We’re collaborating with a construction co-op called Co-Everything, based out of Boston. And they’re out here in Oakland right now building the first prototype of the housing that we’ve been collaborating on.

Prospective homeowners in the Bay Area trying to buy a property find it’s just a no-win. At the last minute, some computer programmer shows up with a briefcase full of cash and gets the house. For us, that’s not really a way to create new housing or long term housing stability.

So what we’re trying to do is look at pieces of property that aren’t being fully utilized — maybe city property — and build new property there.

But our primary model is to go to homeowners and say, you have 600 square feet in the backyard you’re not using. We’ll develop property on it, accessory dwelling units, with the funding. And our construction co-op will build it — we’ll get the permits and everything else. Then we’ll rent it out, giving you a share of the rent, to someone who otherwise couldn’t afford to live in the Bay Area. So that’s the model. And we’re hoping that if the prototype succeeds, then we’ll be able to accelerate the project.

No, it’s definitely going to be primarily a worker cooperative, and if the tenants or the homeowners want to become members of the co-ops, they can buy in.

I happen to live in a housing cooperative, I’ve lived in land trust housing cooperatives for the majority of my adult life. And I definitely believe in them.

But what I also find is that as the residents, you really don’t have any incentive to help people create more housing. Maybe have the skills or the interest to risk your existing housing to create more housing. What we’ve always done with the worker co-ops is to use whatever assets we’ve created to create more assets, to build more cooperatives.

We want to create the same incentives for a housing cooperative system, where it’s really building housing which will go to people who have incentive to create more housing.

Yes. We asked our members back in 2018 to create a vision for the association. In earlier years when we had asked this question, the members said create more food co-ops, that’s what we know how to do.

But in 2018, they said, no, we need to create a more stable economic environment and in the Bay Area housing is one of those things that we need to be working on. So let’s go in the direction of a construction co-op and a landscaping co-op.

We wanted to think about how to bring our whole system to another region that might want us to help develop their system. So instead of us renting a bakery and driving up the cost of the building and the cost of the housing nearby, we would go in and buy the housing or put it into trust. We would have our own construction co-op buy the property and build the bakery. That’s part of how we want to create a comprehensive system when we go to some other region.

Absolutely, we’ve definitely looked at home care as well as charter schools as a form of co-op. Unfortunately, with home care, if you’re living in San Francisco, even the best rates of reimbursement won’t allow you to have affordable housing. To develop some of the things that we say are important — like education and elder care — we need more secure housing for people. It’s a bit of a chicken and egg kind of thing. For now, we’re trying to build the chicken that can lay some housing.

The sad thing about it is it was a three year plan that was supposed to say how great 2021 was going to be. So our focus shifted to simply surviving, other than this new partnership around housing. And all our businesses have survived, which is not easy in the food business.

Related to which, I think one of the challenges we at the Arizmendi Association realized early on was that co-ops, even highly successful co-ops, didn’t have a tendency to grow. So we said, okay, we’ll let them stay the size that they want to be for serving our community but we’ll take some of the resources that are being generated and create new co-ops at the same time.

More recently, I’ve come to understand the economic disincentives to growth for cooperatives in a different way. So can we change the incentives to actually allow cooperatives to scale up without necessarily just outsourcing that growth? So I’ve been working on that. And we got a California law for worker co-ops passed a few years ago. And one of the things we said in it was that you could distribute the patronage not just based on hours worked but based on jobs created. If our incentive is to grow new jobs, we should have incentives to reward existing members for growing those jobs. I’m hoping that other people work on that as well — how we change the structure so that it stops punishing people for creating jobs and actually rewards them.

We definitely learned from them. At one point we had for the first time one of our bakeries that wasn’t succeeding and it was the founding group. It was a real struggle for us. But the rest of the co-op rallied round, and sent their work over so that we eventually relaunched the cooperative and saved it. So that was the test that we had maybe reached one of the initial stages of Mondragon, where the whole system rescued something that was in trouble. And that co-op is still around today.

I’m very much interested in what Start.coop is doing and also what Obran is doing. And if they can scale up the management skills that are necessary for participatory development.

I think there’s too often a tendency in co-ops to turn to a model where we try to pick the right manager who will take care of everything. That led to co-ops that are very narrow, very dependent on one or two people to succeed — and that weakens their robustness and resilience.

I’m more interested in organizations that are really trying to develop human potential and leadership. That’s something I’ve talked to the folks at Obran about. How can you scale up a management education program for people who were not hired solely on their success as a business person. You really need to have a plan to develop both the cooperative as well as the business.

Yes, I’m part of an early-stage co-ops leadership group — people that are veteran leaders. Yep. And we’re asking what would it look like to have a leadership development program that went across co-ops. So you could take people who were founders of a business which converted to a co-op, while themselves staying involved with the business. Now they can step back and develop enterprise leadership and mentor new people.

One of the things I’m hopeful about is the growing number of organizations who are looking at the “silver tsunami” of retiring CEOs scaling up to help them convert their businesses in a quick way. I think that’s a good strategy to be taking.

I also think it’s important because of my long-time belief that co-ops are not going to just gradually replace the existing economy. We are trying to build in recognition of the fact that there will be more and more economic crises. And when those crises come, we have to have the capacity to rapidly expand.

And so figuring out how a business can survive and convert to a co-op is incredibly important. I went to Argentina to look at the worker cooperatives that took over a number of factories when their economy collapsed in 2001. It’s an interesting example of a canary in a coal mine and it’s remarkable what they’ve done.

Right. They’ve always sprung up during emergency times. But people have not put the structure in place to continue to grow in non-emergency times. And that’s what we need. We need to actually grow a big enough platform that when emergencies come, we can take advantage.