May 9, 2014 at 12:00 pm EDT | by Ted Smith
Condos vs. coops — what’s the difference?
condo, coop, gay news, Washington Blade, real estate.

On left, 1000 New Jersey Capitol Hill Towers coop. On right, 1025 1st Street SE Velocity condo.

In last month’s column, I discussed the difference between housing type (e.g. apartment, rowhouse, detached house, etc.) and housing ownership (e.g., condominium, cooperative, fee simple, rental). I noted that people often confuse the different sets of terms (e.g. apartment and condo). This month, I want to discuss the difference between condominiums and cooperatives, because buyers are often reluctant to look at coops—and they shouldn’t be.

Although these two terms are types of housing ownership that could apply to several housing types, they usually are applied to ownership of an apartment in a multi-unit building, whether low-, mid- or high-rise. In Washington, many cooperatives were formed when units in rental apartment buildings became available for purchase in the 1960s and 1970s (a process called conversion). For example, many of the multi-unit buildings along Connecticut Avenue in Northwest are cooperatives. Some of them are condominiums, with a few rental buildings remaining.

So what’s the difference between cooperatives and condominiums? Here are several important differences:

Coops have members; condos have owners. Coop members own a share of the coop corporation analogous to the size of their unit, but they don’t own the inside of their units, which condo owners do.

Because of this difference in ownership, coops frequently have more rules to follow than condos.  For example, there is usually a set number of years that you can rent out your coop before being required to sell it—if, in fact, the coop rules allow you to rent it at all.

Coops typically have a lower list price than comparable condos.

Coop purchases typically include a meeting with the coop board of directors in order to be approved.

Coops typically have higher monthly fees than condos, but these fees often include all utilities and property taxes, and may include monthly payment on an underlying mortgage (see below).

When there is an unexpected expense for a building (like HVAC systems that quit prematurely), coop boards will typically take out an additional underlying mortgage and assign monthly payments to coop members based on their share in the cooperative. In the same situation, condo boards will typically impose a special assessment on homeowners, which may be paid in one lump sum or as partial payments on a monthly basis.

Now let’s see how these differences show up when comparing two similar properties:


Unit #624 at Capitol Hill Towers in Navy Yards neighborhood is a 1-bedroom, 1-bath coop with parking that sold for $325,000 last month after being on the market for 15 days. The unit has 741 square feet. The monthly coop fee for this unit is $1,118 monthly, which includes $664 for an underlying mortgage payment, $224 for building management and maintenance fees, property taxes, water for the unit, and $230 for buildup of the coop reserves. Because the total amount of the underlying mortgage for this unit is $122,852, it was only necessary for the buyer to finance $216,148 when they bought the coop—the remaining $122,852 debt for the underlying mortgage passed over to the buyer from the seller at settlement.

Unit #1104 at the Velocity Condo in Navy Yards is a 1-bedroom, 1-bath condo unit with parking that recently sold (in January 2014) for $439,000 after being on the market for 34 days. The unit has 821 square feet. The monthly condo fee for this unit is $390, which pays for building management fees, including reserves buildup, and maintenance.

Here you can see the significant differences: the coop had a much lower purchase price for approximately the same square footage, but has a much higher monthly fee because of the underlying mortgage. And here’s the lesson for new homebuyers: if you can afford the monthly fee with your cash flow, you will often get more for your money with a coop, once all the other cost factors have been balanced out. But don’t be immediately be put off the fee — you’ll usually end up paying the included expenses one way or another whether you buy a coop or a condo.

Happy Hunting!

Ted Smith is a licensed Realtor with Real Living | at Home specializing in mid-city D.C.  Reach him at and follow him on ,  or @TedSmithSellsDC. You can also join him on monthly tours of mid-city neighborhood Open Houses, as well as monthly seminars geared toward first-time home buyers. Sign up at

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