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As I understand it, a condominium is an owned residence in a multipule unit building in which you pay mortgage and property taxes, just as you would for a house, plus a monthly maintenance fee to cover repairs, and upkeep of common facilities. A co-op is an arrangement where you pay rent just like a regular apartment renter, but you also own a share of interest in the property which is not tied to your physical allotment of space (although your rent presumably is).
So: Why is it that you only ever hear of co-ops in reference to New York City?
…?
There’s a ton of co-operative housing in Ontario, Canada.
It’s non-profit housing. The rent goes towards paying property taxes and maintaining all the units, landscaping and amenties and whatnot, as well as helping to subsidize some really low income people’s rent. No one is reaping any big cash rewards, the funds accured from the rental fees, are thrown into a pot to benefit the Co-op.
Kinda socialist, really…
Is it different in them thar parts?
Hoo, yeah. In New York, a coop is just what the OP described – an “apartment building” in which “tenants” own shares in the corporation which in turn owns the building. Basically, when you buy a coop, you’re buying a right to lease certain space in the building and shares in the corporation proportional to the amount of space you’re occupying (three bedrooms get more shares than twos, etc.). You also agree to pay into a maintenance and tax fund as decided by the board of the corporation. No one is subsidizing anyone. It’s a little socialist, in the sense of common ownership, but it’s not like the guy in the penthouse pays extra so the poor guy in the basement studio can have his space at a below-market price.
Three primary reasons for coops in NYC. First, condos were illegal in New York State until 1964. Second, condos can’t have an underlying mortgage. Since most coops were conversions from rental units, allowing a mortgage on the building in addition to a “mortgage” (really a form of margin loan) on the units allowed landlords to maximize profits in a conversion by taking his capital out early and selling the units over time rather than all at once at potentially fire-sale prices. Third, coops can be more exclusionary – condos aren’t allowed to approve who may buy units, whereas coops can control who may buy shares. While it’s illegal to exclude buyers for all the standard reasons, it is legal to exclude a buyer for no reason at all.
Dunno why they’re not more widespread outside NY, though.
The law which authorizes them is a State law, not a city one, so they’re theoretically legal anywhere in the State of New York. But I have a strong hunch that only in NYC is there the population concentration that makes being part-owner of the corporation that is your landlord, along with your co-renters, a beneficial idea, as opposed to owning a condo or renting and apartment.
I do know of one building, a beautifully preserved 1930s barracks structure in brick and concrete, on a large lot on a lakeshore, which is zoned and offerable as high-end condos. or a co-op., if someone has a couple mill. of venture capital to sink into it to complete the conversion process. I mention it here not to promote a commercial venture, but because it is a potential co-op. situation over 300 miles from the Big Apple, though within NYS. It’s the only instance I know of where a co-op. is even speculatively promoted outside NYC, though.
Syracuse dopers? There was talk ten years ago about using the co-op. mechanism north of Armory Square as part of the rehab. of that area – did anything ever come of that?
Another co-oper here (yes, we have them outside of Manhattan [the boro, not the guy]). I’m in a studio a little less than 600 sq. ft. with a galley kitchen and closets barely wider than the door that opens onto them and about as shallow as Britney Spears. It’s also on the next-to-lowest floor with a view of some trees and the backyards on 237th St. Comfortable little place, though, good enough for a few years until I get the dough to move to Manhattan (the boro).
So, I pay one of the lowest “maintenance fees”, which is roughly analogous to rent in that it pays the super’s and porter’s salary, my water and heat (thrilled about this as in Boston it’s usually separate and it drove me crazy each winter), my taxes to the city, and basic repairs for things like plumbing catastrophes and structural integrity. However, if the faucet leaks I’m responsible for it; I pay my own electricity and cable and modem bills; the super is nice but he doesn’t paint for us or anything like that, etc. It went co-op in the early 80s and there’s still tenants who pay their rent to the original owners of the building (their possible Mafia ties helped keep the building from deteriorating or getting burned during the rough times of the 70s), but when they move or more usually get carried out feet first, the apartment is sold. Most of the tenants are elderly and under rent stabilization, which is not quite rent control; the rest get modest hikes every year but I don’t believe their rents have any relation to the owners, or are subsidized by the building except via our property taxes. Loooong waiting list for apartments and prices go up every year. 
No furry pets allowed but kittycats can be found here and there. There’s a non-mandatory building-wide meeting every May, and some bitching is done by the usual suspects but mostly it’s nice and businesslike.
Co-op boards in NYC are, each and every one, a little gang. This part of the city isn’t like some of the legendarily snobbish Fifth and Park Ave. boards, or the hyperactiveSome of the boards are like Woody Allen movies, whining and complaining but getting things done in the end, and some are like the Godfather movies, inapproachable and vaguely corrupt and spending our money in weird ways (our lobby had some weird cheap late '80s wallpaper and furniture from a disreputable board back then). Ours is like LOST IN YONKERS, mostly nice and efficient (new roof and laundry machines, and they’re steadily replacing the tubes in the 1959-vintage boiler) but forget about digital modems or a satellite dish or having dishwashers–who needs that newfangled stuff? If somebody brings it up they’ll type up a ‘survey’ and slip it under everybody’s door and see who bothers to reply–under 50% and forget it, the building’s not interested (of course, owner’s average age is about 50 or so).
