How many people in Wales are trapped in rented accommodation when they would prefer to own their own home? Recent research published by the Wales Co-operative Centre suggests that there is an identifiable group of people who feel stuck in the private rented sector who would be interested in co-operative housing
Research into the potential demand for co-operative housing in Wales was commissioned by the Wales Co-operative Centre and undertaken in conjunction with the Confederation of Co-operative housing and the Chartered Institute of Housing Cymru. It suggests there is an appetite for a supply of co-operative housing options in wales. Co-operative approaches appeal to individuals and families looking for housing choices that offer a heightened sense of community alongside tangible home ownership.
The research identified a group of ‘reluctant renters’ – individuals and families who often earn reasonable wages but can’t afford to buy their own homes independently. Members of this group often can’t afford to save for a large deposit, yet can earn too much too qualify for social housing. Co-operative housing offers these ‘reluctant renters’ both an escape from private renting and real property ownership.
A housing co-op is a housing organisation where members democratically control and manage their homes. There are three basic approaches to co-operative housing:
• The first is a rental model where tenants rent from an owner co-operative. This is often the more affordable approach but usually 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.
• A promising limited equity mutual model 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.
The Welsh Government made a commitment in its Programme for Government to ‘develop and promote new ways of providing land and funding for housing, such as community land trusts, mutual home ownership and co-operatives’. In August 2013, housing and regeneration minister Carl Sargeant announced a £1.9 million investment in co- operative housing in Wales.
Since November 2012 Dave Palmer of the Wales Co-operative Centre has been running a project, funded by Welsh Government and Co-operative Membership Cymru/Wales, to support a series of pilot co-operative housing projects in Wales.
‘Co-operative Housing may offer an innovative solution to the housing crisis in Wales,’ he says. ‘Although co-operative housing is often seen as a niche approach in the UK, it is a mainstream element of housing supply in economies where mortgages are difficult to obtain or house prices too high.’
In Turkey, 25 per cent of the total housing stock is co-operative housing. In Germany, co-operative rented housing makes up 10 per cent of the total housing stock, 2.2 million units. In the United States, co-operative housing accounts for just 1 per cent of the housing stock, a figure which is comparable to Wales. However, 1 per cent of stock in the US is equivalent to 1.2 million housing units.
Co-operative housing is affordable and it offers long term stability and security in safe, democratic communities. The approach is flexible enough to meet most occupiers needs.
‘In fact,’ Dave Palmer continues, ‘our research showed that the respondents were very interested in the potential that co-operative housing offered not just for ownership, but in its potential for helping develop a strong sense of community within these new build developments.’
The research was commissioned to better understand how to take forward co-operative housing and community ownership. It focused on a number of emerging pioneer projects in Wales, but also referenced other projects around the country. Over 250 respondents completed an online survey. The study suggested that there is an appetite for co-operative housing in Wales. Research participants responded overwhelmingly positively to the principles and housing models demonstrated in the research. This is particularly the case for households who are currently priced out of the owner-occupied sector.
A high proportion of respondents indicated that they were interested in the benefits co-operative housing can offer in creating an intentional community: a community that works on shared values and principles and creates an environment where home owners know each other. The potential for developing ‘community’ in such a way is an intangible benefit but one that is very attractive to potential co-operative home owners beyond their obvious need for affordable homes.
If co-operative housing is to meet housing needs the major area for agencies to focus on is these ‘reluctant renters’ who want more security. The research also showed that there is existing demand for co-housing which would require no public subsidy, although practical support will be required to assist in the development of schemes.
The Wales Co-operative Centre is supporting a number of pioneer projects in Wales. Dave Palmer explains: ‘The projects we are working with are ready to begin work on delivering a number of co-operative homes. The funding recently announced by Welsh Government will assist in the building of these homes in three of our pilot projects and will help demonstrate that co-operative housing can offer a viable alternative housing option in Wales.’
In Cardiff, approximately 40 co- operative homes are being developed in partnership with Cadwyn Housing Association at Ely Farm, which is just over the river from the large Ely Mill development and will be connected to it via a footbridge. In Newport, Charter Housing Association is developing a large estate which is looking at incorporating co-operative housing, utilising a leasehold equity scheme approach. Carmarthenshire County Council is exploring three sites across the local authority area to develop a social and intermediate rent model and focussing the developments on a scheme in Ammanford.
The three main pilot schemes are progressing well and the Wales Co- operative Centre hopes to see these schemes at a ‘shovel-ready’ stage in early 2014.
Dave Palmer sees a bright future for the co-operative housing approach. ‘The long term hope with these “pilot” co- operative housing schemes is that whey will become self financing,’ he says. ‘This will take time and involve a certain amount of culture change. If the demand for co- operative housing is there and the potential exists to kick start it now with the help of Government and RSLs there is no reason that co-operative housing can’t become a mainstream housing choice in Wales in the future.’
Action for the future
The report proposed a number of recommendations that the Wales Co-operative Centre and the partner organisations will be taking forward. These included:
• Maintaining a register of people interested in co-operative housing but not living in areas covered by the pioneer schemes at present
• Undertaking work at local and national level to promote the benefits of co- operative housing
• Housing associations facilitating the development of a co-operative housing development need to invest time in a local awareness raising campaign to maximise consumer interest in membership and participation in future schemes
• Focussing on inclusivity and in contacting harder to reach groups in all promotions.
• Welsh Government and the housing sector in Wales should consider what
sort of mechanisms can be put in place to provide advice, support and assistance to co-housing groups in Wales, to assist them to move proposed developments forward.
• Welsh Government should consider how it supports groups of co- operators and housing organisations beyond the conclusion of the project based at the Wales Co-operative Centre.
For further information on the Co-operative Housing Project or to request a copy of the full research report, please visit the Wales Co-operative Centre website http://www.walescooperative.org or call the centre on 0300 111 5050.