the colored neigh-
Father of the credit unions in this part of the state and of the Co-
lumbia co-operative community is Sylvester Dean, a tall, soft-spoken
Negro who gave up a college degree so that he might return to his
people and put to practical use his faith in co-operatives. To gain an
idea of the magnitude of Dean's task, one must know something of
the conditions under which the Negroes lived.
Nowhere is there greater need for decent housing than in the poverty
stricken areas of North Carolina between Tarbor on the Great Swamp
and Dismal Creek, which cuts across the marshy lowlands reaching
down to the sea. Three-quarters of Tyrrell County on the coast is under
water. Mile after mile stretch the great cypress swamps, the trees stand-
ing a yard deep in stagnant water, their bare branches tangled in choke
vines and Spanish moss. The homes of the Negroes and "poor whites"
stand on stilts, the brown water rippling under the porches. The people
are poor. In 1939 the average farm worker earned $513. Today he may
reach $1,000, but not all of that in cash.
A mid-winter trip gave me some idea of the country. The road from
138 Get Your Own Home the Co-operative Way
Raleigh to Rocky Mount in the east crossed the flatlands, squared off
into alternate fields of stubbled corn and bare-branched cotton, forgot-
ten tufts hanging sodden in the rain. In the wood clearings, thousands
of scrub pine boards stood stacked in X's. From Rocky Mount to the
coast the swamps predominated, relieved occasionally by a farm boast-
ing both hogs and cows and perhaps a rectangular vine of Scuppernong
grapes on four-squared fences, or a stretch of young tobacco plants
When the bus on which I was traveling stopped at a railroad cross-
ing, two passengers alighted, ploughed through the mud and were
"home." No need to open the front door. There wasn't any. A piece
of burlap served instead. Cardboard faced the windows in the bulging
walls. Down the rusting roof rain dribbled, to puddle in the mire.
Pudding stones supported the sagging porch, one end of which had
already succumbed to the laws of gravity and rested in the muck. A
black razorback snouted through a pile of rubbish. And in the front
yard a doorless "Chic Sales" gaped to the highway.
More miles of swamp. More mud-chinked shanties and here and
there native landmarks a mullet fish shop, a decrepit funeral home, a
juke box dive.
In such surroundings, Sylvester Dean, the six-foot Negro crusader,
and his little band of followers are building a co-operative community
in Columbia in the midst of the cypress swamps between Dismal Creek
and the Alligator River. With iron in their souls and sand in their
mule carts, the Negroes are filling the marsh and building white bun-
galows where shanties stood before.
The Deans came to Columbia twenty years ago. They live in a cot-
tage at the end of a winding dirt road. The cottage is built on ground
so spongy that it was necessary to firm the marsh with sawdust before
it would hold the piles.
"We haven't sunk through yet, so I guess it will hold," said Mrs.
Dean, turning up the space heater to take the chill off the parlor. "All
the land 'round here is boggy. Two feet down you hit water and under-
neath that is clay. So when it rains good and hard there's no place for
the water to go. It just sits on top."
From the lone nickel loaned to the savings club by Mrs. Jones, grew
the fund which started the credit ball rolling in eastern Carolina. The
Light of Tyrrell Credit Union was started in Columbia irf 1939. For
some months previous there had been a study club which met nights
to discuss the problems of the Negro community. Members gathered in
the old schoolhouse an institution which has grown to three times its
Columbia, North Carolina 139
original size and is now a large frame building with auditorium, hous-
ing a grade school and a high school accommodating three hundred
The group decided to form a credit union because it was the simplest
form of a co-operative and because it was a natural stepping stone to
other plans. Under the liberal North Carolina credit union laws, a
charter was granted by the Office of the Superintendent of Credit
Unions, North Carolina Department of Agriculture. Six months later
the credit union was in full operation, making small loans from its
cash on hand which totaled $360. By the end of a year resources had
reached the $1,000 figure. Today, the Light of Tyrrell Credit Union
has assets of $45,000.
Incoming members pay an entrance fee of twenty-five cents and sub-
scribe for at least one share of stock at $5, paying for the stock at the
time of subscription or in equal installments at the rate of twenty-five
cents per month on each share. Regardless of the number of shares
held, each member has but one vote.
No loan in excess of $50 may be made without adequate security
such as an assignment of shares, the endorsement of a note, or such
other security as the credit union may consider adequate. No person
may borrow in total more than 10 per cent of the funds on hand. There
are no time limits on repayment, but borrowers must pay 6 per cent
interest. Each year the board of directors declares a dividend to its
shareholders, usually 3 or 4 per cent.
Money may be loaned under the liberal North Carolina credit laws
for anything that is "productive or provident." Farming and building
may come under "productive." A good many of the loans made under
the "provident" provision have been for sickness.
In ten years the Light of Tyrrell Credit Union has loaned its 411
members $120,110.19 without a single foreclosure. There are now 167
Negro credit unions in the United States. Eighty-four of them are in
North Carolina. They list three quarters of a million dollars in assets.
Dean has been very active in credit union work. Two years ago he
gave up his position as principal of the high school in Columbia so
that he might devote more time to the Light of Tyrrell Credit Union
and to his new job as promotional director of the All Negro North
Carolina Council of Credit Unions and Co-operatives. The Edward A.
Filene Good Will Fund has subsidized his salary so that he might ex-
tend his efforts throughout the state.
Four townships make up the territory served by the Tyrrell Credit
Union Alligator, Columbia, Gum Neck, and Scuppernong. In these
140 Get Your Own Home the Co-operative Way
communities the thirty-four houses have been built or reconstructed. All
of them were financed by the credit union. This is unprecedented. Few
states allow credit unions to loan money on real estate. North Carolina
is one of the few.
There was much to be done before the houses could be erected. Dean
found that his people, in the grip of loan sharks, were losing farm
after farm. They would mortgage their land to buy a mule and then
the mule, overworked and underfed, would sicken and die and they
would lose both farm and mule. Recurring failure brought frustration
and despair to the Negroes.
Through the eyes of Sylvester Dean, they glimpsed hope of new
conditions conditions which they would create and which would build
for them a new life. They began to pool their pennies, day after day,
week after week. In a short time twenty-five farms were saved from
foreclosure and fifteen that had already been lost were regained.
Then nine members of the credit union bought a 588 acre farm
which they run co-operatively. The cost $22,000 was financed with
the aid of a $4,000 loan from the Tyrrell Credit Union and an $18,000
mortgage loan furnished by the Western Salem Bank for ten years at
6 per cent. On 298 acres of the land, oats, peas, and garden truck are
grown; corn is raised for stock; and soybeans for oil. Registered breeds
are now replacing the wornout stock of yesterday. There are six cows
on the farm, thirty-one hogs, and one hundred chickens. Milk, meat,
and vegetables not used by the families running the farm are sold to
members of the Tyrrell Co-op.
There is a good deal of timber on the farm. Much of the pine was
cut, processed in the co-operative sawmill owned by twelve members
of the credit union, and used in the new homes. Wood lots of choice
white pine owned by the members offered another source of lumber.
Most of the cottages are a story and a half or two stories in height,
whitewashed or painted, with wood shingles on the walls and asphalt
shingles on the roofs. Each house contains from four to six rooms, arid
everyone has a porch across the front. Those who built new houses
borrowed from $300 to $1,500 from the credit union for materials
other than lumber. Labor was exchanged, but on a rather informal
basis. Thus, if John worked on your house this week end, you worked
on his house come Saturday next.
There is a small co-op store in the community. Future plans include
the erection, on a two-acre section of land in the center of the com-
munity, of a combined store, cannery, and hammermill to crush grain.
There will also be a refrigerator plant, a storehouse for farmers' crops,
Columbia, North Carolina 141
a boarding house for visitors, a playground for the children, and a soda
A new home for the Credit Union nucleus of the future building
project was started during the summer of 1947 in a vacant lot next
to Sylvester Dean's house. It didn't get very far. A mob of two hundred
townspeople armed with sticks and stones, infuriated because there
were white students in the group sent by the Fellowship of Southern
Churchmen to assist in the project, forced a halt in the construction.
The building stands half -finished. The plans of the Co-operative
are half -finished. But the Light of Tyrrell will spread. For the people
have faith in Sylvester Dean and faith in themselves. *-
In government and business circles, co-operatives are often called
"mutuals." This is chiefly because industrial interests are averse to
association with any enterprise labeled "co-op" on the grounds that
such an enterprise encroaches upon the realm of private profit.
In 1940 Colonel Lawrence Westbrook, special assistant in the Fed-
eral Works Administration used the term to designate "a system of
rental ownership under which the occupants of homes in a given com-
munity lease the premises which they occupy from a company owned
by the occupants themselves." In such a project the co-op takes over,
for operation and eventual purchase, a completed development.
In the Westbrook plan, sometimes known as "the Camden plan"
because it developed in Audubon Park, Camden, N. J., no down-pay-
ment was required. Monthly charges were low. Each tenant-owner had
a chance to build up an equity in his property. Homes were maintained
in good condition. It was easy to move if a larger or smaller house was
desired. It was easy to leave if another job loomed on the horizon.
Everyone participated in the management of the community. And, best
of all, there was a "future security" angle which allowed the member
to "coast" on his equity in times of sickness or unemployment.
No individual ever received title to his dwelling. That remained
with the co-operative or mutual. He did receive a life lease which
might be passed on to his heirs and he did enjoy freedom from worry
that the landlord would appear once a year with a rent raise in hand.
The projects discussed in this chapter became co-operatives after the
development was complete. Some of them were sponsored by Govern-
ment agencies and some by private sources. They differ chiefly in the
extent to which co-operative action was carried.
Eight of the projects were built under the defense housing program
of the Federal Works Agency and were earmarked at the time of con-
struction as future mutual housing communities. The eight are in five
states and total 4050 units. Several have completed negotiations and
become full-fledged co-operatives. Others are still in the formative
Their story is important, not only because they are successful experi-
ments, but also because they set a pattern which can be adopted in part
at least by the hundreds of other war housing projects of permanent
construction, built by the Federal Government and slated for disposi-
tion in the next few years. The Government wants to retire from the
real estate business. It is selling out its war housing projects some to
private individuals, some to commercial groups buying for investment.
But mutuals organized among the residents are always given first chance
When the National Housing Agency now called the Housing and
Home Finance Agency was created, the eight projects mentioned
above were transferred to the Federal Public Housing Authority in
that Agency. Funds were advanced by the Federal Government under
the provisions of the Lanham Act, but all mutual projects were to be
self -liquidating from the start and were to carry no rental subsidies.
The dwellings were placed on a rental basis under direct Federal
Public Housing Authority management with ownership retained by the
Government, but with commitments to sell the projects eventually to
non-profit housing corporations to be formed by the tenants.
The steps through which the developments passed from the time
they graduated from the Federal cradle until they became full-fledged
co-ops or mutuals were clear cut:
1. The tenants first formed a non-profit mutual home-ownership
corporation. In the usual procedure, a tenants' committee was named
at an election wherein all lease-holders were eligible to vote. The com-
mittee organized the corporation.
