In the fight against gentrification in Little Village, residents are looking to create a co-op housing complex

When the building where Maria de la Luz Rodriguez lives in Little Village came up for sale, she and other residents rallied to buy it themselves.

But while they were organizing, the property was sold to a group of buyers. Frustrated, Rodriguez braced for a rent increase.

At the time, she had not heard of housing co-ops, but she soon learned about them when she found herself in a meeting with other residents working to purchase 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 looking for an apartment building to buy to live in and keep housing for its longtime residents.

The group, which formed this year, is in its early stages, but has already secured a $150,000 grant from the city funded by federal coronavirus pandemic relief funds, according to the city’s website. Half of the grant can be used to purchase the building, and the other half is supposed to go to supporting the group during its establishment.

Throughout the Chicagoland 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 makes loans to co-ops that need improvements in common areas. A cooperative is controlled and owned by the people who live on the property and are members of the cooperative.

He’s noticed more interest in this type of housing in particular since the city created a grant program for it.

“I think we’ve seen a new wave, a resurgence of something that’s been around for a while,” he said.

In the past, some co-ops arose from properties formerly owned by the U.S. Department of Housing and Urban Development that were purchased by tenants with a common interest while others arose from tenant rights movements, Feinberg said. Some new cooperatives are being formed to ward off displacement and gentrification, he said.

Robin Simmer, who helps organize the group but has no intention of living in a co-op, said she decided to explore what it might take to bring a housing co-op to Little Village after volunteering with Únete La Villita, a community organization, and hearing from residents facing evictions, rising rents and others who They can’t afford to stay in the neighborhood.

She also knows that more development is likely in the neighborhood especially because of changes to Discount Mall, a facility at the entrance to Little Village that houses local vendors but is in the process of being redeveloped.

“What can we do to ensure that people are not evicted from their homes because more and more people are having to leave,” Simmer said.

When she attended an event related to housing cooperatives, she met other small village residents who were also interested in this type of housing model.

As the group has grown to seven, they have spent the past two months discussing details of how the co-op would operate, leaning toward a limited equity model that could help them access mortgage loans at below-market interest rates. The limited stock model usually places limits on what a person can get from selling their shares in the cooperative.

But Simmer said the biggest hurdle may be the cost of purchasing a building and making sure it remains an affordable option for people of all income levels. Many people interested in forming a cooperative earn less than 60% of the area median income.

“Our goal is to do everything we can to reduce the amount allocated to residents,” Simmer said, adding that the group is looking for grants and other forms of funding or even becoming a nonprofit.

Anthony Vasquez/Sun-Times

Their efforts come amid a competitive housing market. Over the past year, there has been a decline in the inventory of homes for sale in Little Village, which reflects the market throughout Chicago, said Erika Villegas, incoming president of the Chicago Association of Realtors. The area has seen a roughly 50% decline in new property listings, and a roughly 50% decline in closed sales, she said.

The average sale price of properties in Little Village has increased this year. The median price for a two- to four-unit building in South Lawndale was $280,000 in 2022, and that number has risen to $292,985 as of the second quarter of this year, according to data from the Chicago Association of Realtors.

“I think the Little Village market will continue to be a tight market, and we see that anything that gets activated on the MLS (Multiple Listing Service) gets done very quickly under contract,” Villegas said. “So I think that’s a sign that the market is still very hot in Little Village.”

One continuing challenge facing housing cooperatives is finding lenders who offer equity loans, Feinberg said. A share loan allows co-op members to borrow money to buy shares in a building, according to the National Association of Housing Cooperatives.

The shortage of equity loans has led some newly formed co-ops to look to private philanthropy and public incentives to reduce the amount a person pays for stock, Feinberg said.

“In the absence of equity loans, we see some creative capital structures trying to accommodate that,” he said.

For Rodriguez, the hot market and potentially uphill battle to secure the funds to purchase the building doesn’t dissuade her, adding that she’s willing to try multiple approaches until she finds something that works for the group.

“We’re 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 distributed fliers to parents outside the Daniel J. Corkery Elementary School in Little Village to announce the next meeting of the cooperative to be held at 5 p.m. Monday at the Tuman Branch of the Chicago Public Library, 2708 S. Pulaski Rd. The group wants to bring as many residents into the cooperative as possible. As children played on the school playground and parents gathered waiting for the school bell, Rodriguez handed out fliers and tried to explain the meaning of a housing co-op.

Maria Moreno, a Little Village resident and friend of Rodriguez, helped her distribute the fliers. Moreno, 47, said she is interested in learning more about how the cooperative works. She and her husband have been locked out of homeownership due to credit problems.

“We keep paying the rent, but we don’t get anything from it,” she said in Spanish.

Rodriguez said the group plans to host more community meetings to try to reach potentially interested residents, as well as reach out to property owners who might want to sell to them or join them.

They also want to make sure the building has a mission tied to helping the community. While some of the collaborative group’s members are immigrants, Simmer said they also wanted to be inclusive and reach out to other area residents, which is why their materials were bilingual.

“Someone who has a need and sees community as an important part of life,” Simmer said of the potential residents they are trying to reach. “Because to live in a co-op, everyone has to have a job, everyone has to share, and living in a co-op is not for everyone.”

Rodriguez, who has lived in Little Village since immigrating to the United States, said she wants to stay in the neighborhood, and sees the co-op as a way to do that.

“The little village is my home, and I love it very much,” she said. “It’s a piece of Mexico, and I think that’s why people love Little Village.”

Anthony Vasquez/Sun-Times

Elvia Malagon’s reporting on social justice and income inequality is made possible by a grant from the Chicago Community Fund.