Cooperative land financing for multiple owners requires creative approaches to finding low-cost properties and building community support. You’ll need to consider a range of unconventional real estate options and be prepared to navigate legal and social challenges. Please contact [email protected] if you find outdated information on this page or wish to contribute new information.
photo by Juan Cruz Mountford
Finding the Real Estate
There are several types of properties that are suitable for cooperative ownership because they are often available at a lower cost or come with existing infrastructure.
- Commercial and Underutilized Properties: Look for properties that are no longer in active use, such as old schools, churches, monasteries, or even small hotels and motels.
- Old Schools: These are often up for sale for $300,000 to $400,000, and offer a wide range of existing amenities that are ideal for communal living: multiple restrooms, a large kitchen, a cafeteria, offices, a library, storage rooms, gyms, and even a theater or stage. Classrooms can be converted into family residences or shared dorm-style rooms.
- Hotels/Motels: This setup is ideal for housing a community of singles or couples, providing individual rooms and a single kitchen for shared meals.
- Marginal or Abandoned Land: This can be an affordable option. In cities like Detroit, you can find contiguous empty houses or entire blocks where the city is demolishing vacant structures. Securing a block of these properties and fencing it off can create a shared living space with minimal neighborhood resistance.
- Partnerships: Teaming up with other groups can be a powerful way to access land.
- Small Farmers: A farmer may be willing to enter into a rent-to-own agreement or a conservation easement to protect their land from subdivision. This offers a win-win: your group gets access to land and agricultural knowledge, while the farmer ensures the land’s legacy is preserved for generations. You could even establish a legal agreement that a share is held in perpetuity for the farmer’s descendants.
- First Nations or Native American Tribes: Tribes may have access to land and resources that can be leveraged for a cooperative housing project.
- Environmental Groups: Some environmental organizations have a mission and funding to create conservation easements. They might help purchase land with a farmhouse or ranch house, with your community contributing to the purchase and the legal work.
Securing Property for a Fraction of the Cost
There are three legitimate methods to acquire land and homes for next-to-nothing, though the process is complex and varies by state and agency.
- Buying Through Tax Sales: When property owners fail to pay their taxes, the government places a tax lien on the property and sells the debt to investors as tax lien certificates or tax deeds. By purchasing a tax debt, you can eventually gain ownership of the property. This process is complicated and should be done with the help of a lawyer.
- Buying Seized Property: Government agencies sometimes seize property connected to crimes and sell them at auctions for deep discounts. You may need to register days or weeks in advance and pay a fee to bid.
- Secondary Markets: Websites like eBay and Craigslist sometimes have hidden gems. However, scams are common. Be extremely cautious and always perform a title search to ensure the property title is legitimate and clear. Be wary of quitclaim or tax deeds, which may not offer the same legal protections as warranty deeds.
Navigating Community Resistance
Building a co-housing community isn’t just about finding the land; it’s also about gaining acceptance from existing neighbors. Proactive communication is key.
- Door-to-Door Outreach: Learn from successful examples like successful co-housing developments in Boulder, Colorado. Before starting construction, knock on doors in the neighborhood to explain your project’s positive aspects and how you plan to be a good neighbor.
- Focus on Publicly Owned Land: Reclaiming abandoned property, especially if it’s owned by the city, may be the most affordable option and generate the least resistance. Collaborating with city or county governments can provide access to less desirable, publicly owned land that you can improve over time.
Alternative Avenues for Low-Cost Land
- Free Land in Small Towns: Some U.S. towns offer free land in exchange for a commitment to build a new home. While the land is free, you are typically required to build a traditional home with a professional builder, a cost that can easily exceed $200,000. Mobile homes and other alternative housing are generally not permitted.
- Urban Homestead Programs: Cities like Buffalo, New York, and Boston, Massachusetts, have programs that provide access to free or cheap properties. The catch is you must be able to prove you can bring the properties up to code, and you will likely need to make a personal investment that can be significant.
- Finding Unclaimed or Remote Land: While truly “unclaimed” land is rare in the U.S., you can find low-cost plots in states like Alaska, or acquire federal land through mining claims in 19 different states. Websites like alaskaremoteproperties.com and Landsearch.com are useful for finding remote plots.
