Housing affordability in New York City has reached a critical juncture. The city’s rental and homeownership markets continue to escalate beyond the financial reach of many residents, creating widespread housing insecurity and threatening the cultural and economic diversity that has long defined NYC. With rents 72% higher than the national average and the cost of homeownership exceeding 87% above the national median, the current trajectory is unsustainable. Essential workers, artists, and long-term residents increasingly find themselves priced out, raising urgent questions about the city’s future livability and economic resilience.

This paper explores models of collective ownership as a strategy to address NYC’s worsening affordability crisis. By shifting housing away from speculative real estate dynamics and toward tenant-driven, perpetually affordable models, collective ownership frameworks present an alternative that stabilizes housing costs while empowering residents as stakeholders in their communities. This paper examines Limited Equity Cooperatives (LECs), Community Land Trusts (CLTs), Initial Shared Equity (ISE), Baugruppen, and Participatory Housing Design, drawing from both local and international case studies. These frameworks each provide different lessons and elements which can be adopted in the New York City context, but all challenge the dominant developer-led model, and instead have the potential to foster long-term affordability.

The Rising Cost of Rent in NYC

Renters in NYC face some of the highest housing costs in the country, with studio and one-bedroom apartments averaging over $2,500 per month. While high rents have long been a reality in New York, median rent growth has consistently outpaced household income over the past two decades. The Department of Housing and Urban Development (HUD) categorizes renters who spend over 30% of their income on rent as rent-burdened, and those spending 50% or more as severely rent-burdened. In NYC, nearly one-third of renters fall into the severely rent-burdened category, meaning they devote more than half of their gross income to housing costs. This imbalance leaves little financial flexibility for essentials such as healthcare, education, and transportation, exacerbating economic instability and widening income disparities.

Homeownership: A Distant Reality for Most New Yorkers

Beyond the rental market, homeownership in NYC remains elusive for the majority of residents. With median home prices surpassing $785,000, the ability to purchase a home requires substantial upfront capital that is out of reach for most middle- and low-income households. Condo ownership presents additional barriers, as high common charges make monthly costs disproportionately more expensive than single-family homes elsewhere in the country. The homeownership gap further reinforces disparities in generational wealth-building, as rising property values benefit existing homeowners while preventing new buyers from entering the market.

For many, the inability to buy a home translates into a lifetime of renting with no long-term financial security. Unlike traditional homeownership, where individuals build equity over time, renters see their housing costs rise annually with no return on investment. This dynamic has fueled the urgency for alternative ownership models that offer the stability and financial benefits of homeownership without the speculative pricing that continues to drive costs higher.

The Impact of Housing Inaccessibility on NYC’s Future

The inaccessibility of affordable housing has far-reaching implications for the city’s workforce, culture, and overall economic health. The majority of city residents—including teachers, healthcare providers, and transit employees—struggle to afford housing near their jobs, leading to longer commutes and increased worker attrition in vital industries. The city’s creative sector, long a defining characteristic of NYC’s identity, also faces displacement as artists and cultural institutions are pushed out by rising rents. Without interventions to ensure long-term affordability, NYC risks losing its diversity and vibrancy, transforming into a city accessible only to the wealthiest residents.

Beyond individual impacts, housing unaffordability threatens NYC’s economic stability and ability to provide essential services. High turnover rates among workers in critical sectors—exacerbated by unaffordable housing—reduce the city’s capacity to function efficiently. Furthermore, the lack of stable housing increases reliance on emergency services, shelters, and other public resources, placing greater strain on municipal budgets.

The Limitations of Existing Affordable Housing Programs

While NYC has a history of government-backed affordable housing programs, most current policies fail to address the scale of demand. The most affordable options – public housing, rent-controlled units, and market-rate units rented with Section 8 voucher assistance – provide limited relief. These programs are either vestiges of programs no longer sponsored by the government, or in the case of Section 8, have a fixed number of vouchers, meaning that the aggregate supply of the the most affordable housing options stays static in the best-case, but in reality decreases year after year and previously affordable projects and units become deregulated. The number of affordable units available to low-income renters has dwindled, as previous generations of rent-controlled and Mitchell-Lama apartments have either converted to market-rate housing or fallen into disrepair due to lack of reinvestment.