2. The corporation named 9 trustees, 3 representing the public; 3,
the residents; and 3, the Government. The trustees formulated the by-
laws, passed on membership applications, and issued membership cer-
3. As soon as two-thirds of the residents indicated they would sup-
port the idea, the Federal Public Housing was asked to lease the prop-
erty to the corporation, giving the corporation the option to purchase
it at the end of two years of operation. During that time, the corpora-
tion took over the management.
4. If the corporation decided to buy, no down-payment was re-
quired. The corporation received title to the property but gave the
144 Get Your Own Home the Co-operative Way
FPHA a mortgage for the entire purchase price and a promissory note
for which the mortgage was security.
5. The promissory note and the mortgage note obligated the cor-
poration to make monthly payments of -^ of the purchase price every
year for a period of 45 years, plus 3 per cent on the unpaid balance.
Each individual, on joining, paid a membership fee of $5 to $50
entitling him to one vote in the corporation; and he signed a contract
agreeing to purchase on the installment plan, over a 30-year period,
stock in the corporation equal to the value of the house he expected
In return, the member received a life-lease on the property on the
condition that he make his payments regularly. These monthly pay-
ments included taxes, insurance, administrative expenses, reserves for
maintenance and contingencies, the payment on his stock subscription,
and 3 per cent interest. Each month the interest, figured on the unpaid
balance, decreased. When the member paid off the entire principal or
cost of his house, his monthly payments would include only taxes, in-
surance, maintenance, and repairs.
In those projects where the tenant contracted to pay off his obliga-
tion in 30 years whereas the Corporation had a 4 5 -year period of amor-
tization, he enabled the Corporation to make prepayments on the prin-
cipal owed the Government, thus building up an advance equity for
use in times of financial stress.
The agency or supporting factor need not necessarily be the Federal
Government. But whether public or private, the agency which puts up
the initial capital exercises full authority over assets until amortization
retires the largest part of the debt. Then the community assumes com-
plete control and runs the project through a board of directors, various
committees, and perhaps other sub-co-ops within the larger co-op.
More recently, a variation of the mutual housing project above de-
scribed has evolved. A commercial development company organizes the
residents into a mutual home-ownership corporation for a fee usually
3 per cent of the valuation of the property sometimes more. That
was the way Greenbelt, the Government's model suburban community
in Maryland, became a mutual.
Walnut Grove, Indiana
Walnut Grove in South Bend, Indiana, built during the defense
housing program of the Federal Works Agency, was completed in Feb-
ruary, 1944. It covers 81 acres, only 21 of which are occupied by houses
and lawns. The development is planned on a horseshoe-shaped road,
the dwellings being placed diagonally on dead-end streets which lead
off the main thoroughfare.
There are two playgrounds for children, an adult recreation ground,
a baseball diamond, community gardens, a community hall, and a
grocery store. The store is operated by a separate Consumers' Co-opera-
tive Corporation made up of the same membership as the housing cor-
Sixty-four of the units are single houses containing two bedrooms.
The rest are duplexes one, two, or three-bedroom units. Some of the
dwellings are one-story; many are on two levels, with the kitchen and
living room on the ground level and the bedrooms and bath several
steps higher. Raising the rooms in this manner permits cross ventila-
tion through a row of small windows set in the wall at the point where
these rooms rise above the lower level of the house. One-story struc-
tures have half -basements. Two story structures have fu}l basements.
It is the monotony of the brown houses, like rows of battleships at
anchor, that strikes the visitor immediately on entrance to the property.
I almost overlooked the orderliness of the project neat lawns in front,
tidy yards in rear in my effort to find one note" of relief. Neither the
position of the houses nor their color can now be changed. It might
be possible however, to highlight the surroundings by the addition of
more shrubbery on some lawns and low white garden fences on others.
According to report, the U. S. Government spent $1,200,000 in
developing the property, which is in one of the most exclusive resi-
dential districts of South Bend. The residents expressed no enthusiasm
over the proposed development that was to bloom in their midst, but
the well-kept community soon killed criticism. Included in the Govern-
ment's figure was $80,000 for the cost of the land; $787,610.06 for
the construction of the dwellings, not including cost of improvements
and alterations; and $50,000 for the community buildings and store.
The Walnut Grove Mutual Housing Corporation acquired the property
for $750,000, agreeing to pay for it on a monthly basis at 3 per cent
interest. On April 1, 1947, the Mutual completed purchase plans and
took over the operation of the development.
The cost of the units and the monthly payments by members were
listed as follows: one-bedroom duplex apartment $2,397.64, at $40 a
month; two-bedroom duplex $3,014.68, at $42 a month; two-bedroom
single house $3,177.60 at $43 a month; and three-bedroom duplex
$4,088.79, at $46 a month.
In a year or two payments should be reduced by about $8 a month.
146 Get Your Own Home the Co-operative Way
The management first wants to establish a reserve with which to take
care of possible vacancies and collection losses and several repair jobs.
When the reserves are sufficient, it will be possible to lower the
No down payment is required. But members pay a membership fee
of $50 which is not returnable except as a credit on the last payment
on the contract. There are no extra charges for sewage or garbage dis-
posal, both being taken care of by the city of South Bend. Members
are metered individually for their own electricity, water and gas.
The "extended occupancy" or "future security" arrangement at Wal-
nut Grove is similar to those in effect in most other mutual housing
corporations. If a member cannot meet his monthly payments, the cor-
poration will carry him to the value of his equity. If he decides to
move, his equity is rebated. Equity, of course, consists only of that por-
tion of his monthly payments credited against principal, less a depre-
There is no rebate from the reserve appropriated for the repair and
maintenance of the property, because this reserve has been set up to
keep the dwellings in livable condition for a period of 30 years. "This
may be a flaw m the plan, but I see no way around it without saddling
the incoming purchaser with a large down-payment," said the manager.
"As for the vacancy and collection loss reserve, we have not completed
our plan of disbursing this to out-going members. We recognize, how-
ever, that this will have to be done."
A comprehensive picture of the financial operation of Walnut Grove
is contained in the accompanying table.
In July, 1948 the average per unit income and expense figures were
OPERATING AND OTHER INCOME
Dwelling rent schedule (less vacancy loss) $18.38
Non-dwelling rentals .22
Membership assessment (less vacancy Joss) 15.26
Services performed for others .93
Interest on membership contracts 4.10
Total income $38.98
OPERATING AND OTHER EXPENSE
Management expense $ 2.66
Operating service .88
Dwelling and commercial utilities .09
Repairs, maintenance and replacements 2.61
Insurance . .76
Mutual s 147
Real estate taxes 6.08
Other taxes .55
Cost of service, to others .93
Collection loss t .09
Interest on Contract of Purchase PHA 7.30
Depreciation expense (equipment) .17
Provision for repairs, maintenance & replacements 4.20
Provision for vacancy and collection loss 4.44
Total expense $30.76
Net income 8.22
Principal paid to PHA on contract 5.55
Principal charged to members 6.42
A Survey of Other Housing Co-ops
SPONSORED BY HOUSING ASSOCIATIONS
In the lake country of Wisconsin, the people of Madison are build-
ing themselves a co-operative community. The Badger-Staters have
made a good start. Seventy-one houses have been erected and there is
room for 130 more on the seventy-five acre tract. Named Crestwood
after the giant tufts of trees which top the surrounding hillsides, the
community is a planned project as sturdy as the Danes and Scots who
Lying snug in an alfalfa valley between two wooded hills, Crest-
wood 4 is six miles from Madison and a mile from the municipal bath-
ing beach at Lake Mendota. The residents include public utility em-
ployees, University professors, engineers, research assistants, merchants,
bookkeepers, accountants, industrial employees, railroad mail clerks,
chemists, lawyers, and a doctor. The average salary is $3500 a year.
Annual incomes were far lower in 1936 when several hard pressed
members of the Wisconsin State Employees Association (an AFL
union composed of 3500 state, county, and municipal workers) joined
forces to work out a solution of their common housing problem.
Enlisting the services of John Bordner, in charge of the Division of
Land Economic Inventory, Wisconsin Department of Agriculture, the
little group selected the abandoned farm of seventy five acres which is
now Crestwood. With the help of senior members of the University
faculty, one hundred people were gathered together who were able to
put up $150 each to meet the asking price of the property $15,000.
On September 30, 1936, the Wisconsin Co-operative Housing As-
sociation was incorporated under the laws of Wisconsin. Capital stock
was listed at $45,000, of which $30,000 was composed of six hundred
A Survey of Other Housing Co-ops 149
shares of common stock at $50, and $15,000, of three hundred shares
of preferred stock at $50 a share. The non-interest-bearing common
stock, of which each member had to buy three shares, went as payment
for the land.
With the idea in mind of obtaining Government-insured mortgages,
the Wisconsin group approached the Federal Housing Administration. '
The FHA turned thumbs down, claiming Crestwood was "not a good
risk." A year later, Mr. Bordner convinced the Federal Housing's
office in Milwaukee that the project was sound. He returned to Madi-
son with FHA's approval of the construction of twenty small houses.
Today Crestwood has assets of $58,000.
At the time the Association purchased the property, neither water
nor sewerage lines 'were available. Proceeds from the preferred stock
helped finance the installation of the water and sewerage systems, and
each member was required to buy at least six shares. In addition, bonds
totalling $7000 were issued. To provide water, the Association drilled
a 350-foot well, built a pumphouse and installed eighteen hydrants.
..The well delivers two hundred gallons a minute and can service five
Laying the sewerage and water lines cost little. The University pro-
vided WPA labor to do the work. In return, the Association allowed
the school to take stone from an old quarry on the property. Now
Crestwood has a hillside quarry which forms an ideal amphitheater.
To provide for the management of the sewerage lines, the Town
approved the creation of a new sanitary district, selected three Crest-
wood members to operate the district, keep books, and arrange to issue
bonds to finance the project. The Association turned over to the new
sanitary district officers the sum of $11,000, proceeds of preferred stock
collections, and received in return thirty-year-assessment bonds paying
5 per cent interest. This money was used to install sewers a mile in
length to connect with the metropolitan trunk line, and to lay sewers
in the streets of the development. The Association was to control the
installation for thirty years, during which time the new subdivisions
wishing to use the sewer would have to assume a portion of the orig-
inal cost, so that the bonds held by the Association could be retired.
In 1946 a new street was opened and in 1947 still another. Sewer-
age and water installations were financed by the sale of 4 per cent
callable bonds, that is, bonds which may be called at any time by the
issuer on payment of principal plus interest up to the time of calling.
This bond issue was offered to members of the housing co-op and
150 Get Your Own Home the Co-operative Way
was over-subscribed by 75 per cent. The sanitary district now includes
the adjoining section of Glen Oak Hills where the Wisconsin Hous-
ing Co-op owns a number of lots. Cost of utilities to each new owner
in Glen Oak is $400 to be paid over a ten year period.
