Funding for Housing Co-ops
Do you want to set up a housing co-op with government funding?
There are over 250 housing co-ops registered with a government body called the Housing Corporation, which provides funding for and monitors housing co-ops. Most ownership co-ops were established under the more generous grant subsidy regimes in the 1970s and 1980s.
Most of these housing co-ops are fully mutual (that means that all their tenants are members of the co-op and have a right to be involved in the co-op). These co-ops own, manage and control their properties, but many buy services from agencies or other housing associations, or employ their own staff.
Most co-ops elect a management committee which organises the day to day business of the co-ops, but all members of co-ops make the overall policy decisions of the organisation.
All of these co-ops received some public funding to build or renovate their properties, the consequence of which is that the co-op has to take half of its nominations from the council.
Organisations can only get public funding if they also raise private loans and other funding. Ever decreasing grant funding throughout the 1990s and irresponsible development by housing associations has led to escalating rent levels in housing associations and there is now a growing recognition that the policies of the 1990s did not work.
The housing co-operative movement is now investigating, long frozen out of being a major player in developing homes, because Government preferred the large scale housing solution, is now considering how it can once again become a viable alternative for a greater number of people in the country.
Do you want to set up a housing co-op without government funding?
There are a growing number of housing co-ops that have set up over the last 10 years without the use of public funding.
This partly because public funding has not been readily available, and partly because the co-ops involved do not want to work within the limitations that the public sector imposes.
This sector, although a minority of housing co-ops, has played a key role over the last 10 years, because it has been the only sector that has been able to consistently been able to develop new housing co-ops.
Housing co-ops set up in this way raise the cost of the properties they buy through approximately 70% mortgage from building societies or other lenders, and the rest of the money comes from issuing loan stock ( a means by which ordinary people can lend money to a co-op), through various fund raising activities or through donations.
Because of the high costs of private loans, many of the co-ops set up in this way are shared houses, where tenants have separate rooms, but share facilities.
Members of the co-op are often involved in carrying out renovation work and day to day repairs and through this learn many useful skills.
Some of the co-ops set up in this way have links with worker co-operatives, which can also provide employment for some of the co-op members.
A organisation called Radical Routes provides support services to help these kind of housing co-ops set up.
Radical Routes have published a booklet called "How to set up a housing co-operative" that contains a lot of useful information on how to set up housing co-operatives. It is available from Radical Routes, c/o Cornerstone Housing Co-op, 16 Sholebroke Avenue, Chapeltown, Leeds LS7 3HB and costs £5.
