Edited by Nic Bliss people in co-operative and mutual housing ... communities can’t be trusted to make decisions. ... National and local political will has to

Edited by Nic Bliss

www.ccmh.coop

Edited by Nic Bliss

www.ccmh.coop

Published by Commission on Co-operative and Mutual HousingISBN 978-0-9564332-0-6Copyright © Commission on Co-operative and Mutual Housing 2009www.ccmh.coop

Edited by Nic BlissDesigned and produced by Homer Creative

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Adrian Coles (Chair)Director GeneralBuilding Societies Association

Diane BellingerChief Executive OfficerCommunity Gateway Association

Sarah Anne BergerCo-housing Network

Nic Bliss (report editor)*Chair Confederation of Co-operative Housing

Gavin Cansfield*Chief Executive OfficerTower Hamlets Homes

Terry Edis MBE FRSAChair National Federation of Tenant Management Organisations

Pauline GreenChief Executive OfficerCo-operativesUK

Dr Chris Handy OBE*(Executive Commissioner)Chief Executive OfficerAccord Housing Group

Blase Lambert* Treasurer Confederation of Co-operative Housing

Gun-Britt MårtenssonCECODHAS – the European Liaison Committee for social housing

Bruce MooreChief Executive OfficerHanover Housing Association

John Morris*Chief Executive OfficerTrident Housing Association

Professor Alan Murie*University of BirminghamCentre for Urban and Regional Studies

David OrrChief Executive OfficerNational Housing Federation

Ben ReidChief Executive OfficerMid Counties Co-operative

David Rodgers*Executive DirectorCDS Co-operatives

Sarah WebbChief Executive OfficerChartered Institute of Housing

* Members of the Commission’s research sub-group. John Goodman from Co-operativesUK was also a member of the sub-group

The Commission on Co-operative and Mutual Housing

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Contents

With thanks to:.............................................................................................4

Bringing Democracy Home

Executive summary ...................................................................................5

1 Co-operative & Mutual Housing

what’s that all about then? .............................................................9

2 Housing – where do we go now? ................................................13

3 What do people out there want? ................................................19

4 Co-operatives and mutuals?

What’s different about them? .....................................................29

5 Well, so what’s the big deal? .......................................................37

6 Myths and realities .........................................................................49

7 So what’s it like in other parts of the world? ........................55

8 Making it happen..............................................................................61

Appendix - proposals for action ..........................................................71 A summary of the Commission’s recommendations by organisation

The Commission’s sponsors:Accord Housing GroupCDS Co-operativesCommunity Gateway AssociationConfederation of Co-operative HousingCo-operativesUK

Hanover Housing GroupHousing Associations Charitable TrustHuman City InstituteLiverpool Mutual HomesMatrix Housing PartnershipM.E.L ResearchMid Counties Co-operativeTrident Housing AssociationWATMOS Community Homes

Organisations who assisted Commission hearings:All Party Parliamentary Group on Housing Co-operativesand community Controlled HousingBirmingham Co-operative Housing ServicesBristol Co-operative Development AgencyCDS Co-operativesChartered Institute of HousingCo-operativesLondon, Co-operativesNW, Co-operativesScotland, Co-operativesSE,Co-operativesSW, and Co-operativesWM

Co-operativesUK

Co-operative Housing in PartnershipCo-operative Housing in ScotlandEast Midlands Tenant Participation ForumHousing Associations Charitable TrustLocal Government AssociationLondon Federation of Housing Co-operativesNational Housing FederationNational Tenant Voice Project GroupNorth West Housing ServicesRedditch Co-operative Homes

Case studiesBelgrave Neighbourhood Co-operative HACommunity Gateway AssociationHomes for Change Housing Co-operativeLiverpool Mutual HomesRedditch Co-operative HomesSanford Housing Co-operativeShahjalal Housing Co-operativeSt Mungos and Outside InWATMOS Community Homes

People/organisations who made submissions:ABC Southwark Housing Co-operativeB-line HousingBuilding and Social Housing FoundationChartered Institute of HousingCHIBAHCllr Bill Hartnett, Redditch Co-operative HomesCommunity Gateway AssociationConfederation of Co-operative HousingEast Midlands Development AgencyEmilia LaszcykGlyn ThomasNational Housing FederationNew Longsight Housing Co-operativeSarah Blandy – University of LeedsTAROETenant Services AuthorityTPASUK Co-housing Network

OthersTrevor Bell, NFTMOJeremy Carson, Friday Hill TMORobbie Erbmann, Co-operative PartyJohn Goodman, Co-operativesUK

Kevin Gulliver, Human City InstituteDebbie Hanley, Trident Housing AssociationDawn Hendon, Accord Housing GroupKelly Hunt, M.E.L ResearchMartin Kovats, London Borough of SouthwarkPeter Marsh, Tenant Services AuthorityNicola Parlby, LHA/ASRAMoseley and District Churches Housing AssociationRob Pocock, M.E.L ResearchDawn Prentice, Human City InstituteRob Rowlands, University of Birmingham Centre for Urbanand Regional StudiesLynn Spirrett, BITMOLaura Shimili, Local Government AssociationJon Stevens, BCHSTamzin Taylor-Rosser, St Basils

PhotographsSupplied by organisations featured in case studiesAdditional images supplied by Bob Kauders Photographyand the Accord Group

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With thanks to:

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The independent Commission for Co-operative andMutual Housing was launched in 2008 to research theEnglish co-operative and mutual housing sector and todraw conclusions about its relevance in the currentenvironment to national housing strategy. A sector largelyforgotten by UK housing policy makers since the 1980s,the Commission has found that co-operative and mutualhousing has been consistently producing a range ofbenefits. We call for an aim to be set that by 2030, eachtown, village and community should be able to offer co-operative and mutual housing options to potentialresidents.

Marked by above average resident satisfaction ratings,confirmed by Government research as being significantlyhigher than other types of housing, independent researchalso shows that service provision statistics are generallyas good as, if not better, than the best of other housingproviders. The Commission shows that this is because thepeople who live there democratically own and/or managetheir homes, taking responsibility and feeling a sense ofbelonging, identity and ownership.

The Commission has heard about:

■ many members of co-operative and mutual housingorganisations who would not want to live in any othertype of housing, not least because of the mutuallysupportive communities they have established, wherethey know that they have friends and neighbours whowill look out for them – a tapestry of human interactionthat characterises the sector.

■ how mutual support has helped members of co-operative and mutual housing organisations whostarted out with broken lives start to reshapethemselves, get skills, get into work, move on in theirlives.

■ ordinary people in co-operative and mutual housingorganisations who want to do things to tackle climatechange, volunteer as school governors, or participatein various other community activities.

■ co-operative and mutual housing organisations set upin neighbourhoods affected by a lack of trust and lackof community, starting to transform them, helpingresidents feel like they are part of something.

But in England, it’s a tiny sector. It makes up only 0.6% ofthe UK’s housing supply, compared with 18% in Sweden,15% in Norway, 8% in Austria and 6% in Germany. Thesmall scale is due to a number of factors:

■ the different elements that came together to form co-operative and mutual housing sectors in othercountries – Government policy working in sympathywith the sector, an effective development, support andadvice framework, and grass roots communitydevelopment – has never come together at the sametime in the UK.

■ prevailing housing establishment perceptions havedeveloped a folklore that ordinary people andcommunities can’t be trusted to make decisions. Whilstthe Commission recognises that there have beengovernance and other problems, it is possible to createsystems of support, checks and balances to preventproblems arising or deal with them when they do.

■ there is an overwhelming problem with regards to thepromotion of co-operative and mutual housing options.The Commission has heard from local authorities wholike the idea of co-operative and mutual housing, butcall it “Britain’s best kept secret”. Little information isavailable for communities, local authorities, housingassociations or others who are interested in exploringco-operative and mutual housing options, and modelsare hard to develop in an environment not establishedto support them.

Different models of co-operative and mutual housing,united by them being democratically and legally ownedand controlled by a service user membership, offer a widerange of potential for communities to choose from:

■ housing co-operatives that collectively own anddemocratically manage affordable homes are thelargest part of the sector, consistently out performingother housing providers over many years.

■ tenant management organisations managing homesowned by other landlords have inspired change, havegreatly improved services and have stimulatedcommunities.

■ community gateways and mutuals, tenant andmembership owned housing organisations, have madea start on injecting democracy into large scale housing,transforming their local neighbourhoods into beaconsof hope.

Bringing Democracy HomeExecutive summary

■ co-housing schemes, intentional small scalecommunities, are providing community housingalternatives to the alienation of modern life, particularlyfor elderly and multi-generational communities.

■ community land trusts and mutual home ownershipschemes, couching aspirations for individual assets ina community safety net, offer a potential way forwardfor the intermediate housing market, for those caughtin between the overwhelming hegemony of homeownership, and the increasingly scarce social rentedsector.

As well as this, the Commission recognises that manyhousing organisations now recognise the value ofcommunity, and that some are taking steps towards co-operation and mutuality. We identify the next steps thathousing organisations could take on this journey. Whilstthe Commission is not suggesting that it is only throughco-operation and mutuality that community basedapproaches can be developed, our research has shownthat there are specific benefits that derive from co-operative and mutual housing organisations, and thisreport discusses those benefits.

This is a sector that provides some potential answers tothe serious housing and community challenges we face,significant problems even before the global financial crisismade them even harder to resolve. Aspirations toindividual home ownership are less likely to be fulfilled for

a growing number of people, but co-operative and mutualhousing can meet many of the factors behind thoseaspirations – having a decent home, security, freedom,status, community, lifestyle, environmental. TheCommission has identified that co-operative and mutualhousing could provide homes:

■ through mutual home ownership and communityland trusts for low income households who stand littlechance of getting onto a housing ladder that’s beenpulled beyond their reach.

■ through co-housing and mutual retirement housingdeveloping mutually supportive environments forelderly people that values their ongoing contributionsand provides them with respect.

■ through housing co-ops, tenant managementorganisations and community gateways offeringdifferent ways to provide housing for low incomehouseholds that helps them to help and respectthemselves and to feel like they’re part of society.

All potentially producing sustainable mutually supportivecommunities with less reliance on the state, co-operativeand mutual housing could potentially be an investment forsociety. It is a move away from detached managerialismand the dependency created by an expectation that thestate will always be there for people.

Bringing Democracy Home - Executive summary

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The Commission’s recommendations for developing amature co-operative and mutual housing sector in Englandgo beyond simply calling for Government support. Theyare underpinned by the need for society as a whole to beaware of co-operative and mutual housing solutions. Witha need for England to become a nation of home builders,the Commission’s research suggests that manycommunities would find co-operative and mutual housingoptions more attractive than traditional models … if theyknow about them, and if they have a clear route map toimplement them. With this in mind, the Commissionmakes recommendations in six broad areas:

1 NATIONAL AND LOCAL GOVERNMENT – THE WILL TO CHANGEif we want the benefits that come from co-operativeand mutual housing, national and local governmentneeds to start to trust ordinary people andcommunities. National and local political will has tobe there to make co-operative and mutual housingoptions available to people and to take the stepsnecessary to make that possible. A legal, regulatoryand support framework needs to be developed thatunderstands and is sympathetic to democratic usercontrol of housing.

2 THE HOUSING WORLD – PEOPLE AND COMMUNITIESchange has already started in the housing world,but much more needs to change. The housing worldneeds to embrace the idea that its biggest assetsare the people and communities they house. Thehousing world needs to learn the importance ofcommunity from the co-operative and mutualhousing sector, and re-align its skills and expertiseto help facilitate ordinary people and communitiesto take control.

3 THE CO-OPERATIVE MOVEMENT - EMBRACING HOUSINGthe UK co-operative movement is a powerful part ofour national democracy. It has reinvigorated itselfover the last ten years. But co-operation starts inthe home. Where people live is as much a part ofthe co-operative movement as where they shop,where they bank and where they work. If theRochdale Pioneers were alive today, they’d bebuilding housing co-ops! The co-operativemovement needs to rise to the challenge, putting itsdynamism, imagination and vision behind the co-operative and mutual housing sector.

4 CO-OPERATIVE AND MUTUAL HOUSING –UNITE AND GROWthe co-operative and mutual housing sector needsto recognise its importance, its success, its uniqueidentity and believe in itself. It needs to cometogether to get its message across and be muchmore outward facing through comprehensive andprofessional sector leadership throughrepresentative bodies. It needs to build andmaintain strong open, transparent and accountabledemocratic governance and the support structuresnecessary to make this possible.

5 FINANCING AND ENABLING – SUPPORTING A WINNERmoney usually likes to support things that work. Ifwe want co-operative and mutual housing optionsto be available for people, the resources andframeworks need to be there. But this isn’t all aboutpublic money. This is about national and localGovernment coming together with the privatefinancial sector to work out what needs to berealigned and developed to facilitate the expansionof co-operative and mutual housing.

6 DEMOCRACY COMES HOME – A MUTUAL HOUSING VISIONdemocracy starts in the home. If we want thebenefits of co-operative and mutual housing, weneed to recognise it as a distinct form of housingwith its own identity and vision that captures theindividual vigour of home ownership in a communitysafety net. With national and local promotion, co-operative and mutual housing options could capturethe imagination of the British people, could meetpeople’s aspirations and could become a tenure ofchoice that stimulates active citizenship andcommunity resilience.

The global financial crisis has meant that there is a needfor an ongoing debate about financing all forms ofaffordable housing, including co-operative and mutualhousing, in the changed financial world. To avoidlengthening this report with technical detail, we haveoutlined financial models for co-operative and mutualhousing on the Commission’s website.

The Commission started with a firm commitment that itsconclusions would be evidence based, an independentcommission that drew together the mainstream and co-operative housing sectors. The overwhelming weight ofthe evidence that has been presented to us has led us tothe clear conclusion that the UK needs to bring co-operative and mutual housing options into our nationalhousing policies. We need to bring democracy home.

This introduction sets out:

■ why the Commission for Co-operative andMutual Housing was set up;

■ the key questions the Commission set out toaddress and where in the report we answerthem;

■ points made by various stakeholders inwelcoming the Commission’s work;

■ a definition of the words co-operative andmutual;

■ a brief note on the Commission’smethodology.

1.1 Strong co-operative and mutual housing sectorsexist in various countries across the world. Of the35,000 member organisations of the Europeanhousing body CECODHAS, 30,000 of them are co-operative, particularly drawn from Norway, Sweden,Austria, Germany, Italy and Spain who haveextensive co-operative and mutual housingtraditions. Despite a strong English co-operativeand mutual sector, where “over 4,820 jointly owneddemocratically controlled businesses, owned bymore than 11.3 million people, 1 in 5 of the Britishpopulation, creating and sustaining more than205,800 jobs, contributing £28.9 billion in turnoverand £9.7 billion in assets to the UK economy”1, onlya small English co-operative and mutual housingsector exists, and there has been limited debateabout its relevance outside of the sector.

1.2 The Commission on Co-operative and MutualHousing2, an independent Commission chaired byAdrian Coles, Director General of the BuildingSocieties Association, that brought the“mainstream” and co-operative housing sectorstogether, was set up in 2008 to examine why this isthe case. Against a background of supply, quality,access and choice problems, “Bringing DemocracyHome” seeks to address whether and how a moresubstantial contribution from co-operative andmutual housing could have a beneficial impact inEnglish housing strategy. The Commission soughtto build on the work of the Co-operativeCommission, which reported in 2000 on the strategyand structure of the British co-operativemovement3. With housing policy devolved to theScottish Parliament and the Welsh and NorthernIreland Assemblies, our remit was limited to theEnglish housing sector. However, we consideredelements of Scottish co-operative housing because

their experience has relevance in England, and theconclusions and recommendations in this report willhave interest to policy makers and others in theother UK countries.

1.3 Key questions - some of the key questions thereport seeks to answer can be found in Table 1 onpage 10.

1.4 Interest in the Commission - generally, theCommission’s work has struck a chord with moststakeholders who have given evidence to theCommission:

■ “This is a significant time to be consideringresearch into this area and demonstrating thebenefits of co-operative and mutual housing. Notonly could the research support tackling barriersto delivery of co-operative and mutual housing,but the strengths of community empowermentthat it brings could influence tenant control andempowerment more widely.” Sarah Davis Chartered Institute of Housing(CIH)

■ “The Federation believes co-operative andmutual housing organisations have the potentialto play an increasingly important part in housingprovision, and this can be seen in the growth ofthe community gateway model. Co-operativeand mutual housing organisations clearlycomplement the wider agenda of providinggreater empowerment to local communities inrelation to the services they receive. They arewell placed to provide excellent housing servicesto and with their tenants.” Helen Jeffery National Housing Federation(NHF)

■ “TAROE consider it to be an appropriate andtimely stage for the researching of co-operativeand mutual housing. The social housing sector isundergoing the most significant restructuring fora generation, and there are opportunities atpresent for shaping the regulated housing sectorto ensure the pre-eminence of ‘tenant primacy’.Whilst co-operative and mutual housingrepresents only a very small proportion of thesector as a whole, it is however much moresignificant in what the tenure represents.” Darren Hartley Tenants and ResidentsOrganisations of England (TAROE)

1 Co-operative and Mutual Housing – what’s that all about then?

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■ “TPAS welcomes the establishment of theCommission. We are supportive of all models ofco-mutual and co-operative housing that aresupported by tenants. TPAS believes that goodquality housing which is democraticallycontrolled or subject to effective tenantinvolvement has the potential to empowerpeople and this in turn can aid the process ofcommunity improvement and renewal. TPASbelieves that housing co-operatives with theiremphasis upon engaging with tenants offer thepotential to upskill people and to generateambition, aspirations and confidence.”Michelle Reid Tenant Participation AdvisoryService (TPAS)

■ “More needs to be known about mutual housingin general as it is an area of social housing thatboth experts and laymen are quite uninformedabout. Tenants need to know all the optionsavailable to them. Mutual housing may well bethe favoured option for many tenants whorequire more control and responsibilities overtheir housing.” Phil Morgan Tenant Services Authority (TSA)

1.5 What is co-operative and mutual housing? Theunifying factors behind co-operative and mutualhousing are considered in more detail in Chapter 4,but the Commission needed to define the sector itwas considering.