The road problem was settled quite nicely when the town took over
each street as soon as it supported two houses.
On joining, the member buys three shares of stock for $150, en-
titling him to one vote in the Association and the right to select a lot.
Prices range from $350 to $500. The initial fee of $150 was assigned
toward the total price of the lot.
Early houses cost between $3500 and $6000, while those now under
construction are figured at $10,000 to $12,000. On a $5000 house,
sewer assessment approximated $6 a year and water assessment about
$12 for the same period. The ratio is about the same on a $10,000
house; assessments for sewers and water rise to $40 a year.
Title to the house and lot is held by the individual who finances
his new home as best he can. Cape Cod cottages, solar moderns, ranch-
style types, and Swiss chalets sit side by side in quiet content at Crest-
wood. Pine, birch, and oak, painted or stained, have been used in the
construction of some of the homes. Other houses are brick. Many are
of Waylite blocks. These blocks are made of slag left at the bottom of
the steel ladles. The slag is broken and mixed with concrete. Blocks
weigh forty pounds and are 8 by 8 by 16 inches. Costing twenty five
cents each, the Waylite blocks have many advantages: they are mois-
ture-resistant, fireproof, easy to paint, and they have insulating prop-
Co-operative plans and policies marked every step of the develop-
ment of Crestwood: in the purchase and plotting of the tract, in finan-
cing, in installing water and sewerage systems, in architectural supervi-
sion, in supplying title insurance, and in the building of several homes
for members. The purchase of building material and equipment
through the Central States Co-operative in Chicago, the Midland Co-
operative Wholesale in Minneapolis, the Central Co-operative Whole-
sale in Superior, Wisconsin, and the Consumers Service Co-op in
Madison, resulted in considerable savings.
Other co-operative projects include: a baby-sitting group, a grocery-
buying club, co-operative vegetable gardens, a co-op nursery of six
thousand young shrubs and evergreens, and a community woodlot
from which members may cut logs for their fireplaces. But for every
tree chopped down, a new one must be planted.
Cost of upkeep of the common land, which includes the ten acres of
A Survey of Other Housing Co-ops 151
wood on the hilltops, is paid by members in the form of a yearly as-
sessment of 1 per cent of the value of each improved lot.
St. Paul and Minneapolis, Minnesota
Under the sponsorship of co-operative housing associations, two
developments were completed in Minnesota one in St. Paul and one
in Minneapolis both on land which had reverted to the state through
non-payment of taxes.
Credit unions played a major part in the financing of the St. Paul
project. Laws in most states do not permit credit unions to make loans
on real estate. This is not true of Minnesota, and the Co-operative
Housing Association of St. Paul composed of members of credit
unions of federal, state, and city Civil Service employees took full
advantage of the fact.
Members of the Association were able to borrow money from the
Minnesota League Credit Union and the City and County Employees'
Credit Union, which have combined assets of $2,000,000. The central
credit union, organized under the State Act, qualified as an FHA lend-
ing agency and proceeded to make mortgage loans on a twenty-five
year basis to finance the forty-two individual dwellings. The members
then applied for FHA insurance and in most cases were able to obtain
maximum FHA insurance of 90 per cent of the appraised value of the
The land, which cost the Association $120 for each sixty foot lot,
was sold to members for $350 per lot, the difference being used for
Association expenses. The houses cost $3750 to $5400, monthly pay-
ments averaging $35 and $40 a month. They were completed in 1941
Horace Hansen, one of the initiators of the project, is now proceed-
ing with plans for a second development to be built under the spon-
sorship of the Co-operative Home Association, an organization which
operates in much the same manner as the Co-operative Housing As-
sociation of St. Paul.
The Co-operative Housing Association of Minneapolis, organized in
February, 1940, sponsored the construction of eighty-seven dwellings
on city lots in five adjoining blocks. The land was acquired from the
state and paid for at the rate of one-third of the delinquent taxes.
The average house cost $4700. Monthly payments including amor-
tization, interest, loan insurance, and fire insurance amount to $24.50
on a $4600 house with a twenty-five year mortgage. Taxes of $8 a
month make a total of $32.50 per month.
152 Get Your Own Home the Co-operative Way
SPONSORED BY LABOR UNIONS
Ten miles from Racine, Wisconsin, in Kenosha, a city of fifty
thousand, is a labor-sponsored housing project. Joining forces, the
housing committees of the CIO and AFL unions purchased a large
tract of farmland in 1947, planning single-family dwellings for 222
families, a community hall, and a shopping center.
To provide decent housing for its members, many of whom were
living in slum districts, the American Federation of Hosiery Workers,
CIO, sponsored the erection of the Carl Mackley Apartments in Phila-
delphia in 1934. There are 284 units in the building, ranging in size
from 2\ to 5 rooms, with rents averaging $31 a month for the smallest
apartment and $53 a month for the largest.
To supervise construction and manage the development after its
completion, the Juniata Park Housing Corporation, a limited-dividend
corporation, was formed. It operates through a board of five directors
who, in turn, employ a paid manager and staff.
Community facilities include three acres of landscaped grounds, an
auditorium, fifty-nine heated garages renting for $5 a month, a library,
a craft room, and a laundry.
Co-operative activities include a large credit union started with $28,
a nursery school accommodating fifty pupils at $1.25 a week, a swim-
ming pool, and a grocery store which grosses on an average $2000 a
St. Louis, Missouri
Under the direction of the International Ladies' Garment Workers
Union locals in St. Louis, a small group formed in the spring of 1948
to develop a co-operative housing association. Using the Swedish Hous-
ing Co-operative idea as a model, the members organized a "mother
society" in St. Louis to sponsor separate projects in districts where
housing is needed. The Dallas, Texas, local of the ILGWU is following
a similar plan.
South Bend, Indiana
When the United Auto Workers, CIO, Local No. 5 in South Bend,
Indiana, announced that it would sponsor the development of a co-
operative housing project on the outskirts of the city, five hundred
applicants paid in $300 each for a total of $150,000 within six weeks.
A Survey of Other Housing Co-ops 153
A tract of land, 156 acres in size, was purchased for $42,500. The
property is large enough for the 571 houses planned. Difficulty in find-
ing a contractor who could build within the price limit set by mem-
bers, forced the co-op group, in the summer of 1948, to turn to a
wooden house fabricated by American Homes. This structure, it is
figured, can be erected for $7000, exclusive of land. There are one
hundred units under construction in the development which is called
Edison Park, Inc. Houses are individually owned.
Front Royal, Virginia
The Textile Workers Union of America, Local No. 371, sponsored
the building of fifty houses on fifty-seven acres of land in the Blue
Ridge Mountains overlooking Front Royal. The property cost $25,000.
The idea for the development started among a group of auto-tire cord
workers employed in a viscose plant. Of 3500 in the factory, 3000
belonged to the textile union. The workers named their project Stone-
The financing of the project was a fine example of co-operation.
Several of the leaders contributed all their savings; local unions in
Roanoke, Parkersburg, and Front Royal made loans out of union
treasuries; and the national union assisted. Finally a loan was made
through a local bank.
By August, 1946, all the houses were finished. The first group cost
$5500 and $6000; the second, $7000; and the final lot, $8000. There
was no profit at any stage of the operation. Purchasers made a down-
payment of $650, and monthly payments are $33.68 for a period of
twenty-five years. Each applicant received individual title to his house.
MUTUAL HOUSING ASSOCIATIONS
Greenmont Village in Dayton, Ohio, an oval-shaped development
of square pastel houses, covers 141 acres and provides for five hundred
Most of the residents are members of the United Electrical, Radio
and Machine Workers. All are members of locals affiliated with the
CIO. Each local is represented in the Montgomery County Industrial
Union Council. This Council, apprized of the Government's plan to
sell the Greenmont development to a mutual housing group if such
a group were organized, set up a housing committee and mapped an
intensive program of education in the industrial plants in Dayton.
The plan was a success. The Greenmont Mutual Housing Corpora-
154 Get Your Own Home the Co-operative Way
tion was incorporated in October, 1942, and less than a year later
signed a lease with the Government with option to purchase. Final
papers were signed in April, 1947, the purchase price being $1,500,000
payable over a period of thirty years at 3 per cent interest. The original
cost of the development was $2,385,000.
All but fifty of the houses are two stories in height. The fifty units
housed in single-story structures are doubles, accommodating one
hundred families. Each unit has one bedroom and costs $27.50 per
month. The two-bedroom duplex costs $30 a month; the two-bedroom
single house, $32; and the three-bedroom duplex, $32.50. These
charges do not include electricity, water, or heat all of which are
metered to the individual houses. Nor do they include sewerage line
charges and garbage collection, which cost the members another $2.50
Operating under the board of directors which manages the property
is a paid staff, including the manager at a salary of $5000; accountant
$3500; senior stenographer $2800; junior stenographer $2000; main-
tenance superintendent $4000; two maintenance mechanics, $3000
each; a maintenance aid, $2500; two laborers at $2300 each; and a
janitor at $2000.
The workers have their own co-op barber shop, beauty shop, dry
cleaning establishment, community hall, church services, school, and a
volunteer fire department with a town truck on the property. The co-op
grocery store grosses an average of over $21,000 a month, and the
drugstore grosses an average of almost $4500 a month.
Audubon Park, New Jersey
Two miles from the center of Audubon, New Jersey, the Federal
Government built a housing project on a mud flat, while everyone
laughed. Today, Audubon Park is a garden spot marked by curved
driveways, white cottages, tulips by the wide-paved paths, fir trees by
the doorways. Its design of operation, now known as the Camden
Plan, has served as an example for many other co-operative communi-
Ninety per cent of the residents are shipworkers. From the formative
group evolved the Audubon Park Mutual Housing Association in-
corporated July 8, 1941. Six years later, the Association commenced
negotiations to purchase from the Federal Government the develop-
ment known as Audubon Park, which consisted of one hundred acres
and five hundred houses. Cost to the Government was $2,321,000.
Cost to the Mutual Housing Association will be about $1,500,000, pay-
able over a period of thirty-five years at 3 per cent interest.
A Survey of Other Housing Co-ops 155
Henry J. Andreas, one of the initiators of the project, said that the
cost of maintenance in a mutual home ownership project is 50 per cent
lower than in a rental proposition because the tenants take an interest
in their homes.
Dallas and Grand Prairie, Texas
In Texas there are two mutual housing projects within five miles of
one another, each housing three hundred families and both operated
by the same manager. The development of the Dallas Park Mutual
Ownership Corporation covers 114 acres and is in Dallas proper, while
the project of the Avion Village Mutual Ownership Corporation covers
seventy-eight acres and is in Grand Prairie, a few miles to the west.
Each development contains both apartments and single dwellings.
The rental for a one-bedroom apartment is $22.50 per month; and
for the three-bedroom single dwelling, from $32 to $34 a month. In
addition, the residents pay $6.75 to $8.50 a month for gas, light, and
Buildings at Dallas Park are of frame and brick and were completed
January 1, 1942. The development, which cost $972,166, has been
appraised at $760,000. Avion Village, which is all-frame construction,
was completed October 1, 1941, at a cost of $920,094.
