As New York City—and the entire nation—confronts an epic housing crisis, everyone from lawmakers to activists to the private sector is struggling to figure out viable and equitable solutions. History shows us that in other tumultuous times, New Yorkers’ ingenuity, sticktoitiveness, and sheer chutzpah enabled new forms of home ownership through organization, legislation, and cooperation. It might be worth examining the history of cooperative housing in New York to inform the dilemmas we currently face.
New York City in the Gilded Age was in some ways an even more extreme version of socioeconomic divide than it is today. At the time, there were essentially two forms of housing: private homes for the wealthy, which were often extravagant mansions of vast proportions, and tenements for the lower classes, which were often cramped, cold, dark, and dilapidated. It was in this era that the cooperative housing model came to the Big Apple.
Partners Phillip Hubert and Jared Flagg built The Rembrandt at 152 W. 57th St. as the first apartment building under cooperative ownership in 1881. Inspired by the success of what was known as the “French Flat”—apartments that were four times larger than the average tenement and included amenities like steam heat, light and air, and privacy, making them palatable to the middle class—they marketed the units to “people of means and good social standing” and established artists (hence the name), who themselves financed the development they would eventually call home.
In Hubert’s next co-op endeavor, the Chelsea Hotel (completed in 1885), he brought the idea of hotel amenities to apartment living: full maintenance staff, dining options, concierges, and so on. His co-ops also brought the idea of exclusivity—the buildings were controlled by the owners themselves via the co-op board, who could set their own rules and choose who could live there.
Other developers followed Hubert’s successful model, including 34 Gramercy Park, completed in 1883 and today the city’s longest surviving co-op. At nine stories, the building was one of the first to make use of the newly invented Otis elevator. Although it made possible the idea of “living in the sky,” 34 Gramercy Park priced all units the same (between $10,000 and $20,000), and they each had 10 rooms. This egalitarian framework extended to other new communal concepts, such as buying commodities like coal and ice in bulk to share building-wide.
In spite of his early success, Hubert basically caused the demise of the Gilded Age co-op in 1885, when he built the 100-unit Navarro Flats on Central Park South and 7th Avenue. He neglected to transfer the land title to the cooperative, leading it to open as a rental and pouring cold water on other ambitious cooperative projects.
Turn of the 20th Century
It wasn’t until the new century that the next wave of co-op development in New York City came to be. This time it was in the form of artists’ cooperatives. New York had very few artists’ studios at the time, and those that did exist did not meet the needs of the artists they were intended for. Developers Henry Ranger and Walter Russell decided to use the cooperative model to finance and build the 67th Street Studio Building, completed in 1903 to the specifications of the artists who would live and work there. It wasn’t long before 67th Street became known as “artists’ alley” with the development of more of these cooperative studio apartments—not the one-room studios of today, but more loft-like spaces with 20-some-foot ceilings, abundant windows, and tons of North-facing light. Such cooperatives also appealed to the upper classes for whom the “bohemian” lifestyle was fashionable at the time.
It is also in this era that the first nonprofit workers co-ops were established—but they’re probably not the ones you’re thinking of. In 1916, Finnish immigrants built Alku—meaning “beginning”—and Alku Toinen—“beginning two”—in Sunset Park, Brooklyn, followed by two dozen more Finnish co-ops in a seven-block radius. These co-ops were based on the “Rochdale Principles”—a doctrine codified in 1844 in the eponymous town in England where the cooperative movement began, and from which the two-trees symbol originates. The principles have been amended over the years, but as of their last update in 1995, they include “voluntary and open membership; democratic member control; member economic participation; autonomy and independence; education, training, and information in the cooperative enterprise; cooperation among cooperatives; and concern for community.”
After the First World War, New York City’s rent prices skyrocketed. Coupled with nationwide inflation, economically it made more sense to own an apartment or home than to rent one. This led to more speculative building of cooperatives, especially on Park and 5th Avenues, where developers knew that the wealthy would be motivated by these economic factors. (Cooperatives were the only apartment ownership model; condominiums didn’t come around until the 1960s.) High-end rental buildings even converted to co-op, such as 969 Park Avenue which made the switch in 1911.
With population growth and commensurate housing shortages after World War I, interest in suburban living began to take hold among middle- and upper-middle-class households. Developers tried to rein this in by building large-scale planned communities that blended elements of urban and suburban living. The first of these was Hudson View Gardens co-op in 1923—a collection of “Scarsdale Tudors” in Washington Heights that incorporated light, air, space, and yards into its design.