1.6 Co-operatives are defined by the International Co-operative Alliance (ICA), as “an autonomousassociation of persons united voluntarily to meettheir common economic, social, and cultural needsand aspirations through a jointly-owned anddemocratically controlled enterprise”. The ICAdefinition goes on to describe a set of internationallyagreed co-operative values and principles4. Housingco-operatives are one subset of co-operative formsof housing distinguished by the incorporation of thevalues and principles in their governance and rules.

“The essential characteristic of a co-operative isthat it is a democratic organisation engaged in themarket place, providing goods and services. It isnevertheless based on people, not on capital orgovernment direction. In its essence, it can neverescape, even if it wanted to, the capacity ofmembers to exercise control whenever they wish todo so.”5

1.7 Mutual is defined in various ways in the OxfordEnglish Dictionary6 to mean common relationshipsbetween two or more parties, and in relation tobuilding societies and insurance companies “ownedby its members and dividing its profits betweenthem”. In the housing context, the Commissiondefines a mutual housing organisation as one whichenables residents, through having the right tobecome members, to control or participate ingovernance and to exercise control over theirhousing environment, neighbourhood andcommunity.

1 Co-operative and Mutual Housing – what’s that all about then?

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The second chapter examines the current English housing framework and considersquestions about the market segments that co-operative and mutual housing mightpotentially cover. The third chapter explores the needs and aspirations of thehousing consumer and seeks to assess co-operative and mutual housing againstthose needs and aspirations.

The fourth chapter identifies the existing English co-operative and mutual housingsector and its distinct and unifying factors, leading into the fifth chapter thatexamines the sector’s performance.

The sixth chapter considers various myths and perceptions about co-operative andmutual housing, identifying where there are issues that need to be dealt with.

The seventh chapter compares the English experience to co-operative housing sectors in other countries.

The eighth chapter sets out what needs to happen if the co-operative and mutual housing sector is to be developed in England, including aseries of specific recommendations that are summarised in Appendix One.

Could co-operative and mutual housing optionsadd to supply, quality, access and choice in thehousing market?

What exists in the current English co-operative andmutual housing sector? What makes co-operativeand mutual housing distinct from other forms ofhousing? How well does it perform? What is itspotential?

What are the perceptions of co-operative andmutual housing? What is the truth about issues inthe sector?

What can we learn from the internationalexperience of co-operative and mutual housing?

How do we develop the English co-operative andmutual housing sector? What can housingorganisations learn from co-operative and mutualhousing?

Questions Where they are considered

Table 1 - Key Questions

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1.8 In adopting this definition, the Commission is notsaying that benefits deriving from mutualism areautomatically turned on by adopting a mutualconstitution. Indeed some housing organisationsadopt some of the community characteristics ofmutualism without being legally mutual.Nonetheless, a defining characteristic of a mutualhousing organisation would be the extent to whichactive membership is encouraged. The more serviceusers who take up and take advantage of theirmembership rights, the more mutual theorganisation becomes, and potentially the morebenefits.

1.9 Whilst in the UK the majority of existing co-operative and mutual housing exists in the socialrented sector, some are private organisations set upby their members without state aid. In othercountries, co-operative and mutual housingorganisations house a much wider economic andsocial strata of residents.

1.10 Methodology - the Commission has based thisreport on evidence gathered during the Commissionthat has included:

■ initial independent research about the nature ofthe English co-operative and mutual housingsector carried out for the Commission by theUniversity of Birmingham’s Centre for Urban andRegional Studies7.

■ research carried out by the Human City Instituteon baseline and mapping information about thesector8.

■ a series of hearings with people living in co-operative and mutual housing, and with tenant,housing association, local authority and co-operative movement audiences.

■ various case studies into particularorganisations.

■ call for evidence submissions from a number ofhousing related stakeholders and otherorganisations9.

■ a set of focus groups carried out by M.E.LResearch into the housing aspirations of socialrented housing tenants and shared homeowners,homeless and recently homeless people, andprivate renters10.

■ the report has been assembled by a Commissionresearch sub-group11, and has been edited byNic Bliss from the Confederation of Co-operativeHousing (CCH), who also carried out additionaldesktop research.

1.11 The Commission owes a debt of gratitude to ourfunders and the large numbers of people andorganisations who have participated in our work,particularly including those who have attended ourhearings, responded to our call for evidence andacted as our case studies. We could not haveassembled our evidence without these contributionsand we give heartfelt thanks to all those who havesupported our work.

Footnotes1 Co-operativesUK (2009) Co-operative Review2 The Commission’s key terms of reference and methodology are on

the Commission’s website3 Co-operative Commission (2001) The co-operative advantage:

Creating a successful family of Co-operative businesses Co-operativesUK. The Co-operative Commission was an independentcommission set up by Tony Blair at the request of leaders of theBritish co-operative movement. Its aim was to review the strategyand structures of the sector, with an aim to suggesting ways todevelop and modernise the movement, and its members comprised“business leaders, politicians, trade unionists and co-operators”under the chairmanship of John Monks, the General Secretary of theTUC.

4 The ICA definition of co-operatives and co-operative values andprinciples are included on the inside back cover of this report

5 Dr Ian McPherson (1994) The Co-operative Identity in the Twenty FirstCentury Review of International Co-operation 3/94

6 Full Oxford English Dictionary definition “1 experienced or done byeach of two or more parties towards the other or others. 2 (of two ormore parties) having the same specified relationship to each other. 3held in common by two or more parties. 4 (of a building society orinsurance company) owned by its members and dividing its profitsbetween them”

7 Rowlands, R (2009) Forging Mutual Futures – Co-operative andMutual Housing in Practice – History and Potential University ofBirmingham Centre for Urban and Regional Studies. This research isavailable on the Commission’s website

8 Gulliver, K. and Morris, J. (2009) Exceeding Expectations: The Natureand Extent of Resident and Community Controlled Housing in theUK, Human City Institute, Birmingham. An extract from this researchis shown on the Commission’s website

9 A listing of the submissions received are shown on page 410 Hunter, K (2009) Commission on Co-operative and Mutual Housing

focus groups M.E.L Research. This research is available on theCommission’s website

11 Membership of the Commission’s research sub-group is shown onthe Commission’s membership list

This chapter discusses:

■ the challenges we face in national housingstrategy;

■ the changes to housing strategy over theyears;

■ the issues facing the three predominanttenures – owner occupation, private rentingand social renting;

■ what co-operative and mutual housing mightoffer to national housing strategy.

2.1 Housing in England is at a crossroads. Presentstrategies for delivering housing are not working.Long established difficulties in building enoughhousing to match demographic change havebecome more dramatic in the aftermath of theglobal financial crisis. Households unable to accessor afford home ownership may find alternativeprivate renting options unattractive, leading toincreasing waiting lists for local authority andhousing association homes. Concerns are growingthat social rented housing as it currently operatesrestricts the life chances of the people it houses.Increasing numbers of households in all tenuresexperience overcrowding, insecurity and a lack ofcontrol over their home and their future housing.

2.2 Changes in housing strategy - housing in Englandhas undergone a series of transitions over the pastcentury. A hundred years ago, England was a nation

of tenants. Nine out of ten households, from thepoorest to the wealthiest, rented their homes fromprivate landlords. During the 20th Century, housingpolicy was principally concerned with improvinghousing quality (building new high quality housing,clearing slums, improving defective housing andreducing sharing and overcrowding), and councilhousing and home ownership became the means ofachieving these objectives, both tenures expandingto take the place of private renting.

2.3 But as the worst problems of housing condition andsupply had been resolved, home ownership becameseen as the tenure of choice, and since the 1960s.all governments have sought to make the tenureavailable as widely as possible. At the same time,changing aspirations, the introduction of the Rightto Buy, and public expenditure restrictions endedthe growth of council housing and the number ofcouncil homes declined from the 1980s onwards.This led to council housing increasingly becoming aresidual tenure with a narrower social base and lesscommunity stability on many estates. Althoughhousing associations have grown through new buildand transfers of council housing, the social rentedsector as a whole continued to decline until 2008.Whilst England retains a large social rented sectorby international standards, its overall direction hasbeen towards it becoming a sector of last resort.

2 Housing – where do we go now?

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Table 2: Dwellings by tenure in England (Thousands)

England 1971 1981 1991 2001 2007

Owner-occupiers 8,334 10,653 13,397 14,838 15,449(51.9%) (59.5%) (68.1%) (70.0%) (69.6%)

Privately rented 2,051 1,767 2,133 2,866(11.5%) (9.0%) (10.1%) (12.9%)

Housing association 410 608 1,424 1,886(2.3%) (3.1%) (6.7%) (8.5%)

Local authority 4,530 4,798 3,899 2,812 1,987(28.2%) (26.8%) (19.8%) (13.3%) (9.0%)

All dwellings 16,065 17,912 19,671 21,207 22,188

Source: DCLG, Housing Statistics

Combined3,201

(19.9%)

2.4 Limitations of home ownership based strategies- whilst home ownership has provided opportunitiesfor many, it has never offered a solution for allhouseholds at all stages of their lives. England maynow have reached the maximum possible homeownership expansion. Further expansion could onlybe achieved with significant subsidy, and even thenwith the risk that those supported will not be able tosustain ownership. The global problems caused bymarketing sub-prime mortgages at low incomehouseholds and those with poor credit ratings arenow well known.

2.5 The seemingly settled objective of moving morepeople into home ownership by marketing mortgagepackages further down the income distribution isnow less tenable. Firstly, affordability problems havebecome a constant characteristic of a housingmarket dominated by home ownership. Secondly,banks and building societies have now returned torationed lending based on stringent credit checks,conservative valuations and substantial depositrequirements. And thirdly, whilst current historicallylow interest rates are reducing mortgage costs forsome existing home owners, interest rate rises,predicted by some12, could have severe financialconsequences for home owners.

2.6 Some green shoots of recovery may have beendetected in the housing market, but, whilstproblems of access and affordability may moderatein the future, they are unlikely to go away.Insufficient new building, falling far short of theBarker Review aspirations13 and unequal incomes,look set to continue inflating some parts of themarket, whilst lack of access to credit, falling houseprices and negative equity will continue to causemultiple problems. Abigail Davies of the CIH14 said“a constant feature is a strong but misguided hopethat the market will soon get back to familiar groundwith strong price rises and huge profits to be made.The performance of the market to date is not good –it does not deliver affordability, sufficient supply, orhousehold mobility, either in good times or bad.”

2.7 Private renting alternatives - against thisbackground, the fastest growing tenure in the futureis widely expected to be private renting - a sectorthat grew in 2007 at the expense of homeownership, which suffered its first decline in marketshare in over 50 years. Private renting is the easiestsector to access and is a suitable tenure for somehouseholds. But it is more prone to sub-standardhousing (40.6% non decent homes in the privaterented sector, as opposed to 29.2% in social rentedhousing and 24.9% in the owner occupied sector15)and to insecure tenure arrangements, an advantagefor young, affluent or mobile groups, but potentially

a problem for households seeking long term stablehousing.

2.8 Rugg and Rhodes identify that private rentingserves as “a first port of call for new households, abolt hole when circumstances change, a stoppingoff point when people change jobs and movehouse”, as well as being a long term home for somehouseholds (21% of private renters having lived intheir current home for more than five years)16. Theygo on to identify a number of sub-categories ofprivate renters, ranging from groups positivelychoosing private renting for various reasons (suchas young professionals, students and high incomerenters) to those with no alternatives (such as thehousing benefit market, slum rentals, immigrantsand asylum seekers, and temporaryaccommodation). They conclude that “the perceivedproblems with property quality, security of tenureand affordability all play a part in persuading tenantsthat the private rented sector provides, at best, aninsecure home.”

2.9 Social rented housing - the squeeze on homeownership and the inability of the private rentedsector to meet the needs and aspirations of allhousehold types have resulted in a social housingcrunch. Social renting waiting lists that stood ataround 1 million in the 1990s have risen steadilysince 2003. In 2008, 1.7 million households wereregistered on waiting lists - 1 in 12 of all households- and this figure is likely to rise in the future. Thesupply of new social rented housing was notmatching this demand before the credit crunch.

2.10 With the proportion of social tenants in the poorest30% of all households rising from under 30% in 1963to 67% in 200817 and with many of its more popularhomes sold under the Right to Buy, social rentedhousing has increasingly been seen as a lessattractive safety net for the most vulnerable. Calls forsocial rented housing to grant less secure forms oftenancy to encourage greater mobility could, ifenacted, further marginalise the sector and its tenants.

2.11 Following a number of enquiries and reports intohousing supply and planning and the social rentedsector and its regulation18, Government’s responsewas to initiate the most significant reorganisation ofhousing regulation and investment for decades inthe establishment of the Tenant Services Authorityand the Homes and Communities Agency. As wellas creating the platform from which to launch amajor increase in housing supply, it signalled agreater commitment to improving the quality ofhousing and services for tenants and increasingaccountability.


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2.12 However, even while the details of these newarrangements were being finalised, the creditcrunch was unfolding. The dramatic falls in privatesector housebuilding, the shortage of credit and theinability of housing associations to continue crosssubsidising social rented housing through homes forsale or mixed tenure now make it even harder forthe supply of new homes to match demand.Population predictions19 (an increase of 4.4 millionby 2016, and if past trends continue, up to a totalpopulation of 71 million by 2031), changinghousehold demographics, longer life expectancy,changing needs and cultural and religiousexpectations, all suggest a potentially deepeninglong term problem of housing supply.

2.13 What could Co-operative and Mutual Housingoffer? The three dominant tenures all play importantroles, but with home ownership unlikely to expand,and with the rented sectors not able to meet allneeds and aspirations, this report argues that co-operative and mutual housing, largely overlooked by

public housing policy debates for many years, has apotential for growth and innovation to respond toneeds emerging from current challenges. On theone hand, the evidence we have gathered showsthat co-operative and mutual housing is asuccessful and attractive model of social rentingthat can deliver what people want. On the otherhand, co-operative and mutual forms of homeownership could provide collective protection for anintermediate market20 from individual risk andmarket fluctuations whilst capturing investmentgains collectively. The next chapter suggests thatco-operative and mutual housing could meet someof the needs and aspirations of people unable toaccess other tenure forms. At a time when extremehousing market vagaries have left many housingconsumers insecure and unsure about the future,co-operative and mutual housing might be anattractive alternative option, not just to stateprovision of housing, but also to market provision.


16

2.14 Indeed, the fifth chapter of this report points to arange of other performance, social, community andenvironmental benefits of co-operative and mutualhousing that suggests that there are a number ofpositive reasons to support the sector. Whereproperly fostered and nurtured, co-operative andmutual housing can:

■ deliver high resident and member satisfactionwith services alongside vibrant communityidentity;

■ stimulate individual and community resiliencethrough active and democratic citizenship;

■ provide a place-making cornerstone, makingplaces work better for people who live in them;

■ contribute to addressing social disadvantageand worklessness;

■ can enable collective influence over whathappens beyond the immediate boundary of anindividual property, whilst at the same timesupporting the individual household interest inhousing;

■ be a tenure of status, meeting the needs andaspirations of people who want their individualityguaranteed through community based solutions.

Key conclusions

1 A housing policy simply based on mass homeownership and a residual social rented housingsafety net was too limited and inflexible evenbefore the credit crunch, and is now even more so.

2 Whilst private renting is an attractive option forsome in the intermediate market, it will not beable satisfactorily to house increasing numbersof households who will not be able to enterhome ownership or social renting.

3 Co-operative and mutual housing is not auniversal panacea to all problems, but it canprovide solutions for some people for whomcurrent arrangements do not work, for someparticular groups of people, and for others whowant to consider alternatives.

4 Co-operative and mutual housing particularlymight be able to make a contribution in thecontext of renewed interest in alternatives to thestate and the market and a stronger emphasis onresponding to consumers and communities.