West Acres, Michigan
West Acres, in Pontiac, Michigan, is an example of a mutual hous-
ing development sponsored by an individual instead of by a govern-
In 1936, when Colonel Lawrence Westbrook was associated with
the Works Progress Administration, the late Senator James Couzens
of Michigan told him he would like to sponsor a mutual housing devel-
opment for automotive workers whom he credited with having built
his fortune. Couzens put up $550,000 to purchase land and to con-
struct two hundred homes in Pontiac. No down-payments were re-
quired. Monthly rentals on a one-bedroom house were listed at $32.70
and on a three-bedroom house at $43.80.
Oak Park, Dayton, Ohio
In Dayton, Ohio, a group of factory employees raised sufficient capi-
tal to take an option on eighty-six acres of land, immediately adjoin-
ing the property on which Greenmont Village is constructed (see page
The new project was sponsored by the Dayton Mutual Homes In-
corporated and was not financed by the Government. When the initial
156 Get Your Own Home the Co-operative Way
group had obtained option on the land, the members approached the
Federal Housing Administration and were able to get from that agency
a letter of intent that the FHA would agree to insure, under Title VI,
80 per cent of any loan that might be obtained. Two insurance com-
panies loaned the money at 4 per cent interest.
The land was divided into 362 plots. Prefabricated houses of four,
five, and six rooms were erected at prices ranging from $4350 to
$4750. Houses are individually owned. Each member made a down-
payment of $275; monthly payments are $36 to $39 a month. This
amount includes payments on the principal, interest, taxes, fire insur-
ance, water and sewerage lines. It also included a "future security"
angle. Two dollars of the monthly payment was set aside as a trust
fund to be used if the member, because of sickness or unemployment,
was unable to meet his monthly charges.
Mineral Wells, Texas
The Elmhurst Park Co-operative Housing Corporation was formed
by the Farris Anderson Post No. 75 of the American Legion in order
to acquire Elmhurst Park in Mineral Wells, Texas, from the Federal
Government. The organization, chartered as a non-profit corporation,
contains many veterans.
Applicants must invest a minimum of $100 for one share in the Cor-
poration, but may invest as much as $10,000. The development con-
sists of 184 dwellings and was constructed in 1941 to house war work-
ers stationed at near-by Camp Wolters.
The Greenbelt Mutual Home Ownership Corporation was formed
by families living in the nine-hundred-unit model town of Greenbelt,
Maryland, for the purpose of purchasing the property from the Federal
Government. Greenbelt is one of three towns planned in 1936 under
the auspices of the Federal Resettlement Administration as demonstra-
tions of low-rental model communities. The town is girdled by a pro-
tective green belt used for truck farming.
The white asbestos-shingled houses range in size from two to five
rooms in single and multiple dwellings. The seventeen stores and serv-
ices of the Greenbelt Consumer Services Incorporated reached a re-
cord sales volume of $1,726,666.50 in 1947. The town has its own
The Greenbelt Mutual Home Ownership Corporation has signed a
contract with the Trans- American Development Corporation of Wash-
A Survey of Other Housing Co-ops 157
ington to execute plans for the purchase of the property from the
Federal Government. The Washington Company received $9 per mem-
ber on signing the contract, and was to receive $20 per member when
the deal was consummated. There are one thousand members in the
Duluth Homesteads, located on 1220 acres of land seven miles
northwest of Duluth in the village of Hermantown, is operated by the
Duluth Homesteads Association, a non-profit organization incorporated
under the co-operative laws of Minnesota. Individual family units in-
clude a brick house with combination garage and barn on plots 3i to
10 acres in size.
The project was initiated in 1934 by the Subsistence Homesteads
Division of the Department of the Interior when the Federal Govern-
ment appropriated $983,994 for the construction of eighty-four homes
In August, 1939, the development was conveyed to the Duluth
Homesteads Association by the Federal Government, and in 1947 the
Government informed residents they might purchase their homes out-
right and receive deeds to the properties. The sales price of the pro-
ject to the Association was $225,742, an amount which was secured
by a note and mortgage to the Government. The average sales price of
each unit was $2684, and the average monthly payment is $20.30.
The homesteaders grow most of their own food and some for com-
mercial purposes. Eighty per cent raise poultry and several have cows
and hogs. Community projects include a co-operative store with sales
averaging $70,000 a year, a co-operative locker plant with assets of
$48,000, and the Hermantown Federal Credit Union with assets of
Linden, New Jersey
Organized as a non-profit corporation under the New Jersey laws,
the Winfield Mutual Housing Corporation operates Winfield Park at
Linden, New Jersey, with option to purchase the seven hundred-unit
development from the Federal Government. Winfield Park, a Defense
Housing Project, cost $4,392,000 almost three-quarters of a million
more than the amount allotted the development by the Government.
Two other defense housing projects have been earmarked by the
Federal Government for mutual home ownership: Bellmawr Park in
158 Get Your Own Home the Co-operative Way
Gloucester, New Jersey, and Pennypack Woods in Philadelphia, Penn-
sylvania. Bellmawr Park contains five hundred dwellings on 133 acres
and was erected at a cost of $2,119,000. Pennypack Woods includes
one thousand units built on 120 acres at a cost of $4,367,000.
SPONSORED BY VETERANS' GROUPS
Naylor Gardens, in Washington, D. C. is a model community of
748 red-brick garden apartments owned by the Veterans Co-operative
Housing Association. This Association, formed by the AMVETS, an
organization of World War II veterans, bought the property from the
Defense Homes Corporation, a U. S. Government agency, for $5,125,-
000. The development, which covers an area of forty-four acres, cost
When the purchase agreement was signed on January 15, 1947, the
Federal Government agreed to convey the property to the veterans for
a down-payment of 10 per cent, or $512,500, and upon completion by
the Association of mutual contracts with three hundred members. A
year later, the Association fulfilled the stipulations.
Each member on joining the Association pays a fee of $50 and
makes a down-payment of 20 per cent of the cost of his apartment.
Prices start at $5680 for one-bedroom units, $6750 for two-bedroom
units, and $7990 for three-bedroom units. Monthly charges range
from $59.50 per month for the one-bedroom suite to $78.50 a month
for a three-bedroom suite. The mutual member does not receive legal
title to his residence. Title remains in, the Veterans Co-operative Hous-
ing Association, each member receiving a certificate of membership
and a mutual contract which entitles him to perpetual use of his apart-
The goal is 741 members. To speed the membership drive, the As-
sociation engaged a real estate firm on the basis of a 3 per cent com-
mission on all apartments leased through its offices.
The balance of the purchase price, over and above the down-pay-
ment, is in the form of a deed of trust note in favor of the Defense
Homes Corporation in the amount of $4,612,500 with interest from
January 1, 1948 to January 1, 1968, on the unpaid principal, at the
rate of 3 per cent a year. i
Charlotte, North Carolina
Sponsored by Independence Post No. 262 of the American Legion,
a group of veterans in Charlotte. North Carolina, built fifty homes for
less than $8000 each, with 100 per cent financing.
A Survey of Other Housing Co-ops 159
The cost of the land $25,000 was financed partly by member
down-payments and partly through private loans. The average price for
a sixty-foot lot was $500.
Difficulties in finding a contractor to erect houses for very little profit
were overcome when Edwin L. Jones, head of the J. A. Jones Con-
struction Company, offered to build the houses for cost plus $1. By
July, 1947, fifty white-clapboarded houses were finished.
Twenty-five of the houses cost $7500 and the other twenty-five cost
$7825. These figures included the price of the lot, the cost of the
sewerage lines ($250 per member), the stove, and the refrigerator.
Each house was financed with a $6500 FHA-insured mortgage for
twenty-five years at 4 per cent interest plus ^ of 1 per cent mortgage
loan insurance. In addition, most of the houses had a VA-guaranteed
loan for twenty years at 4 per cent interest, to a maximum of $1000
on the $7500 house and $1325 on the $7825 house. Monthly payments
covering principal and interest, mortgage insurance, taxes, and fire in-
surance, totaled $50 on the first groups of houses and $52 on the
second group. Similar five-room cottages in the vicinity were renting
for $80 to $90 a month.
Wilmington, North Carolina
A co-operative housing association known as the Veterans Homes,
Incorporated, has purchased 584 permanent housing units at Lake
Forest, Wilmington, North Carolina, from the Federal Government
In February, 1948, the veterans met the Government's stipulations:
a 5 per cent down payment of $89,850 and a membership in the Cor-
poration equal to 67 per cent of the number of dwelling units in Lake
Forest. Houses were priced at $2804, $3011, and $3392 for one-,
two-, and three-bedroom suites, with monthly payments scheduled at
$37.75, $40.25, and $44.40.
On the banks of the Maumee river, fifteen veterans, incorporated as
the Inwood Place Association, built homes for themselves in 1947.
They co-operated through the acquisition of the land, the financing,
and the construction of the homes.
Baton Rouge, Louisiana
An acute housing shortage prompted the Mayor's Veterans' Emer-
gency Housing Committee in Baton Rouge, Louisiana, to suggest to
160 Get Your Own Home the Co-operative Way
the Nicholson Post No. 38 of the American Legion that low-cost
homes could be provided for ex-servicemen through use of a tract of
land then belonging to the Federal Government. Acting on the sugges-
tion, the veterans formed the American Legion Housing Corporation
in September, 1946. Two years later, 250 vets moved into new homes.
A tract of 160 acres was purchased for $74,000, the amount being
borrowed from the National Home Mortgage Company. By selling an
artesian well (to the Baton Rouge Water Works Company), two com-
mercial areas, and thirty-three lots it did not need, the Corporation was
able to pay up the mortgage within eleven months.
With the land on a mortgage-free basis, the Corporation officials
were able to obtain from the Federal Housing Administration a loan
guarantee for 90 per cent of the construction cost of the project. The
National Home Mortgage Company acted as nominal mortgagee to the
FHA for the 250 mortgages totalling a commitment of $1,671,000.
A construction loan of $1,760,000 was acquired by the Corporation
from the Crawford Corporation of Baton Rouge the firm hired to
build the development. The cottage erected was known as the Craw-
ford House a packaged unit. For the least expensive home containing
two bedrooms, the veterans paid $6300. This price included the cost
of the land. The most expensive house, containing three bedrooms, cost
Veterans moved in without making any down-payments under an
arrangement whereby the Housing Corporation paid the initial 10 per
cent and the veterans acquired FHA-insured mortgages for 90 per cent
of the valuation, at 4 per cent interest plus J of 1 per cent loan in-
surance. In return for the initial payment, the Housing Corporation
accepted notes of purchase from the veterans covering a period of three
Installation of utilities cost little. The Baton Rouge Water Com-
pany contracted for the water franchise, and the Parish of East Baton
Rouge organized a new sanitary district to take care of the sewerage
problem in Legion Village.
