Tenant Opportunity to Purchase (TOPA) policies provide tenants living in multifamily buildings with advance notice that the landlord is planning to sell their building and an opportunity for them to collectively purchase the building. It turns potential eviction and displacement into tenants having the power to shape what happens next in their housing journey –  and can create opportunities for tenants to become homeowners, helping to close racial homeownership and wealth gaps. TOPA is an emerging anti-displacement tool that can be used to preserve affordable rental housing stock, keep housing with community hands, and stabilize Black and Brown communities that have long faced displacement, disinvestment, and exclusion. These policies generally require landlords to provide an “intent to sell” notice to their tenants, along with a timeframe for the tenants to form a tenant association and express interest in purchasing the units, and an additional timeframe for the tenants to secure financing. By providing tenants with the right to negotiate and collectively bargain to purchase their buildings, TOPA policies level the playing field in highly speculative markets. Keys to successful TOPA programs include: 

1. Clear Timelines for Notice and Acquisition: In order for tenants and other preservation buyers to be prepared to make offers on buildings, a clear and realistic timeline must be established for steps to be taken towards acquisition. Advance notice of sale is one part of the equation, requiring landlords to provide plenty of notice before they put the property on the market. Then, a period during which tenants or preservation buyers state or register their interest in purchasing the property - often referred to as “registration of interest” - must be established. Next, a negotiation period is needed for interested buyers and current owners to finalize a price and other sale terms. Buyers are then given an amount of time to secure financing. Finally, all parties are given a maximum number of days for closing.
    
2. Technical Assistance Across the Spectrum: Necessary technical assistance starts with public education and awareness so that residents understand their rights, resources and opportunities to negotiate future tenure or purchase their home. In addition, funding for tenant organizing is key because organizers help with both getting neighbors organized to the point at which they want to pursue ownership together, and navigating the acquisition process itself. Lastly, legal expertise is required to guide tenants through the complicated landscape of real estate transactions and whatever policy or regulation they are exercising to buy the building. Sometimes, homeownership training is made available to prospective buyers. In other scenarios, non-profit organizations like land banks are necessary partners to initially acquire properties and steward them until development financing is finalized.
    
3. Financing From Beginning to End: Like any development budget, tenant ownership of housing requires financing tools. One of the most important aspects of financing is how quickly it can be mobilized. Real estate transactions move quickly, and fast capital is the best capital because it allows tenants to respond to the rapidly evolving market. The types of financing that buyers need includes: pre-development financing, acquisition loans, rehabilitation or construction loans, and permanent financing. Oftentimes, the buildings that tenants or preservation buyers want to buy are in poor condition due to landlord neglect or a lack of capital improvements. That should be accounted for by offering rehabilitation or construction loans to improve the material conditions of the home. Lastly, loans should be offered with little to no-interest so that residents can keep units affordable.
    
4. Long-Term Support for Building Management and Sustainability: Once buildings are transitioned to tenant or community ownership, a commitment to the complexities of shared ownership and leadership is necessary for long-term success. If a board of member owners is created to manage the property, support may be needed from cooperative housing organizations to facilitate and manage that leadership body. Property management duties, from calculating members’ shared equity to financing capital improvements, may require stewardship support as well.

As an anti-displacement tool, TOPA policies and programs can stabilize households facing displacement pressures and provide an opportunity for long-time residents to stay in their neighborhoods and purchase their homes. Furthermore, TOPA is a way for communities to regain control of their homes and futures while simultaneously combatting the financialization of housing. In Washington, DC — home to the nation's oldest and most comprehensive TOPA program — TOPA has been used to develop or preserve over 16,000 affordable units, giving tens of thousands of tenants a seat at the table in negotiations over the sale of their building. TOPA can also be a cost-effective method for cities to preserve their affordable housing stock since preserving existing housing costs less than building new affordable homes.

Cities and states can also consider developing Community Opportunity to Purchase Act (COPA) policies as an alternative or to complement a TOPA policy. COPA allows a qualified nonprofit to make a first offer to purchase a building with low-income tenants if the property owner decides to sell. COPA should be carefully crafted with tenants and nonprofit partners such as community land trusts, limited equity housing cooperatives, and other affordable housing providers. While only a few cities and states have developed policies that allow for the purchase of unsubsidized housing, a number of cities and states have provisions that allow for the purchase of subsidized affordable housing in order to preserve affordability. 

In addition to PolicyLink tools and resources, see the Partnership for the Bay’s Future, the DC Fiscal Policy Institute, and Local Initiatives Support Corporation (LISC) for more resources related to tenant/community opportunity to purchase policies. Read our piece in Nonprofit Quarterly about how community ownership strategies advance housing justice.

• Elected and appointed city and state officials can champion, pass legislation, and allocate funding for the creation of robust and intentional TOPA/COPA programs.
   
• Tenants are at the frontlines, organizing for expanded tenant rights, leading TOPA campaigns, and developing TOPA policies.
   
• Tenant advocacy groups like UHAB support tenants in becoming cooperative homeowners, from providing co-op shareholder trainings to helping a co-op board create a budget for building maintenance.
   