5 In particular, there is a need for innovative newforms of housing to meet the aspirations of thosein need of an affordable home, who, before theglobal financial crisis, aspired to and would havebeen able, albeit at a high price, to access homeownership.

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Footnotes12 Nationwide Building Society’s Chief Economist’s Martin Gahbauer,

speaking at the 2009 Chartered Institute of Housing conference,predicted rises in mortgage interest rates, leading to high levels ofrepossession

13 Barker, K (2004) Review of Housing Supply, Delivering Stability:Securing our Future Housing Needs’ Final Report –Recommendations. London: HMSO

14 Writing in the Guardian on 18th June 200915 DCLG, English House Condition Survey16 Rugg, J and Rhodes, D (2008) The private rented sector: its

contribution and potential University of York Centre for HousingPolicy

17 Craven, E (1975) ‘Housing’ in Klein R (ed.), Inflation and Priorities,Centre for Studies in Social Policy, London, pp. 105-130

18 Barker, K (2003) Review of Housing Supply: interim report. London:HMSO; Barker, K (2004) Review of Housing Supply, DeliveringStability: Securing our Future Housing Needs’ Final Report –Recommendations. London: HMSO; Barker, K (2006) Barker Reviewof Land Use Planning: Final Report. London: HMSO; Hills, J. (2007)Ends and Means: The Future Roles of Social Housing in England(London: Centre for Analysis of Social Exclusion, London School ofEconomics and Political Science); Cave, M. (2007) Every TenantMatters: A Review of Social Housing Regulation (Wetherby:Communities and Local Government); DCLG, (2007) Homes for theFuture: More Affordable, More Sustainable HMSO Cm 7191

19 Office of National Statistics20 Wilcox, S (2005) “Affordability and the intermediate housing market”

University of York - Centre for Housing Policy defines theintermediate market as “the proportion of working households ineach area who cannot afford to buy at the lower quarter point ofhouse prices for two- and three-bedroom homes. This includes threesub-sectors: working households unable to afford social housing rentwithout housing benefit; households in the narrowly definedintermediate housing market [see below]; and households able toafford to buy the lowest decile point of house prices, but not at thelowest quarter point”. Wilcox defines “the narrowly definedintermediate housing market” as “the proportion of workinghouseholds in each area who can afford social housing rent withouthousing benefit but cannot afford to buy at the lowest decile point ofhouse prices for two- and three-bedroom dwellings”

This chapter considers:

■ what people are looking for from theirhousing choices;

■ the key criteria that makes home ownershipthe aspiration of choice;

■ how co-operative and mutual housingmeasures up to those aspirations;

■ positive aspirations for co-operative andmutual housing;

■ a growing cultural change that makes co-operative and mutual housing more relevantat this time;

■ the balance between community andconsumer based approaches.

3.1 During this chapter we particularly draw fromfindings from the Commission’s focus groupscarried out by MEL Research21 with social rentedhousing tenants and shared homeowners, homelessand recently homeless people, and private renters.

3.2 Housing and home ownership aspirations - themajority of the UK population aspires to individualhome ownership. This aspiration was clearlyconfirmed in the Commission’s focus groups andarticulated by Shadow Communities MinisterCaroline Spelman22 - “my dad passed on thereceived wisdom that the best investment you canmake is bricks and mortar. And he was right. If youlook at where young people can best make their

investment that over their lifetime will yield the bestreturn, it is in buying their own home, without aquestion”. In 2007, the Council for MortgageLenders23 reported that “following a protracted dipthat started after the early 1990s recession, some84% of adults hope to be homeowners in ten years’time.” They particularly pointed to a growth in thenumbers of under 25 year olds aspiring to homeownership from 40% to 50%.

3.3 However home ownership aspirations are notentirely clear cut. In 2007, the Hills Review24

reported that whilst 90% of home owners and 72%of private renters wanted to own their own home, asignificant 43% of local authority tenants and 47%of housing association tenants wanted to be tenantsof social landlords. More recently, the TSA’s 2008Existing Tenants Survey25 found that “most socialrenters (72%) stated a preference for remaining inthe sector over the next ten years. Only 16% would,if possible, switch to the private sector.” Based onpoints raised at the Commission’s focus groups,Hunter26 suggested that that tenure choice “reallydepends on the individual, where they have comefrom and the experiences they have had in housingso far”. She goes on to say that lifestage andlocation are important, but that “the main driverwhich directed participants’ choice of tenure wascost or affordability. Whilst many aspired to becomehomeowners one day, the financial cost of doing soacted as a barrier.”

3 What do people out there want?

19

Owner Occupation Local Authority Housing Association Private Landlord Other

Table 3: CML figures for home ownership aspirations 2007

Owner Occupiers Council Tenants RSL Tenants Private Renters

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

“You’ve asked us for the ideal, and most peoplewould say homeownership, but the reality of it isthat not everyone will end up owning their ownhome.”27

3.4 Even in 2007, the Council for Mortgage Lenders28

identified that “there may now be significant groupsof households, including many young, singlepeople, those on lower incomes and those withoutgenerous parental support, that face difficulty inachieving or to all intents and purposes areexcluded from home ownership.” A Notting HillHousing Trust report29 at the same time showed thatwhilst 63% of social renters want to own a property,they “have a number of concerns about the realityof being able to achieve this goal.” The reportcontinues that “nearly three quarters (73%) worryabout taking on too much debt and 58% of socialtenants believe home ownership to be too much ofa responsibility.”

3.5 Post credit crisis affordability pressures havechanged perceptions further. In 2008, the threenational tenant organisations30 analysed housingaspirations, concluding that not all were best metthrough owner occupation. Subsequently, a YouGovsurvey commissioned by the CIH31 identified that,whilst 70% of respondents still considered homeownership a good long term investment, the“biggest change in attitudes has come in the 25 to34 age range, with a 14% reduction from 83%saying to own their own home was their ideal livingsituation before the credit crunch, compared to69% saying it is currently their ideal living situation.”The report goes on to say that only just over a thirdof those aged between 18 and 24 consider homeownership as their ideal living situation. The CIHcomment that “we’ve driven too many people intounsustainable owner occupation and we need tomake a far better job of putting renting and owningon a level playing field. A generation has grown upbelieving it has to own at any cost – in part becausewe haven’t provided them with decent informationabout the alternatives.”

3.6 Nonetheless, in the CIH study, 22 year old RuhulAlam said “ownership is an aspiration to mostyoung people. Ownership gives you security, youcan’t be evicted. It gives you freedom and it is astatus thing” and a recent study commissioned byScottish Provident in 2009 reported that 89% ofhome owners surveyed believe that owning theirown home is important for a “reasonable standardof living.”32 As well as the fundamental issue ofhaving a decent quality home, these points identifysome of the key perceptions that sit behind housingaspirations - security, freedom, status and standardof living. We go on to discuss these aspirations,suggesting that whilst it is often perceived that

home ownership will meet them most successfully,the reality is that this may not always be the case.

3.7 A decent quality home - the most fundamentalhousing aspiration is access to a decent qualityhome with sufficient space and facilities. Hunter33

pointed out that the Commission’s “recentlyhomeless” focus group “focused on havingsomewhere nice to stay, typically with a garden andtheir own space.” Generally the key criteria inrelation to access is the resources a household hasavailable and in a market where demand outstripssupply, choice will be limited for some. The socialrented sector seeks to allocate its homes inaccordance with need, but limited supply meansthat not all needs can be met. Whilst “choice basedlettings” were introduced to enable an element ofchoice in social lettings, the lack of supply has oftenmade this choice illusory.

3.8 Security - once in a home, security is a keycomponent in most people’s housing aspirations –knowledge that nothing will threaten continuingoccupation of a home. Some attendees at theCommission’s focus groups particularly referred tothe security inherent to home ownership, and manyhome owners feel a strong sense of security in theirhome. However, security in home ownership can belimited for those affected by negative equity orreducing income, perhaps due to retirement,relationship breakdown or other reasons.

3.9 Social rented housing currently offers a strong levelof security to remain in the home. That social rentedtenants can remain in their homes provided theypay the rent and comply with other tenancyagreement terms provides some of the mostvulnerable people in society with a security that theymay not be aware of, particularly important at timesof difficult economic circumstances. As somecommentators have proposed less secure socialrented tenancies, tenants have expressed concern.The tenant representative body TAROE34 has saidthey “will vehemently oppose any proposals todilute tenancy rights, either for existing or futuretenants within the regulated housing sector. One ofthe key strengths of the current regulated housingsector is the security and stability it offers tenants.”

3.10 As well as this level of security, the relationshipbetween social rented tenants and the landlord aregoverned by a system of safeguards andprotections, which form a fundamental part of theequitable and fair treatment that tenants expect.Protections include rent levels, health and safetyprotection, freedom from discrimination, and accessto a housing ombudsman amongst other things.


20

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3.11 Freedom - the concept of freedom in relation tohousing may refer to a range of criteria, includingthe ability to move to any location in the country; tomake decisions and effect change in one’s livingspace and neighbourhood; and to have a generalperception of independence.

3.12 Mobility is a problem for all forms of housing,primarily due to scarce resources in all sectors. Theprivate renters focus group considered that privatelyrented housing offers the greatest degree offlexibility and mobility. Mobility is dependent onresources available, but negative equity and highhouse prices can make it difficult to move in thehome ownership sector. In the social rented sector,opportunities to move can be very limited, leadingto the Conservative Party proposing a Right toMove for longer term social rented tenants.

3.13 Given that, subject to resources, planningpermission and some other constraints, homeowners can usually do whatever they want in theirhome and garden, home owners are usuallyperceived to have the greatest freedom to makedecisions and effect change in their living space.

3.14 In the social rented housing sector, the potentialexists that its tenants can be collectively involved indecisions about their homes and neighbourhoods,dependent on their landlord. The TSA35 refers to a“strength of feeling” expressed by tenants in theirNational Conversation about being “involved indecisions about their homes”, but they went on tonote that a disproportionately high number ofactively involved tenants in housing associationsand local authorities are less satisfied because theydo not see the difference their involvement ismaking.

3.15 On an individual basis, social rented housing doesoffer some means by which tenants can improvetheir homes, gardens and neighbourhoods (not leasta legal Right to Improve their homes subject tolandlord agreement) and many tenants do makeconsiderable improvements and take pride in them.

3.16 Status – defining status attached to housing isdifficult because it is dependent on trends that aredifficult to capture. Described in 2007 by KateDavies36 as a “renting rut”, some consider thatsocial renting in particular has a negative status.That home ownership is often considered to be theonly tenure of status may be partially due to it being“talked up” by Government and others. A recentCLG select committee report37 concludes that “forthirty years Government policy has been focussedon promoting home ownership. Current economiccircumstances, however, demonstrate that there isno immutable law that owner occupation should

increase. The tenure is not appropriate for asignificant proportion of the population who needhomes, and much more attention needs to be paidto developing the roles of both the private andsocial rented sectors.”

3.17 Standard of living - owning a home does not per selead to a higher standard of living. Some peoplewho buy homes may have higher incomes, but morehome owners live in properties in Council Tax BandA than local authority tenants38. The housing assetgives the potential for higher standards of living,and as home owners pay off mortgages, disposableincome may be comparatively higher than thosewho still pay rent for their homes. However housingassets can soon dwindle as elderly people needsheltered and supported housing and have to payfor it.

3.18 It is questionable whether standards of living arehigher for those still paying off mortgages. Whilstthe Commission’s private renters focus groupsidentified the common perception of rent as “deadmoney”, Sunday Times columnist Merryn SomersetWebb39 points out that the difference betweenaverage rent and mortgage payments could createa more substantial asset than a bought home. Aswell as this, home owner standards of living may benegatively affected by their liability for repairs andmaintenance of their home, with 84% of socialrented housing tenants recognising the value of nothaving that liability40.

3.19 What this brief analysis suggests is that theperceptions and realities of the different tenures canbe different. Home ownership is often perceived tobe a better tenure, and for most people who buytheir home, their aspirations are met through theirhome ownership. But for some this is not the case,and other tenures have positive features.

3.20 As well as this, other factors than tenure influencepeople’s quality of life, such as the type, size andvalue of properties (irrespective of tenure), access togreen spaces, schools and other facilities, and thecharacteristics and reputation of neighbourhoods.The blurring of tenures, with many neighbourhoodsnow containing a tenure mix, even those that usedto be considered to be “council estates”, meansthat a household’s tenure arrangements are not theonly factor that determines whether their aspirationsfor security, freedom, status and standard of livingare met.

3.21 How does co-operative and mutual housingmeasure up? Co-operative and mutual housingdoes have the potential to meet some of theaspirations identified above, particularly wherehouseholds cannot afford to buy their own home.

3.22 Currently, access, choice of home, and mobility aredifficult in co-operative and mutual housing becauseof lack of supply, but the problems are broadlysimilar to equivalent tenures. For example, in asocial rented housing co-op, access is restricted tothose in the most housing need, and in a co-housing scheme, access is limited by resourcesavailable. Whilst many co-operative housingorganisations also have access criteria relating toaccepting participation responsibilities, co-ops havesuggested to us that their allocations processesoften lead to more genuinely homeless people beinghoused than through local authority nominationsprocesses, described by the Commission’s“recently homeless” focus group as being like a“gameshow or a lottery”.

3.23 On the face of it, housing co-op tenancies offer lesssecurity of tenure than the assured and securetenancy regimes for housing association and localauthority tenants. This is because under the distinctfully mutual legal identity of most co-ops, they issue“contractual tenancies”, where tenancy conditionsare based solely on what is included in the tenancyagreement (as opposed to statutorily based assuredand secure tenancies). However, housing co-opsregistered with the TSA are required to grant similarrights in their tenancy agreements, and in generalthe legal membership rights and democratic controlin co-operative and mutual housing provide a

community based approach to security andfairness. The CCH commented that “most housingco-ops are run by people who aim to ensure thattheir members receive the same levels of fairnessthey would expect to receive themselves. Co-opsusually have to operate on the basis that they willhave to account to packed general meetings ifanyone proposes anything that is unfair.”

3.24 Commission case study Sanford Housing Co-operative illustrates that some co-op membersconsider security and fairness should go hand inhand with an individual responsibility to co-exist in acommunity with other co-op members. Notregistered with the TSA, and therefore able to conferrights they wish to in their tenancy agreements,provided they comply with landlord/tenant and otherlegislation, Sanford provides high density sharedhousing in the New Cross area of London. JimNoble from the co-op told the Commission aboutsome evictions that had taken place because ofpeople not being able to co-exist in particularshared houses – “if we want to evict someone, wehave to show the court that it complies with ourconstitution and rules, and the judge has to grant uspossession. We go through fair processes beforewe evict, including the matter being discussed at aco-op general meeting. But some of the cases wehave dealt with have been about alleged heroindealing, physical and mental aggression and sexual


22

Commission case study – set up in the 1970s to provide low cost accommodation for single people, SanfordHousing Co-operative provides 134 rooms in 14 shared houses with 6 studio flats. It is governed through amanagement committee made up of representatives from each of its houses, which holds monthly open meetings,and buys support services from CDS Co-operatives through a dedicated officer who works specifically for the co-op. The co-op operates a long list of 42 officer roles that cover everything from the standard chair role to gardensand ponds officers.

23

harassment, things that can’t be tolerated in sharedhousing. In effect, if we as a community did not takeaction, we would by implication be evicting theother tenants who would be forced to leave. Ourcommunity has our own rules and we apply themfairly.”

3.25 Legal membership rights and democratic controlalso means that co-operative and mutual housingconstitutionally enshrines the means to makecommunity decisions about homes andneighbourhoods. Mick Davies from New LongsightHousing Co-op suggested that “co-operativehousing can give people a similar feeling of controlof their housing as does home ownership.”

3.26 For some, co-operative and mutual housing inEngland has a status of its own. Havingexperienced co-op membership, people often don’twant to live in another tenure, and the CCHmentioned that some housing co-op members feelthat they can’t move because they don’t want tolose the benefits they gain through living in a co-op.Samantha Dyer from Argyle Street Housing Co-op inCambridge41 commented that “I wouldn’t want tolive in any other type of housing other than co-ophousing. I have lived here for 20 years and havefound it an empowering environment in which tospend my life. I moved in as a young 20-year-oldand have grown up to be a parent. We stay herebecause we love living here and can’t think of abetter environment in which to bring up our child.”

3.27 Until recently, it has not been possible in the UK forindividuals to develop personal assets through co-operative and mutual housing, but the developmentof mutual home ownership by CDS Co-operatives42

offers the potential to change that. As a new model,mutual home ownership enables households onmodest incomes who cannot afford to buy a hometo build an equity stake in their housing throughowning equity shares in a mutual.

3.28 Positive aspirations for co-operative and mutualhousing - some people positively aspire to co-operative and mutual housing because of lifestylesassociated with it. The UK Co-housing Network’swebsite43 describes co-housing as bringing“individuals and families together in groups to sharecommon aims and activities” and as “a means ofcompensating for the alienating effects of modernlife where neighbours don’t recognise each otherand where day-to-day collaboration is minimal.”

