Enact Tenant Opportunity to Purchase Legislation
Housing is a fundamental part of a stable society. When housing is scarce or severely unaffordable — as it is today — the burden falls most heavily on vulnerable populations and working families.
Many affordable housing programs benefit developers and management companies far more than tenants. As someone who has lived in affordable housing, I can attest that eligibility requirements are often unnecessarily cumbersome, leaving many residents caught in the middle: too wealthy to qualify for assistance but too poor to obtain housing without it.
Even when renters secure affordable housing, they often face layers of application, screening, utility, and administrative fees that raise the question of whether the housing is truly affordable.
While strengthening renters’ rights is important, helping renters become owners is transformative. Cooperative housing is the best way to do this at scale.
Cooperative housing allows residents to collectively own the building where they live. Instead of paying rent to a landlord, residents are the sole shareholders in the cooperative that owns their entire complex. Housing payments go toward the mortgage, maintenance, and long-term upkeep rather than generating profit for an outside owner.
Cooperatives can be structured in different ways depending on their goals. Some models prioritize keeping housing permanently affordable, while others allow residents to build equity or benefit from market appreciation. One of the most appealing aspects of cooperative housing is the element of self-determination. Mortgages for cooperative housing have been eligible for federal insurance through HUD for more than 50 years.
At the state level, we could promote cooperative housing through Tenant Opportunity to Purchase (TOP) legislation. This legislation gives renters and cooperatives the first right of refusal when landlords sell the properties they live in. By forming a cooperative, renters can organize, negotiate, and bid on the property themselves. Since being implemented in Washington, D.C., in 1980, the program has been credited with preserving 16,224 affordable housing units.
The plan below is modeled off of the one in our nation’s capital, with small buildings being those with 2–4 units and large buildings being those with 5 or more units.
Step 1: Offer of Sale
When planning to sell a building, the owner will be required to provide an offer of sale to the tenants. If they make a contract with a third party to purchase, the owner would be required to provide tenants with a copy of the contract within 7 days.
After an Offer of Sale is provided to the tenants, they can request additional information including the building’s floor plan, operating expenses, utility rates, capital expenditures, current unit and lease details, and list of vacant units. The owner would be required to provide this information within 7 days of the request.
Step 2: Statement of Interest and Cooperative Formation
If the tenants are interested in purchasing the property, they must provide a statement of interest to the owner. This timeline would vary based on the number of units in the property.
For small buildings, the tenants would have 15 days to submit this statement if they wish to collectively purchase the property. If this does not happen, individual tenants would have 7 additional days to submit a statement to purchase the building for themself.
For large buildings, tenants would be required to form a cooperative organization. If they have not already formed a cooperative, they would have 45 days to do so and submit a Statement of Interest. If they have already formed the co-op, they would have 30 days to submit a Statement of Interest.
Step 3: Negotiation and First Right of Refusal
After sending a statement of interest, tenant organizations or individuals would negotiate the sale with the landlord. If a third party is involved, TOP legislation would grant tenants the first right of refusal, which is the opportunity to match the terms offered to a third party.
For small buildings, the tenants would have a minimum of 90 days to negotiate the contract, with an additional 15 days added if a third-party contract is involved. If a collective tenant organization fails to make a contract, an additional 30 days of negotiation would be provided to individual tenants who provided a statement of interest.
For large buildings, the tenants would have a minimum of 120 days to negotiate the contract, with an additional 15 days added if a third-party contract is involved.
Step 4: Opportunity to Secure Funding
If the owner is selling to tenants, they will be provided a timeline guaranteed by statute to secure funding. For small buildings, they will be granted a minimum of 90 days to secure funding. If a lending institution provides notice in writing that they will need more time to make their decision, this period will be extended to 120 days. For large buildings, tenants will be granted a minimum of 120 days to secure financing, which can be extended to 240 days with written notice from a lending institution.
Step 5: Reset Period
If the owner has not entered into a sales contract within a specified time, the TOP process will reset with a new Offer of Sale. For small buildings, this will happen 240 days after the original Offer of Sale. For large buildings, this will happen 360 days after the original Offer of Sale.