Questions for Tom Carr on the Co-op Ordinance

Some possible questions for the meeting with Tom Carr. Each part is the proposed BRC revision or amendment, then followed by some questions:


Section 4: Section 9-8-5 is amended as follows:

(d) A dwelling unit licensed as a Cooperative Housing Unit pursuant to Section 10-11-3 “Cooperative Housing Licenses,” BRC 1981, shall not be subject to the occupancy limits set forth in this section.

Question: Surely they are not exempt from all occupancy limits – aren’t there still health and safety codes that would apply?  Don’t there have to be sufficient legal bedrooms for 12 people?

Section 6. The following new definitions are added to Section 10-1-1:

Area Median Income shall have the same meaning as set forth in Section 9-16-1, “General Definitions,” B.R.C. 1981

Cooperative means a housing arrangement in which residents share expenses, ownership or labor.

Cooperative housing unit means a dwelling unit in a Private Equity, Group Limited Equity or Rental Cooperative.

…………

Private Equity Cooperative means a cooperative in which two-thirds of the adult non-dependent residents own an interest in the property, two-thirds of the individuals who own an interest in the property are also residents of the property, and the owner-residents hold a controlling ownership interest in the property. A organization recognized as tax exempt under section 501(c)(3) of the Internal Revenue Code with a housing focused mission may own a minority interest in the property.
 
Rental Cooperative means a cooperative in which the more than one-third of the some or all of the residents do not have an ownership interest in the property in which the cooperative operates.
Group Equity Cooperative means a cooperative in which a majority ownership interest is held by a non-profit organization which is tax exempt under section 501(c)(3) of the Internal Revenue Code.
 
Questions:
 
1) If residents share some but not all expenses, is that still a cooperative? For example, if they share the water and power bills, but not internet access, is that a cooperative?
 
2) If sharing expenses is all that is required, what is the distinction between a Rental Cooperative and an over-occupied rental property? And how will the City determine if such sharing is actually done on an ongoing basis? Note that the review by the Expert Cooperative Housing Organization in 10-11-14 is apparently limited to a one time review of the paperwork submitted with the application.
 
3) Will the coop have to keep some separate bank accounts into which each resident deposits money, and from which expenses are paid and recorded?
4) What will ensure that a “non-profit organization tax exempt under 501(c)(3)” is not a shell company effectively controlled by a for-profit investor?
5) What is the justification for allowing 1/3 of the owners of a private equity co-op to be non-resident?
6) What assurance is there that the owner-residents of a Private Equity co-op actually own a meaningful share in the co-op?  Couldn’t an investor resident-owner just sell shares for $1 apiece to several other resident “owners” and then charge them some sort of rent under the table?

10-13-3:
 (e) Any Group Equity Cooperative shall be permanently affordable. The price of any equity ownership interest shall be affordable to a households earning no more than sixty percent of the area median income. Rents charged must be affordable to households earning no more than sixty percent of the area median income. 
 
Questions:
 
1) Is the “permanently affordable” requirement permanent? In other words, is it a deed restriction held by the City or other similar entity? And what if the owners decide to sell? Does this requirement run with the property?
 
2) Who is expected to put in the rest of the equity? 
 
3) How does this “permanently affordable” requirement comport with the relatively short term of the license? What if the cooperative fails to meet the license requirements, violates some BRC provisions at some point in the future like the Neighborhood Compatibility requirements, or has its C.O. revoked? Or the whole cooperative notion is abandoned?
 
4) If this “permanently affordable” requirement can be broken by the owners’ actions or inactions, then isn’t it irrelevant, in that the owner could choose to violate the law and then sell or rent it at market rates?
 
5) How will the “price of any equity ownership interest” be determined? Is this something that will be made available whenever someone wants to sell, or is there some other idea? Will the City monitor all such sales? Who in the City will do this?
 
6) Given that this is one single house, what is meant by “affordable to households” in both the equity and rental parts? Is each renter or owner a “household” or what?

 


10-11-1. Legislative Intent

The City Council seeks to balance the benefits of cooperative living against the impacts from the increased density that comes along with cooperative living.  The City Council is also concerned about the cooperatives competing in a tight housing market with families seeking single family homes.  The City Council intends to monitor the implementation, affects, and results of this ordinance.

Questions:

1) Please explain how anything in this ordinance mitigates the impacts from increased density or the competition for single-family housing.

2) How will City Council “monitor” the effects and results of this ordinance?


10-11-3. Cooperative Housing Licenses

(d) No cooperative housing unit may locate within five hundred feet of from the property boundary of another cooperative housing unit…

Questions:

1) Does this buffer requirement include existing co-ops such as Masala, Ostara, etc. that are not licensed under this ordinance?  If not, why not?

2) Is that measurement from property boundary to property boundary, or is it from the building of one co-op to the property boundary of the other co-op?


10-11-4. License Application Procedure for Cooperative Housing Licenses.
Questions:
1) This section is hopelessly convoluted and impossible for anyone to follow.  It is difficult to see what parts would apply to a Rental Co-op, or to a Private Equity Co-op, or to a Non-profit Group Equity Co-op.  It is also impossible to decipher what responsibilities lie with an investor landlord vs. the responsibilities of the prospective rental co-op tenants.  There’s also a tricky way of seeming to allow for partial pre-licensing that’s very confusing.  Will this be re-written to be more clear?
2) A property owner still has the right to discriminate against co-ops as a prospective tenant.  Does the property owner also have the right to limit the number of occupants to less than what the ordinance would allow?