A Legion Village Post has been formed among the members to
operate the community until a Legion Village Association is organized
to direct the co-operative activities of the development.
Legion Village is an example of what may be accomplished when
public-spirited citizens; town, county, and state officials; local indus-
tries; financial institutions; and federal housing officials work together
in the building of a community.
A Survey of Other Housing Co-ops 161
Organized in 1946 by a group of men stationed at Wright Field in
Dayton, Ohio, a co-operative association named Air Village Incor-
porated, purchased 110 acres in Van Buren township, Montgomery
County, plus twenty adjoining lots in Dayton. The development is
large enough to accommodate four hundred homes.
Salt Lake City, Utah
Two World War II veterans were responsible for the formation of
Homeless Veterans Incorporated, which has built forty-five homes in
Salt Lake City and plans sixty-one more.
The organization, incorporated in May, 1946, purchased a tract
of twenty-five acres for $38,000. The cost was met by membership fees
of $600 each.
City sewerage connections were unobtainable, so the veterans instal-
led septic tanks at a cost of $125 each. The problem of getting water
into the property was solved by an arrangement under which the Cor-
poration agreed to pay Salt Lake City ten cents for every hundred
cubic feet of water used. The water was re-sold to members at a slight
profit, the money realized being deposited in the Corporation's treas-
ury to pay overhead costs and community maintenance expense.
Five-room brick houses were constructed under the direction of the
Board of Directors and Hamer Culp, Jr., one of the veterans, who
acted as general contractor at a salary of $500 a month. The homes,
which are individually owned, averaged $10,000 in cost with garages
available for $400 extra.
Under the sponsorship of the AMVETS, an organization of World
War II veterans, a co-operative housing group called the AMVETS
Homestead Association Incorporated was formed in 1947 in Columbus,
Ohio, for the purpose of building eight hundred homes for veterans
and non-veterans. The property, 202 acres in size, cost $82,000. Some
of the houses will be brick, some will be frame; and the cost will be
about $10,000. The co-operative has signed a contract with Ronald A.
Ferguson Associates, Inc., of Cincinnati, counselor for the Brookeplan
Method of project management, to develop the community.
Palos Verdes, California
Sponsorship for the development of Dapal Homes Incorporated at
Rolling Hills, Palos Verdes, in Los Angeles county, was undertaken by
the Douglas Aircraft Post No. 523 of the American Legion.
162 Get Your Own Home the Co-operative Way
A clam-shaped tract of land of thirty-two acres was purchased for
$49,000. It is large enough for five hundred homes. Road work was
commenced in the spring of 1948.
New Brunswick, New Jersey
Poor management brought to a sudden end the construction of 168
houses by the Veterans Building Co-operative Incorporated of New
Brunswick, New Jersey. By the spring of 1948, at which time the vet-
erans asked for a receiver, thirty-two houses had been erected and
forty-one more were in process of construction. The project was named
Twin Pines Manor.
Sponsored by the American Legion, the Veterans of Foreign Wars,
and the United Rubber Workers, the Veterans Homes of Mishawaka
Incorporated is building 315 homes on the edge of the town. The
eighty-acre site was purchased for $25,000.
Project co-ordinator is Robert Pine of Robert L. Pine Associates.
His fee is 5 per cent of the total cost of the project, which is expected
to amount to $3,000,000. A $2,499,000 FHA- and Veterans Adminis-
tration-insured mortgage has been secured from the Phoenix Mutual
Life Insurance Company of Hartford, Connecticut. The individual
homes are costing the members from $8600 to $9950. Forty homes
were finished by the fall of 1948, and it was planned to have 180
houses completed by the spring of 1949.
With the approval of the Illinois State Housing Board, the Cook
County Housing Authority is building a fifty-unit project for the Des
Plaines Veterans Homes, Inc., a not-for-profit corporation. Des Plaines
is six miles from Chicago.
With funds provided by the Illinois State Housing Board, the Hous-
ing Authority purchased the land, installed improvements, and then
deeded back the land to the veterans who used it as equity to secure
FHA- and VA-insured loans to build homes. The Authority is respon-
sible for the construction, letting all contracts, and bearing legal and
administrative costs. When complete, the homes will be sold and the
Housing Authority will be repaid the money it advanced.
The fifty units will be in twenty-five ranch-type duplex homes. The
plan is to sell each building to a veteran who will become a landlord
to another veteran in the second unit. Each duplex will cost $13,500,
A Survey of Other Housing Co-ops 163
including the land v the landscaping, and all street, water, and sewer
improvements. The first houses will be ready early in 1949.
The Lorain Veterans Housing Association has commenced construc-
tion on the first six homes of a fifty-unit project at Lorain, Ohio. The
members are doing all the work themselves under supervision. Each is
required to put in sixteen hours a week on the project.
Some of the houses are one-story high; some are 1J stories. All the
construction money used so far has been advanced by the members of
the Association. A revolving fund has thus been created. As soon as
a home is completed, it is mortgaged, and the money returns to the
Corporation to be used to start another house. The members receive
deeds to their homes but must sell back to the Corporation at cost. The
cash outlay for the house is $6000. Lots cost $500. The members esti-
mate that it will require 2080 man-hours to complete a home.
Charleston, West Virginia
A veterans' co-operative housing association called Hill Top Park
Incorporated has commenced development of a community in the
South Hills district of Charleston, West Virginia. The thirty-acre tract
of land will accommodate 163 families. Houses range in cost from
$8000 to $12,000.
Larchmont, New York
Through the generosity of Mr. and Mrs. Benno Elkan, a group of
veterans in Larchmont, New York, was able to acquire five and a half
acres of land at very low cost, on which to build fifty houses. Under
the name of the Larchmont Veterans Building Corporation, the ex-
servicemen erected brick houses with slate roofs at costs ranging from
$11,450 to $12,100. The figures include the cost of the lot.
The houses were financed co-operatively under a unique arrange-
ment. To explain it, let us take the case of a veteran who built a $12,-
000 house. On being admitted to the Larchmont Veterans Building
Corporation, he made a down-payment of $600 for three shares of
stock in the Corporation. He then made application to the County
Trust Company of White Plains for a $10,000 building loan at 4 per
cent interest, assigning the loan to the Corporation which acted as
agent and made payments in his behalf.
The veteran then made application to the First Federal Savings and
Loan Company in New York city for a VA-guaranteed mortgage for
the full amount of the appraisal of his house $12,000 less his $600
164 Get Your Own Home the Co-operative Wdy
down-payment. In this case, the veteran was granted an $11,400 mort-
gage for twenty-five years at 4 per cent, the mortgage deal being con-
summated on completion of his home.
The purpose of this arrangement was to provide the Corporation
with sufficient capital to contract for the construction of the homes.
Under the New York State laws, a business corporation may not bor-
row more than two-thirds of the money needed for construction pur-
poses. But there is no law to prevent the individual from borrowing
the full amount necessary and assigning his loan to a corporation
which acts as a receiving agent.
The banks co-operated by reducing the closing fee on each house
from $208 to $58. In addition, the County Trust Company relin-
quished a 1 per cent mortgage fee. The $150 thus saved was not re-
turned to the veteran in cash, but was credited toward the amortization
of his mortgage.
Mamaroneck gave the veterans every assistance possible, providing
roads and utilities and helping to landscape the areas adjacent to the
development. The houses were completed in October, 1947.
The American Veterans Committee of Philadelphia sponsored the
formation of the American Veterans Housing Co-operative at Abing-
ton, Pennsylvania. The veterans purchased forty-three acres of farm-
land at $1000 an acre in 1946.
The co-operative has plans to develop a 216-acre site in Abington
township outside Philadelphia. Neighborhood opposition is delaying
the program. In the fall of 1948, the American Veterans Housing Co-
operative brought suit against thirty of its prospective neighbors,
charging conspiracy in malicious mischief. The Co-op charged that
neighbors complained the $9800 houses planned by the veterans would
jeopardize land values, and that they jammed through zoning changes
requiring larger lots and much larger houses.
The Co-op also alleged that their prospective neighbors threatened
to withdraw large deposits from the Pennsylvania Company for Bank-
ing and Trusts in an attempt to coerce the bank into repudiating the
contract under which the co-operative obtained the land. The Co-op
also charged that the residents tried to obstruct the development by
inducing building contractors to refrain from bidding on the con-
struction contracts, threatened the employers of individual members of
the co-operative, and brought pressure against lending institutions
which might have financed the development.
A Survey of Other Housing Co-ops 165
In spite of strong opposition and its million-dollar damage suit,
the co-operative intends to proceed with the construction of the first
group of forty-five dwellings on the forty-three acres of land it has
purchased. Later, it will go to work on the 173 acres of adjacent land
which it now has under contract. The development contains single-
family houses and the site plan has been approved by the Federal
Housing Administration. The individual householder will be granted
a ninety-nine year lease from the co-operative.
Silver Springs, Maryland
Five veterans in Silver Springs, Maryland, bought a piece of land
together, hired a builder on a cost-plus-fixed-fee basis and built them-
selves homes at savings of $1000 on each house. The houses, built in
1947, are Colgate frame prefabricated structures. The average cost was
Cold Springs, Kentucky
The Vetvillage Home Builders Association, Inc., was formed by a
group of ex-servicemen. The veterans are planning a development of
125 homes in Cold Springs, Campbell County, Kentucky 1 .
STUDENT HOUSING CO-OPERATIVES
From Connecticut to California, Montana to Texas, fifty thousand
college students live in houses which they rent or own, and operate
co-operatively. For many of them, continuation in school was possible
only because under the co-operative plan they were able to live for two-
thirds the cost which their fellow students in non-co-operative houses
Most of the student housing co-ops were depression born. Michigan
House at the University of Michigan in Ann Arbor, Michigan, lays
claim to being the oldest. It was started in 1932. In the intervening
years it has housed seven hundred students. There are now five co-op
houses in Ann Arbor. Another early student housing co-op was founded
at the A and M College in College Station, Texas, in 1932. In Chicago,
the United Co-operative Projects Inc. the student co-operative in the
University of Chicago area manages five houses.
At the University of California in Berkeley, the Students Co-opera-
tive Association Incorporated has a membership of 850 students. It
serves 2500 meals daily to its co-operative members. Assets of the Co-
operative are $375,000, with an annual volume of business, covering
room rentals and meals, of more than $260,000. The University of
166 Get Your Own Home the Co-operative Way
California in Los Angeles has a Co-operative Housing Association with
a membership of 225.
Large student housing co-operatives have been organized at: the
University of Texas, the University of Kansas, Baker University, the
University of Missouri, the University of Nebraska, North Dakota
Agricultural School, and Michigan State College.