Rent-stabilized housing – which is the predominant affordable program currently creating new housing stock in the city – still plays a role in affordability, yet the income brackets it serves vary widely, with many new units designated for middle-income rather than low-income households. This mismatch between available housing stock and the needs of NYC’s most rent-burdened populations highlights the growing gap between policy solutions and affordability realities. Without new mechanisms to ensure permanently affordable housing, existing programs will continue to fall short of meeting demand.

Why Collective Ownership?

Given these challenges, collective ownership offers a transformative alternative to traditional rental and homeownership models. Unlike market-driven housing, collective ownership prioritizes permanently affordable, resident-controlled solutions that are not subject to speculative price increases. By removing land and housing from the speculative market, models such as LECs, CLTs, ISE, and Baugruppen can provide housing stability across generations.

One of the key advantages of collective ownership is its ability to prevent displacement. Because these models rely on shared equity, resale restrictions, and cooperative governance, they offer a long-term solution to rising housing costs rather than short-term affordability measures that phase out over time. Furthermore, these models provide an opportunity for resident participation in governance, allowing tenants to have a direct stake in the management and financial sustainability of their buildings.

By analyzing these collective ownership strategies, this research aims to offer a new framework for NYC’s housing future—one that moves beyond reliance on developers and speculative market forces; centering housing, not financial returns.

U.S. Examples of Collective Ownership

Collective ownership models in the U.S. have emerged as successful strategies to create and maintain permanently affordable housing. Three primary models—Limited Equity Cooperatives (LECs), Community Land Trusts (CLTs), and Initial Shared Equity (ISE) models—have demonstrated viability by detaching housing from speculative market forces and emphasizing long-term affordability.

Limited Equity Cooperatives (LECs)

LECs represent a unique form of cooperative housing that ensures permanent affordability by capping the resale values of shares in the cooperative. Unlike conventional homeownership, where property values rise with the market, LECs restrict equity appreciation to prevent speculative inflation, ensuring that homes remain affordable for future generations. This approach allows low- and moderate-income families to benefit from stability and cost control without being priced out by increasing land values.

Case Study: Co-op City, Bronx, NYC

One of the most significant and enduring examples of LECs in the U.S. is Co-op City in the Bronx, the largest cooperative housing development in the world. Built in the 1970s by the United Housing Foundation (UHF) with financing from the Mitchell-Lama program, Co-op City houses over 15,000 units and 50,000 residents. This model demonstrates the scalability and longevity of limited equity ownership, as Co-op City has remained affordable for more than 50 years.

The success of Co-op City highlights the potential for large-scale cooperative developments to provide enduring housing solutions. By limiting the resale value of shares, the development ensures that affordability remains intact across generations. Unlike conventional real estate models, where rising market prices displace low-income residents, Co-op City has offered stability and affordability to thousands of New Yorkers while fostering a strong, resident-led governance structure.

In its early days, Co-op City was the site of one of the largest rent strikes in US history, eventually requiring state intervention (bail-out), and playing a large role in the dissolution of UHF (the project’s not-for-profit developer). Much of this can be attributed to the sheer size of the project, as these issues were somewhat unique to Co-op City, in contrast to other, smaller, and more centrally located Mitchell-Lama projects developed by UHF. Nonetheless, it remains a landmark example of affordable collective ownership, proving that cooperative housing can function effectively in dense urban environments, and within the specific legal frameworks already extant in New York.

Community Land Trusts (CLTs)

CLTs take a different approach to affordability by separating land ownership from building ownership. Under this model, a nonprofit Trust owns the land, while individuals or cooperatives own the buildings via long-term ground leases. This bifurcation removes land from speculative markets, ensuring that property values remain stable and that affordability is maintained over multiple generations.