Finding Property Without a Real Estate Agent
- For Sale By Owner (FSBO) Websites: Websites like Craigslist and Facebook Marketplace have large numbers of “for sale by owner” listings, often at a lower price because no realtor is involved. Be prepared for cash sales or simple owner financing and always perform a title search yourself.
- Commercial Real Estate Websites: Websites like LoopNet.com and Land.com are good for finding commercial properties and large plots of land.
- Direct-to-Owner: You can find cheap properties in foreclosure by getting in contact with the holding company. By being friendly with the secretaries, you may be able to find out the lowest price they are truly willing to accept. One landowner was able to get a property for $40,000 that was later valued at $160,000.
- Tax Sales: Check with your local counties and municipalities for their tax sales. You may be able to get land cheap if no one else bids on it. A good resource for this is bid4assets.com.
- Scams: Be cautious of scams. For example, governmentauction.com is a real company, but it has a history of poor customer service and questionable business practices. It is not a trusted or reliable source for auction goods. The site is a private company and is not affiliated with the U.S. government.
Legal and Financial Frameworks
- Legal Expertise: You need to navigate the legal process of co-ownership, land sharing, and green technology approvals. Resources are being developed to help, such as a forthcoming book from Simon Fraser University that aims to provide a “recipe-like” format for co-owning and sharing land.
- Problems with Permits: Be aware that you may encounter significant resistance from municipal governments. A lack of leadership at the municipal level can lead to endless permit struggles, with officials often looking for reasons to say “no” rather than “yes.”
- Co-op Finance: Traditional financing can be difficult for co-ops. However, some financial institutions and foundations specialize in lending to cooperatives. Another model is a Community Land Trust (CLT), a non-profit that acquires and holds land for the benefit of the community in perpetuity. The CLT sells the buildings on the land to residents at an affordable price while retaining ownership of the land itself.
Avoiding Building Codes
Navigating building codes is one of the most significant challenges for a group seeking to build a cooperative living space. While all states technically have building codes, enforcement is often determined at the county level, and some rural areas may have lax or non-existent regulations.
- Understanding the Risk: Be aware that building without a permit or not to code carries significant risks. Local authorities can use code violations as leverage, and in the worst-case scenario, your property could be bulldozed. While this is rare, it is a real risk, especially if a government official “sets their eyes” on your property.
- Low-Population Areas: The most promising places to find areas with relaxed or unenforced building codes are those with low population density and are far from major cities.
States with Known Flexible Regulations: Some states have a reputation for more relaxed building code enforcement, especially in their rural counties. These include:
- Colorado
- Hawaii
- Arizona
- Arkansas
- Texas
- Alabama
- Wyoming
- Michigan
- South Dakota
- North Dakota
- Missouri
- Washington (rural counties)
Specific Counties and Regions with Few or No Building Codes:
- Delta County, Colorado: This county has no building codes and does not require building permits or a certificate of occupancy for residential homes.
- Montezuma County, Colorado: No building codes for residential buildings in unincorporated areas.
- Arcosanti Urban Laboratory, Arizona: An experimental city with no building codes by law, though builders follow the city’s design principles.
- Brewster County, Texas: This large, sparsely populated border county has no building codes.
- Marfa County, Texas: A small county where building codes have not yet been adopted for residential buildings.
- Terlingua, Texas: A former mining district with several abandoned towns where there are no building codes whatsoever.
- Wonder Valley, California: While this county technically has building codes, they are not strictly enforced. Many residents live in non-compliant homesteads and cabins without issue.
- Miller County, Missouri: Building codes are not enforced for the most part, but this could change in the future.
Washington State Considerations: Some Washington counties are particularly favorable for alternative housing due to their low-regulation environment and supportive zoning for co-living. These include:
- Wahkiakum County: Lightly regulated and open to alternative dwellings and shared-use land models.
- Jefferson County (rural): A hub for intentional communities with supportive zoning.
- Clallam, Lewis, Stevens, and Pacific Counties: All are known for being owner-builder tolerant, having large lots, and being open to non-traditional builds.
Pacific Northwest Islands: For those interested in island living in the Pacific Northwest, Anderson, Ketron, and Fox Islands are noted for not having the tough zoning laws found on other islands in the region.