Lincoln Woods opened three decades ago, an idealistic housing cooperative unlike most developments, a place created with the idea that residents would help run the community where they lived.
Those who moved in - residents of low and moderate incomes, as well as those who paid market-value rent - bought shares in the community, giving them equity in Lincoln Woods.
But now the largest affordable housing development in Lincoln, a town that has struggled to meet state affordable housing requirements, is mired in financial trouble.
Last month, the development signed an agreement with a nonprofit group that would take over Lincoln Woods, ending the community’s run as a cooperative, one of a few around the state. Residents, who will vote on the proposal, would become strictly tenants.
“You will become a tenant at will,’’ said Carole Gnatowski, who moved into Lincoln Woods 25 years ago. “You lose control and you lose ownership. I don’t want that.’’
For decades, the complicated business model of Lincoln Woods worked. But in more recent years, problems arose, since the cooperative’s rules dictate that as the mortgage - held by MassHousing, the state’s affordable housing arm - gets paid down, the share prices go up.
Today, those shares cost an average of $18,000 for each unit. The charitable arm of the community that loaned money to low- and moderate-income new residents, helping them come up with enough money for the share prices, is running out of money.
“It wasn’t a problem in the beginning, and it wasn’t a problem midway through the game,’’ said John Scotti, president of Lincoln Homes Corporation. “But now, as the share values have increased, we’re starting to cannibalize the very market that we want to sell shares to. Finding new residents gets difficult because the cost of moving into Lincoln Woods goes up and up and up.’’
Last month, the development signed a memorandum of understanding with The Community Builders to acquire Lincoln Woods, pay residents the value of their shares, and run Lincoln Woods as a rental property. Although the development would still be open to low- and moderate-income residents, they would lose their portion of ownership in the development. Residents must now vote on the change.
The Community Builders couldn’t be reached for comment.
Lincoln Woods offers a rare chance to live affordability in Lincoln. The median price for single family homes sold in town the first five months of this year was $1,010,000, according to The Warren Group, a figure 13 percent lower than the same period last year. The town of about 2,300 doesn’t have many rentals. And yet rents for Lincoln Woods range from $487 to $709 per month, for those who qualify to live in the low-income units; and $595 to $891 per month for the moderate income units. The market-rate units range from $1230 to $1772 per month.
About one-quarter of Lincoln Woods’s 125 units are for low-income residents, about a third for moderate-income, and the rest - 42 percent - rent at market value.
Town officials are eager to keep the same number of affordable units in Lincoln Woods. Now, only the development’s mortgage with MassHousing requires the community to continue to offer affordable housing. Under any new agreement with The Community Builders, town officials would like to see a permanent deed restriction guarantee that the community keeps its affordable units, said Selectman Gary Taylor
“The town would be concerned about losing any of the affordable units in a restructuring,’’ he said.
Even with Lincoln Woods, and newer affordable housing units in town, Lincoln still may fall short of the required number of affordable housing units after the 2010 census. State law requires towns to keep at least 10 percent of their housing units affordable. Otherwise, developers who want to build affordable housing developments can bypass zoning regulations. Since Lincoln’s population is estimated to increase slightly, the town will likely need an additional five or six units of affordable housing in 2010, said Renel Fredriksen, chair of the town’s housing commission.
Among affordable housing developments in the state, cooperatives like Lincoln Woods are rare. Nine of the developments MassHousing is involved with - including one in Lexington - are cooperatives, according to Tom Farmer, a spokesman for MassHousing.
Residents who move into Lincoln Woods pay rent, but they also must buy co-op shares in the development. (If they leave Lincoln Woods, they are paid for their shares.) Since share prices require a hefty amount of cash, low and moderate-income residents can apply - and most do - for loans from the Lincoln Woods Charitable Trust. But as share prices have increased, the charitable trust has nearly run out of money.
Some Lincoln Woods residents are wary about the changes, fearing they will have less control over their development if it’s no longer a cooperative. Gnatowski, her husband, and their 2-year-old daughter moved to Lincoln Woods as moderate-income residents. They now pay market price for their two-bedroom unit. But she fears what will happen to their rent if the cooperative is dissolved and residents do not share the governance of Lincoln Woods.
“We could be priced out of here after 25 years,’’ she said.
Gnatowski, like many other parents in Lincoln Woods, was drawn by the chance for her daughter to attend Lincoln’s well-regarded schools, and the convenience of the units to the commuter rail station and a grocery store. Still, she said, Lincoln Woods carries the stigma of low-income housing.
“You’re not one of the wealthy people,’’ she said. “It’s tough for people to grow up here. You’re in the town, but you’re not of the town.’’
Kathleen Burge can be reached at kburge@globe.com. 