There are also student housing co-operatives at the University of
Wisconsin, at Antioch College, at the v University of Arkansas, and in
more than one hundred other colleges and universities across the
To find out how much college students saved by living in co-opera-
tive houses, the Pacific Coast Student Co-op League made a survey in
1947 of the costs in eight colleges. University of Oregon co-operators
enjoyed the lowest proportionate costs in the Pacific group. Room and
board cost $30 a month as against $51.75 paid by students living in
non-co-op houses. At Oregon State College it cost the co-operator
$34.41, and the non-co-op, $55 a month. At the University of Wash-
ington, co-ops paid $45 while those not affiliated paid $54.25; at Wash-
ington State College, $36 as against $55 paid by those not living in co-
op homes; at the University of Montana, $30 a month while others
paid $47; and at the University of British Columbia, $29.50 while
students living in non-co-operative houses paid $42.
VARIOUS OTHER TYPES OF HOUSING CO-OPERATIVES
There are fifty houses in the co-operative community at Granger,
Iowa, which owes its existence and continued prosperity to its sponsor,
Monsignor Luigi Ligutti, executive secretary of the National Catholic
Rural Life Conference.
Granger is in the bituminous coal district of central Iowa. Since
there is little production in the summer, the miners are idle a good part
of the year. When Father Ligutti arrived in Granger, he found the
miners living in dilapidated huts fronting on muddy roads with sewers
between. They averaged between $500 and $900 in wages a year.
When the Federal Subsistence Homestead Corporation was created
in the Department of the Interior, Father Ligutti made application for
a Federal loan to build new homes for the miners. He eventually
secured an allottment of $175,000 to build the community. A tract of
224 acres of land was purchased for $28,243 and in January, 1935,
the contract for the construction of fifty five- and six-room frame
houses was awarded. Each family unit includes a house, 'a barn, and
A Survey of Other Housing Co-ops 167
two to eight acres of ground. The average house cost the homesteader
|1925, payable at the rate of $17.50 a month over a period of forty
years. The homesteads cost the Federal Government $3500 each. Each
house was subsidized by the Government to the extent of about $1575.
In 1942, the residents formed a corporation known as the Granger
Homestead Association, assumed the mortgage obligations formerly
carried by the Federal Government, offered the homesteads as collateral,
and received in return deeds to the homesteads. By 1948, thirty-nine of
the fifty homesteaders held title to their own homes.
The miners raise all their own vegetables and fruit and grow stock
feed for their cows, hogs, and chickens co-operatively. Co-operative
projects include a credit union, a co-operative buying club, a co-
operative market for surplus products, a co-operative Home Tractor
Association for the purchase of farm machinery, a co-operative home
craft club, a co-operative road improvement association, and a co-
operative bus club which owns the bus used in transporting the
Granger children to school.
Ten architects, six professors, two engineers, a college dean, a
pediatrician, and a librarian make up the co-operative community taking
shape on the summit of Six Moon Hill in Lexington, Massachusetts.
The original group consisted of six members of Architects Collabora-
tive, a co-operative organization composed of young architects who
work together on an equal footing and share profits and losses on an
even basis. When the membership included twelve families, a tract
of twenty acres was purchased for $16,750 in the spring of 1947. Each
family was assessed $1500 to pay for the land. Twenty-nine building
lots of a half-acre each were planned and two acres were set aside for a
park and community house. Next, a road was constructed through the
property at a cost of $19,000. The money was raised in twenty-four
hours when members sold their own bonds or drew on their private
Most co-operatives allow one vote per member or unit family,
regardless of the number of shares held in the corporation. Six Moon
Hill wanted two votes per family one for the husband and one for the
wife. If a bachelor joined, he would be entitled to two votes. The
matter was solved by the attorney for the corporation. Two classes of
stock were instituted: Common Stock A, one share per family at
$1300, non-voting; and Common Stock B, two shares per family at
$100 each, carrying two votes. Common Stock A would be returned
168 Get Your Own Home the Co-operative Way
to the corporation by the member in exchange for title to his lot.
Common Stock B would be retained by the individual and would
represent his interest in the common land of the property.
The first three houses were built by the same contractor at savings
of $200 on each house. If the houses had been constructed from the
same basic plan, greater savings would have been possible. The first
house, a contemporary modern built for the librarian in the Harvard
University Business School, cost $17,000. This figure included the cost
of the land and the utilities.
There is neither racial nor color discrimination in the Six Moon Hill
In the lona Self-Help Co-operative Community in lona, Idaho, Mr.
and Mrs. Phares Young and their children have lived in a basement
structure for twelve years. They will build the rest of the house when
they are debt free. Meantime, the basement is a far better home than
the granary in which they formerly lived.
Thirty nouses were erected in lona, but six got no farther than the
basement. Another project is now being planned to house the second
lona lies in the flat spud country of Idaho. Most of the residents
are farmers, descendants of the Mormons who established co-operative
groups called United Orders in Idaho in 1870. In the depression year
of 1934, when 80 per cent of the residents were out of work, fifteen
families formed a co-operative group and applied to the Federal Emer-
gency Relief Administration for a grant of self-help co-operative funds.
Included in the application was a request for a revolving building
fund. The group was granted $1750. The money was used to make
loans to members for housing purposes.
As soon as a member could show clear title to a piece of ground
(most of them owned the lots on which their shacks stood), he re-
ceived a cash loan of $500 from the revolving fund, plus a loan of
co-operative labor, that is, part-time assistance from his fellow members
in the construction of his home.
With the loan, materials necessary for the construction of the base-
ment were bought by the co-op's bookkeeper Eugene Olscn, a school
teacher who fathered the struggling group. The loan had to be repaid
over a period of two to five years. Payments ranged from $3 to $10
a month. When the loan was repaid and the member had worked
out his labor claims, he received title to his property.
In most cases three loans of $500 were necessary to complete the
A Survey of Other Housing Co-ops 169
house. The first loan built a concrete basement 28 by 32 feet which
provided four rooms. Half the basements have bathrooms. All boast
the luxury of running water with a tap in the kitchen, electricity, and
a cesspool. In this basement the family lived while repaying the first
loan. The second loan covered the cost of the shell of the super-
structure, and the third, the finish and trim. The manner in which
the houses were constructed enabled a family, in the space of six to ten
years, to build and pay for a home worth $2000 to $2500, without
owing more than $500 in cash at any time, or paying more than $12
interest in any one year.
Exchange of labor at the rate of thirty cents an hour brought the
cost of the house down to a minimum. Work was carried out under
the guidance of one member who was a carpenter, and a second who
understood plumbing and masonry work. Further reductions in cost
were accomplished by utilizing native stone, salvaging lumber from
demolished buildings, and making building blocks on a secondhand
machine for two cents apiece. The blocks were made of pumice
volcanic glass taken from the lava bed hills near-by.
Co-operative projects included a credit union, a medical and dental
plan, co-operative gardens, and a widows' insurance program. Under
the latter plan, each member pays ten cents a month on each $100 of his
cash loan still owing. If he dies, the co-operative takes a mortgage in
the amount still owing and gives the widow a deed to her house,
permitting her to live there the rest of her life without further
Members co-operated in many other ways: in logging, stone cutting,
ice storage, trucking, laundry work, sewing, butchering, coal loans,
livestock loans, buying clubs, growing seed potatoes, raising chickens,
pigs, and cows, erecting a freezer locker, and building a new Mormon
Employees in the composing room of the Chicago Daily News
formed the nucleus of the Home and Community Planning Association
which built thirty-five homes in 1948 and plans 242 additional houses
in Niles, near Chicago, Illinois. Subsequently, members from the typo-
graphical unions of both the Chicago Sun-Times and the Chicago Daily
Tribune joined. Many of the members are veterans.
Seventy acres of farmland were purchased for $119,000, the cost
of which was defrayed by the $500 down-payment required of each
member. For the development and maintenance of the community prop-
erty, each member was assessed $30 a year.
170 Get Your Own Home the Co-operative Way
Rising costs forced an increase in the price of the houses, which are
now costing between $12,000 and $15,000 each, including the lot. In
the fall of 1948, two members brought suit against the Association,
claiming that the houses were costing more than they could afford, that
the Association had neglected to build any roads, and that the Board
of Directors was careless, lacked experience, and knew little about
building. The judge continued the case and the Association and the
plaintiffs agreed on a new plan.
There are no membership bars to race, creed, or color in the Home
and Community Planning Association.
Schenectady, New York
A group of engineers employed at the General Electric Company
in Schenectady, New York, formed a co-operative housing association
in 1946. The group incorporated as the West Hill Development, In-
corporated, in 1947, with a capitalization of $60,000 and plans to build
On the outskirts of the town, 260 acres of land were purchased
for $27,000. The money was raised by the members who subscribed
for 286 shares in the Corporation at $100 a share.
The preliminary site plan was designed by the engineer-members. In
the spring of 1948, the first twenty members commenced construction
on their homes. Because they could not wait until water lines were laid
throughout the property, these initial members rented a small piece
of land from the Corporation, drilled a common well, and installed a
distribution system to service their properties. Houses are individually
Chapel Hill, North Carolina
Sponsored by the Service Employees Corporation of the University
of North Carolina in Chapel Hill, fourteen brick and frame houses
were built under a self-help plan which reduced the cost of the units
to less than $5000 each.
A forty-acre tract of land was purchased by the Corporation for
$2200 and called Oakwood Community. The project was financed from
funds advanced by the Service Employees Corporation, by loans from an
insurance company, and by FHA-insured mortgages. The Corporation
retained title to the property until the member completed the number
of self-help labor hours agreed upon, when he received title to his
house and lot and the property was refinanced.
The houses cost from $2750 to $5000, and were completed in 1941.
A Survey of Other Housing Co-ops 171
Each member was required to put in a minimum of $500 worth of
labor on his own house.
Planner House Homes Incorporated was formed in August, 1945,
under the sponsorship of Planner House, a social settlement in the
Negro section of Indianapolis.
Planner House is co-operating with the city's Redevelopment Com-
mission in working out a plan to provide for the rehabilitation of five
hundred families in a 160-acre section of the city. The homes will be
built on a non-profit basis by veterans who will be trained under the
direction of the Veterans' Administration and the City School Board.
The community, to be called Fall Creek, will be developed under a five-
New Brighton, Minnesota
Twelve miles north of the twin cities, St. Paul and Minneapolis in
the town of New Brighton, is the Circle Pines Community, covering
1203 acres with room for two thousand families. Forty houses and
twenty-six apartments in thirteen buildings were constructed in 1948.
Circle Pines was evolved by three St. Paul business men who paid
$100 an acre for the land. In July, 1945, the Circle Pines Develop-
ment Association of New Brighton was incorporated under the non-
profit laws of Minnesota. The Association's activities will end when
the development is complete, at which time the members in the com-
munity will form their own co-operative association for the operation of
Applicants pay a membership fee of $1 plus $100 for membership
in the Circle Pines Co-operative which operates the shopping center.
The Center, which was built before the homes, includes a grocery and
meat market, five hundred frozen food lockers, a feed store, a hardware
shop, a gasoline station, and a restaurant.
In addition to the $1 fee and the $100 subscription, the prospective
homeowner is required to make a down-payment on his house and lot
equal to 10 per cent of the total cost.
The first ten houses erected were Cemesto units. Cemesto is a pre-
fabricated building panel composed of a Celotex cane fibre insulation
board surfaced on both sides with one-eighth inch of cement asbestos.
