24 October 2018
Wales has strong links to the co-operative movement. Robert Owen, from Newtown, was one of its pioneers in the 19th century. He improved the working and living conditions of staff at his cotton mills and is regarded as a great social reformer and father of the movement in Britain.
That commitment from Robert Owen to improve not only working but living conditions through co-operative principles lives on in Wales. This blog focuses on co-operative housing in Wales, where we are now, and plans for the future.
What is co-operative housing?
Housing co-operatives are groups of people who collectively own/rent and manage their accommodation – from shared houses, to blocks of flats, to entire housing estates. Collectively they take responsibility for arranging repairs, making decisions about rent and who joins or leaves the co-operative. There are many different forms of co-operative housing – that could apply to all forms of housing tenure (home ownership, shared ownership or rented housing, either at market or affordable rent). However, in all forms of co-operative housing:
- There is a democratic community membership of a housing organisation where all members have an equal nominal share (usually £1) giving them the right to vote on matters affecting the co-operative; and
- The co-operative housing organisation has control over the homes in some way – and in some cases – collectively own and manage them.
Different kinds of housing co-operatives
There are different forms of co-operative housing:
Rental co-operative – a co-operative in which the member has a nominal share (typically £1 or £5). Members pay a monthly or weekly rental charge to the co-operative for the right to occupy a home owned by the co-operative. Like a tenant, when a member leaves the co-operative they surrender or transfer their occupancy agreement and their nominal share is forfeited. Members have no interest in the value of the property they occupy – they pay rent.
Market value co-operative – Sometimes known as a co-housing co-operative, in which the collective ownership of the properties that members occupy is held in the co-operative. Members are free to buy and sell their home (or the right to occupy it) at a market price. Often access to mortgages for individual members are provided via the co-operative itself (but funded by banks). The role of the co-operative becomes principally that of a building manager handling communal and structural repairs and providing other member services.
Limited equity co-operative – A co-operative in which members have a share in the capital value of the co-operative home they occupy. The collective co-operative is funded, in part, directly by the member providing personal finance. The co-operative part of the cost of provision of the member’s home is funded through a corporate mortgage loan to the co-operative. The member pays their own finance costs and a monthly payment that services the co-operative’s loan and management and maintenance costs. When a member leaves they are entitled to sell or assign their occupancy rights with their limited equity share at either a regulated price (to keep it affordable) or at an open market price for the sale and purchase of the limited equity share and the occupancy rights that go with it.
Co-operative Housing in Wales Project
In 2012, the Co-operative Housing in Wales project started with eight pioneer schemes. Three of those pilot projects – in Cardiff, Carmarthen and Newport – received £1.9 million from the Welsh Government in August 2013.
In 2017, the Welsh Government provided Wales Co-operative Centre with almost £150,000 to support the Co-operative Housing in Wales project. The Co-operative Housing in Wales project aims to:
- Assist the progress of developing co-operative housing schemes in Wales;
- Support the development of a variety of different housing co-operative models; and
- Improve the skills and expertise of the members of co-operative housing schemes in Wales to ensure their sustainability.
Building Homes, Creating Communities, Changing Lives
The Wales Co-operative Centre has developed a strategy – Building Homes, Creating Communities, Changing Lives – to maximise the impact of co-operative housing in Wales. Working with the Confederation of Co-operative Housing, Rural Housing Enablers, the Welsh Government and other partners, the strategy aims to:
- Scale up co-operative housing with more schemes and more people benefitting from them;
- Contribute to the Welsh Government’s target of 20,000 affordable homes;
- Develop and put into practice a means of assessing the performance and impact of housing co-operatives; and
- Increase the diversity of co-operative housing schemes, spanning tenures, potential income levels and meeting diverse housing needs in rural and urban communities.
- The strategy also has five key objectives:
More co-operative housing schemes, working with more partners;
- Developing an online support resource (like the Housing Associations’ Charitable Trust toolkit which the Wales Co-operative Centre contributed to) – develop online guidance, including podcasts and video materials, setting out key issues regarding the development of co-operative housing, enabling communities, local authorities and housing associations to understand what is involved and what potential options are available;
- Expanding options – explore new and innovative approaches to meet the needs and aspirations of those who become interested in co-operative housing;
- Developing support structures – welcome new partners into the Stakeholder Group, and identify how best to support formal and informal networks between the developing co-operative housing organisations; and
- Developing impact methodology – develop and implement a common method through which the impact of new co-operative housing groups and the outcomes from the co-operating housing schemes can be assessed.
Where is co-operative housing in Wales?
Co-operative housing can be found across Wales. The map below shows the existing developments – a number of others are planned in the near future.
The Co-operative Housing in Wales Project is funded by WG until March 2019, alongside this the project receives funding from the Nationwide Foundation to bring in specialist advice and expertise to help groups move forward with their co-operative housing schemes.
According to the Wales Co-operative Centre, over the coming months the Co-operative Housing in Wales Project will continue to work closely with local authorities and registered social landlords to identify potential schemes that can be allocated to co-operative housing.