Co-op Real Estate: A Collective Solution

Nonkululeko Tabata. Photo Thai Ng

Co-op real estate is at the center of progressive housing solutions in Minnesota, rooted in shared power, sustainability, and belonging.

How the Co-op Model Works

Worker-owned cooperatives are formal business structures in which workers share in the ownership, profits, and decision-making of the cooperative. “Housing and real estate co-ops extend this model to land and property, allowing communities to collectively own and steward spaces in ways that prioritize stability over profit,” says Nonkululeko Tabata, director of community wealth building at Nexus Community Partners.

There are several forms of co-op real estate, but the core idea is that members buy shares in a cooperative that owns a certain property in exchange for the right to occupy a specific unit in the building, while having a say in the management of the property. Some co-ops are strictly residential, others are focused on commercial real estate, and some are mixed-use buildings. Instead of paying rent to a landlord, member-owners pay a monthly fee to the cooperative to cover operating expenses, including mortgage and maintenance.

Cooperatives are frequently governed by a board of directors elected by members. Prospective members must be approved by the board before they can purchase a membership. With a “one member, one vote” model, members play a key role in decisions that determine policies, budget, and board member election, directly shaping how their community is run. In Minnesota, membership is open to both individuals and businesses.

Traditional real estate models often prioritize profit over the people living in local neighborhoods, leading to displacement and high costs that create a lack of affordable housing options. Co-ops, instead of tying control to the amount of capital invested, democratize ownership to keep power and resources within the local community, says Northeast Investment Cooperative (NEIC) board chair Leslie Watson.

Minnesota is one of the largest homes for real estate co-ops in the country, and it leads in the number of senior housing cooperatives.

“Minnesota, and especially the Twin Cities, has a strong foundation for cooperative work because of a long history of community organizing, mutual aid, and cooperative economics,” Tabata says. “That history, combined with strong nonprofit infrastructure and community-led movements, has created fertile ground for newer forms of co-ops, including real estate and housing.”

“At the same time, there is a clear need that has driven this work forward,” she adds. “Rising housing costs, displacement, and racial wealth gaps have pushed communities to seek alternatives to traditional ownership models. Cooperative real estate and housing offer a way to stay rooted, build collective wealth, and maintain community control.”

Minnesota Examples

Across the state, dozens of housing and real estate cooperatives have formed. Among them, Nexus has worked to build engaged and powerful communities of color through initiatives that advance equity and generate community wealth, says Diana Siegel-Garcia, program manager at the Shared Ownership Center. The center has worked with more than 50 companies since 2019 to explore shared ownership models and has supported the development of eight cooperatives across the Twin Cities.

In early March, the Shared Ownership Center at Nexus Community Partners announced that it had awarded $125,000 to South Como Community Investment Cooperative (SCC). The SCC was funded partly by the LOCAL Fund: Community Ownership, a grant program in partnership with the City of Saint Paul’s Office of Financial Empowerment. With the award, SCC acquired its first property — a mixed-use building with two occupied residential units and vacant commercial space for neighborhood businesses.

NEIC, the nation’s first commercial-property investment cooperative, was founded in northeast Minneapolis in 2011 by a small group of community members in the aftermath of the 2008 financial crisis.

Frustrated with how traditional developers were mismanaging neighborhood properties and ignoring community needs, Leslie Watson and her neighbors decided that they needed to act.

“Central Avenue … had once been a thriving corridor of locally owned businesses,” says Watson, a cofounding board member of NEIC. “But that rooted, community-oriented investment had eroded over the decades. We kept asking ourselves: Who was going to do something about it? NEIC emerged as an answer, to provide a way for neighbors to pool resources and collectively buy, rehab, and manage property in the neighborhood, rather than waiting for outside developers whose interests rarely align with ours.”

In the northwest suburbs, including Brooklyn Park and Brooklyn Center, Ignite Businesswomen Investment Group supports BIPOC businesswomen in purchasing and using commercial real estate “so they can own their business spaces instead of renting,” says member Jannie Seibure.

In Greater Minnesota, cooperatives include Center City Housing, which develops, owns, and operates supportive housing apartments across the state. In its first year, the co-op expanded to 27 buildings and more than 1,000 units. One Roof Community Housing is another affordable housing advocate, doing redevelopment and new construction housing work in Duluth neighborhoods.

How to Replicate the Co-op Movement

More communities recognize the value in the co-op model and are excited about bringing cooperative developments to their neighborhoods, but the work often comes with several challenges related to capital access, property availability, and a change in how we think about ownership and success.

According to Tabata, lack of access to capital disproportionately affects groups that historically have not had wealth-building opportunities. Traditional financing structures often make it difficult to secure funding for a co-op structure. Pre-existing policies are often geared toward individual-owned businesses and profits.

NEIC continues to search for underutilized properties in its neighborhood that would benefit from patient capital to support the local economy. The cooperative acquired two buildings in its first few years, Watson says, but it hasn’t been able to complete a new project recently. Changes in the real estate market have rendered properties less accessible.

Watson advises that potential co-ops consider scope, scale, and capacity. She adds that fostering meaningful relationships with others in the community is an important first step.

At Nexus — through fellowships, leadership programs, and one-on-one relationship building — the organization has formed community partners across sectors, including residents, workers, organizers, and cultural leaders. They center lived experience in their approach, “ensuring that multiple stakeholders are not just present, but shaping decisions, resources, and outcomes,” says Tabata.

Replicating co-op development also requires an adjustment in the flow of resources. “Organizations need flexible, long-term funding that supports not just projects, but the time it takes to build trust, develop leadership, and do the relational work that cooperative models require,” Tabata says. With low-interest loans and community-controlled funds, Nexus brought people and resources together, rallying behind leaders and organizers who had started the work and giving members tools to get the collective off the ground.

“Most importantly, co-op development requires a shift in how we think about ownership and success,” Tabata says. “It means valuing shared ownership, community control, and long-term stability over quick returns. When funding, policy, and institutional partners align around these values, it becomes much easier for organizations and communities to build and sustain this work.”

The work is not only about building co-ops, Tabata adds, but is also about building the conditions where shared ownership can thrive. Shaping a more sustainable and equitable housing future begins with recognizing that the power to bring transformative change to communities across Minnesota is in the hands of its people.

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