Hedges states his views on co-operative housing in Wales

A CO-OPERATIVE FUTURE FOR HOUSING IN WALES?
By Mike Hedges AM – Assembly Member for Swansea East

With the average age of first-time buyers being 37 and expected to rise to 40, it’s perfectly clear that the current housing system needs to be changed. Hefty deposits, the difficulty in securing affordable mortgages from lenders, and the overall lack of good quality housing are among the main reasons that have attributed to the continuous rise in the average age of first-time buyers.

For many people, the dream of buying their first home has been put on the backburner, and the only remaining options are to either move back in with their parents or to rent a property for over a long period of time with the aim of saving up enough money for a deposit. Despite this, the idea of home ownership still remains the ultimate goal for the vast majority of people in the UK.

The UK has, after all, been traditionally dominated by two types of housing tenure models, namely that of owner occupation with or without a mortgage and that of rented accommodation either privately or from a social landlord. In other parts of the World however, there is a third form of housing tenure which seems to be growing rapidly in support; this being housing co-operatives.

Under a housing co-operative tenure, members of that co-operative have the collective power to manage the accommodation between them. This involves taking responsibility for duties such as arranging repairs, maintaining the property, and making decisions about the rent. As the decisions are made by the members, the principles of both community ownership and democracy are placed at the very heart of housing co-operative models.

There are strong co-operative housing sectors in countries ranging from Sweden, Norway, Canada, Austria and Turkey, to name but a few.  In Sweden for example, two large co-operative organisations provide over 750,000 homes which equates to around 18% of the total population of the country living in co-operative housing. In Canada, which began developing housing co-operatives in the early 1970’s, there are now over 400,000 living in Co-operative homes.

To put these figures into a domestic  perspective, there are more co-operative housing homes in just Vancouver alone than in the whole of the UK, with housing experts estimating that less that 1% of people in the UK live in a housing co-operative.

The idea of introducing and developing housing co-operatives in the UK is not a new one. In fact, the idea was previously considered by the former Conservative Government of John Major back in 1992. The then Government asked the management consultants, Price Waterhouse Coopers, to investigate both whether or not housing co-operatives generated a greater level of personal and social benefits in comparison to traditional housing tenure provisions, and also whether housing co-operatives would create affordable, long-term solutions for the housing market.

The investigation lead to a report being published by the Conservative Government in 1995 entitled “Tenants in Control: an evaluation of tenant-led housing management organisations”, which, to the astonishment of many, concluded that co-operative housing models not only were cost-effective but also provided their members with a vast number of benefits.

Subsequent reports and investigations into housing co-operative models have since reinforced the findings of the originally PwC report, as well as identified other potential benefits for its members.

For instance, being part of a housing co-operative gives members the opportunity to use existing skills or even develop new skills. They provide members with a stake and vested interest in where they live and can help reduce any dependency tenants have on landlords or the state itself.

In terms of the social benefits, housing co-operatives can help promote community cohesion and integration as well we play a role in reducing vandalism and anti-social behaviour in the surrounding area. In some cases, other community services such as child care and social activities for members arose from being part of a housing co-operative.

On a further note, housing co-operatives give tenants control over the property rents, building services and contractors, and also over any rent arrears. Any surpluses made by the housing co-operative can then be reinvested into the property, depending on the will of the membership.

Despite these considerable benefits, the question inevitably remains as to why we are not seeing co-operative housing models implemented and developed in our communities?

The simple answer to this question is down to our arcane feudalist land and property laws which still exist today. Under the current system, there is what can be described as an “inherent conflict of interest” presumption between the rights of a tenant and the property owner, and as such, does not recognise or take into account housing co-operative tenures, where property is owned jointly by members of that co-operative. The presumption of a “conflict of interest” would hence be absent in a housing co-operative model, as the principles of democracy and commonality of interest are placed at the centre of the model.

In my opinion, the current land and property laws with the in-built perception of tenure feudalism are not only out-dated but present a major obstacle to the establishment and development of the housing co-operative sector in this country. Despite the current situation, there is light at the end of the tunnel.

The Welsh Government’s Minister in charge of housing, Huw Lewis AM, has made it absolutely clear on a number of occasions that he intends to pursue a robust co-operative housing agenda in Wales to help address the housing shortage our country faces, and to do this, the Minister accepts that there must be a change in the current system.

It’s also worth acknowledging the outstanding work being done across the border by the Labour Co-op MP, Jonathan Reynolds, in the form of his Co-operative Housing (Tenure) Bill, which was brought before Parliament in October 2011. This promising Bill, which was introducing under the Ten Minute Rule, seeks to end the feudal nature of laws that govern land and property ownership in England by creating a co-operative model as a new form of tenure. The Bill has received the backing from a number of prominent MPs, including David Miliband, and is due to return to the House of Commons for a second reading on 30th March 2012.

Let’s hope that the UK Coalition Government pick up where John Major’s Government failed and show some real decisiveness and action by getting behind this tremendously worthwhile Bill, which will help towards tackling the distinct lack of good quality housing in England.

What’s clear is that more work has to be done, especially in these difficult financial times, to help people get a foothold on the property ladder at an early age. It’s my belief that the time has come to reach beyond the “traditional” and “conventional” housing tenure options by looking at other alternatives and options to satisfy our housing needs.

Co-operative and mutual housing models provide us with a viable, sustainable solution that has the potential to radically change the way we view and think about housing altogether.

Three things will need to be done in order for us to see housing co-operatives in our communities. First of all, there needs to a change in the current law to make the creation of housing co-operatives easier; secondly, lenders need to be convinced of the security of their lending which may entail a Welsh Government underwrite, and thirdly; housing co-operatives along with the potential benefits they produce need to be promoted and publicised so that people will be enthused into creating and joining them. None of these points are achievable without the political will to achieve it.

With the National Assembly for Wales’ new primary law making powers, changing the law to establish and promote a legally separate co-operative housing tenure is now feasible. We have a determined Welsh Housing Minister that is committed to driving the housing co-operative agenda forward, and I have no doubt that if one person can make this idea of co-operative housing a reality, then Huw Lewis is certainly that person.

The year 2012 is the official UN International Year of Co-operatives; what better way to celebrate and mark this significant occasion than by reforming our out-dated land laws and giving co-operative housing models the legal recognition they deserve on the statute books. Whilst co-operative housing will not solve all of the housing problems Wales faces, I believe it will certainly be a respectable start.

,