Case Study: Champlain Housing Trust, Vermont

One of the most successful examples of a CLT in the U.S. is the Champlain Housing Trust (CHT), which has operated in Vermont since the mid-1980s. CHT’s model is structured around 99-year ground leases, where homeowners lease land from the trust at a nominal fee while agreeing to resale restrictions that ensure continued affordability.

The success of CHT demonstrates the stability and resilience of the CLT model, particularly in the urban Burlington environment where land speculation has otherwise driven up prices. By removing land from market speculation, CHT has ensured that its housing remains accessible to low- and middle-income families while fostering long-term community investment.

CLTs also provide a flexible framework for affordable housing preservation, as they can apply to single-family homes, multi-unit buildings, and commercial spaces. The adaptability of this model makes it a viable solution for New York City, where rising land values continue to price out residents. However, the scalability of CLTs in NYC would require strong public-sector partnerships to acquire and preserve land for non-speculative use.

Initial Shared Equity (ISE) Models

ISE models introduce an innovative approach to affordability by allowing future residents to invest in housing developments before construction begins. This strategy not only reduces reliance on speculative real estate financing but also gives tenants a stake in decision-making and allows for customization of their living spaces.

Case Study: NABR SoFA 1, San Jose

A recent example of an ISE model is NABR SoFA 1 in San Jose, California. NABR’s approach allowed tenants to invest equity upfront, giving them influence over the building’s design – including kitchen layouts, bathroom configurations, and finishes. By involving residents early in the development process, NABR aimed to reduce the need for traditional speculative financing, which often leads to inflated construction costs and higher sale prices.

Although NABR SoFA 1 has faced delays and is very much entrenched in the real-estate market, the project’s model provides a glimpse into an alternative to developer-led housing production. The ability to fund housing cooperatively through shared equity investment has the potential to lower costs, increase tenant autonomy, and reduce speculative pressures.

However, scaling ISE models in NYC presents several legal and financial hurdles. Most banks and traditional lenders remain hesitant to finance projects that do not follow standard real estate development structures. Additionally, states have varying laws related to utilizing condominium unit escrow deposits towards construction costs, which this framework may be categorized as. Overcoming these barriers would require new policy mechanisms and incentives to integrate ISE models into the city’s housing strategy.

Global Examples of Collective Ownership Models

Beyond the U.S., several countries have successfully implemented collective ownership models that prioritize affordability, participatory governance, and social cohesion. Baugruppen in Germany and Participatory Housing Design in Austria represent two innovative frameworks that offer lessons for developing resident-led, sustainable housing in NYC.

Baugruppen Model: Resident-Led Development in Germany

Baugruppen, or “building groups,” are resident-led housing cooperatives in Germany that remove traditional real estate developers from the housing process. Instead, groups of future residents pool financial resources to collectively purchase land, design buildings, and oversee construction. This approach eliminates speculative profit margins, reducing costs while allowing residents to create customized living spaces that meet their communal and individual needs.

Case Study: Spreefeld, Berlin

Spreefeld Berlin is one of the most well-known Baugruppen projects, offering a model of how participatory housing can function in dense urban environments. Developed by a group of future residents, Spreefeld combines private units with extensive shared spaces, encouraging a balance between individual privacy and collective engagement. Additionally, this model reduces overall construction costs while fostering a stronger social fabric among residents.

A key innovation of Spreefeld is its typological flexibility, incorporating features such as:

• Shared kitchens and dining spaces to reduce unit sizes and overall costs.
• Flexible work-live units that allow residents to adapt spaces based on changing needs.
• Common areas, including terraces and co-working spaces, to strengthen community engagement.

