What is a housing co-op and could Winston-Salem get one this year?

Featured photo: Winston-Salem city leaders met on Aug. 12 to discuss forgiving a nearly $157,000 loan on 207 N. Spring St. to make way for new owners who aim to create a housing co-op there. (Photo by Gale Melcher)

Downtown Winston-Salem is one step closer to having its first known cooperative housing community at a five-unit complex at 207 N. Spring St.

On Aug. 12, city councilmembers on the Community Development, Housing and General Government committee recommended that the full city council forgive a $156,870 loan that will clear the path for nonprofit Spring Street Co-op to obtain the property. The debt must be paid or forgiven before the property can be transferred from the current owners, Partners for Homeownership, to the nonprofit. Spring Street Co-op was born from the organizers with Housing Justice Now, a local tenant advocacy group.

The property at 207 N. Spring St. was used for several years by AIDS Care Service of Forsyth County until 2016. It has sat vacant for years since then.

Committee members DD Adams, Annette Scippio and Kevin Mundy voted in favor while Robert C. Clark abstained.

The final word on the loan will be issued by a vote at the Sept. 3 city council meeting.

What is a housing co-op?

Along with this request to forgive the loan, Spring Street project organizers submitted a 100-page document explaining the project narrative, scope of work, inspection results and more. Steven Virgil, Spring Street Co-op’s legal representative and teacher at Wake Forest School of Law, explained how the co-op will work during the Aug. 12 meeting. 

It will have six voting members — five votes will belong to the tenants of the units and one will belong to the board of directors of the nonprofit Spring Street Co-op. The current board members are Virgil as the incorporator and secretary, Sara Hines as president, Jes Bolduc as vice president, Phillip Carter as treasurer and Dan Rose as a board member.

“The nonprofit assures — just the nature of the 501(c)(3) — that resources that go into this development are now and forever committed to affordable housing,” Virgil said.

Spring Street Co-op has committed to offer the units to tenants who make 30-50 percent of the area median income for a minimum of 30 years. Winston-Salem’s AMI is $54,195, so tenants would have to make no more than $27,000 per year. 

While they’re agreeing to a 30-year minimum for affordability, “it really is indefinite,” Virgil noted.

One of the biggest differences between a housing co-op and a regular apartment is that tenants pay fees that they can partially get back if they move out. According to Virgil, tenants of 207 N. Spring St. will pay a monthly fee that covers the cost of property rehabilitation and maintenance. Part of that fee will go into savings, so if a tenant decides to leave, they’ve built up some wealth that they can take with them. Instead of having a landlord that profits off of tenants, the tenants make the profit, Virgil explained to TCB. 

Virgil has worked nationally on co-ops in cities such as Baltimore, Detroit and Denver. Innovative ideas such as co-ops take “economic relationships,” such as paying rent, and “create mechanisms that allow them to build assets that lead to life improvement over time,” he explained to councilmembers on Monday.

“Our country is built on the notion of property,” Virgil added. “For me, the co-op gives a way for low-wealth individuals to participate in the citizenship that is afforded by property.”

Also helping with the project is Dr. Dan Rose, an organizer with Housing Justice Now and professor at Winston-Salem State University. (Disclosure: Rose has contributed to TCB in the past.)

At past city council meetings, Rose has spoken on agenda items during the public comment period, but this was his first time coming to the podium with his very own agenda item.

While Scippio and Mundy lauded the idea as novel, the discussion didn’t go without some serious questioning from Clark and Councilmember Jeff MacIntosh.

“Do you really have a realistic assessment of what it’s gonna cost to bring something back into operation?” Clark asked. “Houses cost more than you think; things break.”

Adams offered support, but cautioned: “We don’t want you to fail. We want you to be successful.” That’s why they’re asking questions, she said.

What’s next?

The group is in the process of securing a 25-year low-interest loan with Piedmont Federal Savings Bank that will finance the estimated $200,000 in renovations, according to Rose. Then, residents will pay back the loan in order to become the building’s owners. Payments estimated at $350-$400 per month will cover the repayment of the renovation costs, the creation of a $20,000 emergency maintenance reserve and funds for property taxes, insurance and routine maintenance needs.

However, some on council weren’t so sure $200,000 would be enough to cover the renovations.

“I think that’s way low,” MacIntosh responded.

Years ago, the city signed off on forgiving the loan when a different buyer was interested in the property. That was in November 2019. In exchange for the loan being forgiven, the agreement stipulated that Matt Swiderski of Swiderski Properties would renovate the apartments and offer them to renters who make up to 80 percent of the area’s median income for five years. The project never got off the ground. Swiderski predicted that renovations would cost $138,500, and estimated that the project would take six to nine months to complete.

Then the COVID-19 pandemic hit, and the world came to a grinding halt.

Since then, contractor costs have risen substantially along with the price of construction materials.

Still, Spring Street Co-op’s project remains in motion. Virgil and Rose will provide additional answers to city leaders’ questions when they return to city hall on Sept. 3.

Rose told TCB that he hopes renovations will be complete by this winter. 

With the blessing of Partners for Homeownership President Jane Milner, Rose and other organizers have already started improving the property, which had been broken into in the past. The crew worked with Twin City Harm Reduction to remove needles and also cleaned up human waste, power washed the building and secured the property.

Following the meeting, Rose, Virgil and Milner reflected and remained hopeful about the future of project. After all, the city has “room to try some new things,” Milner quipped.

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