East Bay Permanent Real Estate Cooperative
Scale of policy change (local, state, national): Local
WHO – East Bay Permanent Real Estate Cooperative, a group of Oakland residents, supported by the Sustainable Economies Law Center
WHAT – a democratic, People of Color led cooperative that takes land and housing off the speculative market to create permanently affordable, community controlled land and housing.
WHERE – Oakland, CA
WHEN – Incorporated in 2017.
WHY – To address the housing crisis due to the speculative market and rampant gentrification in the Bay Area, specifically in Oakland.
Interviewed: Ojan Mobedshahi, Finance Director at EBPREC
What’s the policy + why?
From the Sustainable Economies Law Center:
“Permanent Real Estate Cooperative” is a phase that the Sustainable Economies Law Center uses to describe a land ownership model that began to strike a chord with many of our partner organizations and clients. The model combines features of CLTs, limited equity housing cooperatives, real estate investment cooperatives, and self-organizing social movements from around the world. This hybrid needed a name to set it apart from other models.” Read more here about the model from SELC.
EBPREC’s work is focused more around creating a new model than it is about a specific policy change. Yet policy work is critical to the creation and expansion of this model. “We designed this model so it can work within the markets. Most affordable housing is dependent on government subsidies and there are never going to be enough subsidies to provide all the affordable housing we need. We are trying to create a model to show that there are real, effective ways for us to ensure affordable housing for ourselves, without waiting for subsidies.” Once a property is bought within EBPREC, they have a model for how it is managed and co-owned. The financing of this model is where specific policy change becomes especially relevant.
One of the most important policy changes, which has already been passed and won, has to do with recognition of cooperatives and people’s ability to invest in the coop. Sustainable Economies Law Center worked to pass AB 816, the CA Worker Cooperative Act, which creates an entity for worker cooperatives within existing cooperative corporations law. The law also allows anyone in California to invest in a cooperative corporation, which is the model EBPREC follows. The law increased California cooperative corporations’ securities exemption, which allows them to raise capital through membership shares.“The passing of AB 816 created a huge opening for us. It makes our work so much more possible. It allows us to actually raise the amount of money needed and ensure shared ownership at the same time, instead of having to choose one or the other.” They have been able to raise $200,000 in their first year from people making small investments, and those investors then receive a 1.5% annual dividend (but 40% have chosen to donate their dividend back to the coop). EBPREC is borrowing money from their community, instead of outside investors. This provides cheaper capital for the co-op’s projects, translating into more affordable rents, and is also providing a service to those community members who want to move their money out of Wall Street and into something that’s doing good in their community. This policy provides the opportunity for Black and Indigenous community members, those who they are looking to serve, to also become investors, in addition to newcomers to Oakland. “It’s really important for people who do move here to be able to invest in the local community in a real way. Many people do not want to be gentrifiers but they are; we are offering them a way to support instead of displace existing residents.”
Aside from that major policy victory, EBPREC is also working on a few things with the City of Oakland. For example, the City’s affordable housing funds are usually only available to nonprofits. EBPREC is working to shift that so they can also receive funds. The City has actually written limited equity cooperatives into their language so that EBPREC can be part of it. They are also helping to craft legislation around a tenant’s option to purchase, with other organizers in Oakland. They are participating in policy work around a specific plan for Downtown Oakland, as well, to make sure that the community voice is being represented. The city is beginning to see them as a serious stakeholder, now that they have formed their institution and are building their base.
Other policy work EBPREC hopes to pursue has to do with the “three P’s of affordable housing” – production, preservation, and protection. They are seeing that there has been a great deal of emphasis on production as a strategy, but EBPREC is trying to challenge this. “There are more than enough empty units in the Bay Area to house all of the homeless people three times over. We want to secure and preserve this housing as affordable as much as possible. Focusing only on production is a false solution.”
The everyday and long-term decisions that impact EBPREC are collectively taken by its staff collective and membership. See more on that below. With regards to policy, AB 816 was decided by the California State legislature, and some of their projects have aspects that are decided by the city of Oakland.
Who is the community? What is their history?
The mission of the EBPREC is to facilitate an anti-gentrification effort for the Black and Indigenous people of color of Oakland and for allied communities. That is the target audience for housing security, but is not exclusive.
“We live and work on occupied Ohlone territory. This is the Indigenous name given by Europeans, but is known as Huichin Village. The Sogorea Te Land Trust is an important project, led by Indigenous women, reclaiming land for Indigenous people in the Bay Area, that we work in partnership with and aim to support as well. Sogorea Te has a standing appointment to the our board, because it’s essential for them to have a voice in informing our work. We take leadership from them.”
There is a long history of genocide, displacement, and enslavement with the Spanish missions that were in the Bay Area. Oakland used to be majority Black. Over the last 20-30 years the Black population has decreased dramatically. East and West Oakland, areas that became Black historically due to redlining, are experiencing massive displacement. West Oakland in particular is facing some of the most acute impacts of new development and gentrification, being the closest part of Oakland to San Francisco. The city of Oakland has been making loans to outside developers to go out and rezone the community, but not directly to those communities.
“EBPREC is founded on a belief that development can be done in a way that benefits the people who live in Oakland, those who have been living here. We believe in creating things that help undo the damage that has been done, and show how we can make that possible.”
Currently, most of the development is working to displace the Black and indigenous communities. In downtown Oakland, the average white household is making close to $90k a year, and the average Black household makes $32k. Broader Oakland is more disparate. The average median income now is close to $100k a year. These are the current realities EBPREC is building within in Oakland. These figures are important because the city creates affordable housing based on average median income. For example, if 80% of average median income is used as a metric for new affordable housing, this means they’re actually serving the white population. The city would have to use a designation of 30% of median income to actually serve the Black population.
