When the building where Maria de la Luz Rodriguez has lived in Little Village was put up for sale, she and other residents rallied to buy it themselves.
But just as they were organizing themselves, the property was sold to a group of buyers. Frustrated, Rodriguez braced for a rent increase.
At the time, she hadn’t heard about housing cooperatives, but she soon learned about them when she found herself in a meeting with other residents working to buy a building in Little Village.
“This is what I wanted,” she said. “I don’t want to leave. There are many people who love Little Village but had to leave.”
Rodriguez is part of the newly formed Cooperativa La Villita, a group of about seven people searching for a residential building to buy to live in and preserve housing for longtime residents.
The group, formed this year, is in its early stages, but it has already secured a $150,000 grant from the city funded with federal pandemic relief funds, according to the city’s website. Half of the grant can be used toward the purchase of the building, and the other half is supposed to go toward supporting the group as it establishes itself.
Across the Chicago area, there are already more than 10,000 cooperative units, often referred to as co-ops, said David Feinberg, of the Chicago Community Loan Fund, which provides loans for co-ops that need improvements in common areas. A co-op is controlled and owned by the people living on the property who are members of the cooperative.
Feinberg has noticed more interest in this type of housing in particular since the city created a grant program for it.
“I think we have seen a new wave, a new resurgence to something that’s been there for a while,” he said.
In the past, some co-ops grew out of formerly owned U.S. Department of Housing and Urban Development properties that were purchased by tenants with a shared interest. Others grew out of tenants rights movements, Feinberg said. Some of the newer co-ops are forming to fend off displacement and gentrification, he said.
Robin Semer, who is helping organize the group but does not intend to live in the cooperative, said she decided to explore what it would take to bring a housing cooperative to Little Village after volunteering with Únete La Villita, a community organization, and hearing from residents facing evictions, rising rents and others who couldn’t afford to stay in the neighborhood.
She also knows that more development is likely in the neighborhood, especially because of changes to the Discount Mall, located at the entrance of Little Village, which housed local vendors but is in the process of being redeveloped.
“What can we do to ensure people aren’t kicked out of their homes because more and more people have to leave?” Semer asked.
When she attended an event related to housing cooperatives, she met other Little Village residents who were also interested in this type of housing model.
As the group has grown, they’ve spent the last couple of months hashing out details of how the cooperative will operate, leaning toward a limited equity model that could help them access below-market interest rate mortgages. A limited equity model typically places restrictions on what a person can get from the sale of their shares in the cooperative.
But the biggest hurdle may be the cost of purchasing a building and ensuring it remains an affordable option for people with various income levels, Semer said. Many of the people interested in forming the cooperative make below 60% of the median income for the area.
“Our goal is to do absolutely whatever we can to lower the amount for the residents,” said Semer, adding that the group is researching grants, other forms of funding or even becoming a nonprofit.
Their efforts come amid a competitive housing market. Over the last year, there’s been a decrease in the inventory of homes for sale in Little Village, mirroring the market throughout Chicago, said Erika Villegas, the incoming president of the Chicago Association of Realtors. The area has seen about a 50% decrease in new property listings, and about a 50% decrease in closed sales, she said.
The median sale price for properties in Little Village has increased this year. The median price for two- to four-unit buildings in South Lawndale was $280,000 in 2022, and that figure has risen to $292,985 as of this year’s second quarter, according to data from the Chicago Association of Realtors.
“I think that Little Village will continue to be a tight market, and we see that anything that goes active on the MLS (multiple listing service) very quickly goes under contract,” Villegas said. “So I think that’s a sign that the market is still pretty hot in Little Village.”
One of the challenges for housing cooperatives has been finding lenders who provide share loans, Feinberg said. A share loan allows members of a cooperative to borrow money to purchase shares of the building, according to the National Association of Housing Cooperatives.
The shortage of share loans has led some newly formed co-ops to seek out private philanthropy and public incentives to reduce the amount a person is paying for the shares, Feinberg said.
“In the absence of share loans, we are seeing some of the creative capital structures to try to accommodate that,” he said.
For Rodriguez, the hot market and possible uphill battle to securing funds to purchase the building doesn’t dissuade her. She’s willing to try multiple avenues until they find something that works for the group, she said.
“We are competing with people who have a lot of money, but we have a lot of heart and soul,” Rodriguez said.
On a recent Tuesday, Rodriguez passed outflyers to parents outside Daniel J. Corkery elementary school in Little Village to get the word out about the cooperative’s next meeting at 5 p.m. Monday. It’s at the Toman branch of the Chicago Public Library, 2708 S. Pulaski Road. The group wants to include as many residents as possible in the cooperative.
As children played on the school’s playground and parents huddled waiting for the school’s bell, Rodriguez passed out flyers and tried to explain what a housing cooperative meant.
Maria Moreno, a Little Village resident and Rodriguez’s friend, helped her pass out flyers. Moreno, 47, said she is interested in learning more about how the cooperative would work. She and her husband have been shut out of homeownership because of credit problems.
“We continue paying rent, but we don’t get anything from it,” she said in Spanish.
The group plans to host more community meetings to try to recruit interested residents and to reach property owners who might want to sell to them or join them, Rodriguez said.
They also want to ensure the building has a mission tied to helping the community. While some of the cooperative’s group members are immigrants, Semer said they also want to be inclusive and reach other area residents, which is why their materials have been bilingual.
“Someone who has the need and sees community as an important part of life,” Semer said about the potential residents they’re trying to reach. “Because to live in a cooperative, everyone has to have a job, everyone has to participate, and living in a cooperative isn’t for everyone.”
Rodriguez, who has lived in Little Village since she immigrated to the United States, said she wants to stay in the neighborhood, and she sees the cooperative as a way to do that.
“Little Village is my home, and I like it a lot,” she said. “It’s a piece of Mexico, and I think that’s why people love Little Village.”
Elvia Malagón’s reporting on social justice and income inequality is made possible by a grant from the Chicago Community Trust.