3.29 These values, generally common to all forms of co-operative and mutual housing, were recognised in aCommunities and Local Government report as ofparticular relevance to elderly people44 - “there isgrowing interest among older people in co-housing

communities, where they can control their own self-contained accommodation and live as a mutuallysupportive group with some common space”. Thereport continues that “It is hoped that these forms ofhousing will help meet the needs of a growing, single,older population looking for congenial company andsupport as they grow older.”

3.30 Housing for elderly people and multi-generationalhousing was identified by some in response to theCommission’s call for evidence, as being a particulararea of importance for co-operative and mutualhousing. The CIH, in its submission to theCommission, suggested that “demographic changesand the ‘ageing society’ in particular could triggerdemand for new or alternative forms of living whichthe co-operative model might provide. Models suchas ‘generational living’ along mutual/co-operativeprinciples, whereby younger households lendsupport to older households have sprung up inGermany for instance. Whilst such models are still inan embryonic state and not very widespread,increasingly tight welfare budgets and furtherindividualisation of society means that such forms ofhousing could become more than just a nicheprovision.”

3.31 Thomas45 argues for mutual retirement housing forelderly people through community land trusts. Hepoints out that, in the context of Britain’s ageingsociety, “Mutual Retirement Housing removesworries and provides residents with a better quality oflife. It ensures that everyone would have an equal sayin how the place is managed. But equally everyonewould have their own front door key and be able toenjoy their own company when they want to.Experience in existing co-operative housing schemeswith elderly residents has shown that residents tendto look out for each other and providecompanionship for those who feel in need of it”.Thomas argues that mutual retirement housing wouldmaintain the independence of elderly people throughmutual self-help and market drivers, as opposed tothrough the welfare state, important in the context ofa society where meeting the increasing care andsupport needs of elderly people is set to become amajor social and economic challenge. Brenton46,referring to examples in other countries, suggeststhat it is in the wider economic interests of societythat mutual housing choices for older people beexplored and developed.

3.32 Whilst existing housing co-ops statistically make only8% of their lettings to elderly person households,some co-ops have been particularly targeted atelderly people and evidence given at Commissionhearings suggest they meet the needs of elderlypeople well. Brian O’Hare of Huyton Community forthe Elderly told the Commission that his co-op had

recently lost its last original member. “He had beenactive into his 90s carrying out day to day activitiesfor the co-op as a member of the managementcommittee. Involvement in the co-op gives elderlypeople an ongoing challenge in their lives and helpsto prolong their independent living.” Phil Welsh MBEhighlighted how West Whitlawburn Housing Co-ophad used their local community knowledge to ensurean effective concierge safety net service for theirelderly members.

3.33 Co-operative and mutual housing solutions have alsobeen set up with an identity relating to the needs andaspirations of particular groups of people, such aswomen, black and minority ethnic people, andpeople who wish to adopt a particular “lifestyle”.Private sector co-ops, such as Sanford Housing Co-op and Cog Housing Co-op, who gave evidence tothe Commission’s Bristol hearing, pointed to groupsof young people who positively want to live in sharedhousing, often with shared ethical views andcommon practices. Sanford Housing Co-opconsidered that it would not be possible for theirshared housing to be run in any other way thanthrough a housing co-op.

3.34 Commission case studies Shahjalal Housing Co-opand Belgrave Neighbourhood Co-operative HousingAssociation were set up to provide homes in theethnically diverse areas of Aston in Birmingham, andBelgrave in Leicester respectively.

3.35 A changing culture? - Whilst co-operative andmutual housing potentially measures up well againstthe aspirations set out above, it may be an option ofchoice for some because it offers some of the bestopportunities to establish a shared sense ofbelonging and identity in communities, the centralimportance of human relationships being a keydefining feature of the sector. Sarah Blandy from theUniversity of Leeds said that “there is a small butsignificant demand from people who are searchingfor community rather than individual control ofhousing, and for the benefits which that brings. It isa particularly attractive setting in which to bring upchildren, or to live in old age, because of the mutualsupport.”

3.36 Hunter47 reported that all of the Commission’s focusgroup participants “were positive about the idea ofco-op housing, with the main selling point being thecommunity side of things”. She goes on to say that“the real plus side for the [private renters] group wasthe community aspect – sharing responsibility anddecision-making, being part of a wider community,and the potential to have fun.” The private rentersfocus group illustrated their interest in co-operativeand mutual housing with a number of detailedquestions, such as how to access it, how equity inmutual home ownership would work and how co-operative and mutual housing ensures thatindividuals don’t dominate.


24

Commission case study – taking its name for spiritual leader Shah Jalal, who spread Islam through the Sylhetregion of Bangladesh, Shahjalal Housing Co-operative was formed in 1996 from three co-ops set up in the1970s to meet the housing needs of families faced with severe overcrowding in the Aston and Saltley areas ofBirmingham. Now managing 85 homes and with assets of £3.7m, the co-op is governed by a managementcommittee made up ten annually elected and five co-opted members, and buys support services from localagency BCHS.

25

3.37 Co-operative and mutual housing is particularlyrelevant within a wider changing cultural shift fromindividualism to collective, communitarian, ethicaland environmental approaches - approaches whichemphasise place making, a sense of belonging anda sharing of risk. It may be that co-operative andmutual housing sits alongside trends such as carsharing, recycling, use of low energy appliances andlocal produce and positive responses to the Co-operative Bank’s and Co-operative Group’s ethicalpolicies - all suggesting an emerging generation ofpeople who want a lifestyle not built entirely on theindividual and consumption but one that seeks tobuild a new contract with how and where we live.Thake48 notes the emergence of “new forms ofindividual action” emerging as “a myriad of ordinarypeople every day in places where they do havecontrol – behind front doors, on their streets and intheir neighbourhoods”. He argues that “the retreatinto protective individualism” can be seen as aresponse to the failure of agency and a loss ofsolidarity. Thake concludes that we need to“develop a shared narrative for personal and groupbehaviour relevant for the twenty-first century” andthat “the role of government is to create theenvironment which enables communities to mobilisetheir latent energies to take control of their lives.”

3.38 Bauman49 goes further arguing that an “absenceand withdrawal of society” have led to “the liquid-

modern, individualised society of consumers”. Hecontinues that “the marketplace, which long agoexpanded to include the relations of production, hasnow expanded to include all relationships. We’vestopped recognising ourselves in any obligation tolive for the sake of something else than ourselves.”Bauman considers that this has led to “cognitivedissonance – people want what they will not getdespite being told that this is a meritocracy leadingto anger and resentment.” He concludes that ashumans, we need both recognition and to beincluded.

3.39 There is evidence that these theoretical conclusionsare supported by the realities of what people want.Scase/Scales50 identified that living in a friendlycommunity was the most important priority forsurvey respondents asked about what they wantfrom their neighbourhood. They went on to suggestthat a friendly quiet community with low crime mayeven compensate for poor levels of services andamenities. Similarly, a CLG survey51 in 2006/7concluded that “individuals value good communityrelations”, with 69% of those surveyed stating thathaving good neighbours is very important to qualityof life. Hunter52 identifies that “for some [of theattendees at the Commission’s private renters focusgroup], it was the sense of community whichattracted them, and kept them, in the area.”

Commission case study – with 353 homes, including one sheltered scheme for the elderly, housing more than460 members, Belgrave Neighbourhood Co-operative Housing Association is the largest housing co-op inEngland. It was set up in the 1970s in the Belgrave area of Leicester, and buys services from LHA/ASRA. Run by amanagement committee of 13 tenants and 2 co-optees, in 2009 the co-op attracted 350 of its members to anannually held multicultural event.

3.40 In 2009, the Young Foundation53 reiterated theimportance of increased contact betweenneighbours, leading to improvements in localdecision making and the impact that this can haveon neighbourhood well being. The YoungFoundation highlight that “regular contact betweenneighbours is an important element, feeling asthough you belong to a neighbourhood”, and citeincreased geographical mobility and the demise ofcivic institutions as causes for declining contactbetween neighbours. They continue that “there aremany ways to increase the sense of worth thatpeople have in their neighbourhoods; valuing theircontributions and people feeling that they havesome say and stake in the place they live are alsoimportant factors in creating the conditions for thatsense of worth.”

3.41 The appointment of a Communities Minister in 2004reflected a growing interest in communities andneighbourhoods. Speaking in 2005, David Miliband,the first Communities Minister, highlighted that “atthe heart of this renewal is the commitment to civicaction that creates value for society - civic actionthat is done in the main at local rather than nationallevel - civic action that is rooted in civic pride”. TheCommunities Ministry has led to an agenda for“localism”, seen by some as an antidote to thefacelessness, impersonality and cost of centralcontrol and big government, although it is unlikelythat most activities that have stemmed from thisagenda, primarily operating at a local authority level,will engage at a level “local” enough for ordinarypeople and communities to engage with.

3.42 Communities and consumerism - this growingcommunity agenda – Thake’s shared narrative andBauman’s recognition and inclusivity - sitsuncomfortably with the individualist consumeragenda. This is particularly illustrated in the socialhousing sector, where a lack of experience ofcommunity amongst most tenants, and varyinglevels of ability amongst traditional sector providersto understand, engage or in some cases to evensee the importance of community relationships, hasled many to espouse that tenants’ single aspirationis to receive good quality service, and that the wayto meet that aspiration is to treat tenants solely as“customers”. For example, in 2004, the HousingCorporation argued for54 greater use of “marketingtools, customer intimacy and market segmentation”.

3.43 This is an over simplification of the relationshipbetween tenant and landlord. Firstly, it oversimplifies a wide range of tenant needs andaspirations, such as providing life and employmentopportunities, tackling anti-social behaviour,providing environmental improvements ordeveloping community. These issues cannot be

mapped using market techniques, particularly giventhat it is rarely easy for social housing consumers tobehave like customers and take their customelsewhere.

3.44 Secondly, the TSA55 identification that tenants wantthe “softer, human elements of service” and a“cheerful, helpful, caring, understanding attitude”echoes a previous identification by the NationalConsumer Council56, discussing all public services,that “people spoke about empathy, compassion,warmth, the human touch, respect – taking the timeto listen and respond to individual circumstances,and focusing help on people who need it most.”Tenants often suffer isolation, and their links withtheir housing service can be one of their onlyexternal links. The relationship between tenant andlandlord often performs an important socialfunction, and in some cases, it is a vital lifeline.

3.45 Thirdly, an approach that seeks to match theproduct to the customer is premised on a pre-determined product, with an assumption made thatthe infrastructure is right and that it is only theproduct that needs to be adjusted to meet customerexpectations. An approach based solely on peopleas “consumers” means that people are notencouraged to have higher expectations than theproduct currently on offer, particularly in the socialrented sector where people have low expectations,and where their ask will usually be at best a slightlybetter version of what is already on offer.

3.46 The Tenant Involvement Commission57, consideringthe relationship between tenants of housingassociations and their landlords, concluded thatmuch of the sector has a “paternalistic get what youare given culture” and argued that tenants want a“new relationship” based on a synthesis ofcommunity and consumer approaches. They saidthat tenants “want good quality services, but therelationship they want with housing associationsgoes beyond normal customer service as it opensup an element of partnership. There is a need torenew and refresh the relationship between landlordand tenant, based on customer service, mutualityand business success.”

Key conclusions

1 People’s primary housing aspiration is to live in adecent quality home that meets their needs.Once in a home, they refer to issues such assecurity, freedom, status and the role of thehome in their standard of living and quality of life.

2 Most people identify individual home ownershipas being the tenure that is most likely to meettheir needs and aspirations and for many


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households the experience of home ownershipwill match their expectations. However thevariability of the sector and issues of access andaffordability, particularly for newly forminghouseholds, mean that the tenure does notdeliver the same benefits to everyone.

4 Co-operative and mutual housing is able meet atleast some of the needs and aspirations ofpeople with regards the areas we have identifiedas being what people want from their housing,such as security, status and standard of living.

5 Freedom in relation to housing tenure is acomplex mesh of perceptions, choice and othercriteria. More freedom and independence isavailable to those with greater resources, but forthose on middle to low incomes, freedoms canbe limited. Co-operative and mutual housingmodels may offer significant levels of freedom forthose who cannot afford to buy a home.

6 Co-operative and mutual housing is an option ofchoice for some people because of its sharedsense of belonging, identity in communities and

mutual support structures. With publicity, co-operative and mutual housing models have thepotential to become the option of choice for awider body of people.

7 Co-operative and mutual housing may have aparticular role to play in meeting the need for anew intermediate market for home ownership,particularly providing homes for young peopleand newly forming households not able toaccess traditional home ownership. It could alsoplay a role in providing mutual supportivehousing for elderly people, black and minorityethnic people and other particular groups.

8 There may also an opportunity for the co-operative and mutual housing sector to re-framethe relationship between individuals asconsumers and as members of society in waysthat both respect people’s desire to makechoices about the kind of services they requireand their need to engage with and shapeservices and communities on a human level thatgoes beyond a simple commercial interaction.

Footnotes21 Hunter, K (2009) Commission on Co-operative and Mutual Housing

focus groups M.E.L Research. This research is available on theCommission’s website

22 Quoted in Inside Housing 17 July 200923 CML Housing Finance report “Improving attitudes to home

ownership” – Bob Parnell March 2007 – studies based on BMRBOmnibus surveys carried out in January 2007

24 Hills, J (2007) Ends and means: the future roles of social housing inEngland – London School of Economics – figures from the BritishSocial Attitudes Survey 2005/6

25 Tenant Services Authority (2009) Existing Tenants Survey 2008 TenantMobility and Aspirations based on interviews with 19,307 generalneeds tenants, 808 supported housing tenants and 1,147 sharedhome owners

26 Hunter, K (2009) Commission on Co-operative and Mutual Housingfocus groups M.E.L Research

27 An attendee at the Commission’s social housing tenants focus group28 Williams, P (2007) Home ownership at the crossroads - CML Housing

Finance Report29 Ipsos Mori (2007) Assets and opportunities – Notting Hill Housing

Trust30 TAROE, NFTMO, CCH (2008) Developing housing strategy in a post

credit crunch world31 YouGov (2009) – a Chartered Institute of Housing survey of 2,028 UK

adults, with particular interviews carried out with members of theYouth Empowerment Board of east London housing associationPoplar HARCA

32 Ipsos Mori (2009) High Wire Britain - Scottish Provident33 Hunter, K (2009) Commission on Co-operative and Mutual Housing

focus groups M.E.L Research34 TAROE (2009) – Response document: Building a Regulatory

Framework35 Tenant Services Authority (2009) Building a Regulatory Framework36 Kate Davies, Chief Executive Notting Hill Housing Trust – press

release for Assets and Opportunities 200737 House of Commons CLG committee (2009) Housing and the Credit

Crunch: follow up report38 Communities and Local Government - Survey of English Housing39 Merryn Somerset Webb – writing in the Sunday Times 200540 Tenant Services Authority (2009) Existing Tenants Survey 2008 Tenant

Perspectives on social landlord services41 Argyle Street Housing Co-op (2007) The case for new co-operative

housing in Cambridge42 Rodgers, D (2009) New Foundations: unlocking the potential for

affordable homes The Co-operative Party43 UK Co-housing Network website – www.co-housing.org.uk 44 DCLG (2008) Lifetime Homes, Lifetime Neighbourhoods – a national

strategy for housing in an ageing society Department of Communitiesand Local Government/Department of Health/Department of Worksand Pensions

45 Thomas, G (2009) Keeping control of our lives: mutual retirementhousing for older people

46 Brenton, M (1998) Co-housing communities for older people in theNetherlands Bristol Policy Press and Brenton, M (2005) Co-housingfor older people: housing innovation in the Netherlands and Denmark’Australian Journal of Ageing


48 Thake, S (2008) writing in report series on Social Evils - JosephRowntree Foundation

49 Bauman, Z (2000) Liquid modernity50 Scase, R and Scales, J (2003) Regional futures and neighbourhood

realities National Housing Federation. The research quoted from theESRC British Household Panel Survey based on interviews withc.12,000 families. 56% of survey respondents listed “friendlycommunity” as the most important neighbourhood priority, followedby a quiet area (42%), low crime (38%), access to town and shops(37%), access to countryside/open spaces (29%) and transport(28%)

51 Communities and local Government Best Value PerformanceIndicators (2006/7)


53 The Young Foundation (2009) Neighbourhoods, empowerment andwellbeing

54 Housing Corporation (2004) Sector Study 35a55 Tenant Services Authority (2009) Building a Regulatory Framework56 National Consumer Council (2005) Playlist for Public Services57 Tenant Involvement Commission (2006) What Tenants Want National

Housing Federation - based on the views of a cross section oftenants assembled at a deliberative forum held in Leeds in 2005

This chapter identifies:

■ different types of co-operative and mutualhousing;

■ statistical information about the sector – itssize, who it houses, where it is;

■ common characteristics and what unites thesector.

