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Cooperative housing in Europe: current situation and future perspectives

Luciano CaffiniPresident Legacoop Abitanti and CECODHAS Cooperative Section

Valencia, 5 March 2012

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What is CECODHAS Housing Europe?

CECODHAS Housing Europe is the European federation of public, cooperative & social housing, a network of national and regional federations gathering 44 members in 19 EU members States + Norway and Switzerland.

Altogether they manage over 27 millions dwellings, about 12% of existing dwellings in the EU.

In 2009, our members have built about 332 000 new dwellings and renovated about 234 000. 

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Who do we represent?

In absolute terms housing cooperatives (34867) are the most numerous local housing providers within our membership, followed by housing associations (3929), publicly owned housing companies (1657) and privately owned (not-for profit or limited-profit) housing companies (632).

almost 35 thousand housing cooperatives which vary significantly in size

34867

3929

1657 632 269

Housing cooperativesHousing associationsPublicly owned companiesPrivately owned companiesOther

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Housing Cooperatives within CECODHAS

Through the national federations, CECODHAS Housing Europe represents about 35 000 housing coops, providing over 10 million dwellings, and accounting for over 11 million members co-operators.

Direct members: Cooperatives in 15 EU member states +

Associate members: Cooperatives in Norway and Switzerland

CECODHAS Cooperative Section: = Housing sector of Cooperatives Europe= ‘European region’ of ICA Housing

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Size of cooperative housing sector in Europe

Source: CECODHAS Survey 2011. Note: figures only refer to CECODHAS members

Size of housing cooperative sector (number of dwellings, 2009)

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

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Cooperative housing sector share of the housing market

Note: figures only refer to CECODHAS members

Share of dwellings in housing cooperatives out of total national housing stock

0% 5% 10% 15% 20% 25% 30%

France

Belgium

Italy

Spain

Germany

Hungary

Estonia

Denmark

Austria

Norw ay

Sw eden

Czech Republic

Poland

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Cooperative housing in a nutshell

A housing cooperative is a housing business in the form of a consumer cooperative mutually owned by its members, which operates in accordance with the Cooperative Principles and Values.

The cooperative housing movement has a long history. The first housing cooperatives were formed in the mid-19th century, when Viktor Aimé Huber initiated the construction of several dwellings in Berlin. Today, housing cooperatives are increasingly widespread in Europe and beyond.

There are different cooperative housing models in the different countries, but what characterises housing cooperatives compared to other housing providers is that they are jointly owned and democratically controlled by their members, according to the principle of “one person, one vote”. This has clear implications for the way they operate compared to other actors on the housing market and benefits not only their members but also the public interest.

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Different models of cooperative housing

Two main ownership models: Most common is the equity model (or coop home ownership): the

member has some kind of ownership stake in his or her unit, or holds shares in the cooperative as a whole. Typical of Scandinavian countries (Sweden, Norway) but also Spain, Portugal, Ireland. It can be: Individual ownership = the resident member holding full (most common in Eastern Europe), or partial title to the housing unit. Or collective ownership= the cooperative owns units and common parts and members receive a contract, right to occupy the individual housing unit on a permanent basis.

Non-equity model (or rental coop): the member has no ownership stake, he pays a rent and has to surrender the housing unit back to the cooperative if he leaves. Non-equity cooperatives are usually non-profit. In many parts of Canada and the United States, Germany, also Austria, Danmark, Belgium, Switzerland

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Current issues specific for housing cooperatives In Sweden, Norway and Germany, co-operative housing development

was enhanced by the establishment of savings and loan schemes for members wishing to save a deposit towards their co-op membership shares.

Still changes in the legal framework for coops in Eastern European countries, which may change the statutes of cooperatives (Estonia for example concerted into association of homeowners, Poland...)

‘Dilemma’ of scale: small scale better link with neighbourhoods and democratic governance, but need to increase efficiency by merging into bigger organisations

In many countries housing cooperatives participate in the provision of social housing as they are entitled to access dedicated public funding schemes (Austria, Italy, Spain…), but this type of financing is decreasing

In general as a consequence of the crisis more difficult to access credit from banks and at same time less demand for housing for sale: cooperatives are adapting to these trends by reducing production (Italy, Spain..)

