Life Lease Coop
Description
John Restakis:
"Life lease co-ops are an innovative housing model in which co-op members purchase life leases whose proceeds go toward the development costs of the housing. In this model, the co-op retains ownership of the housing unit. The value of the life leases is returned to the users when they no longer occupy a unit.
Life lease co-ops are often sponsored by a local organization or group of organizations that agree to act as a guarantor(s) for the initial development period of the co-op. Once the co-op is established and the development work is completed, the control of the co-op transfers to the co-op’s board of directors.
Typical sponsoring organizations for life-lease co-ops include senior’s groups, social service agencies, local credit unions or co-ops, labour organizations, and faith groups. The city however, could play a major role in catalyzing these types of developments by entering into partnerships with other partners such as credit unions and community organizations providing services to seniors.
The great advantage of life-lease co-ops is that they can be built for below market cost since developer profits are excluded. In addition, once life-leases have expired with a given member, the existing unit may be offered to a new leaseholder for below market rates. The co-op may set the lease price to include a surplus that may be allocated toward the provision of additional services to members such as home care and assisted living services, or toward the financing of new housing.
This is a model that is in the financial reach of many seniors since the costs of a life-lease can be met with the profit that is generated when seniors sell their current homes. However, it is most appropriate for seniors who are able to live independently or with a moderate amount of assisted living services."