What sector of the U.S. economy has roughly 29,000 businesses, 2 million jobs, $652 billion in annual sales and assets of $3 trillion? Cooperatives, and October is Co-op Awareness Month, a national series of events throughout the country to make cooperatives more visible in their contributions to local economies and to the country.
Cooperatives come in many shapes and sizes but, at root, are business enterprises formed by groups of people who voluntarily develop, jointly own and democratically control the enterprise to meet their common economic, social and cultural needs.
Some are consumer co-ops, where, for example, a group of people organize themselves to buy the food they want in bulk and at a savings, like the Belfast Food Co-op or the Good Tern in Rockland.
Some are producer cooperatives, where, for example, a group of dairy farmers organize a milk processing and distribution facility that they own and run together. Some are marketing co-ops, such as Port Clyde Fresh Catch, where commercial fishermen have organized to sell locally harvested ground fish.
A worker cooperative, like King Arthur Flour in Vermont, is a firm where the employees own the company. A credit union is a financial services co-op and is owned by the member depositors rather than by a separate group of shareholders.
However, one type of co-op that few Mainers have experience with are Resident Owned Communities, or ROCs. This is too bad, because ROCs are particularly well-suited to Maine and have the power to transform the lives of their residents, who may be low-income, elderly or disabled.
In traditional mobile-home parks, residents own their home and rent their lot. But owning a home on someone else’s land is not a good strategy for building wealth or strengthening a community. Investor-owned parks may or may not be well taken care of, the parks can be sold at any time, and residents have no control over their communities or lot rents. These and other factors are a large source of instability and insecurity that weaken community ties and degrade the value of the residents’ biggest asset — their homes.
ROCs flip this dynamic by giving park residents the opportunity to cooperatively own their community, as well as individually owning their own home. Residents who own their communities can ensure their lot rents are affordable into the future, set community rules that improve the quality of life and prioritize and deal with pressing issues such as road maintenance and septic systems.
Community ownership fosters economic opportunity and growth, just like owning a home, a business, or a 401(k) does. In fact, a recent study by the University of New Hampshire’s Carsey Institute showed that “homes in ROCs sell more quickly than homes in investor-owned communities, they have a 12 percent higher price … and the monthly lot fees are lower.”
The story of ROCs started in New Hampshire in 1984 when the Meredith Center Trailer Park was put up for sale. A developer was about to buy the park and evict the 13 families who lived there, but the New Hampshire Community Loan Fund helped the families form a cooperative and loaned them the money to buy the park. Out of this experience, ROC USA was formed, a national network of regional organizations that have helped roughly 8,000 families in 129 communities in 12 states join together to buy and run their communities.
The basic concept is simple. When a park may be up for sale, residents join together and form a corporation, which takes a mortgage and buys the park. Each household in the park owns one share in the corporation and has one vote for the board of directors, who run the day-to-day affairs and must also be residents of the park. The shareholders vote on all major decisions, like an annual budget that covers the mortgage and maintenance and sets the monthly lot rent. Each household pays a nominal price for their share, usually $100, and has no individual liability.
In this way, the residents control if and how much their lot rents go up and, if there is a surplus, can choose for themselves whether to allocate it to an important community project or use it to lower rents. These communities are using market-rate loans and, with more than 129 ROCs created over 30 years, not a single one has ever failed or defaulted.
With more than 500 manufactured housing parks in Maine, these communities are the largest source of unsubsidized affordable housing throughout the state. According to the U.S. Census, the average cost of a new singlewide is $40,600, and the cost of a doublewide is $74,200, but the average cost of a site-built home (including land) is $272,900. Additionally, new manufactured housing is very energy efficient, meeting stringent federal Energy Star building codes.
Currently, only two Resident Owned Communities exist in Maine, and Medomak Mobile Home Cooperative in Waldoboro is a good example of how success begets success. As the residents have gained experience and confidence in managing their own community, they have expanded cooperation into new areas, including community gardens and projects that have improved the safety and livability of many individual homes.
In most of New England, the Cooperative Development Institute is the on-the-ground organization working with residents who want to purchase their communities and has recently expanded the ROC program into Maine.
Cooperative Maine is an organization that has emerged over the past five years to connect, strengthen and support all types of cooperatives across the state. They have published Stronger Together: a Directory of Maine’s Cooperative Economy, so people can see what types of co-ops are working in their communities.
Just as individuals have joined together to start credit unions to meet their financial needs, food co-ops to meet their needs for healthy food, or industry co-ops to meet their common needs such as processing and marketing, ROCs offer residents an opportunity to take control of their community and meet their need for a stable, affordable and safe community to live in.
Rob Brown is the Maine Housing Program organizer for the New England Resident Owned Communities Program of the Cooperative Development Institute. He lives in Liberty and can be reached at email@example.com.