For Immediate Release: Colchester Parks Become Newest ROCS!
February 10, 2022
Colchester, Vermont
Contact:
Annik Paul, Vermont State Manager
Cooperative Development Institute – New England Resident Owned Communities
(802) 851-0110
Kathleen R. Berk, Executive Director
Vermont State Housing Authority
(802) 828-3019
Gus Seelig, VHCB Executive Director
Vermont Housing & Conservation Board
(802) 828-3251
Anne Loecher, Senior Marketing & Communications Manager
Vermont Community Loan Fund
(802) 224-9140
Micha Josephy, Executive Director
Cooperative Fund of New England
(800) 818-7833
Rosemarie White, Vice President Commercial Banking
Northfield Savings Bank
(802) 223-6001
If your neighborhood is in danger of becoming unaffordable, here’s a solution – just buy it yourselves. For $13.6 million. Problem solved.
Amazing as it sounds, that’s exactly what the 233 households of the Hillcrest and Breezy Acres mobile home parks in Colchester, VT did this week. The purchase followed an intense year of meeting, debating, talking to engineers, meeting some more, convincing funders, and engaging in some regular down-home politicking.
Resident Power and Control
With guidance from the Cooperative Development Institute (CDI), a nonprofit that helps people set up and run cooperative businesses across the Northeast, residents of both parks formed cooperatives to enable them to run their communities themselves. Now the residents have the power to decide their yearly budgets and, significantly, set their own lot rents.
The lot rents, which otherwise would have gone to outside investors, will now be used to pay expenses, including the mortgage, maintain the park, and set aside some rainy-day savings. This direct control gives the residents the power to keep the rents stable to maintain affordability, while also being financially prepared for future needs.
Erikka Yandow, Vice President of the new Hillcrest Resident Owned Community board of directors, says, “We have really been looking forward to becoming a co-op. Our thoughts on how we want things to be run will finally be heard and implemented.”
“You cannot put a price on knowing where your home will be for the long term,” notes Andrew ‘Skip’ Horner, secretary of the Breezy Acres Cooperative board of directors. “A private buyer could have kicked us out in 18 months. Now we are the ones to control our costs as best we can; the members get to vote on any increases. I want to see my neighborhood get better, not worse, so I got involved to help start up our cooperative.”
Strong Support from CDI, ROC USA and VT partners
Previously the two parks were privately owned; they came up for sale in the fall of 2020. Under Vermont’s “Opportunity to Purchase” law, residents got the first option to purchase or have a nonprofit purchase on their behalf. While that sounded good on paper, the multi-million-dollar price tag was daunting and seemed prohibitive until various state agencies, nonprofits, and private financial institutions stepped up to make it happen.
This is where ROC USA® and CDI come in. Two non-profits whose sole function is to help these residents become resident-owners, they have a business model 30 years in the making that puts these fledgling communities on what they say is a proven road to success. ROC USA has helped 288 communities across the country (including 56 with CDI) – with nearly 20,000 homeowners and their families — take control of their own future just as Breezy Acres and Hillcrest Village are doing. ROC USA’s Community Development Financial Institution subsidiary, ROC USA® Capital, partners with banks, local and national, to deliver financing to make these purchases possible, and provided the pre-development seed loan to both communities. They coordinate ongoing training opportunities with regional affiliates such as CDI through their network, so communities aren’t left on their own as they begin their journey.
In the very tight housing market we are seeing now, these purchases preserve the financial viability of a completely unsubsidized type of affordable housing, and avoid the displacement of people on low or fixed incomes that would likely have happened in a private sale.
Thanks to bond underwriting by the Vermont State Housing Authority and $1.3 million in grants awarded by the Vermont Housing & Conservation Board, the CDI Development Fund – a subsidiary of CDI – was able to buy the communities on behalf of the residents; a management agreement gives the members of the two co-ops all of the authority they would have if they had purchased outright. Primary financing for the venture was provided by the Northfield Savings Bank, with participation from People’s Trust. Additional loans were made by the Vermont Community Loan Fund and the Cooperative Fund of New England. In the end, $12.3 million of the total price for the parks came from bond-backed financing.