4.1 Co-operative and mutual housing organisationsexist or have existed in a number of different forms.As well as identifying co-partnership housing in theearly 20th Century and its links with the Garden CityMovement, Rowlands58 refers to two subsequentco-operative and mutual housing developmentphases – co-ownership followed by “commonownership and tenant management”.

4.2 Co-ownership housing was promoted byGovernment through the Housing Corporation in the1960s and 1970s. It was intended to be a form ofco-operative housing for those who would not beeligible for social renting but who also would beunlikely to enter individual home ownership.However, neither the Housing Corporation, normany of the initiators of co-ownership societies hadany commitment to co-operative housing andconsequently, although the co-ownership sectorgrew to more than 35,000 dwellings, they did notpass co-operative values and principles on to thesector’s members. The resistance to its dismantling,when the opportunity for sales to individualoccupiers arose, was limited, and so in the 1980s, itwas largely transformed into a part of the homeownership sector.

4.3 The “common ownership and tenant management”phase developed from the 1970s onwards and wasfocused on people in social housing need.

4.4 Social rented co-operative and mutual housing -currently there are a number of social rented modelsthat could be considered co-operative and mutualhousing including:

■ Government funded ownership housing co-operatives – where members and tenants ofhousing co-ops own, manage anddemocratically control their housing. Most ofthese co-ops developed as a result of aGovernment programme to enable access topublic funding in the 1970s and 80s, which

meant that most of the 450 co-ops developedthrough this route at that time were for people insocial housing need. By 1990, their number haddwindled to 247, but that number has remainedmore or less constant since then. They aresupported in various ways, but significant groupsbuy services from support organisations inLondon, Birmingham, Liverpool, Sunderland andLeicester. Redditch Co-operative Homes, withits five independent leasehold housing co-operatives has been the only significantdevelopment of Government funded newownership housing co-operatives in the lastdecade.

■ tenant management – where tenants of localauthorities or housing associations formorganisations to take responsibility for thedemocratic management of features of thedelivery of housing services through amanagement agreement and allowancesnegotiated with their landlord. Some 250 tenantmanagement organisations were established bylocal authority tenants in the 1980s and 1990s,many through a legal “Right to Manage”introduced in 1994. Kensington and ChelseaTMO, the largest set up, managing nearly all ofits council’s homes, has subsequently becomethe only tenant controlled Arms LengthManagement Organisation. A small number ofTMOs have been established through a voluntaryagreement with housing associations, althoughthis number is growing as a result of the transferof local authority housing stock to housingassociations. Commission case study WatmosCommunity Homes is a notable example oftransferred tenant management organisations,where 8 TMOs in Walsall established their ownindependent joint housing association landlord.

■ mutual and tenant owned transfer housingassociations – Walterton and Elgin CommunityHomes became the only mutual housingassociation in England to emerge from TenantChoice legislation in the 1990s. More recently,some local authority tenants and councillors,uncomfortable with the transfer of their homes tohousing associations, wanted the option oftransfer to tenant membership owned housingassociations. Commission case study Preston’sCommunity Gateway Association was the firsttenant owned transfer association set up, withthree subsequent gateway transfers and more

4 Co-operatives and mutuals? What’s different about them?

29

potentially in development stages. Two have alsobeen established in Wales, using the equivalentWelsh Community Mutual model. As well as this,Commission case study Liverpool Mutual Homesalso established itself as a membership basedhousing association, importing some features ofthe community gateway model, and in Scotland,Communities Scotland encourages transferhousing associations to offer membership totheir tenants.

■ housing associations exhibiting features ofmutuality – as well as the above formal mutualhousing models, there are a number of housingassociations that could be considered to exhibitsome characteristics of mutuality. Communitybased housing associations have emerged fromlocal community activity without formalcommunity membership structures, but with highlevels of resident influence. Some landlords nowask their tenants to formally opt into residentinvolvement activities (eg. homeless charity StMungo’s has established a membershipstructure to enable their clients to exercise somecontrol over services provided to them) and itmight be argued that the strong loyalty andidentity exhibited by some tenant respondents totheir landlords in the TSA’s NationalConversation is a nascent, but as yetunformalised, form of mutuality. Some housing

associations are beginning to think in a co-operative fashion. Whilst not co-operativesthemselves, a group of housing associations inthe West Midlands have formed the MatrixHousing Partnership as a commercial co-operative59.

4.5 Privately resourced co-operative and mutualhousing - all of the above models have developedwith some form of public funding to provide mutualhousing solutions for people in social housing need.Without access to Government funding, someprivately resourced co-operative and mutualhousing organisations, many of them quite small,have emerged to meet specific housing needs:

■ short life co-operatives – where co-operativestake responsibility for unlettable properties for anindeterminate period of time, which can spanseveral years. Short-life co-ops, largely operatingin London, where many of its tenants might beeligible for social housing in other parts of thecountry, enter into a lease agreement with localauthority, housing association or private sectorlandlords, and issue temporary tenancyagreements to their members. WestminsterHousing Co-op, one of the largest housing co-ops in the country, is a short life co-op withagreements with landlords in several Londonboroughs.


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Commission case study – Liverpool Mutual Homes was formed following transfer of 15,000 homes fromLiverpool City Council in April 2008. The mutual aspect and high degree of tenant involvement were key toobtaining a positive ballot response. LMH is one of few social rented landlords that has a tenant majority Board (9out of 16) which is replicated on LMH’s five neighbourhood boards. LMH has a membership open to tenants andaims to recruit the majority as shareholders. LMH has adopted some facets of the Gateway model and places apremium on value added approaches such as job creation beyond its housing improvement pledges to tenants.

31

■ non-Government funded ownership co-ops - asmall number of independent ownership (or in somecases management) rental co-ops have developedproviding shared housing, usually in just onebuilding, through the use of loanstock, ethicalfunding and other means. Many of theseorganisations have received support from a nationalorganisation called Radical Routes.

■ co-housing – eight co-operative co-housingcommunities (with as many as 60 others atvarying stages of development) have beenestablished to provide a community basedapproach to owner occupation (with the optionof some shared ownership), with an emphasis onestablishing mutual support networks (eg. forelderly people or families) through designingschemes to facilitate community interaction andthe use of common space facilities. SpringhillCo-housing in Stroud was the UK’s first newbuild co-housing scheme. The Threshold Centrein Dorset is the first mixed-tenure co-housingscheme to gain planning permission andGovernment funding and other Housing

Associations are actively considering similarpartnerships.

■ community land trusts – a generic termreferring to community ownership of land orother assets deriving from the US, communityland trusts offer community based opportunitiesfor asset ownership to meet the needs of thecommunity the trust serves. Various communityland trust pilot schemes are currently underdevelopment, where land or other subsidy isbeing used primarily to enable affordable homeownership. The Building and Social HousingFoundation suggest that the community landtrust model is particularly appropriate in rurallocations as a means of creating homes forpeople on modest incomes but not eligible forsocial rented housing. They refer to theStonesfield Community Trust, created in 1983 inresponse to escalating rents and property pricesin the Stonesfield village in Oxfordshire, whichhas developed 14 affordable homes, a postoffice and local employment opportunities.Community land trusts do require some form of

Commission case study – St Mungos was set up in 1969 to tackle street homelessness in London and is thelargest provider of hostel beds in the capital. As well as providing temporary and permanent housing, they offer awide range of non-residential services covering outreach, resettlement, employment and training particularly forpeople with drugs, alcohol or mental health related problems. Outside In was set up in 2005 to give St Mungos’clients a say in how the organisation is run. Membership of Outside In is open to all clients, and all clients arewelcomed to general meetings, but membership has to be informally “activated” and this process of activationand the subsequent activities clients get involved in is a key part of their recovery process, helping them to buildself-esteem and confidence. Membership of Outside In has steadily grown, although this fluctuates because thepurpose of St Mungos is to enable clients to move on, and its membership have initiated a number of servicerelated changes in the organisation – based on their personal experiences of what needs to change. Clientsdescribe their ownership and membership of Outside In as being important to them because it starts to give themsome element of control over their lives. It is a vital means of tackling isolation, providing peer support, andpersonal development that helps clients through a difficult and challenging period in their lives.

public or private subsidy in order to make theirhomes affordable, but various approaches arebeing used to ensure that subsidy to communityland trusts is locked into the trust and recycled.

Similar principles lie behind community buyoutprogrammes in Scotland, coming about throughlegislation that gave communities a first option tobuy land when it came onto the market andGovernment resource support that enabled localcommunities to buy. Successful community buy-outs, such as on the islands of Gigha and Eigg,have breathed new life through new housing,employment and social opportunities intopreviously dying communities.

4.6 Mutual home ownership - the mutual homeownership model has been developed as aparticular form of intermediate market housingdeveloped on land owned by a community landtrust. Developed by CDS Co-operatives60, mutualhome ownership is proposed as a new way forpeople to own a stake in the housing market. Itsintentions are to make it possible for households onmodest incomes priced out of traditional homeownership to access the housing market. It treatshousing as a consumer durable, not a speculativeinvestment. Instead of owning an individual propertyor a percentage share of an individual property,resident members own equity shares in a portfolio

of properties mutually owned by them and otherresidents built on land held as a community assetby a community land trust. The number of shares amember owns depends on what they can afford.The more they earn, the more equity shares theycan afford to finance through their monthly rentalpayments to the mutual. As incomes rise, they canbuy more equity shares, and if incomes fall, ratherthan the member lose their home, they can sellequity shares if there is a willing buyer, or inspecified circumstances, convert to a rentaltenancy. The value of equity shares is linked toaverage earnings, which reduces risk for residentsand retains affordability for future generations.

4.7 Where are they? Work carried out for theCommission by Gulliver/Morris61 identified some836 co-operative and mutual housing organisationsin the UK, managing a little over 169,000 homes(only 0.6% of all UK housing), of which 92,000 or54% are owned by the co-operative and mutualhousing organisation, the remaining 46% beingmanaged on behalf of others. 62% are registeredwith UK housing regulators. 91% of UK co-operative and mutual housing is in England, with5% in Scotland and 3% in Wales. Whilst co-operative and mutual housing organisations can befound as far afield as Northern Scotland and theScilly Isles, most organisations exist in the majorconurbation areas - 414 (54%) of organisations are


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located in Greater London (71% of TMOs), withother major stock holdings found in Midland andNorthern cities.

4.8 Co-operative and mutual housing organisations areusually centred around one geographical area,which gives them a community identity that is co-terminus with their geographical location. Smallerorganisations may be only one building or onedevelopment, whilst tenant managementorganisations are usually formed to takeresponsibility for management of a clearly definedestate or neighbourhood. The original homes ownedby housing co-ops may have been developed inone location, but as they developed further, theymay have bought or built homes anywhere theycould in the wider neighbourhood. Similarly shortlife co-ops may stretch across wide areas,dependent on the homes they take management of.Larger mutual housing organisations such asCommunity Gateways can be spread over aborough or potentially further, but it is a distinctfeature of the gateway model that they carry outfocused work within areas that match localcommunity identity.

4.9 Who is housed by the sector? Gulliver/Morris useCORE lettings data from the NHF (which only referto social rented co-operative and mutual housing) toshow the diversity of lettings amongst registeredhousing co-ops and community gateways andmutuals. They particularly highlight highpercentages of lettings to black and minority ethnicapplicants (32% housing co-op lettings and 27%Community Gateway and mutual lettings, asopposed to 20% of lettings by small housingassociations and 17% by all housing associations),with particularly high percentages of south Asianand Indian applicants housed. However,Gulliver/Morris qualify these points by suggestingthat percentages for housing associations may belower due to the specialist and rural nature of someassociations.

4.10 Gulliver/Morris identify that single adult householdsare the primary client group for housing co-ops andcommunity gateways, with lone parent familiesbeing the second major household group housed,and multi-adult households with children the third.They particularly point out that people housed byco-ops tend to be younger – the average age ofhousehold heads being 36.5 as opposed to 45.3 forsmall housing associations, and with only 8% oflettings made to people aged 60 or over.Proportions of lettings by housing co-ops to peoplewith a self-defined disability (9%) was lower thanthe housing association sector (18%), but washigher for community gateways (24%).

4.11 Whilst lettings to statutory homeless householdswas higher for community gateways and mutuals(24%) compared to all housing associations(17.6%), statutory homeless lettings were a lot lowerin housing co-ops (7.4%). Nonetheless, 20.7% ofnew applicants housed by housing co-ops(compared to 20.5% by small associations) werenon-statutorily homeless.

4.12 Unifying factors - the Commission faced thefollowing particular challenges in carrying out thisreview:

1 to define unifying factors between co-operativeand mutual housing organisations (that exist inthem by virtue of them being co-operative andmutual);

2 to understand whether unifying factors specificto co-operative and mutual models lead to anyparticular benefits (or whether those benefitscould be derived without them being mutual);

3 to determine whether benefits specific to co-operative and mutual housing organisationswarrant public or other support in order to furtherdevelopment of existing or new models;

4 to identify steps that could be taken by housingorganisations and others to move towards co-operative and mutual housing.

4.13 The first of these challenges was comparativelyeasy. The central unifying factor behind all the co-operative and mutual housing models - that makesthem different from other housing models - is theircommunity and service user membership structure,through which members democratically own,control and make decisions (on a one member onevote basis) about their housing organisation(including the bricks and mortar in the case ofownership models). In most co-operative andmutual housing organisations, all residents arerequired to be members, but in others whereresidents can choose to be members, the more whoexercise that choice and take advantage of thebenefits that membership brings, the stronger themutual identity.

4.14 The Commission also recognises that many housingorganisations can and do recognise the value ofcommunity, and benefits derive from activitiesrelated to this value. The Commission’srecommendations include “steps towards mutuality”that could be taken by housing organisations toadopt some mutual characteristics that may notinvolve taking on full mutuality.

4.15 The second challenge, not as straightforward as thefirst, is to consider whether community membershipand consequent member control makes a differenceand how it makes a difference. This is the subjectmatter of the next chapter.

4.16 The third and fourth challenges are addressed in theeighth chapter and the recommendations of thereport.

Key conclusions

1 There is a wide diversity of co-operative andmutual housing types that have evolved indifferent ways to meet particular needs. Somemodels have been state funded and some,usually smaller organisations, have beenprivately resourced. It may be possible todevelop hybrid organisations that encompassexisting and future co-operative and mutualhousing models.

2 Co-operative and mutual housing represents0.6% of housing in the UK in 836 organisations,the majority being housing co-operatives locatedin urban areas.

3 Co-operative and mutual housing is usuallycentred around a distinct geographical area,although it is not always the case that homes arein one location.

4 Social rented co-operative and mutual housinghouses comparatively higher numbers of peoplefrom a black and minority ethnic background,and caters particularly for single adults andsingle parents. The age range of co-operativeand mutual housing tenants tends to be slightlyyounger than other social rented housing.

5 The defining characteristic for co-operative andmutual housing is that its residents have a legalright to become its members which gives themdemocratic control on a one member one votebasis. As well as this, a mutual organisationencourages all of its service users to becomemembers and participate in governance, and themore that do, the more mutual the organisationbecomes.


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Footnotes58 Rowlands, R (2008) Forging Mutual Futures – Co-operative and

Mutual Housing in Practice – History and Potential University ofBirmingham Centre for Urban and Regional Studies. This research isavailable on the Commission’s website

59 The Matrix Housing Partnership is a unique commercial co-operativestructure, developed in partnership with Anthony Collins Solicitors,that could in the future become a blueprint for part of the overallarchitecture of the support structures for the co-operative and mutualhousing sector

60 Rodgers, D (2009) New Foundations: unlocking the potential foraffordable homes The Co-operative Party

61 Gulliver, K. and Morris, J. (2009) Exceeding Expectations: The Natureand Extent of Resident and Community Controlled Housing in theUK, Human City Institute, Birmingham. An extract from this researchis shown on the Commission’s website. Data was assembled byintegrating Housing Corporation and Scottish and Welsh regulatorsdata with data from Co-operativesUK and the National Federation ofTMOs

62 The democratic community membership structure works in differentways in different co-operative and mutual housing organisations, butcommon features are as follows:

■ all tenants and other services users are offered shareholding membership of the organisation, usually for a nominal, non-returnable fee. In the case of most housing co-ops, many tenantmanagement organisations, and co-housing schemesmembership of the organisation is a pre-requisite for becoming atenant or service user.

■ tenant, service user or community membership has to make upat least a majority of the shareholding membership. Most co-operative and mutual housing has exclusive service usermembership

■ general meetings of the organisation are open and publicised toall members, and operate on a one-member, one-vote basis.Powers at general meetings will differ, but at the very least, thegeneral membership has some electoral powers over at leastsome of the governing body members, and resolutions in generalmeetings would influence decision-making in the organisation’sgoverning body. Generally, the smaller the organisation, thestronger the powers of the general membership. In the smallestco-operative and mutual housing organisations, the generalmembership are the governing body and no committee or boardis elected. In slightly larger organisations (most housing co-opsand tenant management organisations), the general membershipexclusively elects a management committee or board as thegoverning body, and has legal decision-making powers ingeneral meetings. In the largest co-operative and mutual housingorganisations – the Community Gateways - the powers of thegeneral membership are limited, electing only the service usercomponent of a board, mostly through an intermediary serviceuser body.

