Senior Housing Developer Finds Profits in Coops
A Minnesota company, United Properties is finding success with coop housing focused on seniors. The company is planning its first assisted living project President Frank Dutke said, the co-ops are the single most consistent business after grocery stores.
Cooperatives differ from condos in that they are owned by a nonprofit corporation holding a master mortgage. Residents buy shares of the company that appreciates at a fixed value, typically 1-2 percent a year, according to Dennis Johnson, executive vice president of St. Paul-based Cooperative Housing Resources, which arranges financing for co-ops. Residents then pay a monthly fee that covers operating expenses, taxes and debt service on the master mortgage. Most co-op mortgages are guaranteed by HUD.
Minnesota is seen as a leader in co-ops, where they’ve been unusually popular ever since the Ebenezer Society developed the state’s first, at 7500 York Av. S. in Edina, in the 1970s. According to Johnson, there’s about 95 senior co-ops around the country — 75 of them in Minnesota.