Recently, I was trying to calculate the rent for a single-income family of three. Let’s call them the “Smith” family. Mom Smith is working full-time and has been with her company, a large local employer, for many years. She does not want her workplace to know about her current housing instability.
When I examined her income and monthly debt payments, she was clearly unable to rent a market-rate apartment for herself and her two children. The rent for the three-bedroom apartment she needed was between $1,700 and $1,800 a month, plus water and some maintenance fees, which came to an additional $95 per month. This did not include the monthly electricity bill, which at that apartment complex was estimated to run between $150 and $200 a month. In short, the housing cost would add up to roughly around $2,000 per month. For her to afford this rent according to HUD standards, she would have to have a monthly income of $6,000.
In reality, she made far less than that. And after she shared her monthly debt payments with me, I calculated that the Smith family had about $1,500 left over to pay for rent, utilities, food, clothing, medical needs, gas to fill up the car, and any other necessities. I concluded that the monthly housing cost the Smith family can realistically afford is $500 at most.
Before you start judging the Smith family, consider that Mom Smith has been working full-time. Some of her biggest debts are car payments and medical bills. She is a survivor of domestic violence and getting her children in a safe environment has been her priority.
Do you think she will find a safe, healthy place for her and her children to live for $500 a month in Nashville?
About one third of Americans are renters, and according to the U.S. Census, about 49 percent of those renters are cost burdened. That means they pay more than 30 percent of their gross income for housing costs.
The federal Department of Housing and Urban Development (HUD) describes affordable housing the following way, “Affordable housing is generally defined as housing on which the occupant is paying no more than 30 percent of gross income for housing costs, including utilities.”
According to the information I have, the Smith family should pay no more than $1,000 a month for housing and utilities based on their gross income from her full-time job. By the way, the Smith family’s monthly income is too high to get them to qualify for currently available assistance. And if they apply today for a federal housing subsidy to supplement their rent in Nashville, it will take an average of about two years — if they’re one of the lucky families — to get approved for a Housing Choice Voucher (Section 8). The reason is that Congress only funds enough vouchers for one in the four extremely low-income families that qualify for it.
This example clearly shows that the biggest affordability issue in this country is a lack of a living minimum wage combined with a lack of access to affordable housing. No wonder families have become one of the fastest growing populations in homelessness, next to individuals 65 and older. It’s not just the working poor that suffer, but the middle class — and that includes older adults who have worked all their lives — who are increasingly forced to make decisions between paying for medication, food or rent/mortgage.
Mom Smith’s dream is to get out of debt, increase her income, and eventually purchase her own home. However, that dream of homeownership seems to be moving into an increasingly distant future for her and for many Americans.
Or is it?
This is where social housing comes in as one of the options for people to consider and governments to invest in.
The Alliance for Housing Justice defines social housing the following way:
“Social housing is a public option for housing. It is permanently and deeply affordable, under community control, and most importantly, exists outside of the speculative real estate market.
“Social housing can exist in different forms. It can be owned by public entities, residents or mission-driven nonprofits and occupied by renters or homeowners. It includes public housing, community land trusts, new construction, existing affordable housing, and conversion of current market-rate housing, and should meet the scale of the housing crisis.”
Here in Nashville, one form of social housing that recently has garnered some attention is a cooperative housing project called the Cottages at Drakes Creek, which is a 60-unit property located in Goodlettsville. It is the first cooperative housing project in Davidson County.
A housing cooperative, according to the National Association of Housing Cooperatives, is a form of homeownership where a property is collectively owned and controlled by its residents.
The cooperative owns the land, building and common areas, and residents purchase a share in the cooperative and obtain the exclusive right to occupy a specific unit. In essence, they own the unit.
Stephen Watts, cooperative housing developer with the Southeast Center for Cooperative Development (see Q&A here), said, “Cooperative housing is resident-owned, resident-controlled housing properties.
“When we’re thinking about homeownership, usually we’re thinking about maybe one person or one family owns a home. The difference between cooperative housing is you’re looking usually at bigger properties,” Watts explained. “You’re looking at properties [where] ownership is collectively shared among the residents. Residents have governance power.
“They make the decisions about what monthly payments are going to look like, about prioritizing property repairs and managing property management. So all of those things that you normally think of a homeowner doing, cooperative housing is that, just on a much bigger scale.”