■ in all cases, it would be expected that the co-operative andmutual housing organisation would operate a range of otherdifferent ways to encourage involvement in decision-making

This chapter considers:

■ the performance of co-operative and mutualhousing organisations against hard data(tenant satisfaction and performanceindicators) and soft data (community,empowerment, life opportunities andenvironmental);

■ whether and how any benefits derive from co-operation and mutuality.

5.1 Rowlands63 refers to an evidence gap regarding co-operative and mutual housing. Very littleperformance data exists for co-operative andmutual housing organisations not registered with theTSA, but even with regards registered housing co-operatives, Rowlands points out that because oftheir small size, housing co-ops “are not required tocollect performance indicators and therefore find itdifficult to collate this information readily unlesssupported by another organisation which is subjectto the [regulatory] regime”. Limited collective data isalso available about tenant managementorganisations, the last research on the sector havingbeen published in 200264.

5.2 This chapter extrapolates from the data that isavailable, most of which relates to housing co-opsregistered with the TSA. Rowlands provides somedata, and refers to other evidence65 that is now“somewhat dated”. The TSA has recently publisheddata regarding housing co-ops from its NationalConversation66. Data, assembled byGulliver/Morris67 for the Commission from TSA, Co-operativesUK, NFTMO and NHF databases includessome performance information. Cairncross et al68

provide information on performance in the tenantmanagement sector.

5.3 Rowlands also expresses concern about anevidence gap regarding “the contribution ofmutualism and co-operation to the benefitswitnessed in these organisations”, and refers to theimportance of understanding how co-operation andmutuality “influence day-to-day activity, processand relationships.” This chapter seeks to useCommission evidence, primarily evidence gatheredat hearings, to develop this understanding.

5.4 Delivering what people want - the Commissioncame across a range of satisfaction data, all of

which points to generally higher satisfaction ratingsin co-operative and mutual housing, with someorganisations returning extremely high ratings:

■ Rowlands referred to much higher satisfactionlevels (above 90%) found in returns from 4housing co-ops;

■ high levels of tenant satisfaction were alsoreported to the Commission by the ScottishWest Whitlawburn Housing Co-op, who surveyeda 16% sample using a door knocking exerciseacross their 600 homes, reporting that notenants had expressed dissatisfaction withoverall satisfaction listed at 92%;

■ CDS Co-operatives provided the Commissionwith satisfaction ratings from postal STATUSsurveys carried out in 2008 for 45 housing co-ops, including 40 who buy services from CDS.These surveys produced an overall 78%satisfaction rating on a 41% turnout. 5 co-opsreceived 100% satisfaction ratings, and 22satisfaction ratings of 80% or over, whilst 12received satisfaction ratings of below 70%, with2 having satisfaction ratings below 50%;

■ Commission case study Redditch Co-operativeHomes report a 98% satisfaction rating;

■ in 2002, Cairncross et al69 reported that 77% ofTMO tenants (in a group of TMO case studies)indicated satisfaction, particularly finding a highsatisfaction rating of 81% amongst black andminority ethnic tenants (compared to a 51%equivalent satisfaction rating amongst black andminority ethnic tenants in local authority housingat that time);

■ in 2006, WATMOS Community Homes recordedsatisfaction ratings of 86%, with a range of 94%to 73% for its 8 constituent TMOs. Similarly, in2008, London Borough of Southwark’s portfolioholder for housing Cllr Kim Humphreys said thattheir satisfaction surveys had consistently shownhigher levels of satisfaction amongst TMOtenants, adding that “I want tenants in theborough to be happy, so it follows that I shouldbe telling them about the potential benefits ofsetting up a TMO!”;

5 Well, so what’s the big deal?

37

■ TMOs managing local authority homes arerequired to have a five yearly continuation ballotin which all tenants in the area managed areballoted on whether the TMO should continue tomanage. The NFTMO reported that they are “notaware of a single instance of tenants votingagainst continuation”, and it is more usually thecase there are high votes in favour. For example,in 2007, 99.28% of tenants who voted (on a 29%turnout with 833 tenants eligible to vote) on theFriday Hill estate in Chingford, North Londonvoted to continue with their TMO managementarrangements, and in 2009, 91.86% (on a 35%turnout with 2,277 tenants eligible to vote) on theBelle Isle estate in Leeds voted in favour ofcontinuation.

5.5 These generally high tenant satisfaction statisticshave been confirmed for housing co-operatives bythe TSA’s National Conversation survey thatshowed an 88% satisfaction rating amongsthousing co-op tenants, as opposed to a 77% ratingfor housing association and council tenants70. TheTSA conclude that “although they accounted forjust one per cent of tenants, co-operative tenantswere the most satisfied with their landlord

compared to all other landlord types”. The TSA alsoconclude that a breakdown by landlord type “showsclearly that co-operative tenants rate their landlordmore highly across all of the specified services.”

5.6 The TSA go on to record that when asked what, ifanything, landlords needed to do better, “co-operative tenants were the group most likely to saythat their landlord already does a good job (15%), incomparison only 2% of ALMO tenants, 3% ofcouncil tenants and 6% of housing associationtenants said this.”

5.7 TSA satisfaction statistics for TMOs were 78%, butthe NFTMOs consider that statistics relating toTMOs were “unreliable and contrary to what webelieve to be the true position” due to a number ofinconsistencies in the survey form used with regardsthe status of TMOs, and the lack of consideration of“the location and nature of the stock managed byTMOs”.

5.8 Getting the hard nosed stuff right - Rowlandsrefers to two major reports (by Price Waterhouseand Satsangi/Clapham) published by theDepartment of the Environment in the 1990s71 which


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Table 4: TSA National Conversation - what does your landlord do well?

Total HA/RSL Council ALMO TMO Co-op

Base: All tenants in the postal consultation 23,441 16,982 3,019 1,505 370 205Mean Mean Mean Mean Mean Mean

Help with housing benefit 3.91 3.93 3.85 3.76 3.69 4.14

Customer service (eg answering 3.82 3.85 3.70 3.72 3.54 4.19the phone quickly when you ring)

Giving you the chance to have your say 3.77 3.80 3.60 3.67 3.47 4.38

Keeping you informed 3.70 3.75 3.48 3.51 3.52 4.31

Repairs and maintenance 3.65 3.65 3.65 3.57 3.64 4.04

Health and safety for tenants 3.59 3.63 3.44 3.38 3.33 4.17

Dealing with complaints 3.44 3.46 3.33 3.34 3.20 4.05

Help with money or debt advice 3.44 3.50 3.20 3.32 3.11 3.61

Looking after the communal areas 3.31 3.65 3.07 3.05 3.14 3.80of your estate/building

Dealing with anti-social behaviour 3.22 3.28 2.97 3.01 3.08 3.71

Looking after the neighbourhood 3.09 3.12 2.97 3.02 3.04 3.55

Security in your neighbourhood 3.09 3.12 2.95 2.97 2.92 3.63

Providing community facilities 3.04 3.09 2.89 2.74 2.86 3.45

Help with getting a job or 2.81 2.86 2.53 2.77 2.59 3.40developing your skills

Reproduced from Tenant Services Authority (2009) National Conversation – phase one findings. The TSA table points out that “significantdifferences between groups are denoted by bold font. If a finding is shown in bold, it is significantly higher than the findings for other groups”.

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“highlighted the efficiency of tenant controlledorganisations in relation to a set of performanceindicators and higher levels of tenant satisfactioncompared to the social rented sector as a whole.”However, Rowlands points out that these reportsare “somewhat dated” and that Satsangi andClapham had not been able to identify whether theperformance of co-ops was due to their small sizeor their co-op status.

5.9 The Commission had three datasets available toconsider housing co-op performance information –Rowlands’s conclusions, based on limited andpartial data from 57 co-ops; Gulliver/Morris’s data,based on information provided by the NHF; andinformation supplied by CDS Co-operatives on 44co-ops it provides services to. The conclusions fromthese datasets are:

■ arrears – Rowlands concludes that “the averagelevel of current tenant arrears is significantlylower overall in the co-ops than the nationalaverage (1.4% compared to 5.2%)”. Arrearsrecorded by the CDS co-ops were an average of2.96%.

■ vacancies and relet times – Rowlands andGulliver/Morris conclude that vacancies and relettimes are lower than social housing norms, andCDS co-operatives record a void rent loss of0.86%.

■ repairs and “decent homes” – Rowlandsconcludes that “co-ops fare comparably with thenational average for routine repairs”, andreferring to the Government’s decent homesstandard, concludes that “co-ops reportingfigures show a dramatically lower level of non-decent homes”, whilst Gulliver/Morris says thatco-ops “compare favourably on repairsperformance and housing ‘indecency’ isdramatically lower (at 4% compared to 10% forsmall associations)”. CDS co-operative statisticsshow that co-op homes not meeting decenthomes standards lie at an average of 0.93% - afigure amplified by one single co-op having 31%of their homes failing the standard – only 4 co-ops record any homes that do not meet thestandard.

5.10 Gulliver/Morris conclude that “there is growingevidence from HCI case studies and others thatresident and community controlled housingorganisations are more than competent housingmanagers”, whilst north of the border, Tenants FirstHousing Co-op, the largest housing co-op in theUK, with homes spread across Aberdeenshire,reported that their recent Communities Scotlandregulatory report had given them a grade “A” forhousing management services and an “excellent”rating for their care and sheltered housing services.

Commission case study – developed in 2002, WATMOS Community Homes was set up to take transfer fromWalsall Borough Council of 1,800 homes managed by the 8 neighbourhood tenant management organisations in theborough. With a board made up of 8 tenant representatives from the TMOs with 4 independents, WATMOS becamethe central core of the organisation whilst preserving local community control through the constituent TMOs

5.11 Cairncross et al72 is the only comprehensiveinformation on performance in the tenantmanagement sector. At that time, there were 202established TMOs across 53 local authorities, with afurther 81 in development. They concluded that“TMOs are providing an effective service in terms oftheir own aims and objectives. In most cases, theyare doing better than their host local authorities andcompare favourably with the top 25% of localauthorities in terms of repairs, relets, rent collectionand tenant satisfaction.” However, they too pointedto limited available performance information, aproblem they suggested was endemic in the localauthority sector generally. WATMOS CommunityHomes reported an impressive set of statistics atthe end of 2008/9, including average rent arrearsacross their 8 TMOs of 3.59%, and an average of10.9 days to let a property against 25.8 days for thetop quartile in the housing association sector.

5.12 Building real communities – Cairncross et al73

identified that “the development of community spiritwas widely identified by TMOs as one of their mainachievements”. They went on to say that 77% ofresidents in their TMO case studies felt that theirTMO had made a quality of life difference.

5.13 Davids74 identifies that housing co-ops “live out theethics of real community living” and stand for“community warmth and community wellbeing”. Acommon uniting factor of all co-operative andmutual housing is that the development ofcommunity, a shared sense of belonging andidentity, lies at the heart of each organisation.Rowlands recognises this, firstly referring to a 2001report75 that “indicates the positive role that co-opscan play in addressing social exclusion”, and thenhighlighting the ability of co-operative and mutualhousing organisations “to develop high levels ofbonding capital and contribute to making a place acommunity”.

5.14 The following points are a sample of countlessreferences to community gathered in theCommission’s hearings and from other evidence:

■ Jude Bramall from Lark Lane Housing Co-opspoke of “co-ops building a village feel in the bigcity”, a theme developed by the Co-housingNetwork referring to co-housing as “a newtradition in living providing the benefits of yester-year’s hamlets and city quarters”;

■ Paddock Housing Co-operative’s Margaret Copeexplained that in co-ops “you look out for yourneighbour, knowing that your neighbour will lookout for you. And the children all know that theycan knock on any door, and people will look aftereach other’s kids as if they were their own”;

■ Brian O’Hare from Huyton Community for theElderly explained that “people look out for eachother in the co-op” and go on holiday together.He also said that the reputation of the co-op hadspread into the wider area and a number of localhome owners participate in the co-op’scommunity activities;

■ 20/20 Housing Co-operative’s Helima Zindanisaid “my children have been brought up in theco-op. What a place to grow up! Theyimmediately had a circle of friends, and lots ofsocial occasions - summer and halloweenparties, annual trips to the seaside. They neversaw the need to hang around the streets. Theirstreet was where we live, where they knew that ifthey stepped out of line another co-op memberwould be there to correct them”;

■ Syed Maqsood from North West HousingServices reported that there are “virtually noincidents of anti-social behaviour in the co-ops.They keep their neighbourhoods safe and troublefree”;

■ Alex Lawrie from Somerset Co-operativeServices, discussing non-state funded co-ops,referred to “the community aspect andopportunity to take control of a person’s ownlife” being “incredibly important and somethingspecial”. Four members Cog Housing Co-op,who bought a house in Bristol in 2003 using loanstock and a 70% mortgage, said that “there arestill a lot of repairs and renovation work to bedone but the benefit of living together is thateveryone works jointly which is very empoweringand we have learnt a variety of new skills.Members eat together and cook using a rotasystem which helps with a feeling of a sense ofcommunity”;

■ David Ogilvie from the Scottish Federation ofHousing Associations said that “co-ops createbalanced and engaged communities” - WestWhitlawburn Housing Co-op had “created acommunity out of a broken place”;

■ the Co-housing Network refer to how co-housingoffers “particular benefits for children in terms ofsecure play-space and shared activities withtheir peers” and “companionship and mutualsupport from across the generations” for olderpeople.

5.15 Such comments about community could have beenmade by any number of housing co-op members,and they illustrate how co-op members see thesocial fabric of their community as the essence oftheir co-op. Whilst the interaction of people has


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come about because of the need to take a sharedapproach to running the co-op, for many peoplewho live in co-operative and mutual housing, themechanics of housing can be secondary to thecommunity developed.

“Meeting the challenges of globalisation requiresstrong local communities, strong local leadershipand strong local solutions. Co-operatives haveproved to be a key organisational form in buildingnew models to combat social exclusion andpoverty, for example through local developmentinitiatives. Co-operative members learn from eachother, innovate together and, by increasing controlover livelihoods, build up the sense of dignity thatthe experience of poverty destroys.”76

5.16 Power to the people – the principle of encouragingpeople to participate in decision-making is offundamental importance in all walks of life, butparticularly with regards social rented housing. Thethree national tenant organisations77 point out that“the reality is the current tenant constituency islargely disempowered” and that the TSA’s proposed“co-regulatory” system is dependent on “a majorempowerment culture change amongst landlords,tenants and all other stakeholders”.

5.17 The challenge of how to stimulate ordinary peopleto move from a passive and debilitating‘ us andthem’ dependency to an empowered and informedactive involvement in democracy has been under-estimated. Quick win schemes confuse and muddlethe empowerment process and cannot take theplace of the long term processes needed togenuinely enable people to participate in decision-making.

5.18 With this challenge in mind, the CCH claim that “co-operative housing is a systematic and ongoingmethod of empowering ordinary people to makedecisions and participate in democracy”. SyedMasqood from North West Housing Servicesexplained this further – “it is not possible toempower people in one day. It requires an ongoingapproach over a period of time. In co-ops, membershave the democratic right to vote on all issues; theyreceive proper training to exercise that right; theyare enabled and confident to speak out; and thewhole process brings people together.”

5.19 The democratic theory behind co-operative andmutual housing is important. Built on the principle ofone member one vote, every member has a legaldemocratic and equal right to participate, animmutable right that exists as a permanent safetynet for members. This doesn’t mean that everydecision is put to a vote of all members. Members

vote on policy and strategic matters, delegating dayto day operations to staff or particular co-opofficers. It is up to each organisation to find ways tomake the democratic right as meaningful as it canbe within an effective governance and managementstructure. It is often the balancing of formal andinformal activities that determines the success ofthe organisation’s democratic approach. Forexample, this balance is characterised by:

■ informal social interaction, forming an importantpart of the development of the consensus ofopinion, which is then formalised into theorganisation’s formal decision-makingstructures;

■ formal and informal social activities thatmaximise opportunities for social interaction (theCommission received reports about everythingfrom fundays, trips, shared meals, gardeningactivities and even Ann Summers Parties);

■ informal and organic ways in which membersassimilate the shared culture, history andknowledge of the organisation. Training is oftenon the job and handed down from member tomember. Adam (the son of a Tenant First co-opmember) spoke of how he picked up what heneeded to know at meetings over a period oftime. This grass roots training is then augmentedby formal training;

■ balancing formality and informality at bothgeneral and committee/board meetings –ensuring that they carry out the necessarybusiness at the same time as making themenjoyable events that members look forward to.

