RCDG Funds Leveraged for Creation of Residential Owned Communities

Co-operative development centers continue to invest time and resources to build economic sustainability across rural America. Supported by USDA’s Rural Cooperative Development Grant (RCDG) program, these co-operative development centers are further leveraging this federal investment through intentional collaboration, resulting in multi-regional development capacity in several different economic sectors. One recent example is the work of RCDG-funded centers with ROC USA™ , a national non-profit that provides certification and financial assistance to successfully convert existing manufactured home communities into resident-owned communities.

ROC USA’s mission is to make quality resident ownership possible nationwide. It’s president, Paul Bradley, says “Our reason for being is to help homeowners gain economic security through resident ownership of their “mobile home park” or manufactured home community (“MHC”). We are focused on doing one thing really well and doing it time and again for no other reason than to preserve and improve affordable communities and build value for homeowners in MHCs.” ROC USA achieves its mission “on the ground” by training and supporting regional non-profits in doing co-op conversions. To date, at least three RCDG-funded centers have achieved the status of becoming Certified Technical Assistance Providers (CTAPs).

New England
In the fall of 2009, the Cooperative Development Institute became a CTAP, covering the territory of Connecticut, Rhode Island, and Massachusetts. CDI’s starting budget consisted of the standard $50,000 grant from the Corporation for Enterprise Development (CFED), a sponsor of ROC USA, $10,000 of which CDI paid to the network to gain the needed training and materials.

Noémi Giszpenc, executive director of CDI explains, “The support of both ROC USA and USDA has meant a great deal to CDI’s success. Four of the five parks that we have converted to cooperative ownership have been in rural areas, which allowed us to use RCDG resources to pay for a portion of staff time and travel.” That staff time has included the work of CDI’s housing program manager, Andy Danforth, who has made a 5-year commitment to the program, and deferred compensation until the program could cover his salary.
In its first two years, the CDI ROC program operated with $30,000 annually of RCDG support. This was used to leverage about $9 million in capital investment for resident ownership and improved infrastructure. As the number of converted communities in CDI’s portfolio climbs, the ratio of RCDG support to program income will continue to drop, and the program will become self-sustaining as well as generate income for general operations.
“Our initial success has allowed us to expand into Vermont in 2011 and now Maine in 2012, supported by a $60,000 two-year award from a local philanthropist,” says Giszpenc. The growth of the program has also led to job creation. “Our program staff has grown from 0.5 FTE to 1 to 2 and soon will be 3 FTEs, with the addition of two new part-time organizers in the Spring of 2012.”

The Midwest
RCDG fund recipient and ROC USA CTAP, Northcountry Cooperative Foundation is converting rural manufactured home communities into resident-owned communities in the Midwest. To date, NCF has assisted five communities in Minnesota convert into cooperatives. One example is Madelia Mobile Village Cooperative, located in Madelia, Minnesota, population 2,300, in south-central Minnesota.

The Cooperative was organized by residents as a strategy to take control of the community, provide for its improvement, stabilize lot rents, and so create a platform for income- and asset-building for themselves in a resident-owned manufactured home community.
The community was purchased by its residents in December 2008 for $460,000. The state housing finance agency and a community oriented lender provided the financing for the purchase. At the time of purchase, an estimated 75% of the households at Madelia Mobile Village had incomes at or below 50% of Watonwan County’s area-median income, and the other 25% had incomes at or below 80% of the County’s AMI. The community is made up predominantly of emerging market households, generally recently-arrived Latino immigrants.

The Pacific Northwest
The Northwest Cooperative Development Center (NWCDC) expanded its co-op development services in 2008 to include MHCs. NWCDC joined the ROC USA network to leverage expertise and resources, including co-op financing, to help meet its customers’ needs.

“We really value the opportunity of working with ROC and our national network of colleagues. We are able to use well-tested processes and resources in our work with local residents, brokers and owners,” says Ben Dryfoos-Guss, NWCDC’s specialist.

In its first two years, the NWCDC ROC program operated with RCDG support of approximately $25,000 each year. This was used to leverage about $4.6 million in additional private and public capital investment for resident ownership.

To date, NWCDC has assisted three communities to successfully convert to non-profit co-ops. One example is Hidden Village, in unincorporated Thurston County WA. Through co-op conversion, NWCDC helped homeowners avert an imminent threat of community closure and homeowner displacement. Today, the community offers good quality and affordable manufactured homes for its predominately senior residents.

Stabilizing Housing for Seniors
The MSC Fund of the Cooperative Development Foundation’s (CDF) has a mission of finding cooperative solutions to the issues facing senior citizens in rural America. In many communities, senior citizens make up a majority of the residents in manufactured home parks, and they are particularly vulnerable should their parks be put up for sale. Since 2006, CDF has granted over $230,000 to support technical assistance for co-op conversion work by organizations such as ROC USA, the New Hampshire Community Loan Fund, Rural Community Assistance Corporation, and the Twin Pines Foundation.

“Our recent grants to ROC USA have been particularly effective. ROC re-grants funding to CTAPs who are in process of finalizing deals, helping to push those projects over the finish line, and resulting in new co-ops and dozens of new units of co-op housing,” said Kevin Edberg, a member of the advisory committee for the MSC Fund.

CDF hosted a forum this past March on “Cooperative Solutions for Affordable Rural and Senior Housing” to shed light on the importance of converting rental communities to housing cooperatives in order to achieve financial stability, especially for rural seniors. Speakers included Judy Canales, Administrator for Rural Business & Cooperative Programs, Rural Development, USDA; Terry Simonette, President & CEO, NCB Capital Impact; Stacey Epperson, President & CEO, Next Step; Char Thompson, Executive Director, Wisconsin Rural Housing; Andrea Levere, President, Corporation for Enterprise Development; Lance George, Interim Director of Research, Housing Assistance Council; The Honorable James Clyburn (D-SC); Shelley Sheehy, Consultant to Homeward, Inc.; Mike Sloss, Managing Director, ROC USA Capital; and Terry Lewis, LIA Associates. More information about and videos of the Forum are available on CDF’s website, www.cdf.coop, in the Senior Resource Center section.

The partnership between the ROC USA network and cooperative development centers is proving to be an effective one. Bradley explains that “co-op development centers really get both the organizational development and the business development aspects of our work”.
Cooperative development centers, RCDG funding and ROC USA are all essential pieces in the co-operative housing development puzzle. By combining the skill and financial resources they each offer, and continuing to identify new partners and leverage additional funding, a stronger, thriving rural America will emerge.