In cooperative housing, the goal is to keep monthly costs as low as possible “because the annual equity is capped at a certain amount,” Watts said. “So if homeownership or a homeowners’ association is colluding to raise home prices, co-op homeownership is colluding to keep prices low.”
This focus, he said, is what makes it possible for people to come and buy into this property at low and affordable rates in the future.
Watts explained that Drakes Creek was an existing, 60-unit rental property that was built about 30 years ago. The Southeast Center for Cooperative Development, William Franklin Buchanan Community Development Corporation (formerly The Fifteenth Avenue Baptist CDC), and Free Hearts submitted a joint application to the Barnes Fund and received about $7 million to start what is now Nashville’s first limited equity housing cooperative.
A limited equity cooperative legally is a corporate entity. It is “a type of affordable residential arrangement in which residents purchase shares in a cooperative corporation that owns the housing property,” as described by the Legal Information Institute of Cornell Law School. “In exchange for the right to occupy a unit, residents buy a share at below-market cost and pay ongoing monthly fees to cover operating expenses.”
The Legal Information Institute further explains on its website that the limited equity cooperative differs from market-rate housing cooperatives in that they limit how much equity a resident receives when they leave the cooperative. “The resale price is capped by a formula, often tied to inflation or a small percentage of appreciation, to ensure that the unit remains affordable for future residents. These restrictions prevent owners from capturing full market appreciation, preserving long-term affordability.”
Cooperative housing models are not new and have been around in the U.S. since the mid-twentieth century. Usually, they are financed through a mortgage that covers the entire building with all its units and operated by a nonprofit cooperative corporation.
That’s where the Southeast Center for Cooperative comes in at Drake’s Creek with Watts as the advisor and coordinator to help residents establish and run a smooth operation.
“There are two parts of a housing cooperative,” Watts explained. “There’s the housing part, that’s self-explanatory, that’s the physical development. But then there is also the cooperative piece.”
Watts describes his job as helping the new homeowners form a residence board that is capable of governance. Specifically, in a housing cooperative, residents buy equity shares and manage the building through bylaws and a democratically elected board. When I spoke with Watts, he highlighted the importance of creating a power shift in which residents develop their own voice and learn to advocate for themselves and their community.
When a resident decides to leave, they sell their shares back to the cooperative for the initial price paid, adjusted for inflation, plus some additional allowances made for improvements to the unit while they were living there. All of that is based on a formula that is outlined in the bylaws. This approach ensures the affordability of the units for future residents.
When we talk about upward mobility and wealth-building, homeownership is an important part of the conversation. While a cooperative housing model as described here may not lead to huge payouts once homeowners sell their units, the benefits are still tangible once low-income residents understand the concept.
For one, low-income homeowners are no longer beholden to the landlord for maintenance and rent increases that — as we have seen in Nashville — can quickly become unattainable, forcing people to move. Instead, what formerly were rent payments turn into a monthly maintenance fee that goes to the cooperative. That fee is applied to the mortgage, insurance, and other operational expenses to maintain the property.
Secondly, even in a limited equity model, property owners gain some equity, increasing their wealth. And while many cooperative housing models, such as Drake’s Creek, limit the income level of new owners, their housing cost does not increase proportionally once they earn more.
Drake’s Creek is also utilizing a land trust, which holds the land upon with the building stands to ensure that the property remains permanently affordable. However, recent difficulties in turning Drake’s Creek into a housing cooperative have surfaced, as described in a recent Nashville Banner article by Eden Turner (see their piece from March 25, 2026).
The main issue that surfaces is that Barnes Fund dollars required that residents can only participate in the housing cooperative when their income is at or below 50 percent of the Area Median Income, which leaves some renters unable to join, dashing their hopes of being part of this housing cooperative.
If all of this sounds complex, then we need to talk about the reality that housing in the United States has become a commodity for the rich while the poor are left to fight for themselves. And before you blame individuals for their plight, consider that a full-time worker making minimum wage is unable to pay the average market-rate rent of an apartment on a 40-hour-a-week income.
In order to make the safe choice and leave an abusive situation, Mom Smith and two kids had to live in unstable housing for more than a year. She paid for motel stays and slept in her car with her kids when the money ran out for motels, all while she was deemed to make too much money through her full-time job to qualify for any government assistance right here in Nashville.