5.20 Community Gateway was designed to export thedemocratic participation inherent to co-operativeand mutual housing into a more traditional housingassociation environment. This is done through atwin track approach where a membership structureis open to thousands of potential tenant members,and through neighbourhood based “communityoptions studies”, where local people can choosefrom a wide range of empowerment options. Theapproach was always going to be particularlychallenging in that it sought to develop democracyin large scale environments where the potentialtenant members had rarely experiencedparticipation in democracy before.

5.21 The approach has been largely successful. In a2008 review report for Preston Community GatewayAssociation (CGA)78, BCHS concluded that “there isno doubt that the CGA’s empowerment approachhas been increasingly targeting real practical lifeissues for residents, and doing this in a way that has

never been done previously in Preston. Communityoption studies are beginning to engage with peoplewho would never have come forward previously andthe CGA’s wider empowerment approach isidentifying and beginning to tackle issues thatwould have previously been consideredintransigent. The large numbers of people becomingCGA members may be an indication that the CGAhas started to revive hope amongst a growingcontingent of CGA residents.”

5.22 Building better lives – democratic involvement inco-operative and mutual housing can benefit theindividuals who take part. Cairncross et al79 refer toTMO board members reporting “increasedconfidence and skills” and pointed to TMOs “actingas a focus for other community and regenerationinitiatives, providing a resource at the estate levelwhere local residents can promote and often baseother projects and activities, while providing acontact point for outside agencies wishing to makelinks with the local community.”

5.23 Evidence presented to the Commission suggeststhat a co-operative and mutual housing organisationcan be a “local hub of social, cultural, recreationaland economic activity”80. We were informed of anumber of personal journey stories, whereindividuals, often housed as a result of acatastrophic event in their lives, had used the safeand secure community environment of co-operative

and mutual housing to rebuild their lives, gaining theconfidence and skills necessary to participate inother activities. Pearl Pelfrey from Green DragonLane Housing Co-operative referred to this as“healing”, specifically referring to women referred totheir co-op from women’s refuges. Cyril Davenporttold the Commission that his former membership ofTownshend Housing Co-operative had changed hislife – “when I moved in, I was depressed, out ofwork and no one would give me a job. In a co-op,everyone helped me, and an employer gave me achance when they saw that I was the Secretary ofthe co-op. When I was a Council tenant, no onewanted me to get on.”

5.24 People securing employment as a result of their co-operative involvement was a constant theme atCommission hearings and in call for evidenceresponses. Mick O Sullivan from Finsbury ParkHousing Co-operative referred to “at least 8 people”who had been employed from his co-op; MickDavies said that New Longsight Housing Co-op hadbeen “particularly successful in our tenants gettingemployment as a direct result of their participation”;and Maria Walker from Dingle Residents HousingCo-op spoke of “loads of anecdotal evidence ofpeople getting into work because of the securitythey get in a co-op.” Brent Community Housing toldus of their “history of providing routes out ofunemployment for their members. Over the last 15years as a direct result of their involvement in the


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Commission case study – established in 2005 through transfer of its 6,500 homes from Preston Borough Council,Preston’s Community Gateway Association became the first community gateway in the country. Its threecornered governance structure includes its membership, open to all tenants, its Gateway Tenant Committee,consisting of tenants elected by the membership, and its management board, including 7 tenants elected throughthe Gateway Tenant Committee.

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co-op and training available to members, four of theco-op’s last six chairs have gone on to have careersin the social housing and regeneration sectors.Many other members have developed theconfidence and skills to find sustainableemployment and lift themselves out of poverty,worklessness and addiction.” Margaret Cope fromPaddock Housing Co-operative referred to a formerco-op member who had been a “young singleparent with no idea what to do with her life whenshe came to the co-op. She would barely speak toanyone. We encouraged her to come out of herselfand get involved, and when a job came up, we toldher to fill in an application form, telling her you neverknow until you’ve tried. She got the job, and nowshe’s got a house, a good job and responsibilities.”

5.25 We have also been informed of membership leadingto participation in a fabric of wider communityactivity including becoming school governors,parish councilors, and shareholders in localinitiatives such as village shops, joining creditunions, leading play and youth groups, volunteeringwith HomeStart, developing allotments, andparticipating in cookery courses, bridge clubs,singing groups, yoga classes, book clubs, annualsummer holiday programmes, dance classes andconcerts.

“Our co-operative tenants have gained inconfidence - all we did was to set their potentialfree. From having housing done to them for years,they now are involved in doing housing forthemselves and they’re keen to pass on theknowledge. Many have gained qualifications, andgot jobs. Many have said it has changed their livesfor the better. We don’t just build high quality homes- we also build strong communities.”81

5.26 Larger co-operative and mutual housingorganisations have been in a position to take a morestrategic approach to such activity. Examples wehave come across include:

■ Burrowes Street Tenant Management Co-operative’s community leadership of aneighbourhood management pilot schemeacross the Birchills area of Walsall, whereworking with residents from the wider area andWalsall Borough Council, they have establishedthe Birchills Community Charter;

■ a dazzling array of community infrastructureactivities at West Whitlawburn Housing Co-operative, including their Bonus Ball ResourceCentre, their health club, their employmentsupport and advice service (including holdingemployment surgeries, running accreditedtraining courses, providing childcare, transport

and IT facilities), and a pioneering scheme toinstall fibre optic links into new build homes.Susan Small from the co-op told theCommission that the tenant leadership wantedto “bring new technology into people’s homesand establish social cohesion and communityspirit”. Based on schemes in Holland andLondon, the co-op intends to film local peoplediscussing problems in the area, and use that asa means to bring the estate closer together;

■ Preston’s Community Gateway Association,particularly concerned with the effects of therecession on their tenants has initiated a“worklessness group” consisting of membersand staff to look at how they can support peopleinto employment. This adds to a plethora ofexisting initiatives that support individuals andcommunities, including welfare and debt advice,a free training programme that includes IT,presentation skills, food hygiene, first aid, childprotection and DIY workshops, free access tothe CIH’s Active Learning for Residentsqualification, free access to a local foodbank forcommunity groups, provision of communitybuildings, grants and a community minibus forcommunity groups, support for youth co-ordinators and a local faith forum, directlyadvertising training and developmentopportunities to local communities, and supportto individuals and groups to set up socialenterprises and community businesses.

5.27 The environment – with direct access to residents,co-operative and mutual housing provides fertileground for developing environmental and lowcarbon initiatives. Some environmental initiativeshave already been pioneered, including:

■ the development of 36 homes as part of RedditchCo-operative Homes, in partnership with AccordHousing Association, a scheme commended inHomes and Communities Agency awards.Anticipated to cut carbon dioxide emissions by55%, savings will be achieved through use of topquality off-site manufactured timber panels fromsustainable forests featuring high levels ofinsulation and external cladding. Not only doesthis approach reduce waste, it will reduce runningcosts for tenants by up to two-thirds. AwardedEcoHomes grading excellent, this was the firstscheme in the country to achieve the Code forSustainable Homes level 3. Anne Harborne, afuture resident of one of the homes, commented“we were very concerned about the effectthat wasting energy is having on the planet, andwe wanted to do something about it”;

■ the installation in 2008 of solar panels and 14biomass boilers, fed by wood pellets, at SanfordHousing Co-operative. Winning housing trademagazine, Inside Housing’s 2008 award for mostsustainable refurbishment, this initiativedeveloped from their existing plannedmaintenance programme, and, with grantfunding from the Energy Savings Trust, EDFEnergy and additional mortgage funding fromTriodos Bank being repaid from increased rentpayments agreed by their members, Sanfordestimates that the scheme has already achieveda 60% reduction in carbon emissions, and withadditional behavioural and other changes, theco-op are aiming to achieve 80% reductions;

■ the installation of solar hot water systems insome of the homes owned by Balsall HeathHousing Co-operative in Birmingham in 2006,also winning an award from the BirminghamCommunity Global Climate Change Challenge.One year after the systems were installed, resultsindicate that the solar panels have reducedemissions by around 15%;

■ the development of tenant management co-operative, Cedarwood Housing Co-op in Harlow,Essex using sustainable timber and energyefficient communal boilers in 2002.

5.28 With limited development of co-operative andmutual housing for many years, it is difficult toassess the potential for reducing carbon emissionsin the sector. Peter Gommon, an architect whoattended the Commission’s Sunderland hearing,considered that when he had worked in the pastwith new build housing co-ops, “the design processwas more intimate, and gave the membersownership of the design”. This was certainly thecase at the award winning development of Homesfor Change Housing Co-op on the Hulme estate inManchester. Charlie Baker from Urbed and a formermember of Homes for Change told the Commissionthat the involvement of residents had led to thedevelopment of the co-op as a mixed usedcommunity housing scheme alongside Work forChange.

5.29 Aware of the potential interest in climate changeissues in co-operative and mutual housing, the CCHis currently participating in a DEFRA funded projectin partnership with Co-operativesUK and the PlunkettFoundation aimed at achieving measurable changein personal shifts towards pro-environmentalbehaviour in relation to energy usage, waste andtravel. With only limited publicity to the co-operativeand mutual housing sector, the project has yieldedmore than twice the ten housing projects that areintended to be part of the programme. Phil


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Commission case study – Homes for Change Housing Co-op was established in 1985 as the co-operativeoption in the regeneration of the former notoriously poor and deprived Hulme council estate in Manchester, byresidents who wanted to preserve the estate’s indigenous community spirit. The development, undertaken inconjunction with a large housing association, was led by co-op members leading to an award winning innovativedesign with a mix of dwelling sizes and designs, and to the development of 32 business units through partnerorganisation Work for Change, which allows some co-op members to both live and work in the scheme.

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Beardmore from the Birmingham SustainableEnergy Partnership and member of Balsall HeathHousing Co-operative told the Commission “thesocial networks and the ethical views in most co-operative housing make it an ideal environment inwhich to carry out this project. Co-op members areboth tenants, and so have an incentive to see lowerfuel costs, and landlords, and so have the means tomake decisions to introduce carbon reducinginitiatives.”

5.30 The Co-housing Network also identifiessustainability as an objective and a benefit of co-housing, through sharing resources in relation to anumber of practical issues such as car pooling,washing machines, sustainable energy systems andshared shopping. International co-housing “helps tohalve energy use. Co-housing households consumenearly 60% less energy in the home and operatecar-sharing and recycling schemes. Communaloffice space, workshops and a gym on site reducestravel and associated emissions. Pro-environmentalbehaviours result in lower levels of consumption(including energy, land, goods) and wasteproduction giving average savings of 31% in space,57% in electricity and 8% in goods.”82

5.31 But is this because of co-operation andmutuality? This chapter has set out a number ofbenefits of co-operative and mutual housing. Buthow much do these benefits stem from the fact thatthe organisations are mutuals? Could the benefitssimply be because the organisations in question aresmall and therefore closer to the community?

5.32 The evidence submitted to the Commission clearlypoints to the benefits of co-operative and mutualhousing deriving from their democratic communitymembership base.

5.33 Firstly, in co-operative and mutual housingorganisations where tenants are not required to bemembers, the trend over time is that large numberswill become members. For example, Kensingtonand Chelsea TMO, managing approximately 9,000homes, have a membership of over 5,000 of theirtenants and leaseholders. Walterton and ElginCommunity Homes (WECH) has 604 members fromtheir 658 homes, and they estimate that over 80%of WECH households have at least one member.1,886 (28.2%) of the 6,700 tenants of Preston’sCommunity Gateway Association have signed up asmembers, alongside 651 associate residentmembers, whilst 2,648 have joined WatfordCommunity Housing Trust (40.5% of those eligiblefor membership).

5.34 Christine Blackett, the tenant chair of Watford’sGateway Committee said “we chose Community

Gateway because it was a tenant membershiporganisation which will allow us to democraticallyown our homes and work with our staff to makedecisions about our future”. Karen Perry, the Headof Community Empowerment at Preston’sCommunity Gateway Association said “Membershipis about choice. It’s about people choosing to takeup the opportunity to have influence and controlover the CGA and choosing to play an active part inmaking changes in their communities. Gatewaymembers were fundamental in shaping the CGAand their continued involvement is the key to itssuccess. We hope that members will take greaterpride in their position as owners of the organisationand grow in strength and numbers.” Karen went onto refer to a visit to the CGA from tenants of anArms Length Management Organisation who spoketo a number of tenants at random on the CGA’sestates – “they commented that there was a realsense of ownership out there that they put down tomembership. Tenants were talking about our estate,our houses and our housing association in a waythat reflected a real sense of influence andinvolvement.”

5.35 Secondly, during the Commission’s hearings andcase studies, members of co-operative and mutualhousing organisations repeatedly referred to themembership and control in housing co-operatives.The following comments were illustrative of manysimilar points made:

■ “With other housing organisations, you are a unitwith no affiliation. In a housing co-op, you pay amembership fee and you collectively own yourhomes. Although you pay rent, you are a homeowner. You are part of the co-op. We don’t havetenants – we have members”. Martin Vanderlee -Tenants First Housing Co-operative

■ “The co-op’s ownership of the homes isimportant because members feel like they aremaking decisions for themselves”. Brian O’Hare- Huyton Community for the Elderly

■ “Our tenants feel safer and more in control withthe co-op than they would with other housingproviders”. The Sunderland co-operatives

5.36 Thirdly, Rowlands drew the following conclusionsthat several of the higher performance levelsidentified in the data he had collated were due tofeatures of co-operative management:

■ “Co-operators as owners of the business have avested interest in the business and are less likelyto either fall into arrears themselves or toleratearrears from fellow co-operators”. Cllr BillHartnett from Redditch Borough Council made

the point that “the tenant co-operators veryquickly made the link between efficient runningand management and improvements andsavings to their co-op.”

■ “Co-ops mentioned that voids are seen as adrain on the co-op’s resources. Often co-opshave put in place a pre-allocation system prior toa property being vacated. These findings maysay something about the ability of the co-ops assmaller organisations to put the customerpressure into effective action.”

■ “The case studies suggest that experientialmanagement (ie. tenants being responsible forthe management of repairs and budgets)together with a sense of ownership combine toensure that properties are well maintained.”

5.37 Fourthly, a number of people at hearings suggestedparticular features that were only possible as aresult of the housing co-op model. Members of TwoPiers, Argyle Street and Sanford Housing Co-operatives all suggested that their high densityshared housing can only work through a democraticmembership structure, and Charlie Baker fromUrbed also mentioned that it had been co-opmember involvement in the design stage andinsisting on good soundproofing that had made“high density possible”. Daniel Russell fromRedditch Borough Council commented that “noother housing association could have offered thecontinuity and involvement that has come fromRedditch Co-operative Homes.”

5.38 BCHS, who assisted in the establishment of thecommunity gateways in Preston and Watford,considered83 that “people who become legal ownersof an organisation could have a different and morepositive relationship with the organisation – wherethey value the organisation, want to see it thrive andflourish – and may be prepared to take active stepsto assist and support it.” They go on to identify thatbeing “the guardians of the rules” means thatmembers have control, for example, whether theCommunity Gateway merges with anotherassociation, an issue identified as a concern byhousing association tenants in the TSA’s NationalConversation.

5.39 Other forms of co-operative and mutual housing(eg. community land trusts, mutual homeownership, co-housing, mutual retirement housingand non state funded housing co-ops) only exists asco-operative and mutual housing, and if benefitsderive from these models, those benefits could onlybe derived from their co-operative and mutualstatus. For example, the defining characteristics ofco-housing that makes it different from conventionalowner occupation are shared facilities, intentional

neighbourhood design, a participatory developmentprocess and ongoing resident management,common ownership and shareholding. Co-housingwould not exist if it were not co-operative andmutual.

Key conclusions

1 Existing co-operative and mutual housingdelivers what people want. Satisfaction ratings inco-operative and mutual housing are higher inhousing co-operatives than other forms of rentedhousing.

2 Co-operative and mutual housing organisationsare more than competent managers, with goodstatistics for managing rent arrears, lettinghomes, maintaining homes at a high standard,and getting repairs done efficiently.

3 But co-operative and mutual housing is oftenmore about the supportive communities and theinteraction between tenants they build. Membersvalue highly the shared sense of belonging andidentity they get from their co-operative andmutual housing.

4 Co-operative housing is a systematic andongoing method of empowering ordinary peopleto make decisions and participate in democracy.Through a synthesis of informal and formalprocesses, co-operative and mutual housingleads to comparatively high numbers of peopleparticipating in democratic structures anddecision-making.

5 Co-operative and mutual housing provides anon-threatening community based andcomparatively straightforward environmentwhere individuals can expand their skills andtheir outlooks on life in general.

6 By virtue of potential social interaction and thepredominant ethical culture, co-operative andmutual housing is a fertile ground for promotingphysical and behavioural change with regards toenvironmental issues.

7 The Commission’s evidence does clearly point tothe benefits of co-operative and mutual housingderiving from their democratic communitymembership base.


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Footnotes63 Rowlands, R (2008) Forging Mutual Futures – Co-operative and

Mutual Housing in Practice – History and Potential University ofBirmingham Centre for Urban and Regional Studies.