The original estimated cost of $7500 rose to $9600 before the ten
homes were completed.
The next thirty houses were of conventional construction, two- and
172 Get Your Own Home the Co-operative Way
three-bedroom units erected on concrete block foundations. Costs
ranged from $10,000 to $15,000.
Mount Pleasant, New York
Fifty houses are planned in the co-operative development of Usonia
Homes Incorporated, located at the north end of Kensico Reservoir,
in Mount Pleasant, Westchester County, New York. The ninety-five
acres of hilly land were purchased for $25,000 and paid for in cash
through loans made by the members. Usonia Homes was incorporated
in January, 1945, with one thousand shares of stock at $5 a share. It
is a member of Eastern Co-operatives Incorporated.
Under the supervision of Architect Frank Lloyd Wright, the home
sites were designed in circles, each covering an acre of ground. Only
fifty of the plots will be used for home sites, the rest being held as
community land. There are also two open lots. One will be used for
recreational purposes and for a demonstration farm for the children
in the community, and the other will be reserved for a community
house and several guest cottages.
The cost of the unimproved lot was figured at $260 and the cost of
the improved lot with roads, water lines, and sewerage installations
at $1260 to $1760. Driven wells and a gravity feed system supply the
water and the houses have individual septic tanks. Preliminary work
has been completed on two miles of roads through the project.
From the time of its organization, each family contributed on a loan
basis approximately $50 a month to a joint savings fund. By the middle
of 1948, the first thirty-five members had invested $2000 each. New
members, in addition to paying the regular $100 membership fee, are
required to match the total savings of the old members. Before con-
struction begins, each member must have a minimum paid-up invest-
ment of 40 per cent of the proposed cost of his house and lot.
A panel of eight architects and engineers under the supervision
of Mr. Wright is responsible for the design of the homes. A member
may choose anyone on the panel to design his house. All homes are
modern-organic in design and feature wide glass areas, roof over-
hangs, radiant heating, and large terraces. Seven units were under
construction early in 1949.
Houses will cost from $10,000 to $30,000. Title to the homes and
the home sites remains with the Corporation, and houses may be leased
only to individuals approved by the Corporation. Most of the members
are middle-income professional people. Membership is not limited by
race, creed, or color.
A Survey of Other Housing Co-ops 173
Nucleus of the Home Owners Co-operative Incorporated was formed
among members of the Indiana Farm Bureau Co-operative Association.
Twenty acres of land were purchased on the edge of Indianapolis for
Under an arrangement between the Home Owners Co-operative In-
corporated and the Marion County Farm Bureau Co-operative of
Indianapolis, the first ten families building in 1948 were able to buy
their building materials at 5 per cent above cost.
This project is an example of the development of one co-operative
from the membership of another co-operative, and of the co-operation
between three co-ops to the mutual advantage of all.
Faculty Court in Boulder, Colorado, was built by eight members of
the faculty of the University of Colorado. Pooling their resources, they
purchased a city block on "tax title," that is, land available at low
cost on payment of delinquent taxes. The lots cost the families $500
Colorado ranch style houses were erected. As the project was started
in 1939, construction costs were low and the members were able to
build houses at prices ranging from $5500 to $9000. The average
monthly cost to members is $55. In addition, there is an annual
assessment against each member for the care of the common play-
ground and for the taxes and for the nipkeep of the community
Three developments in Watsonville, San Jose, and Stockton, Cali-
fornia, providing housing for 123 families in the low-income groups,
were sponsored by John and Tom Porter. of Watsonville. The first*
project called Pioneer Homes was built on an eight hundred-acre
ranch in Watsonville owned by the brothers: John, who is head of a
lumber supply house, and Tom, who operates a twelve hundred-acre
truck farm. It was commenced in 1939.
The ranch was unsuitable for farming. It might be used for home
sites. But who would buy such wild, hilly land? Tom pointed out
that a good many of his tenant farm laborers, then living in
shacks, tents, or dilapidated auto courts (at $15 a month), needed
homes, and that decent homes with land for vegetables might be
174 Get Your Own Home the Co-operative Way
sufficient inducement to keep them in Watsonville all year around, so
their labor would be available when needed.
Knowing that most of the laborers had no cash and that few earned
as much as $1000 a year, the Porters decided to start the development
on a small scale. A thirteen-acre tract by the railroad was divided into
plots of two acres and one of three acres. A few months later a second
tract was opened.
The first thirty-eight houses were four-room units built on a self-
help program under Title I of the National Housing Act which re-
quired no down-payment. The cost to the prospective home owner was
$400 for a two-acre plot. The materials for the house cost $325. The
labor cost nothing, for all the work was done by the members under
the supervision of the Porters.
The brothers figured that over a period of two years the $325 ex-
pended for materials could be repaid by payments of $14.48 a month
on an FHA-insured loan. After the loan on the materials was paid,
the workers would continue to pay $14.48 a month until the cost of the
land was cleared. To obtain bank financing, the Porters underwrote
each loan with a personal note. At the end of seven years, most of the
workers in the initial group owned their homes outright and only one
had been unable to meet his payments.
The second group of houses was built under Title II, requiring a 10
per cent down-payment but allowing the purchaser to make the payment
in labor. When the development stretched to the hillsides of the ranch,
the Porters found it necessary to install a water system at a cost of
$26,000. This will be mutualized when the development is complete
and will be operated by the community.
The community now includes shed workers, boxmakers, farmers,
laborers, truck drivers, construction workers, and quarry workers. They
have their own community association which operates the development
and their own schoolhouse which was built on the property through
The Milwaukee Co-operative Homes Association has purchased
thirty-eight acres on the northwest side of Milwaukee for the construc-
tion of 133 homes.
The $29,000 purchase price of the property was raised by selling
each member $300 worth of stock. Of this, $150 was considered part
payment on the land and home and $150 was considered a share or
equity in the Association. Construction has been delayed pending an
arrangement with Milwaukee for the installation of water and sewerage
A Survey of Other Housing Co-ops 175
Syracuse, New York
Six miles from Syracuse, in the town of Camillas, the Home Owners
Co-operative, Inc., started construction of its first thirty houses less than
a year after its organization in June, 1947. The development, called
Westerlea, includes 108 acres and is planned for 156 homes.
A tract of rolling farmland was purchased for $30,000 and paid
for by membership stock purchases and a purchase money mortgage
obtained from the Syracuse Trust Company for $15,000 payable in
installments at 5 per cent interest over a period of five years. The prop-
erty was divided into 156 homesites with thirty acres retained for parks,
playgrounds, and commercial use.
Roads cost the co-operative $5500 and the water system cost $60,000,
of which $42,000 was paid by the town of Camillus. The town also
assisted in the road building. After the road base was constructed, the
town accepted dedication of the roads and appropriated sufficient funds
to gravel them.
On the property were a barn and several buildings valued at $15,000.
In an apartment in one of the buildings, the Lee Trimms, two of the
initiators of the project, set up housekeeping, using their living room
as an office for the development's business. In such manner overhead
was kept to a minimum. There were no fancy brochures or advertising
costs. All clerical help was provided by the members. This was necessary
to keep down the costs. Most of the members are white collar workers
averaging $4000 a year.
The houses are contemporary modern. There are seven floor plans
ranging in size from 1000 to 1500 square feet and containing five
rooms. To facilitate construction and save money, the Co-operative
set up the Westerlea Construction Corporation which builds the houses
under contract with the members. The first houses two-bedroom units,
24 by 48 feet cost $9000 exclusive of the lot. Others have been
designed to cost from $7500 to $9000. The houses are individually
In 1930, with big plans but little money, thirty families in Dayton,
Ohio, formed the Hyland Home Owners Association, a non-profit
corporation. For two years, members made weekly contributions to a
trust fund until they had sufficient capital to buy 104 acres seven miles
outside the city.
The tract was divided into three-acre plots and twenty houses were
built under a self-help plan. Construction of a community house 60 by
30 feet was completed in 1948.
176 Get Your Own Home the Co-operative Way
Proof that houses can be built co-operatively at less cost than they
can be built individually, no matter how small the community, may be
seen in the story of Redwood Village in Glenview, Illinois.
Ten families who belonged to the North Shore Co-operative Society
in near-by Evanston decided to build homes together. They formed
the Co-operative Community, Inc., in 1939 and purchased a wooded
tract of five and one-half acres in Glenview for $4000.
Paul Schweikher, the architect,, reduced his fee from 10 to 7 per cent
when he was given the contract to design all the homes. Contractor
Edward B. Hawkins likewise reduced his profit fee from 10 to 7 per
cent and agreed to divide with the co-operators any savings he could
manage above the price he had quoted for each house.
Seven houses were built, the last being completed in 1942. They are
finished in redwood beveled siding and contain four or five rooms.
Their costs ranged from $8000 to $11,500, including the lot. The
members figured they made the following savings by building co-
operatively: $1500 to $1700 in the group purchase of land; $210 to
$330 in architect's fees; $320 to $510 in contractor's profits; $100 to
$150 in the mass purchase of building materials, making a total savings
for each family of $2130 to $2690. Three more families plan to build
Four professors in Winchester, Massachusetts, worked out a plan
for co-operative living which is still successful after eight years. To-
gether they bought a small estate on Mystic. Lake, not far from the
Massachusetts Institute of Technology where the professors were staffed.
They saved money on legal fees, in utilizing one architect for all the
houses, and by purchasing the property in one piece. Because there
was a group of homes, the town of Winchester extended the sewer-
age lines 350 feet to one end of the property, and installed the water
main in the same trench.
Each family has two-thirds of an acre for house site, garden, and
playground for the children, and each has private shore frontage. Not
formally co-operative at all, the families share boats and wharves,
garden equipment and carpentry tools, and purchase together supplies
for the improvement of the property.
Evergreen Co-operative, Inc., of Chicago, started as a study group in
1946. It is planning a development of multiple or row houses for
twelve hundred families on a square mile of land.
A Survey of Other Housing Co-ops 177
The Association was incorporated under the District of Columbia
Co-operative Laws. It is a member of the Co-operative Federation of
the Chicago Area, Inc. Under the present plans, houses and land will be
held co-operatively, members accepting 99 year leases to their homes in
lieu of titles.
Initiated by Socialist Mayor Hoan, a co-operative housing project
which provided homes for 105 families was built in Milwaukee in 1920.
The Mayor prevailed on the Milwaukee Housing Commission to
sponsor the passage of a state law which authorized the formation
of housing corporations on a co-operative basis. These corporations were
permitted two kinds of capital: common stock to be held only by the
tenant owners in amounts equal to the value of the premises occupied
by them, and preferred stock to be held by investors. The common
councils of cities and the boards of supervisors in counties were au-
thorized to subscribe. The plan could be duplicated in Wisconsin to-
day, for the law is still on the state statute books.
Houses built by the Garden Homes Company cost $5000 including
the lot. Tenant-members paid $45 a month for a five-room house.