There is a rich African and African American diasporic culture and history in Oakland, and EBPREC is working in East and West Oakland to preserve that. “They used to call the area around 7th Street in West Oakland the ‘Harlem of the West.’ The history is deep. But that whole strip is about to change. We’re working with Alena Museum, a West Oakland-based project creating space for the African Diaspora to express their culture in the face of gentrification, that was recently displaced from Downtown Oakland, and other community partners to organize against that. We are finding partners to land bank properties in the area, to bring communities into planning, instead of them being affected by development from outside.”
What is the problem they’re working to address?
Displacement is the problem EBPREC is working to address. They understand their work as challenging legacies of systemic oppression, but specifically work against injustice in the housing system, and working towards transforming the finance system around housing, to provide housing in a way that is financially just.
Transforming housing finance means creating pathways for people to build wealth and equity. “In our model, when property is going up for sale and you’re a renter, you can reach out to us and we will together try to organize to purchase that property with you as an owner. That way, you can start building equity, instead of having your rent increase. We want more people to start to build wealth this way and break the control that rent has on our lives. There are endless things we can say about how harmful our current housing system is, but this is where we’re starting.” A general lack of democratic investment in real estate is also part of the problem they seek to address, so the EBPREC model is based on crowdfunding.
Who is organizing? How are people organized?
EBPREC is a worker-owned cooperative and the decision-making body is many fold. There are five key staff owners. That group makes decisions internally. The board functions as oversight. Their membership makes decisions about the overall structure and investments. They use the 1 member, 1 vote system. Members can call meetings and propose topics and work areas. EBPREC recently had its first annual member meeting and members voted on changes to bylaws.
EBPREC is a multi-stakeholder coop. There are four types of owners: staff owners, who are the employees of the coop. Resident owners include anyone who lives or works in one of the EBPREC’s buildings. Community owners include anyone who lives in the community who wants to invest, for as little as $10 a year. Community owners can become resident owners by showing up for meetings and becoming more active participants in the coop. Lastly, investor owners can include anyone living in the state of California, who can invest up to $1000 in the coop.
EBPREC is still in formation, and they are hoping to implement and refine their community decision-making process. They are working to build their base now and get members engaged in the operations of the coop. They have been having their meetings downtown, because it is between East and West Oakland, but they are noticing that the member makeup at those meetigns is becoming more and more white. They are looking to start new circles in East and West Oakland directly to make sure they are connecting with those they really want to serve, knowing it is harder for people to make it out if it’s not in the neighborhood.
EBPREC frequently cites the importance of the Sustainable Economies Law Center to their work. “All of our work is really contingent on SELC. They incubated and helped develop the model, identified and worked to address barriers to the model, and are just indispensable to making EBPREC’s work happen. Partners like them are instrumental to making the models we dream of into realities. They often can’t exist right when we imagine them. SELC makes sure we could actually put the model to work.”
What has been successful in this organizing project? What are the benefits and impacts?
“The first property campaign felt really successful. We had some institutional funders give grants during that campaign because they saw how the community was showing up – excited and eager for something like this. It raised a lot of questions though, like how do we get resident owners to buy in, if for example, 11 people are living in 4-unit apartment complex and one unit is not interested in being part of the coop.”
EBPREC also had a very successful capital campaign for investor owners, specifically to fundraise. This was their first recruitment push because they needed the capital up front, so had to focus on those who could invest more, but it has meant that they have not been able to focus as much on community owners. There are currently more investor owners than community owners as a result. There is a campaign coming specifically for that in 2020.
They are also trying to measure their success in different ways. EBPREC also notes their success is being recognized by the City of Oakland. The City has shifted in its approach to EBPREC, now being much more welcoming and open to their work. The City is inviting them in to be included in the next round of funding. However, they are working hard to not fall into non-profit patterns of continuous fundraising, so they are seeing how other aspects of their work can bring funders in. Their capital and property campaigns generated a very strong press presence, which brought funders directly to them. “Telling a powerful story attracts almost everything we need. In particular Noni, a founding member of the coop, has been doing public speaking, moderating panels, getting the word out there about the project. People are starting to know who we are and what we’re about.”
“We’re a movement cooperative. We’re not just about finding housing for folks. We are trying to create a movement for transformation. So many people feel trapped and disempowered by what’s going on. When we start to share the model, people are often rightfully focused on wanting to own property – their own property – and it seems like, ‘Why would I want to be part of a coop?’ But the vision is, it’s not just about owning property, it’s about being part of a movement where we can support one another and be mutually beneficial. When we share that, we find people are looking for this, and it resonates. Movement is powerful and it is necessary.”
“Since we’re still in our initial phases, it is hard to see all the impacts quite yet, but they are clear. One of the resident owners said her and her partner decided to have children because they now have stable housing. We see the foundational aspects of life being more and more possible for people.” People are showing up. Property is being donated. People are making the decision not to put their property on the speculative market but instead to intentionally share it in community.
What do people need to know who might want to create similar models?
EBPREC says that many people have been reaching out since their launch about wanting to launch their own versions of a permanent real estate cooperative. They are not at the place yet to support other communities with launches. They do recommend getting connected with local Community Land Trusts and the resources connected with them. EBPREC is not a CLT but does partner with those in their area, and have benefited greatly from those partnerships and the institutional knowledge in the CLT movement.
“Beware of professionalization. Beware of being reliant on government nor grant funding and having to spend more time working to make your entity exist than working to make it work for the people it’s supposed to work for. Build a team. This is a big endeavor and it takes many of us.”