• Community-based organizations can serve as potential purchasers or partners providing outreach, education, and organizing support to tenants.
   
• Community development corporations (CDC) and community development financial institutions (CDFI) can partner with tenant groups to find pre-development, acquisition, and rehabilitation financing.

The most effective TOPA/COPA policies are developed in partnership with tenants and housing advocates and include dedicated funding and infrastructure to proactively inform tenants about their TOPA/COPA rights, support tenant organizing, and help tenants finance the purchase of buildings.

Cities and states seeking to implement TOPA/COPA policies must consider a range of related legal and logistical questions.

• Tenant empowerment: TOPA policies can be a tool of empowerment and self-determination for tenants, giving them the ability to participate in the sale of their homes. Opportunity to purchase harnesses tenants' collective power as they form tenants' associations to make decisions about purchasing, what organizations to partner with, and how to secure funding and legal counsel. Upon a tenant purchase, residents have democratic control of their building and can address repairs, maintenance, and renovations as they best see fit. Even when TOPA doesn’t result in tenant ownership, it creates a seat at the table for tenants to participate in negotiations over the sale of their building. This can result in winning rent control provisions for tenants, preservation of affordability through low-income housing tax credits, or extending Section 8 contracts to maintain federal subsidies in buildings.  
   
• Preserving affordability: Typical TOPA/COPA programs are reserved for tenants earning at or below 80 percent of the area median income (AMI). TOPA/COPA helps preserve affordable housing options for low-income residents. This is particularly important for communities facing displacement pressures and at risk of being priced out of their homes and neighborhoods. Cities and states should ensure purchasers through TOPA/COPA can agree to maintain the property as long-term affordable through deed restrictions or requiring the property to enter a community land trust.
   
• Unit and tenant eligibility: Cities and states should consider whether TOPA should apply to subsidized properties to preserve dedicated affordable housing or if it should also apply to unsubsidized properties to preserve rental housing in general. Strong TOPA policies such as that in DC cover both types of properties and help better preserve the availability of rental units and mitigate displacement. Policymakers must also determine the eligibility of potential purchasers, such as tenants at or below 80 percent AMI. Policymakers should offer all tenants the opportunity to purchase by making all rental units eligible for TOPA and to best mitigate displacement.
   
• Timing and notice provisions: TOPA should provide an adequate timeframe for tenants to organize and form an association, make an informed decision, secure funding, and put an offer together. Timing and notification periods should include ample notice of intent to sell to tenants and should outline timeframes for notification, statements of interest, negotiations, and time for residents to secure financing and financial assistance if needed. All notices should be provided in writing and typical notice periods range between several months to several years.
   
• Second right of refusal: If tenants choose to forgo their TOPA rights, they should have the opportunity to assign their TOPA rights to a qualified affordable housing provider, community land trust, or other nonprofit. To preserve affordability, policymakers should ensure the third-party purchaser will maintain the property as affordable. Policymakers and tenants can also consider a second right of refusal for municipal governments such as Washington DC's District Opportunity to Purchase.
   
• COPA and TOPA: While these policies are related, they differ in important ways. With TOPA, tenants are empowered to negotiate directly in the sale of their building or can choose to assign that right to another entity, while with COPA, that ability is given to a list of qualified nonprofits. Which policy is better will depend on policy goals, market conditions, capacity of local housing nonprofits, availability of funding and financing, and capacity for tenant organizing and education.
   
• Adequate funding: Cities and states should dedicate funding to adequately support all aspects of a TOPA/COPA program to ensure its success. This should include funding for tenant outreach, education, technical assistance, enforcement, and a fund to assist tenant or community purchases such as a housing trust fund.
   
• Outreach and education: In addition to ample notification periods, tenants need substantial information, outreach, and resources to make decisions about TOPA/COPA and actualize their rights.
   
• Technical assistance: Cities and states should provide robust funding to offer adequate technical assistance, including legal counsel and representation. Washington, DC's TOPA program funds support staff at community organizations to support tenants in exercising their TOPA rights. Residents often need support post-purchase and cities must continue providing strong technical assistance to help them succeed as first-time homeowners.
   
• Enforcement: Cities and states should outline enforcement mechanisms and ensure adequate staffing to enforce a TOPA/COPA policy effectively. The policy should also give tenants a legal recourse outside of the municipality, such as third-party enforcement, to strengthen enforcement and provide residents with greater recourse options.
   
• Complementary Policies: TOPA/COPA policies are most effective when paired with robust tenant protections, financing, and ownership tools that slow down the real estate transaction process and assist tenants in locating funds. Advance notice of sale policies that require property owners to submit a notice of intent to sell to the city give tenants more time to organize and prepare for a sale. Right of first refusal policies give tenants or non-profit developers the right to match any purchase offer that the property owner accepts on the private market when selling their property. Making acquisition and preservation an eligible use of local housing trust funds is a critical way to ensure tenants or non-profit developers have funds available to buy property in a fast-paced real estate market. Lastly, using the community land trust model as the underlying ownership structure of the acquired land and property is one way to reduce the long-term cost of ownership.