With the 1913 expansion of the subway, garden apartments, as this style came to be known, were primarily built in the outer boroughs. The entire neighborhood of Jackson Heights was created thusly by the Queensboro Corporation, which advertised it on the radio as “the largest community of cooperatively owned garden apartments under single management in the world.” Catholics, Jews, dogs, and people of color were prohibited from entering its grounds.
Partially in response to these discriminatory practices, Governor Al Smith, New York’s first Irish governor, passed the New York State Limited Dividend Housing Companies Act in 1926, which granted 20-year tax abatements and the ability to fund a housing project through collective means such as labor unions, amalgamated banks, and life insurance companies. This led to the spate of limited-equity cooperatives that were primarily the brainchild of Abraham E. Kazan, now known as the “father of cooperative housing in the U.S.”
An immigrant, Lower East Sider, and later head of the Amalgamated Clothing Workers Credit Union, Kazan was appalled by the living and working conditions of working and middle-class people and made it his mission to build adequate, dignified housing that these populations could afford. In total, he built more than 100,000 such homes in New York and changed the paradigm for what urban middle-class living could be.
Socialism Meets Capitalism
The original of these cooperators were largely members of the “needle trade” unions—overwhelmingly Jewish immigrants who were steeped in the socialist-leftist ideologies of the Lower East Side labor movement. In 1927, the Amalgamated Clothing Workers of America, backed in part by the famously socialist Jewish Daily Forward newspaper, founded the Amalgamated Housing Cooperative on Van Cortlandt Parkway South in the Bronx. Its design by Springsteen & Goldhammer modeled the “park experience” of the previous planned communities, but with a deliberate utopian, communal way of life that included cooperative schools, press, markets, and more. Today, Amalgamated Housing Cooperative is the oldest co-op still functioning as a limited-dividend co-op.
Each co-op built in this era and in this model had its own social and ideological leftist bent. The Workers Cooperative Colony at 2700 Bronx Park East built in 1926, known colloquially as “The Coops”—and its cooperators “coopniks”—was even further left from its “comrades,” adopting a decidedly Soviet, anarchist stance complex-wide. The Farband Houses sponsored by the Jewish National Workers Alliance of America in 1928 were proponents of Labor Zionism. At 238th Street in the Bronx, the Sholem Aleichem Houses were built “to propagate and preserve secular Jewish culture.”
These socialist cooperatives were not necessarily opposed to private funding, though. John D. Rockefeller, Jr. financed the Thomas Garden Apartments at 840 Grand Concourse in 1927. When the corporation decided to restrict itself to “whites only,” Rockefeller threw his hat (read: wallet) into the Dunbar Apartments in Harlem—a co-op designed by the same architect in the same garden apartment plan, but this time restricted to black residents in an attempt to be “separate but equal.”
Back down on the Lower East Side, Kazan set out to develop what later became known as Co-op Village—a group of four co-ops comprising 12 buildings with 4,500 residential units in total. Designed by Springsteen & Goldhammer, as well as Herman Jessor, who became the chief architect of limited-equity co-ops well into the 1970s, the complexes maintained the “towers in the park” ethos of another well known developer, Robert Moses, who became a unlikely partner of Kazan and Jessor in their mission to promote dignity for New York workers through adequate housing.
Slum Clearance, Title I, and Mitchell-Lama
The Great Depression and then World War II put a damper on new development and left many neighborhoods starving for investment. The federal government stepped in with the Federal Housing Act of 1949, Title I of which allowed for the concept of “urban renewal”—the benevolent-sounding ends to the means of “slum clearance.” Led by Moses, who was not shy about his motivations to quell the tide of white middle-class New Yorkers fleeing to the suburbs, Title I slum clearance was responsible for displacing hundreds if not thousands of predominantly black and brown households.
Through partnership with Kazan, the labor-backed co-ops that sprung up from the razed “slums” provided spacious, light, airy homes for thousands of New York working-class families. Between Co-op Village and later Penn South—the International Ladies Garment Workers Union-sponsored co-op built between 1957 and 1962 with the stated slogan of “self-help and mutual aid”—7,320 new units of dignified housing came to lower Manhattan. The vast majority of their inhabitants were white.
Various attempts were made to create more integrated cooperatives. In 1947, Parkway Village was built in Queens for workers of the United Nations, many of whom were people of color who faced housing discrimination elsewhere. Its original cooperators were still mostly white. Morningside Gardens, developed in 1957 by David Rockefeller with the intention of being integrated, started off 70 percent white. Finally, fed up with such failures, Kazan developed Rochdale Village with the expressed goal of truly integrated housing—but it, too, began with an 80 percent white makeup. Today, however, Rochdale is the largest predominantly black co-op in the country.