10-11-11. – Parking Management Plan Required.

Each applicant for a cooperative housing license shall prepare a parking management plan. Approval of any such plan shall be a condition of issuance of any cooperative housing license. The plan shall limit the number of automobiles to be parked in the public right of way to three. associated with the property to no more than four vehicles per license.The parking management plan shall include a list of all vehicles to be associated with the property. The list shall include the name of the owner, the make and model and the license plate number of all vehicles to be located at the cooperative housing unit. An agreement by the licensee to require that all residents have a local bus pass with the Regional Transit District may be included in such a plan, but is not required.If the cooperative housing unit is located in a Neighborhood EcoPass district, the plan shall include a requirement that each resident who licensed to drive, acquire an EcoPass.

Questions:

1) What if the coop members own  5 vehicles, and say that 2 of the vehicles aer not “located at the cooperative housing unit”, but in fact are parked around the corner or on the other side of the block? Is that a violation of the requirement?

2) Does the number of vehicles parked in the right of way include visitors/guests?

3) How will the city be able to enforce this?  Will the list of vehicles and license plates be made publicly available so that the neighbors can call in a suspected unauthorized vehicle?


10-11-12. Compatibility with Neighborhoods

A cooperative my be considered incompatible with the neighborhood if the city manager receives multiple complaints relating to parking on the public right of way, noise, trash, or weeds in any twelve month period.

Questions: 

1) Why is this limited to only those four types of complaints?  Why not specify any type of complaint, especially including but not limited to animal control violations, excess occupancy, illegal short-term rentals, illegal activities, endangerment, building code violations, etc.?


10-11-13a. – Property Rights for Equity Cooperatives

Cooperatives that are licensed pursuant to this chapter will have the following status under Title 9, “Land Use Code,” B.R.C. 1981:

(a) Equity Cooperatives. Any licensed limited equity cooperative or private equity cooperative is considered a use of land for the purposes of Chapter 9-6, “Uses of Land,” B.R.C. 1981. If the city changes its land use regulations, such cooperatives shall have the privilege to continue as non-conforming uses under the requirements in Section 9-10-3, “Changes to Nonstandard Buildings, Structures, and Lots and Nonconforming Uses,” B.R.C. 1981, provided that all of the requirement of the Boulder Revised code continue to be met. 

Questions:
 
1) Does this mean that once an equity cooperative is in place, so long as it doesn’t violate the BRC requirements, it is permanent unless the owners decide to sell?
 
2) And if they sell, is the “permanently affordable” requirement still in place? Or can they voluntarily abandon it? 
 
3) What if the owners persistently violate the rules and laws for coops? If it is permanently affordable, who gets it? What happens to the renters?
 
4) And if the owners and/or renters persistently fail to follow the requirements in 10-11-14, exactly what does the City intend to do to get them to do that?

10-11-14. – Legitimate Cooperatives

(a) The city council intends that all licensed cooperatives be legitimate cooperatives. A legitimate cooperative is a group living arrangement in which the residents have a high degree of social cohesion and teamwork. The residents typically govern through consensus and share responsibilities and resources. New members are typically selected by the community’s existing membership, rather than by real estate agents, property managers or non-resident landowners.

(b) All applicants for cooperative housing licenses shall demonstrate and as part of the licensing process that the community to be formed will be a legitimate cooperative. A legitimate cooperative is an organization formed under Colorado law that, in addition to any other criteria adopted by the city manager, has the following:

(1) a documented governance structure; 

(2) a list of members; and

(3) bylaws that provide for the following:

(A) provisions prohibiting discrimination or harassment; (B) a provision requiring regular meetings of all members; (C) a democratic decision-making structure;
(D) provisions for discipline or discharge of members; and (d) provisions for sharing of resources.

(c) The city manager shall designate one or more Expert Cooperative Housing Organizations with 90 days after final adoption of this ordinance. An applicant shall seek training and certification by an Expert Cooperative Housing Organization. An applicant shall submit evidence of such training and certification as part of an application for a cooperative housing license. 

Questions:
 
1) How does the ECHO relate to the cooperative? This does not seem to be spelled out here. Is it somewhere else in the ordinance? Is there role to examine the paperwork? If not, what?
 
2) Is there any requirement for ongoing “demonstration” that this is a “legitimate cooperative” as written out in 10-11-14? Or is this a one time examination of papers, and after that, the role of the ECHO is over with, and the only requirements are in 10-1-1, which requires, “residents share expenses, ownership or labor”?
 
3) What if the “new members” are selected by the property manager? How will the City know and monitor? Will this be a violation, given the “typically” language in the proposed language?
4) Does nonsense like “residents have a high degree of social cohesion and teamwork” really belong in the city’s legal code?

General Questions

1) Who pays for the operations of the “Expert Cooperative Housing Organization”?  The co-op applicants, or the city’s taxpayers?

2) The information contained in the co-op certification and license is spread over several sections of the ordinance.  Will all of it be publicly available?

3) Shouldn’t there be some prohibition against co-ops hosting short-term rentals, hostels, and the like?

4) Is there any requirement to ensure that the “expert cooperative housing organization” does not discriminate against prospective co-ops that don’t share their particular philosophy?

5) Is there anything in here to prevent the establishment of “luxury co-ops”?  If all the residents share the cost of a housekeeper, cook, concierge, etc, would it still meet the criteria of this ordinance?