In the year In 2015, Philanthropy Program Director Sarah Wells sold her Capitol Hill condo at 901 North Clarkson Street with her partner, academic and activist Stephen Polk.
Long shunned for punk houses and other housing complexes, he had just moved back to Denver from New York. Many people plan to convert their home into a co-op for a fraction of what the city pays.
Their new home name: Queen City Cooperative.
It wasn’t an easy decision for Wells to let go of her own condo.
For the young and upper-middle-class person in the United States, there is a tried-and-true path: get a job, find a spouse, buy a house, have children, live as a nuclear family, and build equity. – Money that you don’t actually have to work for and that rises and falls with the market and, in the long run, increases historically.
Individual ownership is a sweet system for those with enough wealth and opportunity to take action, at least for the hundreds of thousands in Denver — and millions nationwide — who have been forced out of home ownership and into investing.
With high prices, even some middle-class people say home ownership in Denver has become impossible. Generally, that means they rent out individual spaces, enrich landlords, or move on from the area.
“I went from owning my own condo and living alone for eight years to living in a big house with lots of guests,” Wells said.
Undoubtedly, Wales was risking an uncertain future by abandoning individual home ownership in favor of co-operative living. Does she want to have housemates? Was it worth giving up personal wealth?
Wells had one question in her attempt to live cooperatively: “‘I want this ladder to go up, not down.’ Because I’ve heard all the stories about walking around in a sleeping bag in the winter. I wouldn’t do that.
Her friends worried that she had made a bad decision.
“I sold my condo, and people thought I was crazy to sell my condo and move into a big house with strangers,” Wells said. “And Stephen became the owner of a mansion in Capitol Hill, and everybody thought it was a crazy sale. So we were both pissing people off, and we felt like, ‘OK, this might be the right thing.'”
Wells delved into the real estate industry—eventually becoming a realtor—to learn how to make co-op living comfortable and fair in a privately owned city.
More than half of them are located in New York City in the United States, where the model was first pioneered in the late 1800s. They grew up in San Francisco and Chicago. Nationally, more than 1.5 million families live in cooperatives, according to the National Cooperative Business Association. It’s the largest co-op in the Bronx alone, with 15,000 people living in 35 buildings.
In Denver, co-ops don’t exist at all. It is illegal to live with more than five unrelated adults. Until the City Council approves the group living amendment in February 2021, no more than two unrelated adults are allowed to share a home. In last November’s election, the Group Life Amendment was opposed by a group called Safe and Sound Denver, but the effort was opposed by nearly 70% of Denver residents.
Figuring out a legal way to buy domestic real estate without individual ownership wasn’t as easy as Wells thought.
“When we started the project, I thought, surely someone else has done this before and we can just copy it and come up with an agreement on how to share ownership in the property. “Nobody we’ve had in years has done that. And it took a long time and money with lawyers and a lot of discussions and learning about the house to adapt a limited equity model to share the equity that people get in their bedrooms.
At first, the couple created a temporary model in which they rented the property individually in a cooperative that was a legal entity in the state of Colorado.
That had a major flaw.
“In hindsight, mortgage holders may decide at some point they don’t want to sublet the home,” Wells said. It didn’t have the same level of stability.
And their personal power in property ownership created tension with their housemates, who perceived they had a disproportionate weight in decision-making – something the couple was trying to distribute among all members of the co-op.
In the end, they wanted a model that would make them, as owners, equal out of the account and make the cooperative itself the owner of the house.
Finally, they found an effective legal solution.
“After going through the formal incorporation process and filing the first year’s regular taxes as a Subchapter T cooperative, we were able to secure financing through 1stBank to transfer the home into the cooperative’s name,” she said. “Therefore, the cooperative is governed by the bylaws that we have created, which stipulates that no owner is allowed to sell the house for personal gain.”
On Friday, August 5, the couple signed the deal at 1stBank and broke ground on their own home.
“The only way someone can sell their home in the future is to create a new partnership,” Wells said. “Or if it’s sold and there’s no new co-op to be created, the money goes to an affordable housing nonprofit.”
What about the equity that Wells and Polk owned? Didn’t lose the deal?
“It’s the same with the idea of sharing equity until everyone realizes they have to give up something,” Wells said. “Oh wait… shoot.”
Polk said they bought the house based on a promise that others would contribute an equal and fair share of the mortgage. As owners, within the law, you can make a profit. But what they are trying to create in a democratic system is that economic participation should be respected equally, so they are not giving money in a union.
Polk believes that sharing equity requires a major cultural shift — and that more people need to make it. The system is not set up that way.
“Just because you own something in this community means you have disproportionate control over whatever value you put on a particular piece of property,” Polk said. “So we could come in here and get everyone to pay off our mortgages, have freedom, and then walk away with all the equity.
“And this is standard protocol for a landlord or an investment property in an apartment complex,” he continued. “Everybody’s paying their mortgage, you’re making a profit off the top, and that’s all yours, just because you own it.”
Wells and Polk, as the original owners, receive enough equity to pay off the entry into the house.
Other equity was used to purchase the adjacent carriage house and also to purchase a second co-op in Atmar Park to create additional housing for more people.
“From our perspective, it’s about living our values that are good enough for us,” Wells said. “And how can we create a world that serves us in a more appropriate way that we want people to live and experience our common resources.”
“We’re not canceling patents,” Polk said. “We are actually expanding it in a more fair and democratic way.”
Coexistence became a blessing for Wells and Polk.
“Having people who share your life with other than your friends is very powerful,” she said. It’s also important to share more of your life with other people in your group and set yourself up for the next and better parts of your life—especially when we’re going through personal problems, like work-related losses or breakups we can’t imagine, or big personal challenges.
Wells and Polk had a child six months before Covid-19 hit Denver. As lockdowns hit Denver, child care centers have been shown to be unsafe. Cooperative members were able to help the new family. A housemate, who worked at a closed restaurant, became a full-time nanny for Polk and Wells’ son so they could keep their jobs.
While many Denver residents continue to struggle to find and pay for child care, Wells and Polk found a solution at home because of their shared housing situation. Such support is intrinsic to the common police.
“It was this beautiful ecosystem that was the result of us living together,” Wells said. Indeed, in many ways we are a family,” he said.