Related: What You Need to Know

Market Rate Coop or Condiminium 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 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 have a formula for the pricing of shares to keep prices lower than market rate for visual artists. The formula is called the Maximum Transfer Value (MTV). The cost of the live-work space is the MTV plus the live-work space’s share of the of the coop mortgage loan monthly cost based on square footage. The idea behind limited equity is to maintain lower than market rate housing.

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