In 1955, New York State enacted the Limited Profit Housing Companies Act, better known as Mitchell-Lama, referencing the two state legislators who sponsored the bill. Its purpose was to support the construction of middle-income housing by providing low-interest mortgage loans and real property tax exemptions in exchange for limitation on profits, income limits on tenants, and supervision by the New York State Department of Housing and Community Renewal (DHCR). A total of 269 developments with over 105,000 apartments were built under the program until it was dissolved in the 1970s and placed under the control of the state.
After 20 years from initial occupancy, housing companies in the program were statutorily permitted to voluntarily dissolve (buyout) and leave the program. By the 1980s, many of the developments were beginning to age and required significant capital repairs and improvements. Since this coincided with many of the buildings aging out of the program, many wrestled with the question of conversion to market-rate—a process by which the original tenants and shareholders in the buildings could purchase their units outright from the Mitchell-Lama program, and then make the choice to rent or sell them at market value.
To date, 93 Mitchell-Lama developments (approximately 31,700 units) have voluntarily dissolved. This had the effect of making the apartments unaffordable for many longtime residents and reducing the overall supply of affordable housing in the city. On the other hand, selling or renting units at market rate offered much-needed cash infusions for buildings desperate for capital funding (and potentially a huge windfall for residents who opted or will opt to sell).
Co-op City and Beyond
By 1968, another Rockefeller—Nelson—was governor of New York, and Kazan was intent on furthering his mission of providing “beauty as well as shelter” to the working classes. Financed under the Mitchell-Lama program, Co-op City was the apotheosis of Kazan’s ideas. Built on the former site of the Freedomland amusement park in the Baychester section of the Bronx, Co-op City became—and still is—the world’s largest co-op development. Its 328 acres are 80 percent open; its 35 buildings house 50,000 residents. Today they are over 60 percent black and over 30 percent hispanic. It is the largest Naturally Occurring Retirement Community (NORC) in the city, if not the nation, because most original cooperators still live there—a testament to the fact that cooperators are specifically invested in their buildings and communities.
Then came the 1970s, in which “the Bronx is burning” and New York City went bankrupt. Landlords abandoned their apartment buildings, blighting entire neighborhoods and once again decreasing the city’s housing stock. Families fed up with paying high rents for substandard housing saw an opportunity to form their own cooperative communities in these derelict buildings through what became known as urban homesteading. In 1973, the Urban Homesteading Assistance Board was formed and helped convert 1,640 buildings within a year. New York City also passed legislation in 1971 that allowed cooperatives to obtain mortgages, opening the possibility for mutual aid.
The City of New York also acquired many of these abandoned buildings, rehabilitated them under Housing Preservation & Development (HPD), and gave the tenants the opportunity to become shareholders in the limited-equity cooperatives known as Housing Development Fund Corporation cooperatives, or HDFCs. More recently, the City has financed and provided tax exemptions for the new construction, rehabilitation, and stabilization of HDFCs. Today, there are over 1,100 HDFC co-ops—but only a dozen were developed or converted in the last 5-10 years.
By the 1980s and 90s, many of the original limited-equity cooperatives were facing their own confluence of economic factors. The 25-year tax abatements granted to redevelopment companies had expired and were then extended for 10 years during which the taxes were increased in annual increments. Meanwhile, unions had lost their power both in numbers and influence after the 1960s, and many of their once idealist communities had abandoned their socialist tendencies. When the question of privatization hit their doorsteps (literally), there was pressure to go market-rate. All but Penn South elected to become private corporations in a process known as reconstitution, allowing apartment shares to be transferred on the open market for market prices (after some initial years of price caps), but also subjecting the corporations to full real estate taxes that are determined by an opaque system of comparable valuations.
Enter the Bloomberg era and the condo boom of the early 2000s. Residential real estate has skyrocketed, both in price and height. So many of these ultra-tall, ultra-modern condos sit uninhabited while nearly 70,000 New Yorkers have nowhere to call home. Affordability and availability of housing is but one of the problems; community investment—not just on an economic level, but in the sense of commitment and engagement—is what sustains and nurtures communities and therefore neighborhoods and therefore entire cities. People invested in a cooperative way have demonstrated longevity in those homes and communities, keeping them in New York City and thus letting it remain the thriving, dynamic, diverse, and important city it has been and should always be.
Darcey Gerstein is Associate Editor and a Staff Writer for CooperatorNews. Thanks to Lucie Levine and the Historic Districts Council for providing a historical overview.