As more and more older adults seek 55+ living options that provide independence, community, and affordability, senior living cooperatives (or “senior living co-ops”) have emerged as an appealing choice for some. But what exactly are senior living cooperatives, and how do they compare to other senior living options? 

Let’s examine the concept of a senior co-op and also take a look at some of the pros and cons of choosing this unique type of living arrangement.

What is a senior living co-operative?

A senior living cooperative is a housing option that offers adults age 55+ independence and social interaction without having to shoulder all of the maintenance, chores, and expenses of single-home ownership. 

Dennis Johnson, president of Cooperative Housing Resources in Shoreview, Minnesota has been working in senior living co-ops for over 40 years. In a 2024 interview on Minnesota Public Radio, he explained how this particular type of 55+ housing arrangement works. 

Rather than owning individual residential units or paying rent to a landlord, co-op residents “buy a share in the cooperative,” he says. “The cooperative owns the building, the land, all of the appliances, all of the floor coverings, all of the window treatments. So it takes care of any maintenance requirements that go along with that. And the purchase of your share entitles you to live in a specific unit in the building, and so you’re really a tenant in a building that you are an owner in.”

>> Resource: The Ultimate Guide to Senior Living Terminology

A housing concept based on democracy

People have been living in cooperative-type communities for centuries. Co-ops were inspired by the commune system that became popular in Medieval Europe, as well as the communes that saw a resurgence in the U.S. during the “hippie movement” of the 1960s and ‘70s.

Much like communes, the residential co-op model is based on principles of shared responsibility and democratic governance. By owning shares in the co-op, residents are not only granted the right to live in the co-op, they also gain the right to participate in the community’s management and decision-making about maintenance, financial matters, and the overall functioning of the co-op. 

Residents typically elect a board of directors to govern the community. The board then creates various committees that are responsible for overseeing specific tasks, e.g., the building and grounds committee, the social activities committee, the financial oversight committee, etc. And although they are self-governing, co-ops often will hire a management company to help them with the day-to-day operations of the community (e.g., landscaping, trash removal, building maintenance, etc.). 

The origins of senior cooperative housing

The unique concept of senior living-focused co-ops first originated in the Midwest in the late 1970s. In fact, even in 2024, 60% of the senior housing co-ops operating in the U.S. were located in Minnesota, according to Minnesota Public Radio. 

So while senior living co-ops remain predominantly located in the Midwest, they are becoming more plentiful nationwide, including in states like Colorado, Florida, Texas, Arkansas, and Washington — in rural, suburban, or urban settings. This is due in large part to the ongoing retirement of the Baby Boomer generation. There are even a number of continuing care retirement communities (CCRCs or “life plan communities”) that operate under a co-op model. 

>> Related: Solving the Baby Boomers’ Loneliness Crisis

What is the cost of living in a senior living co-op?

Senior living cooperatives can range from independent living single-family homes, townhomes, or apartments, to more supportive environments that provide some level of care services if needed. The level of amenities and services provided, as well as the location of the community, will largely determine the cost a resident might expect to pay. 

But regardless of location or amenities, senior living co-ops are designed to be more affordable because community operation and maintenance expenses are shared by the residents. Dennis Johnson spoke to the topic of senior living co-op cost in the 2024 Public Radio interview. 

“The member [i.e., co-op resident] purchases a share in the cooperative, which is generally around 50% of the total value of [their residential] unit. The rest of that [cost] is financed with the master mortgage that the cooperative has, and the member pays a monthly fee that is their share of the master mortgage and the interest on that. 

“Their share, the real estate taxes, their share of the insurance, and their share of the operating expenses for the management company and the common areas generally runs about $1 to $2 a square foot … and that includes the mortgage payment. So if you’re in a 1,500 square foot unit, it’s around $3,000 a month. But that’s your mortgage payment as well as the operating expenses. Your share of the real estate taxes and your share of the interest on the mortgage [may be] deductible on your personal income tax under the IRS rules.”

Note: Bear in mind that the rough costs Johnson references are for the average community in Minnesota in 2024. Costs may be higher or lower in other parts of the country, and depending on the level of services and amenities provided by the community. 