The median sale price of single-family homes in Chittenden County jumped 18% in 2021, increasing 27% since 2018. With housing costs in the county accelerating and vacancy rates dropping, manufactured-home communities such as these offer the most affordable option for homeownership in Vermont. The vacancy rate in parks in Chittenden County was only 1.4% in 2020. While the State of Vermont regulates lot-rate increases by private owners, an exception at the time of sale would allow a private purchaser to raise the rents at will, effectively ending affordability for many residents and potentially forcing some into homelessness.
In this dire situation, resident ownership provides a lifeline to many of the people in these communities. The financial participants in the successful purchase have nothing but good things to say:
Vermont State Housing Authority director Kathleen Berk commented, “We are proud to work with CDI in bringing the resident-owned community model to the residents of Breezy Acres Cooperative and Hillcrest Resident Owned Community in Colchester.”
Emerging as a strong supporter of the model, Berk added, “Cooperative ownership provides housing affordability, increases economic opportunities, and provides a stronger investment in the community. This is a wonderful accomplishment and in direct alignment with VSHA’s mission.”
Thomas Leavitt, President of Northfield Savings Bank shared, “We are delighted to play an important role, in participation with Peoples Trust Company, in financing the Breezy Acres Cooperative and Hillcrest Resident Owned Community in Colchester. Our NSB Equity Framework promotes the kind of independence that residents of these properties will enjoy under the new structure. We wish them all the best.”
And from Gus Seelig, Executive Director of the Vermont Housing & Conservation Board, “Vermont’s mobile home parks provide homeownership opportunities for more than 7,000 households statewide. We appreciate the commitment of the residents in taking on the obligation and responsibility of cooperative ownership. VHCB’s investment in these two parks will help ensure that the affordability of these important housing resources is preserved into the future.”
Will Belongia, Executive Director of the Vermont Community Loan Fund, said, “We are so pleased to support the new resident owners of Breezy Acres and Hillcrest as they take the huge step of creating resident-owned communities. Ownership of the land both increases household wealth and also preserves affordability into the future – a win-win for the owners.”
Micha Josephy, Executive Director for the Cooperative Fund of New England, agreed: “Conversions to resident ownership are a unique opportunity to support people in building wealth and sustaining access and control over their housing. CFNE is excited and honored to partner to secure more than 230 homes and establish shared ownership.”
Looking forward to the Future
The purchase and all it entails have had a deep impact on residents of the two communities. “It has been a long and arduous process, but I am sure it will have been worth the wait,” Hillcrest’s Yandow says. “We are really looking forward to what the future holds for our park and our homes.”
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About the Partners
The Cooperative Development Institute is a regional 501(c)3 non-profit founded in 1994 by co-op leaders in the Northeast. Cooperative Development Institute’s mission is to work with people in the Northeast to create cooperative businesses and networks that grow a prosperous, equitable economy. We are transforming ownership of our economy, so all people can meet their basic needs. To date, CDI has supported the conversion of 52 manufactured housing communities to resident owned cooperatives and continues to provide ongoing technical assistance to residents managing their communities.
ROC USA® (rocusa.org) is a non-profit social venture with a national network of 12 organizations (such as Cooperative Development Institute) and a national financing source for resident corporations. ROC USA® is sponsored by the Ford Foundation, NeighborWorks® America, Capital Impact Partners, Prosperity Now, and the New Hampshire Community Loan Fund. The Community Loan Fund, a non-profit community development financial institution in New Hampshire, leveraged its experience with 90 resident-owned communities at the time to launch ROC USA with national partners in May 2008. All told, ROC USA Network has helped 288 communities preserve 19,740 homes in 20 states.