I like it, but I know it’s an unusual arrangement for most of the country. Good solution for those of us who can’t afford 1.2 mil for a townhouse but don’t want to move all the way out of Purchase or Hempstead.
D’oh! Forgot to mention that each month I also pay a mortgage to a bank like anybody else. And you’d think buying a single apartment wouldn’t be as complicated as buying a real house, mortgage-wise, but nooooo. Needed a lawyer and everything.
Nice thing is, people in the building were helpful and recommended a good lawyer and banks and stuff.
Another note: Tenants who were here during the conversion, apparently, could choose to stay renters as I mentioned before, but were also able, as most of them did, to buy their units at an especially low rate. Most of them have seen them triple in value at least. 
Dunno if it’s relevant, but about a year ago I met a gal who lived in a Manhattan coop. She and her husband are lawyers and the place they live is apparently quite fashionable - grand, even. Certainly very expensive.
And she said the coop board was a goddam nightmare. They apparently love to jerk people around, spend money foolishly, fail to do important building repairs, etc. She said that she and her husband were planning to sell out (if the coop board would ever approve a buyer, which they often fail to do) soon, and she’d never in a thousand years again buy into a coop.
New York real estate lawyer, co-op owner and co-op board member here, and I’ll echo what Manhattan and Mehitabel said, They are not just limited to New York City, but are fairly common in the near suburban counties of New York State and New Jersey as well.
One thing to realize is that New York Co-ops have a long history, dating back to the 1870’s (pdf file on history of Co-ops), and started and were popularized well before condominiums.
When the southwest quadrant of Washington DC was redeveloped – when poor people were thrown out so the gentry could move in – in the early 60’s, the replacement structures were townhouses and apartment buildings. About half of the new resident owned structures were co-ops, the other half condos. Building projects were erected to house some of the poor that were originally dispaced.
As a aide note, Alcoa or Kaiser helped finance one of the co-op buildings, they used it to showcase the use of aluminum in multistory buildings.
Co-ops are also found around the SF bay area - the big difference, in ownership, is that, with a condo, you buy the interior walls, and the INSIDE surface of the external walls - that is bankable interest, and can be mortgaged - in a co-op, you own not physical property, and (conventional) financing is impossible; plus, as already noted, the membership committte can sink just about anyone (usually be requireing proof of past income of 4-5 times the monthly dues, plus a very good expectation of future income of such ratio. A condo usually runs 3x what a similar co-op would.
There is also a legal construct “Tenants In Common”, of which I do not know the details, but they sound like smal-building co-ops.
You can finance the purchase price of a co-op, I opened a fairly standard 30 year mortgage from a big mortgage company to buy mine. The only difference was a slightly higher interest rate and more forms to fill out.
The co-op board does have the right to tank anyone as long as it’s not for a protected reason. My board wanted your income to be about 3x your mortgage/maintenance costs. They actually rejected my first set of buyers, which turned out to be a boon, because my second buyer paid way more, as the market went up.
Indeed, condo’s in my area (Hartsdale, NY at the time) were far more expensive than co-ops. I never quite figured out why, since I got a cheap price to get a nice apartment for a few years, and made money on the resale. I might have made more on a condo, but my monthly costs / downpayment might have been beyond my means.
Tenants in common is not related to the type of building or form of ownership, but it is the manner in which co-owners may own property. The usual way is in joint tenancy, but co-owners may elect to own as tenants in common, especially if they are not related or if they wish to have unequal interests in the property.
If you own a condominium unit, you own the entire unit and have an undivided interest in the “Common Elements,” which usually consist of the general common elements (yards, amenities, etc.) and limited common elements (outside walls, driveway, etc.). A condominium need not be an apartment. It could be a house, and often is a townhouse. That brings up the distinction between a townhouse and a condominium in a townhouse development. Many townhouses are now developed as condos. If not a condo, you run into party walls, having to describe the various easements of ingress and egress and other easements in lengthy legal description in every deed, and various other problems which are simplified in a condominium setup.
The problem with co-ops, and both Illinois and SC no longer use this type of development, is that you don’t purchase any real estate in which you own 100% interest, but you purchase shares in a corporation that owns the building and land, and your interest in your unit is limited to the percentage of shares purchased. This does involve mortgaging difficulties. Mortgages can be had, of course, but if there is a default and the mortgage has to be foreclosed, all the shareholders of the company must be made parties.
Some figures from the U.S. Census Bureau’s American Housing Survey.
Total occupied co-op units in the U.S. in 2001: 570,000
New York City, NY metro area (1999): 165,600
Chicago, IL metro area (1999): 17,200
Los Angeles-Long Beach, CA metro area (1999): 10,100
Philadelphia, PA-NJ metro area (1995): 5,800
Boston, MA-NH metro area (1998): 4,300
Atlanta, GA metro area (1996): 3,600
Houston, TX metro area (1998): 2,500
Seattle-Everett, WA metro area (1996): 1,900
Phoenix, AZ metro area (2002): 1,800
St. Louis, MO-IL metro area (1996): 1,200
Denver, CO metro area (1995): 1,000
co-ops have shared liability too