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Crisis at Rocky Mountain Mutual Housing Association
Abstract
Rocky Mountain Mutual Housing Association (“the Mutual”) was a not-for-profit affordable housing organization incorporated in Denver, Colorado, in April 1992. The Mutual was founded for the purpose of acquiring, developing, and managing affordable multi-family housing to meet a growing social need for low cost affordable housing. The idea of “mutual housing” was based on a European residential model which provided permanent housing to anyone who was motivated to meet the obligations and challenges associated with homeownership. A fundamental feature of the Mutual’s mission was to provide services to its residents in a variety of areas, including job training, after-school programs, and homeownership programs. |
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Issuess
The case is structured to achieve the following teaching objectives:
- To understand the consequences of aggressive growth pursued at the Mutual, a non-profit organization;
- To provide students with the opportunity to evaluate the Mutual’s future; and to decide whether the Board should pull the plug or continue with its commitment to provide affordable housing and other social programs for its low income members.
Keywords
Corporate governance; Strategic management; Financial distress; Governance & due diligence; Non-profit management