With a membership of twenty-one families, a housing co-operative
composed of chemists, engineers, and instrument designers in the
American Cyanamid Corporation of Stamford, organized in 1948 and
purchased land in Darien, Connecticut.
The co-op, called Boulder Ridge, Inc., bought forty-two acres for
$34,000 with funds supplied by the members. Each applicant paid
a membership fee of $100 plus a down-payment of $2000 credited
toward the cost of his lot. Single dwellings are planned.
On a ridge between the Indian and St. Johns Rivers, near Melbourne
in southern Florida, the American Homesteading Foundation, a non-
profit association incorporated under the laws of Ohio in 1946, pur-
chased 160 acres of land at $75 an acre.
The property was divided into 150 home sites, each three-quarters
of an acre in size, with acreage set aside for recreational areas, a com-
munity hall, a craft shop, a store, tourist courts, and trailer camps.
Each individual paid a membership fee of $750.
The houses are concrete or cement block, three rooms and bath,
erected at a cost of about $7000 including the cost of the land. By 1948,
seven houses had been built, five more were under construction, and
178 Get Your Own Home the Co-operative Way
future houses were planned at the rate of one every month. Members
saved money by doing some of the work themselves.
The site plan, designed by Louise Odorne, graduate of Ohio State
University, includes the development of orange groves and truck
gardens. Members also cultivate flowers for shipment by air to north-
ern cities and grow tropical fruits which are shipped out of the state.
Membership is composed largely of ex-social workers and educators.
The community has organized an American folk school.
Through the co-operative efforts of a paper company, a bank, several
business houses, and a group of people who worked nights and week
ends to construct their own homes, fifty-one houses were built in
Millinocket in the lake country of northern Maine.
The Great Northern Paper Company, principal industry for the
6300 inhabitants of the town, started the enterprise in 1947 by divid-
ing a tract of land it owned into fifty-one lots and selling the lots
at $240 each to employees and villagers who would build their own
homes. Self-help work teams went into the woods and cut logs for
lumber. Others cast cement blocks. The Great Northern offered special
rates for the use of its horses and trucks. It also furnished without
cost a bulldozer and an operator to excavate and backfill, a cement
mixer and an operator, and other miscellaneous equipment. To guide
the co-operators, the Company provided the services of several expert
carpenters. There were times when as many as forty members worked
on one house. The Bangor Hydro-Electric Company supplied current
free at night so the men could work on their homes after dark.
The houses are one or two stories in height and contain five or
six rooms. Many have garages. The dwellings were erected at costs
ranging from $4000 to $6500, exclusive of the cost of the lot.
Through the efforts of the Great Northern Paper Company, the
Millinocket Trust Company agreed to make loans which would be
liquidated in ten or fifteen years at 5 per cent interest.
The members developed a community park a year after the project
Yellow Springs, Ohio
Ten veterans formed the Yellow Springs Co-operative, which plans
a garden apartment development in Yellow Springs, Ohio. The mem-
bers hope to save money by joining forces with the co-operative
Riverside Homes in Detroit, Michigan. The two groups will use the
same architect, a similar site plan, and will buy supplies together.
A Survey of Other Housing Co-ops 179
An engineer and an architect, with plans to develop a co-operative
community of five hundred homes, bought a tract of land of seventy-
two acres in Detroit for $800 an acre and undertook the work neces-
sary to plan the project, have the land re-zoned, and organize the
prospective co-operative set-up. This procedure is the reverse of the plan
followed in the development of most co-operative communities.
Donald Monson, engineer in the Detroit City Plan Commission, and
Philip Brezner, Detroit architect, bought the property with their own
funds and then designed a site plan to include park apartments, single
dwellings, duplexes and row houses, a community hall, a shopping
center, athletic and recreational grounds. Land will be turned over
to the ultimate co-operative ownership corporation at purchase price
plus development costs. The building company will be a profit corpora-
tion, but the owning corporation will be a Rochdale Co-op, with title to
all land and buildings remaining with the Corporation.
Six miles from Clarkesville, Georgia, is the co-operative community
of Macedonia, Georgia. The members are businessmen, lecturers, teach-
ers, and students. Many were Conscientious Objectors during the war.
Forty people, many of them living in houses they themselves built,
receive their entire support from the community. It is estimated that
fifty families can be accommodated on the eleven hundred acres.
No one has any money in Macedonia. No one receives any. Houses,
shops, mills, barns, pastures, cows, chickens, store, farm equipment,
and the woodcraft shop where children's building blocks are made are
owned by the community. Wages are pooled, and families draw sub-
sistence checks only to foot current costs of food and clothing.
Five new houses have been constructed and a number of others were
rebuilt. Morris Mitchell, professor at the Alabama State Teachers'
College, initiated the project. There are no bars to race, creed, or color
Celo, North Carolina
A community similar to Macedonia, Georgia, is being developed by
the Celo Community, Inc., on the banks of the South Toe River in
Celo, North Carolina. The main difference is that in Macedonia, mem-
bers depend wholly on community projects for their subsistence, where-
as in Celo many of the members have outside interests which contribute
to their financial support.
180 Get Your Own Home the Co-operative Way
The American Friends Service Committee, Quaker organization,
sponsored the project, purchasing the 1250 acres of land with funds
supplied by the Marquette Charitable Organization of Chicago. Eleven
families have settled in Celo, most of them building their own homes.
Under the name of Parkway Co-operative Association, thirty electrical
engineers, mechanical engineers, and physicists from Pittsburgh, joined
forces to purchase thirty acres of land in Churchill Boro, two miles
from Wilkinsburg. The property cost $30,000.
On the acreage at the time of purchase was a nine-room house which
was converted into three apartments for members in 1947. The land
has been divided into eighty building lots. Single-family dwellings are
planned and will be individually owned. Each member holds stock in
the community house and in other community facilities, which will be
co-operatively owned and operated.
Ramapo, New York
A group of businessmen desiring homes within commuting distance
of New York organized Sky View Acres, Inc., in Ramapo, New York
in 1946. A tract of 150 acres was purchased for $30,000. A twenty-
year mortgage for $16,000 at 4 per cent interest was obtained, the
balance of the cost being paid with members' share subscriptions.
Eighteen acres were sold to the State of New York for a parkway.
Of the remaining 132 acres, 108 were divided into homesites ranging
in size from one and one-half to four acres, and the rest was retained
for community land. The property will accommodate forty families.
Most of the houses planned are one-story expansible units to which
two or three bedrooms may be added later. The homes have been
designed to enable members to undertake a number of the subdivisions
of the construction work. Savings were effected because the members
used the same architect and because they utilized similar materials that
were purchased in quantity. Construction began in the fall of 1948.
Members make a down-payment of $1000. Of this amount, $100 is
retained by the Corporation for development purposes and $900 is
applied toward the individual's lot. Houses are to be individually
There are no paid officers in the Corporation and most of the clerical
work has been done by the members. After the development is com-
plete, the Corporation will operate the community.
A Survey of Other Housing Co-ops 181
A group of union screen cartoonists, intent on solving their respec-
tive housing problems, was responsible for the formation of Com-
munity Homes, Inc., which plans a co-operative community of 280
homes on property located in the San Fernando Valley, Hollywood.
In 1946 Community Homes purchased 106 acres of land for $230,-
150, paying for the property in full with funds acquired through mem-
bership down-payments. Each veteran member made a down-payment
of $750 on joining the Corporation, while non-veteran members paid
$1500. Initial plans called for the construction of frame houses with
exterior walls of redwood siding and stucco.
Under a land re-developrnent program, the Co-operative Residences,
Inc., plans a community of 125 dwelling units in apartments and row
houses to be built on a six and one-half-acre tract in south Chicago.
Application was made in 1948 to the Land Clearance Commission
to purchase the property under the Illinois Slum Clearance and Re-
development law at a cost of thirty-five cents a square foot.
Ten families, threatened with eviction, organized the Fellowship Co-
operative Homesteads, Inc., which is developing Tanguy Homesteads
on 167 acres of farmland in Cheney, Jiear Media, Pennsylvania.
The project was started in January, 1945, when Robert Willson was
evicted from his home. Willson called together the members of a
small group who had been meeting for two years and planning a co-
operative housing development.
Ten families pledged $1000 each toward the purchase of land and
instructed Willson to buy a farm of 110 acres which only three of
them had seen. The property cost $30,000. Of this amount, $15,000
was paid in cash as follows: $10,000 in member loans, $3000 from the
sale of a fruit farm on the property, and $2000 borrowed by Mr. Will-
son. A bank mortgage was obtained for the remaining $15,000.
The farm was divided into forty-two-acre homesites, the rest of the
land being devoted to community interests which include a co-operative
farm. On the property was a sixteen-room farmhouse. This accommo-
dated the Willsons and two other families who converted it into apart-
ments. A fourth family moved into a shed; a fifth rebuilt an old
garage; and a sixth occupied a trailer until the first house was built.
182 , Get Your Own Home the Co-operative Way
This unit, a flat-roofed, cinder-block structure containing three bed-
rooms, cost $8000.
The Tanguy homes are being built by five members who trained at
the school for low cost housing at the Fellowship Center in Walling-
ford. The Tanguy plan is to retain these five members as a building
crew on an all-year basis, guaranteeing them a minimum of $3000 in
wages per year.
The houses constructed after the block home are expansible units
to which two or more rooms may be added later. The first unit erected
In 1948 the Tanguy members purchased a second farm of 87 acres
for $27,000. The purchase money was raised through the sale of three
houses and twenty acres of land, plus $4000 in member loans, and a
bank loan of $3000.
There are no color lines at Tanguy. Four of the first ten families
were Negroes, and a section of the second farm has been set aside for
faculty members of the Cheney State Teachers' College, a Negro in-
stitution. Many of the first Tanguy members were Conscientious Ob-
jectors during the last war.
West Haven, Connecticut
Financial difficulties have delayed construction in the development
planned by the Co-operative Homes of West Haven, Inc.
A tract of seventy-two acres known as the Elm Terrace Golf Course
was purchased in 1947 at a cost of $30,000. Original plans called for
the erection of 122 homes.
No matter what your profession or job,
you can find here people like yourself
who formed a group within their com-
munity, their union, their church, their
office, or even among their friends and,
by co-operative effort, built their own
homes. Some of the groups formed true
and complete co-ops; others adopted some
co-op features; still others formed only
the loosest sort of association. But all of
them got houses of quality and beauty
superior to anything they could have
obtained under separate contracts.
The first and only detailed account of
co-operative housing in the U. S., this
volume is indispensable to all individuals
and organizations interested in any phase
of housing public or private.
Elsie Danenberg has more first-hand
material on group housing than anyone
in the country. She has followed its devel-
opment closely for years, has written
about it, and has counseled numerous
groups on their problems. In gathering
material for this book she spent several
months visiting co-op housing develop-
ments from coast to coast. The information
is, therefore, complete, authentic, and up
GREENBERG : PUBLISHER
201 East 57th St., New York 22, N. Y.
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