While Spreefeld and other Baugruppen projects have been successful in Germany, their replication in NYC would require adjustments to building codes, legal ownership frameworks, and likely to underwriting standards as well. Current U.S. real estate practices favor large-scale developers, and collective financing remains challenging due to a lack of legal recognition for resident-led housing cooperatives. However, Baugruppen projects demonstrate the feasibility of scalable, community-driven development models, which could serve as a foundation for NYC housing policy innovations.

Participatory Housing Design:

Austria has pioneered participatory housing models that integrate resident collaboration into every phase of development. One of the most notable examples is Sargfabrik in Vienna, a cooperatively designed and managed housing complex that prioritizes social engagement and shared amenities.

Case Study: Sargfabrik, Vienna

Sargfabrik was developed in the 1990s as a collective housing experiment, designed to provide affordable, community-oriented housing while challenging traditional developer-driven processes. The project is governed and maintained by its residents, creating a self-sustaining system of housing affordability and community participation.

Key features of Sargfabrik’s Participatory Housing Design model include:

• Collaborative design process: Future residents were involved in determining unit layouts, selecting shared spaces, and developing architectural elements tailored to community needs.
• Extensive common areas: The project includes a communal bathhouse, event spaces, shared kitchens, and childcare facilities, reinforcing a sense of collective identity.
• Long-term affordability mechanisms: As a cooperative, Sargfabrik removes speculative price increases, ensuring cost stability for future generations.

Sargfabrik has been widely recognized as a model for integrating participatory governance with architectural innovation, illustrating how affordable housing can foster both economic stability and social cohesion. By enabling residents to co-design and manage their housing environment, the project demonstrates how participatory models can create more sustainable and resilient urban communities.

While Vienna’s strong social housing policies have enabled the success of projects like Sargfabrik, adapting similar models in NYC would require significant policy shifts; these hurdles are essentially identical to the challenges highlighted above in the Baugruppen section. However, integrating participatory elements—such as cooperative financing, resident-led design, and community governance structures—could pave the way for more sustainable housing solutions in the city.

Key Benefits of Collective Ownership Models

Each of the collective ownership models examined in this paper presents unique advantages that contribute to long-term affordability, resident empowerment, and social cohesion.

• Limited Equity Cooperatives (LECs): By capping the resale value of shares, LECs ensure that affordability is preserved across generations. This prevents speculative price increases and allows low- and moderate-income households to build equity while maintaining housing stability.

• Community Land Trusts (CLTs): CLTs function as mission-driven nonprofits that oversee land ownership while ensuring that homes remain affordable. By separating land ownership from building ownership, CLTs prevent market-driven price surges and prioritize long-term community needs.

• Shared Equity Models: In these frameworks, future residents invest upfront in the development process, giving them a direct stake in the financial sustainability of the project. This model aligns tenant interests with affordability and takes housing out of the speculative real estate cycle.

• Baugruppen: Baugruppen developments demonstrate the power of typological innovation, incorporating efficient designs that reduce costs while fostering communal interaction. By eliminating speculative developer profits, Baugruppen projects enable high-quality housing at lower prices.

• Participatory Design: Housing projects that integrate participatory design processes empower tenants to shape the development of their homes. This fosters a strong sense of ownership, ensures that the building program aligns with resident needs, and strengthens community engagement.

These collective models challenge the speculative nature of traditional housing production, demonstrating that affordability and quality can coexist through alternative governance structures and financing mechanisms.

Financial Flows in Housing: Rethinking Development

Traditional real estate development follows a profit-driven model in which developers and banks finance housing projects with the expectation of speculative returns. This approach contributes to cycles of housing speculation, driving up costs and often displacing low-income residents. Developers typically secure loans, construct buildings, and sell units or lease apartments at market-driven rates that reflect both their financing costs and profit margins.

The proposed collective ownership model, drawing on all of the examples above, presents an alternative financial structure, in which tenant equity finances construction, reducing reliance on speculative investors. In this framework, future residents contribute capital toward the development process, ensuring that housing remains affordable and that residents retain control over pricing and governance. By eliminating speculative appreciation, collective ownership models prioritize long-term stability over short-term financial gain.

