David Palmer, Co-operative Housing Project Manager at the Wales Co-operative Centre, looks at some of the challenges and approaches for developing co-operative housing in Wales.
Co-operative housing is seen as a niche approach in the UK. Yet in other countries it has grown to become a major element of their housing approach, offering affordable housing in economies where mortgages are difficult to obtain, savings difficult to accrue, or house prices too high for average buyers at the bottom end of the market. In Turkey, 25% of the total housing stock is co-operative housing. In Sweden, it amounts to around 18% of the total and in Germany co-operative rented housing makes up 10% of the total rental housing stock – a massive 2.2 million units. In the UK, the percentage of co-operative housing is just 0.6%.
Co-operative housing can offer an alternative model of home ownership in Wales, but for the approach to be successful, the focus must be on quality, affordability and security of tenancy. These are important to ensure that potential co-operative members aspire to live in such schemes, but they must also be financially viable options for anyone struggling to get on the housing ladder. Exceeding the Welsh Government’s Development Quality Requirements and Code for Sustainable Homes – Level 3, would ensure that the homes are not just attractive investments, but also contribute to environmental targets and mean that homes are cheaper to run in the long term.
The Wales Co-operative Centre has been successful in its bid to Wales Government to deliver a project which will investigate the barriers to developing housing co-operative schemes in Wales and support communities and organisations to develop co-operative housing schemes through the provision of advice and expertise.
There are three basic approaches to co-operative housing. First is a rental model where tenants rent from an owner co-operative. This is often the more affordable approach but offers less involvement and ownership.
Another approach is a model where co-housers can invest equity according to their means and the investment by co-operators does not have to be of equal value.
The third is a promising limited equity mutual model which allows individuals to make an investment in their home and realise that increased equity when they move. This form of Mutual Home Ownership Scheme allows individuals to buy into the co-operative property at an agreed market value and, when they choose to leave, sell their share at the current market value.
These models are not mutually exclusive and the approaches can sometimes work together.
A number of pioneer projects are in development across Wales. It is hoped that some of these models can then be replicated in other parts of Wales. In Cardiff, Cadwyn Housing Association is developing a project to build at least twenty five homes. A large amount of preliminary research and development work has already been undertaken and Cadwyn are considering the Mutual Home Ownership approach.
Seren Group are leading on a ‘Garden Village’ style project in Newport on a former Government owned site, with potential for over 200 homes, some of which could be co-operative. The proposal would offer 40% of the homes for sale and 60% for affordable housing (rented and shared ownership). The project aspires to a mixed approach and is looking to engage with the community to stimulate interest and involvement.
In Carmarthenshire, the council is considering potential sites which could provide 100 to 150 homes and community engagement is in its early stages.
There are a number of other emerging schemes including a self build site and a Community Land Trust in North Wales, a live-work centre in the Vale of Glamorgan, refurbishment of existing properties in Merthyr, a Youth Training Social Enterprise at Bron Afon Community Housing and exciting and innovative schemes in mid Wales, together with the potential for over 300 homes.
The Centre has commissioned research into identifying and developing the potential market for co-operative housing in Wales. This research will focus on these pioneer projects, but will also reference other projects around the country. The findings from this research will be applied across Wales and will be relevant to all the pioneer schemes and any new schemes starting up. The research will also be used to develop and stimulate demand for co-operative housing.
Within the next 5-10 years, Wales could become a leader in co-operative housing in the UK. Our work will go some way towards achieving that aspiration.
For more information on the co-operative housing project, please contact David Palmer at david.palmer@walescooperative.org