Housing affordability has nose-dived in many countries, locking out many families from the dream of owning homes and forcing many into a rental market further entrenching inequality. Housing cooperatives are seen by many as a good alternative but have not gained mainstream popularity.
Housing cooperatives can trace their origins to 19th century Berlin, and today are most popular in central and northern Europe, as well as North America, especially Canada. They vary slightly in form, but all have occupants as member-owners, managing the housing democratically and collectively.
The lack of profit extraction compared to rental units run by landlords, for instance, means housing cooperatives are often more affordable. Student housing co-operatives in the UK have shown to be dramatically more affordable than comparable private rentals in the same city, allowing occupants to keep more of their paycheck.
Julie LaPalme, Secretary General of Cooperative Housing International, says they help build strong families and communities, thanks to the cooperative principles of member control and concern for the community.
“Residents of cooperatives are bound together by a housing model that is not top-down like most other types of housing. When your voice matters and when you have security of tenure you are more likely to establish roots and bond with your neighbours, said LaPalme.”
She cites how an extensive study conducted by urbaMonde and WeEffect on the impacts of COVID-19 had on housing co-operatives saw very few evictions during lockdowns and were able to generate income collectively. In addition, neighbours who know one another support one another during hard times.
This combination of affordability and security helps strengthen families and have them bond with their communities, but they can also look further outward often being strong proponents of principles of a circular economy. LaPalm explains how housing cooperatives in countries like Sweden, Norway, and Switzerland are leading the way in sustainable construction practices and eco-friendly measures.
“HSB, a cooperative housing organization in Sweden, prioritizes sustainability through the use of renewable materials, climate-improved concrete, and a focus on reducing their climate impact. They have set ambitious climate targets for achieving a climate-neutral operation by 2040,” LaPalme explains.
La Ciguë, another housing cooperative in Switzerland has an energy production system, which uses two 10,000-liter water reserves to store solar energy for hot water and heating. This system has the potential to fully power the building with renewable energy.
The Edinburgh Student Housing Co-operative’s repurpose of an unused garage into a versatile space that serves as a common room, meeting venue, and event space.
“They prioritized sustainability by using renewable and reclaimed materials, such as reclaimed gym flooring and wood wool insulation, and minimized the use of concrete and petroleum-based products,” explains LaPalme.
Despite their obvious and plentiful advantages to members housing cooperatives remain rare in many countries as large sums of capital are needed, and not plentiful among potential members.
LaPalme stressed that partnerships with different lending organizations are key to creating new housing cooperatives.
“Numerous cooperatives have established solidarity and accelerator funds to spearhead development. Other cooperatives have developed funding mechanisms through ethical finance and public partnerships.”
In Switzerland, La Ciguë, benefitted from “The Bond Issuing Cooperative for Limited Profit Housing” which was established by the government in 1991and the cooperative housing movement. The purpose is to raise affordable financing for non-profit housing. This gives the Swiss housing co-ops access to capital that may otherwise not be available, and is a key reason why in Zurich, 23% of the housing market consists of housing cooperatives.
In Central, Southeastern and Eastern Europe, the MOBA Accelerator is a unique financing instrument for and by MOBA’s novel community-led housing cooperatives in Central, South-Eastern and Eastern Europe (CSEE).
“The MOBA Accelerator helps community-led housing projects in Central, South-Eastern, and Eastern Europe have greater access to financing options that were previously unavailable,” adds LaPalme. “This instrument has helped pilot projects overcome the challenging start-up phase by providing short-term bridge loans. With the support of the ABZ solidarity fund, MOBA’s Accelerator has already proven to be a successful financing model that benefits housing initiatives in the region.”
While capital is key, leadership is also a necessary ingredient.
“Both WeEffect and Rooftops Canada have played a vital role in sharing knowledge and experiences with other organizations, policymakers, and communities,” stressed LaPalme. “Through their support, many housing cooperative initiatives have been established in developing countries, providing affordable housing to those in need.”
Housing cooperatives can provide solutions to housing issues, but the cooperative movement needs to empower more to be formed to empower communities and build a more sustainable economy.