This shift in financial flow creates several structural benefits:

• Lower development costs by removing speculative financing layers.
• Greater tenant control over pricing and management via participation in the design process and collective governance.
• Protection against market fluctuations that typically drive up rents and property values, via a LEC framework.

While this model presents a transformative approach to housing development, its implementation requires overcoming regulatory, financial, and institutional challenges.

Challenges and Next Steps

While collective ownership offers a promising alternative to speculative housing models, significant hurdles remain in implementing these strategies at scale. The challenges can be categorized into two broad areas: Regulatory and Physical Barriers and Financial and Organizational Constraints.

Regulatory and Physical Barriers

Current zoning laws, building codes, and land use policies are biased towards traditional notions of a ‘family’ and prioritize single-family homes and developer-led multi-family housing. These regulations often do not account for alternative housing models that emphasize shared ownership, cooperative governance, and participatory design. Specific challenges include:

• Zoning restrictions that prevent the development of shared-housing typologies, such as smaller private units with larger communal spaces. New York is already looking at changes related to this via the ShareNYC pilot program.
• Building codes that mandate individual kitchens and bathrooms in each unit, making it difficult to implement cost-saving shared amenities.
• Accessibility laws that, while crucial for equitable housing, require standardized unit designs that can sometimes limit flexible, customized housing layouts and have more burdensome requirements on multi-family projects than single family homes.

Addressing these regulatory barriers will require policy advocacy and legal reforms that expand the definitions of acceptable housing types and allow for resident-driven ownership models to thrive.

Financial and Organizational Constraints

Another critical challenge is the lack of financing mechanisms that support collective ownership models. Most banks and financial institutions structure housing loans around individual homeownership or traditional development projects, making it difficult for Baugruppen, CLTs, and shared equity projects to secure funding. Overcoming these constraints will require:

• New financial instruments and legal structures that allow residents to invest in cooperative ownership structures.
• Public-private partnerships that incentivize banks to support alternative models.
• Increased awareness and education about collective ownership structures, both among potential residents and institutional stakeholders.

Additionally, organizing a successful governance framework for collective housing presents another challenge. Unlike traditional developments where property management is handled by a central entity, collective ownership models require resident-led governance, which can be complex and time-intensive. Successful case studies such as Co-op City, Spreefeld Berlin, and Sargfabrik Vienna demonstrate that cooperative governance is feasible, but it requires clear legal structures, dispute resolution mechanisms, and financial transparency.

Conclusion: A Path Forward for NYC

The research presented in this paper illustrates that collective ownership models offer a viable alternative to NYC’s speculative real estate market. By hybridizing elements from Limited Equity Cooperatives, Community Land Trusts, Initial Shared Equity, Baugruppen,and Participatory Housing Design, these approaches present opportunities to create permanently affordable, community-driven housing. However, significant barriers remain, particularly in regulatory frameworks, financial structuring, and institutional acceptance.

Moving forward, further research and policy development must focus on:

1. Regulatory reforms that allow for flexible ownership structures and participatory housing models.
2. Financial mechanisms that support resident investment in housing developments.
3. Pilot projects that test the feasibility of these models in NYC’s housing market.

By shifting away from speculative real estate cycles and toward tenant-driven ownership, NYC can foster a more stable, inclusive, and affordable housing landscape. Through innovative financial structures, cooperative governance, and participatory design, collective ownership models have the potential to reshape the way housing is developed and maintained, ensuring affordability for future generations.

December, 2025

RESEARCH TEAM

Galia Solomonoff, Director

Eddie Palka, Adjunct Associate Research Scholar, ‘18 M.Arch

Benjamin Vassar, Graduate Research Assistant, ‘25 M.Arch

Julian Krusic O'Donnell, Graduate Research Assistant, '26 M.Arch