Market Rate Coop or Condominium vs Limited Equity Coop

Learn more about the two main types of housing cooperative financing methods: market rate and limited equity. The Artist Building at 300 Summer Street is a limited equity cooperative.

Market Rate Cooperative or Condominium: The price of the residential or Live/Work space is allowed to rise on the open market and shareholders may sell at whatever price the market will bear.
The Artist Building is a Limited Equity Cooperative. The by-laws of the Artist Building spell out a formula for the pricing of shares to keep prices lower than market rate for visual artists. The formula results in the Maximum Transfer Value (MTV) for the Live/Work space. The cost of the Live/Work space is: 1) the MTV, plus 2) a contribution to the Cooperative's Capital Reserve Fund, plus 3) the Live/Work space’s portion of the coop mortgage loan, billed monthly based on square footage.

Each share entitles an individual to occupy one Live/Work space and to take part in making decisions regarding the Cooperative. Each shareholder owns a permanent lease that can be sold as real estate to a board approved Eligible Purchaser as per our by-laws. Real estate taxes and interest on mortgage payments are tax deductible.

Purchasing a coop share for a Live/Work space at the Artist Building at 300 Summer Street should not be considered a real estate investment in the traditional sense of the term. The limited equity format was devised primarily to keep Live/Work spaces at below market rates for practicing artists over time (lower purchase price, taxes, etc.) while allowing sellers a reasonable amount of equity.

Related: What You Need to Know