Housing case study 4: US unions help build housing co-operatives

In the Bronx borough of New York City stands a proud pioneering housing co-operative affectionately known as The Amalgamated.

Sponsored in 1927 by the Amalgamated Clothing Workers of America (ACWA), Amalgamated was the first limited equity-housing co-op in the USA and one of the first co-ops directly sponsored by a union. Amalgamated accommodates over 1,482 families.

In the 1930s, ACWA sponsored another co-op Amalgamated Dwellings (230 apartments) to serve its members on the lower east side of Manhattan. ACWA went on to sponsor a third co-op, adjacent to Amalgamated Dwellings, Hillman Houses (807 apartments). The union broke ground in 1949 and dedicated the building to Sidney Hillman, the founder and first president of the ACWA.

With the commitment of union leader Sidney Hillman and the skills of co-op housing leader Abraham Kazan, new ground was ploughed for co-operatives to meet the housing needs of working people. However, the ACWA’s greatest achievement is its early influence on other unions to sponsor housing co-operatives. Here are other unions that followed in the footsteps of the ACWA.

• The Amalgamated Meat Cutters and Butcher Workmen sponsored Concourse Village also in the Bronx Borough of New York City (NYC). The co-op community of 1,883 apartments was completed in 1965.

• The International Typographical Union (ITU), Local 6, in NYC developed the Big Six Towers in 1961. Located in the Queen’s Borough of NYC there are 983 apartments. Approximately one-third of the residents are active or retired union members.

• The International Brotherhood of Electrical Workers (IBEW), Local 3 sponsored Electchester also in Queens. To serve over 5,500 people, there are 2,500 units in 38 buildings. The union leaders worked with the Joint Industry Board of the Electrical Industry to purchase 103 acres on which to build the housing co-op.

• The International Ladies Garment Workers Union (ILGWU) sponsored the Penn South Co-op in Manhattan, NYC. Opened in 1962 by President Kennedy, Penn South provided 2,820 apartments for working class families.

• In 1951, seeing an opportunity to spur co-op housing, a number of NYC unions created the United Housing Foundation (UHF). UHF exploded onto the NYC housing scene. In fifteen years, UHF had developed 23 co-op housing projects with almost 35,000 co-op apartments for over 100,000 New Yorkers. The boom era came to an end in 1970’s with the problems associated with Co-op City (15,372 apartments), voter revolt against massive urban renewal projects, and reductions in government financing opportunities.

• The United Auto Workers Union (UAW) sponsored Cooperative Homesteads in Detroit, Michigan in the 1930s with Frank Lloyd Wright as the architect. Due to the impact of WW II, Cooperative Homesteads was never built. After the war, the UAW sponsored a number of housing co-operatives such as Walnut Grove Mutual (247 homes) in South Bend, Indiana.

• When Ford Motor Company transferred its California-based plant from Richmond to Milpitas, the UAW needed to secure housing for black workers in Milpitas’ all white neighbourhoods. Ben Gross, a UAW leader, pursued a site close to the new plant for five interracial co-ops that built 609 homes. Various unsuccessful efforts were attempted to sabotage the interracial community. In 1962, Gross took pride in showing then Russian President Nikita Khrushchev the interracial co-operative community.

Union involvement in co-operative housing continues today, as exemplified by the AFL-CIO Housing Investment Trust (HIT). Established in 1965, the HIT manages $4.6bn in assets for over 360 investors, which include union and public employee pension plans.

Over the past 15 years, HIT has helped to preserve the affordability of more than 12,660 co-op housing units at seven New York City co-operatives by investing $408m of union pension capital. In the Midwest,  HIT has provided over $71m in financing for construction of 556 units at 10 new co-operative housing developments, most of which are targeted to seniors. In 2012, the National Association of Housing Cooperatives in Washington, DC, recognised the HIT with its first ever Award for Development and Preservation of Co-op Housing.

Another co-operative is behind this growth too. Mary Alex Blanton of the National Cooperative Bank (NCB) said: “NCB has also been a major lender to many of the union sponsored housing co-ops in NYC. In fact, NCB has lent $77m dollars to five of those co-ops.”

One author, Peter Eisenstadt, recently wrote about the massive foreclosures in the Queens borough of NYC, but noted that “One large area, Rochdale Village has none … What makes Rochdale different is that it is a limited equity co-operative.”

Eisenstadt concludes that as the US lost $14tn of net worth in the housing bust since 2007, “we need to reconsider the alternatives to the speculative housing market such as limited equity co-operatives”. Rochdale Village was a union sponsored co-op built through UHF. Queens is the epicentre of foreclosures in NYC.

The real estate debacle destroyed home ownership and the bank accounts of millions of Americans. Millions of people would have been far better off joining limited equity housing co-operatives. Unions, religious institutions and other groups should revive their sponsorship of housing co-operatives for their members and the public.

In doing so, they could turn to AFL-CIO HIT and the National Cooperative Bank to build stable, rather than speculative, housing. Now is the time for leaders to usher in a new era of limited equity housing co-operatives.

• For the full article on the growth of co-operation in the housing sector, and for further case studies, click here.