I believe that community ownership of major assets in our cities will play an important role in creating the justice-driven and future-oriented places Streets.mn is dedicated to. That’s because community ownership is more stable in the long term than the often speculative — and almost always financially extractive — investments that drive up costs for renters.
Major community assets include residential and commercial real estate. Several examples of community ownership have existed in St. Paul and Minneapolis for a long time (see previous Streets.mn coverage from last June), and one is becoming more popular right now.
Community Development Corporations (CDCs)
Nonprofit CDCs began nationwide in the 1970s. They generally work in a specific geographic area, or with a particular population. While they often also work with small business development, a major area many work in is building and owning affordable housing and, less often, commercial real estate development and management.
Nonprofit organizations, including CDCs, are legally considered to be community-owned, though it’s a bit indirect. Their boards are members of the communities where they are located, and their assets belong to the community if the organization ever dissolves.
Examples of housing developers that are tightly bound by geography include Hope Community, located at Franklin and Portland avenues in Minneapolis, and PRG (formerly the Powderhorn Residents Group). Some of the housing developers who work across entire cities or the whole metro area are Aeon, CommonBond Communities, Beacon Interfaith Housing Collaborative, and Alliance Housing. Some housing organizations, such as PPL, provide supportive housing, while others do housing only.
Other CDCs buy and rehab (or build) commercial buildings to create long-term affordable spaces for neighborhood businesses. The Neighborhood Development Center, for instance, is the owner of the Midtown Global Market on Lake Street, among other projects. Redesign, Inc. (formerly Seward Redesign) owns multiple commercial buildings in the Seward and Longfellow neighborhoods and is currently undertaking the rehab of the Coliseum Building at Lake Street and 27th Avenue, along with partners.
Find a list of most of the Twin Cities’ CDCs at the Metropolitan Consortium of Community Developers website.
Community Land Trusts
Land trusts acquire land and remove it from the speculative, for-profit real estate market. They hold the land they own in trust forever for the benefit of the community by ensuring that it will always remain affordable for income-qualified homebuyers. While the people who buy the houses that sit on the land will not get the financial return of someone who buys a house on the open market, they also benefit from a much better deal when they buy at the outset.
Local examples include the Rondo Community Land Trust in Saint Paul and the City of Lakes Community Land Trust in Minneapolis. MinnPost had an article in 2020 explaining community land trusts in more detail. The Rondo trust recently announced that they will acquire Golden Thyme Coffee & Cafe on Selby Avenue, creating Golden Thyme Presents, an incubator for food vendors and Rondo-based entrepreneurs who are Black, Indigenous and other people of color. This new venture will explore using a worker co-op model.
Land Bank Twin Cities, while not a community land trust, purchases real estate to bridge acquisition for community-oriented projects while the organizations are lining up the many details required in real estate development. They typically hold properties for months to a few years. They also help community organizations with deal negotiation and financing.
Housing co-ops are complex, and some would not qualify as what I consider community ownership. (Think of the classic New York City co-op we hear about in news and fiction, which is essentially a condo with somewhat different rules.)
The kinds of co-ops I have in mind are these:
- Work by organizations like Northcountry Cooperative Foundation, which assists residents of mobile home communities in buying the land under their homes. That’s in keeping with the spirit of community ownership.
- Riverton Community Housing, a multi-building student rental housing co-op at the University of Minnesota, which has existed since the early 1970s.
- Limited-equity or group-equity cooperative ownership models that fit the idea of community ownership best. The Lowertown Lofts Artists Cooperative in St. Paul uses one of these ownership models, which has maintained its affordability for the artists who own co-op apartments there.
I don’t know which of the two equity models the recently formed Sky Without Limits Cooperative in south Minneapolis is using, or will use once it is fully decided. The residents of its nearly 70 units, living in a set of formerly slumlord-owned buildings, struggled for years before being able to acquire the property, partly with the help of the Land Bank. The co-op is currently working with Nexus Community Partners to figure out its co-op model.
Real Estate Investment Co-ops (REICs)
REICs are much less common than CDCs in the Twin Cities, though the Northeast Investment Co-op (NEIC) has been operating in Minneapolis since 2011. NEIC owns a building on Central Avenue in Northeast Minneapolis and one on 37th Avenue in Robbinsdale. Its Central Avenue building houses Fair State Brewing and Aki’s Bread Haus, while the adjacent Recovery Bike Shop acquired its building as part of the deal when NEIC purchased its building.
REICs are for-profit organizations, though as co-ops they are community-owned and have an inherent interest in their local community, rather than in wealth extraction. Investors bring “patient capital” to the table. They get a return on their investment (it’s not a donation), but it’s not at the typical real estate rate of return, either.
The big news in local REICs is that there are two brand-new ones recently started in St. Paul, both open for members to join currently. Membership, by state law, is open to anyone living in Minnesota. As co-ops, the organizations have to designate votes on any questions as one-member, one-vote, no matter how much money is invested.
Midway Investment Co-op (MIC) is focused on commercial or residential properties in the Hamline-Midway neighborhood. Board membership is restricted to residents or business owners within Hamline Midway. Membership shares are $100, and scholarships are available. At this point, MIC has not identified any specific building purchases; once this happens, additional investment shares will be available.
Taproot Investment Co-op is focused on the Creative Enterprise Zone area of St. Paul, which runs from the Minneapolis/St. Paul border east along University Avenue and north from I-94 to the south edge of the railroad tracks that divide the St. Anthony Park neighborhood. Membership shares are $1,000.
(Full disclosure: I am already a member of both of these St. Paul investment co-ops.)
Both MIC and Taproot have been consulting with Nexus Community Partners on the cooperative aspects of their start-ups. The City of Saint Paul has committed resources to both REICs and recently hired a co-op coordinator. Mayor Melvin Carter has said he wants St. Paul to be the “cooperative capital.”
Watch for notices of proposed building acquisitions from all three REICs in future months and years if you want to be part of “owning the block,” as MIC puts it.