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Longtime Co-op Creator Matt Cropp Turns His Attention to the Housing Crisis


Published October 11, 2022 at 10:00 a.m.

Matt Cropp outside the Oak Street Co-op in Burlington, which houses local eateries Poppy and Café Mamajuana - JAMES BUCK
  • James Buck
  • Matt Cropp outside the Oak Street Co-op in Burlington, which houses local eateries Poppy and Café Mamajuana

When Matt Cropp was in sixth grade, he saw firsthand the line between the haves and have-nots.

That was the year he transferred from a Baltimore-area elementary school to the pricey St. Albans School, a prep school for boys in Washington, D.C. Cropp's mother was an art teacher there, which granted him access to a place that Business Insider lists as one of the most expensive private schools in the country.

"There were people with giant piles of money," Cropp said. "That definitely made me much more conscious of the levels of disparity in day-to-day life."

Cropp, now 35 and a Burlington resident, is still keenly aware of those inequities. He sees them in Vermont's housing crisis: As real estate prices escalate, homeownership opportunities erode for people with modest means. Rising rents are forcing people out of their homes, and he'd like to do something about it.

That's why Cropp — the executive director of the Vermont Employee Ownership Center, whose career has given him in-depth knowledge of co-ops — has turned his attention to cooperative ownership of housing. In 2020, he and others founded Vermont Real Estate Cooperative, a business that enables Vermonters to collectively own and manage commercial and residential real estate. Shares in VREC cost $1,000 each, and any Vermont resident can join.

Shareholders in a co-op housing company earn profits just as in other investor-owned businesses, but those profits are limited by design. In the co-op model, maximizing the company's benefit to society takes priority over making as much money as possible. So, for example, instead of raising rents to make more money for shareholders, a housing co-op's goal is to provide fair, stable rents for tenants — an important objective, Cropp said, at a time when housing is in short supply and rents are climbing.

At the Vermont Real Estate Cooperative, member-owners can earn up to a 6 percent annual return on their investment, depending on profits.  Renters receive a small refund when there is a profit after paying shareholder dividends. Members who are also tenants would get both. 

In 2021, the business bought its first property, a commercial building in Burlington that houses Good News Garage, a nonprofit that runs a vehicle donation program. VREC member Julia Curry said the difference for tenants is that, as a landlord, the co-op is values-driven — though she noted that the previous owner of the Good News Garage was also committed to helping the community. Although co-op ownership might not mean rents are lower than those in neighboring buildings, it does mean the tenant has some assurance rents won't rise sharply as demand for commercial space increases.

"We are committed and, in fact, legally required to kind of cap our profits, so we'll never be looking to extract the maximum profits that the market would allow," she said.

VREC is now is 50 members strong. Most, like Curry, are people who have been part of the co-op movement in Vermont for years. Curry met Cropp through her work on the board of Burlington's City Market, Onion River Co-op, where he volunteered.

"There's a little bit of a co-op ecosystem in Burlington and, to a smaller extent, around the state," Curry said. "These are people who really value co-ops as a model."

Now VREC is working to recruit more members, with the goal of raising up to $2 million to buy an apartment building with four to 12 units in Chittenden County. When the co-op has acquired five properties in the Burlington area, the founders will start looking at another market in Vermont, Cropp said. They want to move quickly.

"Given how much suffering and pain is out there in the housing market right now, with the desperation you see, how quickly can we have an impact?" Cropp said.

Creating VREC comes naturally to Cropp, who watched his father, a doctor, struggle with mental health problems. These landed his father in Cropp's grandparents' basement and in a series of other inadequate living situations.

"As I got older, it started to become clear what happens when the supports fail or don't really work," Cropp said of his father's situation. "Sharing space, being flexible, taking on risks you otherwise wouldn't — [that] would be unimaginable to people with more resources."

After graduating from the University of Vermont with a degree in psychology and history in 2007, Cropp briefly tried social work. But in a time of financial collapse sparked by predatory lending, he found himself drawn to the idea of member-owned credit unions.

"Here was a model that looked like a realistic alternative," he said.

For his master's thesis, Cropp wrote about the first 25 years of the Vermont State Employees Credit Union. Since 2014, he's been helping companies create employee ownership arrangements through his job at the Vermont Employee Ownership Center. In 2015, he and others founded Vermont Solidarity Investing Club, paying $20 to $400 apiece to join and invest in local cooperative ventures. Cropp also cofounded the Oak Street Co-op in 2020; it owns the building that houses local eateries Poppy and Café Mamajuana.

"I'm something of a co-op nerd," he said.

Cropp, who serves as treasurer of VREC, would like to amass a sizable real estate portfolio in Vermont. The group hopes to find its first residential building through word of mouth.

"If we can find a friendly seller who wants to exit in a way [that] long-standing tenants aren't going to be displaced, that's the best-case scenario," Cropp said. If VREC bought a building with existing tenants, they wouldn't have to join the co-op.

In the future, it's possible that VREC could build an apartment building. For now, the goal is to reach a point where the co-op owns enough real estate to support paying a staff to manage the rentals.

VREC's bylaws intentionally are not a secret: The business will share them with anyone else who wants to start a housing co-op in Vermont.

"We want to encourage everyone to join to help ramp this up," Cropp said. "But if they want to get things going faster where they are, this is a compelling model."

The original print version of this article was headlined "Chief Cooperator"