Additionally, the cost of real estate and caregiving services are trending ever-upward, so senior living prices may increase as time passes. However, co-op shares can only appreciate in value on a limited basis — usually 1 to 2% per year. This is intentional because it helps keep co-op units affordable and marketable to new residents. This can also be a drawback of co-ops, however, since residents continue to be responsible for paying the monthly fee until the vacated residence has been reoccupied. 

>> Related: 2 Key Factors in Senior Living Cost Comparisons

Pros and cons of senior living co-operatives

As we frequently discuss, nearly every senior living option will come with certain pros and cons. It is wise to do your research so you understand the potential benefits of a certain type of senior living community, as well as possible challenges or shortcomings.

Potential pros of senior co-ops

  • Affordability: Because the housing is collectively owned and managed, the cost of living is often lower in a senior living co-op than in other traditional retirement communities or assisted living facilities. Shareholders’ monthly fee typically covers maintenance, property taxes, and other communal expenses, often helping keep costs lower and more predictable.
  • Sense of community and connection: Since all co-op residents are involved in decision-making and share responsibility for property upkeep, it naturally creates an environment where individuals support one another. This is especially beneficial for older adults who may be seeking to avoid isolation and enjoy meaningful social interactions.
  • Autonomy and control: Unlike nursing homes or assisted living facilities, where management typically dictates the rules, residents in senior co-ops have a significant say in how the community operates. This sense of ownership and control can be empowering, helping seniors feel more in charge of their living situation.
  • Engaging activities: Like many other types of retirement communities, senior living co-ops often offer an array of cultural, educational, and social activities that encourage residents to stay engaged. These activities can range from fitness programs to arts and crafts workshops, helping residents maintain an active lifestyle, both mentally and physically.
  • Long-term stability: In many cases, co-ops operate under a nonprofit structure, ensuring that its goal is residents’ well-being, rather than generating profits. This can lead to more financial stability for the community and a more secure living environment for residents, as compared to some for-profit housing options.

>> Related: Financial Solvency: An Important CCRC Selling Point

Potential cons of senior co-ops

  • Initial buy-in costs and ongoing financial commitment: Although a senior living co-op’s monthly fees are typically affordable, there is often an upfront cost in the form of buying shares in the cooperative. This is in essence a fee for the cost of the residence, so the price or requisite number of shares may be higher or lower depending on the size/location of a specific residence. This initial investment in co-op shares can be a significant financial barrier for some individuals, especially those with limited monetary resources. Additionally, the co-op may require residents to sell those shares back to the cooperative when they leave, which means it can take time to recover one’s investment.
  • Shared decision-making: While the democratic decision-making process is a positive aspect for many, in some cases, it can lead to conflicts, delays, and frustration as well. Some older adults may also find it difficult to navigate the responsibilities of being involved in the governance of their co-op, particularly if a health issue arises.
  • Potentially limited support services: While some senior living cooperatives offer a range of services such as housekeeping, transportation, or meal programs, others may not provide as much assistance for residents who need assistance or care — now or in the future. Particularly if health needs increase over time, residents may need to move out or find (and pay for) additional care-related services.
  • Age restrictions: Senior living cooperatives typically cater to older adults, often with a minimum age requirement of 55 or 60. Age restrictions create a community of peers, but they may sometimes lead to a lack of age diversity, which might not appeal to everyone.
  • Maintenance responsibilities: Senior co-op residents share responsibilities for maintaining common areas or addressing repairs. (As previously mentioned, some senior co-ops do choose to hire a management company to handle such tasks.) Some residents enjoy this hands-on approach, but others may find it burdensome, particularly if they are no longer able to perform physical tasks. If the co-op is not well-managed, such maintenance issues can become problematic.

>> Related: Are You Wasting Money by Living in a Home That is Too Big?

Is a senior living co-operative right for you?

Choosing a senior living option is a deeply personal decision that depends on individual needs, preferences, and circumstances. Senior living cooperatives can be an excellent choice for older adults who prioritize affordability, community engagement, and independence. However, they may not be ideal for those who require significant care or prefer more structured environments.

If you are considering a senior co-op, it’s important to visit the co-ops in your area, talk to current residents, and ask questions about fees, services, and governance. Doing thorough research will help you determine whether this type of senior living arrangement aligns with your unique values and lifestyle preferences.

 

Originally posted March 25, 2015; updated Jan. 13, 2025

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