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Trend in housing production in Europe

House building

Construction production index (quarterly, 2007-2009)

-5.00

-4.00

-3.00

-2.00

-1.00

0.00

1.00

2.00

2007Q2

2007Q3

2007Q4

2008Q1

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

European Union (27 countries) European Union (15 countries)

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Challenges: construction costs

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Challenges: decrease of public funding

Average governemnt expenditure on public services in Europe

5.4

5.6

5.8

6.0

6.2

6.4

6.6

6.8

7.0

7.2

7.4

2002 2003 2004 2005 2006 2007 2008

European Union (27countries)

European Union (15countries)

Euro area

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Lack of affordable housing, new forms of vulnerability The deep economic downturn and austerity measures have led to the

increase of the levels of poverty and housing exclusion Especially hard hit are the young adults, the low-skilled and

migrants, and single parents

40.4

49.8

41.039.1

47.4

42.939.7

33.8

22.9

33.531.2

21.8 22.7 22.6 22.1 23.2

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Total Single person One adul t olderthan 65 years

Two adults Two adul tsyounger than 65

years

Two adul ts wi thone dependent

chi ld

Two adults wi thtwo dependent

chi ldren

Two adults wi ththree or more

dependentchi ldren

Below at ri sk of poverty threshold Total

Average housing costs as % of disposable income by household type for total population and those at risk of poverty in EU, 2009

Source: Eurostat

Lack of affordable housing: people spend on average 22% of their income on housing, 41% in case of the poor

Emerging demand for affordable, intermediate housing solutions even from middle class households who don’t qualify for social housing: potential for cooperatives?

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Challenges: socio-demographic change

Ageing: EU population oldest in the world. 17% of the population is over 65 (Germany, Italy, Greece). Number of >65 set to increase by 44% by 2050, and number of those >80 by 180%

Migration: in most EU MS international migration plays a major role in population growth. In 2003-2007 net migration between 11.64 and 2.04 million: 84% of total EU population growth.

Youth: approximately 46% of young adults aged 18-34 in the European Union still lived with at least one of their parents (44% cannot afford to move out)

Households: shrinking households’ size since 1960. Between 2005 and 2009 the average number of people per household in Europe decreased from 2.5 to 2.4

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Challenges: environmental sustainability Fuel poverty: Europeans dissatisfied with the affordability of

energy (-2.2). 9% of respondent to the EQLS 2007 declared they cannot afford to properly heat their home, 17% in New MS.

Climate change: In 2006 residential sector account for 10,38 % of the emissions of greenhouse gasses (EEA), while the whole construction industry is responsible for 40%. Potential CO2 reduction in the sector trough renovation existing dwellings is about 75% (ILO)

Quality of the environment: 59% respondents to EQLS report two or more environmental problems in their neighbourhood (air pollution, lack of green areas…)

Regulation: efficiency standards, all new buildings to be ‘nearly zero energy’ by 2020

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…Cooperative solutions?

Affordability & stability: in many cases housing cooperatives manage to offer housing at price/rent below market levels. More cost-stability (since not subject to shareholder interests) and security of tenure. Many examples of long term sustainability of co-operatives: for instance Co-op L’Aurora in Italy recently celebrated its centenary.

Response to changes in housing demand (increase in provision of rental housing/intermediate tenures, housing for elderly people, for students, young couples…)

Response to residents’ needs in terms of services (from care services to cultural and sports clubs…)

Solidarity & cooperation with other social economy actors (from services providers to cooperative banks)

Flexibility in structure (mergers, creation of ‘satellite’ enterprises such as insurance, saving institutions..)

Attention for sustainability and innovation in the energy field (renovation of housing stock, SHE, Power House Europe..)

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3 MAIN EUROPEAN UNION POLICIES

• COHESION• ANTI-POVERTY• SOCIAL PROTECTION• SSGIs

• INTERNAL MARKET• COMPETITION• STATE AIDS• VAT RULES

• ENERGY• ENVIRONMENT• WATER• LAND protection…

• EU STANDARTS• EU LEGISLATION• RESEARCH• EU FUNDS ? • GREEN VAT ?

• LEGISLATION• EU FUNDS• OPEN METHOD OF CO-

ORDINATION (OMC)• BEST PRACTICES

• LEGISLATION• CONTROL • NOTIFICATION• DISPUTE – ECJ

RULING

HOUSING POLICY « FRIENDLY »

HOUSING POLICY « FRAMELY »

HOUSING POLICY« COSTLY »

SOCIALENVIRONMENTAL

ECONOMIC

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Opportunities and recent success

Cohesion policy: 8 billion Euros available to finance energy refurbishment in buildings (up to 4% of ERDF) + more money for housing renovation/construction for marginalized communities (up to 2% of ERDF): not all cooperatives are eligible. Currently enlarged scope in the proposal for next period (2014-2020): including coops

New opportunities for projects on energy efficiency in buildings: IEE 2012 call, ICT call for energy efficiency in social housing

New energy production cooperatives: tenants as co-operators New energy efficiency services companies: also developed by housing

cooperatives New partnership with cooperatives banks: access to finance at better

condition to deliver affordable homes and special services to co-operators

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… Thank you for you attention!

Contacts:legacoopabitanti@legacoopabitanti.coop

alice.pittini@housingeurope.eu