64 Cairncross, L, Morrell, C, Darke, J, Brownhill, S (2002) TenantsManaging: An Evaluation of Tenant Management Organisations inEngland Oxford Brookes University ODPM

65 Price Waterhouse (1995) Tenants in Control: an Evaluation of Tenant-Led Housing Management Organisations DoE and Satsangi, M andClapham, D (1990) Management Performance in Housing Co-operatives HMSO

66 Tenant Services Authority (2009) National Conversation – phase onefindings

67 Gulliver, K. and Morris, J. (2009) Exceeding Expectations: The Natureand Extent of Resident and Community Controlled Housing in theUK, Human City Institute, Birmingham.



70 Tenant Services Authority (2009) National Conversation – phase onefindings

71 Price Waterhouse (1995) Tenants in Control: an Evaluation of Tenant-Led Housing Management Organisations DoE and Satsangi, M andClapham, D (1990) Management Performance in Housing Co-operatives HMSO

72 Ibid - Cairncross, L, Morrell, C, Darke, J, Brownhill, S (2002) TenantsManaging: An Evaluation of Tenant Management Organisations inEngland Oxford Brookes University ODPM

73 Ibid - Cairncross, L, Morrell, C, Darke, J, Brownhill, S (2002) TenantsManaging: An Evaluation of Tenant Management Organisations inEngland Oxford Brookes University ODPM

74 Davids, T (2008) writing in the CCH Bulletin75 Clapham, D O’Neill, P and Bliss, N (2001) Tenant Control and Social

Exclusion CCH76 Report of the Director General International Labour Organisation

(2003) Working out of poverty International Labour Conference 91stsession

77 TAROE, CCH, NFTMO (2009) Joint response to TSA consultation –building a new regulatory framework”

78 BCHS (2008) Interim review of the Community EmpowermentStrategy Preston Community Gateway Association


80 Quote from the Co-housing Network website81 Cllr Bill Hartnett – Redditch Borough Council82 Williams, J (2005) Predicting an American future for co-housing

Bartlett School of Planning UCL83 BCHS(2007) – a paper written for Preston Community Gateway

Association regarding the role of membership in a communitygateway

This chapter discusses:

■ co-operative and mutual housing andgovernance issues;

■ negative evidence presented to theCommission about co-operative and mutualhousing;

■ whether this evidence is based onperceptions, historical or otherwise, or reality;

■ what is needed to tackle problems that doexist.

6.1 Corporate governance is an important issue inpublic and private organisations. The 2001 Co-operative Commission raised questions aboutgovernance in co-operative consumer societies,and events over the last year have particularlyhighlighted governance issues in the financialsector, and in the structure of the British state. Co-operative and mutual housing is no different andthere are important governance issues that need tobe considered and addressed in the sector.

6.2 The Commission was presented with some negativeviews about the governance of co-operative andmutual housing. In particular, two eminent socialrented housing stakeholders gave pertinentevidence at one of the Commission’s hearings:

■ Lord Best said that the small size of the co-operative and mutual housing sector wasevidence that “it has not worked”. He went on tosay that there is “something inherent in theprinciples of co-operation that are the seeds ofits own destruction” and suggested that whentested, the co-operative and mutual housingmodel “will fail”. As evidence, he offered the lossof the co-ownership sector, where its membersbought their homes when offered the individualpurchase of their homes at very low prices84, thepossible predilection towards racism of manycommunities, and governance difficulties in co-ops when faced with community conflicts.

■ Richard Clark went on to say that work he haddone in the past with co-operatives and mutualshad been doomed to “endemic governancefailure”. He said that there needed to be a“robust framework that ensures thatorganisations are run properly with checks andbalances.”

6.3 The TSA’s RASA team85 told the Commission that“20% of the providers covered by RASA are co-ops.60% of the allegations on our allegations registercome from co-op tenants. That is the main way thatthe RASA team becomes aware of governanceissues. There are numerous reasons for governancefailure. For example, where co-ops are run bygeneral meetings rather than managementcommittees, this can lead to a rather unwieldyapproach to governance. Sometimes managementcommittees don't have the necessary range of skillsand sometimes co-ops don't have up to datepolicies, or fail to follow them. To try and improvegovernance arrangements, we are committed toexploring with the CCH what good practiceguidance we can issue on governance, as well as arange of other issues that would be useful to thesector.”

6.4 The CCH told the Commission that it had comeacross a “steady trickle of co-operatives and TMOswith governance and management problems. Someof them are major and significant problems thatrequire a lot of work to put them right. Others aremore mundane and more easily dealt with”. Someof these issues had been raised by co-opsthemselves requesting assistance, whilst others hadbeen raised by members of co-ops dissatisfied withthe way that their co-op had dealt with issues. Forexample, Julie Timbrell, a member of Lambeth Self-Help Housing Association, had approached theCCH with a number of allegations ofmismanagement by her co-op, and subsequentlygave evidence to the Commission about herallegations.

6.5 There is limited evidence available aboutgovernance in other co-operative and mutualhousing organisations, but Cairncross et al86

referred to some weaknesses in TMO governance.The Commission considered that the followingissues need to be particularly considered in relationto co-operative and mutual housing:

■ is there something endemic about the structureof co-operative and mutual housing that doomsits governance to failure?

■ are co-operatives exclusive? For example, dothey exclude people from black and minorityethnic communities, either explicitly or by virtueof the way they operate?

6 Myths and realities

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■ do co-operatives and mutual housingorganisations in reality only involve a smallnumber of people? Do co-operative and mutualhousing organisations renew themselves with asteady flow of new volunteers?

■ what happens if co-operative and mutualhousing organisations become dominated bydifficult individual members who use andmanipulate the organisation’s democraticstructures for their own personal ends?

■ do co-operative and mutual housingorganisations deal properly with issues of self-interest amongst members? When push comesto shove, does self-interest overpowercommunity interest?

6.6 Governance – that there have been somegovernance problems in some co-operative andmutual housing organisations is not in doubt. Thequestion is why there have been problems.

6.7 The single most important factor referred to bymembers of co-operative and mutual housingorganisations has been the lack of support, advice,and guidance. For example, at the Sunderlandhearing, Joseph Harriott referred to SummerhillHousing Co-operative being “in crisis a few yearsago” due to “relationships between membersbecoming fractious and unworkable”. However, hesaid that strong leadership in the co-op and advicefrom a service provider had helped them toovercome the difficulties. Jim Noble from SanfordHousing Co-operative commented that “we had alot of problems in the 1980s when we were largelyself managing. Having a professional managementagent now to provide us with continuity is veryuseful. We use CDS, themselves a co-op, whichhelps as they understand our particular needs.” LizQuartey from New Longsight Housing Co-operativereferred to the loss of the Manchester serviceprovider as a reason for governance failure in ex-Manchester co-ops.

6.8 Evidence gathered also suggested that support toco-operative and mutual housing is about more thanjust being a reactive customer based relationship.Lord Best said that the support organisation neededto be a “source of leadership. [The supportorganisation is] sometimes going to say, you can’tdo that, that is madness. We have seen it a hundredtimes before and you will go over the cliff – don’t doit”. CDS Co-operatives Executive Director DavidRodgers responded to Lord Best that “thedifference in a co-operative and mutual housingorganisation is between control and advice. Thesupport organisation’s role is similar to that of asolicitor’s or an accountant’s – to give you firm,

sound professional advice. Sometimes a solicitorwill tell you, don’t do that because it is not lawful.But organisations who provide support to co-operative and mutual housing organisations have torespect their right to make decisions”. This view issimilar to the approach taken by the LHA-AsraGroup87 in providing support services to the fourhousing co-ops based in Leicester - “we’re there toprovide a back-up, a level of expertise, a level ofknowledge, to keep an eye on how things are going,to highlight issues, to point out advantages thatcould be gained elsewhere, but to ultimately leavethe decision up to the co-op.”

6.9 Current support, advice and guidance availableincludes:

■ support provided, primarily to housing co-ops,through a variety of service providers, includingspecialist secondary co-operatives, housingassociations and individual consultants. In 2001,the CCH identified88 that the success of suchservice provision depended on the serviceprovider’s links to the co-operative housingmovement through the CCH or other means, andthat there had not been a serious governancefailure in a co-op that receives support in thismanner;

■ support provided through directly employedstaff. Whilst some housing co-ops directlyemploy staff, Cairncross et al89 identified that85% of TMOs employ or second staff andconcluded that “staff/board relationships arecritical to the effective functioning of TMOs”;

■ in the case of the larger scale co-operative andmutual housing organisations, the establishmentof community gateways and mutuals and suchorganisations as WATMOS Community Homeswas itself the development of a support structurefor smaller scale community organisations andactivity;

■ support provided by the CCH, which hasincluded the production of Codes of Governancefor co-ops and TMOs90 , the Lambert/Blissresearch document on how services are providedto co-ops, and more recently direct consultancysupport to housing co-ops and TMOs;

■ support provided by the NFTMO, who havedeveloped a TMO governance kitemark91, and aCommon Assessment Model for new TMOs92,provide training and regional and nationalnetworking opportunities and provide a range ofpolicy information. The NFTMOs have also beencentral to recent Government reviews of theframework for setting up new TMOs;


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■ the CCH and NFTMOs also hold annualconferences (in partnership with each other on abiannual basis) which provide practical supportand networking opportunities for those whoattend;

■ support provided by the Co-housing Network,and Radical Routes, a small organisationproviding support to small non-stated fundedhousing co-ops. Evidence given to theCommission’s Bristol hearing suggests that thissector is now struggling to maintain itself in anenvironment of high house prices. Supportmechanisms for community land trusts arebeginning to emerge, but they are largelydependent on charitable grant funding andmatched funding from government and are, atbest patchy, and at worst, confusing and hard forcommunities interested in setting up communityland trusts to access;

■ some housing associations have providedsupport for the development of housing co-ops,most notably Accord Housing Association intheir support for the development of RedditchCo-operative Homes, and some associations arealso currently exploring providing support to co-housing schemes and community land trusts.

6.10 This support is somewhat limited, and some of it isvoluntarily based. A key problem is its fragmentaryand unco-ordinated nature – largely a result of thelack of recognition by the regulator and others ofthe distinct identity of the co-operative and mutualhousing sector and its need for its own support andregulatory arrangements. This is particularlyillustrated by the Housing Corporation’s (and morerecently the TSA’s) struggle to respond toallegations made about housing co-operatives. Onthe one hand, some allegations arrive at theregulator’s door simply because those makingallegations knew of nowhere else to go. On theother hand, the Housing Corporation expected co-operative and mutual housing organisations tooperate to the same standards of governance aslarge housing associations, and struggled tounderstand the operations of, for example, thegeneral meetings of housing co-ops. The CCH isnow working with the TSA to establish anaccreditation framework for housing co-operativesand their service providers based on the Co-operative Housing Federation of Canada’s 2020Vision93 and other relevant documents, which willboth ensure that standard governance criteria areaddressed, whilst considering how housing co-opsapply the co-operative values and principles. Thistype of approach may be relevant to other parts ofthe co-operative and mutual housing sector.

6.11 Exclusivity – in chapter four we summarisedGulliver/Morris’s data on who the sector houses.There are some differences in the demographics ofthe people housed by other sectors. More black andethnic minority people are housed, perhaps partlybecause most co-operative and mutual housing isin urban areas. Fewer elderly people are housed,perhaps because there are currently few shelteredschemes in co-operative and mutual housing. Butthe Commission came across no evidence that co-operative and mutual housing systematicallyexcludes any particular group of people, or that anyindividual co-operative and mutual housingorganisation has ever excluded particular groups.

6.12 Although more people who are non-statutorilyhomeless are housed, fewer people designated asstatutorily homeless are housed. This may bebecause allocations systems are not designed tonominate to the sector. Preliminary findings inresearch being carried out by Sarah Blandy at theUniversity of Leeds suggest that co-operative andmutual housing is likely to be more successful ifresidents are clear at the outset that they will haveto contribute time and energy. This can be difficultto achieve under current allocations systems. TheEast Midland Development Agency supported thispoint, suggesting that allocations systems to co-operative and mutual housing organisations should“endeavour to identify prospective new householdswho are keen to be part of mutual bodies.”

6.13 There is evidence to suggest that the sectorperforms well in terms of encouraging people fromdiverse backgrounds into leadership roles. RichardCrossley, the co-ordinator of the National TenantVoice, particularly remarked of the 2009 joint annualCCH/NFTMO conference that, for a tenantaudience, delegates included a large number ofyounger people and people from a black andminority ethnic background – a point also made byTSA Chief Executive, Peter Marsh – “I enjoyedspeaking to tenants at the annual conference. I feltfirst hand the passion of members of the mutualmovement and it was great to see such a mixedgroup - both in the age and ethnic diversity - ofattendees.”

6.14 Involvement and renewal – co-operative andmutual housing is about having a legal right toparticipate. In common with most forms ofdemocratic systems of Government, it doesn’tmean that all members exercise their democraticparticipation rights. Les Harborne from Breedon Co-op echoed concern from a number of co-opmembers that it was “always the same peopleattending meetings”. Cairncross et al94 noted that inTMOs, “few residents put themselves forward ascommittee members and elections are rarely

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contested”, and that “AGMs are often poorlyattended and sometimes inquorate”.

6.15 But Paul Mangan from Langrove Housing Co-opsaid that “participation in co-ops ebbs and flowsand that’s a natural thing and might be the result ofa particular kitchen programme or other communityactivities.”

Cairncross et al also noted that 24% of TMOresidents had attended meetings, whilstThornholme Housing Co-op said that about 25% oftheir members are active, and 20/20 Housing Co-opestimated that on some occasions nearly a half oftheir co-op had participated, but that this fluctuates.Housing co-ops run by general meetings withoutelected management committees usually sustaingreater levels of member involvement. For example,Rainbow Housing Co-op told us that their meetingsare regularly attended by as many as 25 of their 30members.

6.16 The CCH recognises that “some co-ops may haveperiods of minimal levels of involvement, but thenumbers and the quality of participation in mosthousing co-ops far exceeds participation in otherhousing providers and in other service activities.Co-ops do tend to renew themselves. One minuteyou hear worrying stories about a particular co-opwith only three active members - the next you hearthat new people have joined their committee. Mostco-ops have lasted through several generations ofmembers – there’s a good record of sustainabilityfor community organisations, particularly in anenvironment that hasn’t been supportive of co-ops.”

6.17 Manipulation – on occasion the ebb and flow ofparticipation can lead to individual membersexploiting a democratic deficit and the co-operativeand mutual housing organisation falls prey todictatorial control by one member or a group ofmembers. CDS Co-operatives refers to the seven“deadly sins” of the “little Hitler” syndrome, the “usand them” oligarchy, corruption, favouritism, lack ofaccountability, secretiveness and failure to declareconflicts of interest, and apathy. When theseproblems happen, they can be difficult to deal with,particularly if they have become entrenched overtime. It is particularly difficult to get democracy re-established because problems of this nature arelikely to be characterised by a difficult atmospherenot conducive to building general activeparticipation.

6.18 However, these problems are thankfully not thatfrequent, and, especially if the problem comes tolight at an early enough stage, they can be resolvedwith the support of a service provider or anotherbody who is good at resolving them. The CCHcommented that “we have come across problemswhere individuals manipulate co-ops. The problemhas been that there has been no guidance for co-ops so that they know what they should be doing orfor co-op members so that they know what theyshould expect, and in most cases, we haven’t hadthe early warning system that would mean that wecould nip the problem in the bud. We are nowworking with the TSA to look at ways of dealing withproblem cases. Most problems can be solved, but,in one or two cases where the problems areintractable, we haven’t been shy about telling theTSA they need to close a co-op down.”

6.19 Self-interest – because governance of co-operativeand mutual housing lies in the hands of the peoplewho receive the service, theoretically they might beprone to conflicts of interest where individuals wantdecisions taken to benefit them personally. Inpractice, organisations usually have systems andmethods to deal with conflicts of interest, and thereis no evidence that personal self interest plays anysignificant role in co-operative and mutual housing.

6.20 Of course, personal self interest is likely to win outover community interest when people are offeredwindfall profits, as happened in the co-ownershipsector. Most co-ownership societies closed down inthe 1980s when their members were offered theopportunity to buy their homes often at very cheaprates. With substantial assets on offer to individuals,perhaps it says more that some co-ownershipsocieties still exist. Personal self interest affects allwalks of life - parliamentary expenses scandals,excessive salaries and bonuses for senior financialand housing executives being particularly publicexamples. The Commission found no evidence thatthe co-operative and mutual housing sector wasparticularly prone to personal self-interest.


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Key conclusions

1 There have been governance problems in someco-operative and mutual housing organisations.Some of these problems have been real andhave needed to be addressed, but theCommission did not find evidence that theproblems are endemic.

2 Most governance problems could be resolved ifcomprehensive and sympathetic support andguidance was available, but this support hasoften not been available when needed. The lackof support and guidance reflects a failure torecognise co-operative and mutual housing as adistinct sector with a need for a specificregulatory, guidance and support framework.

3 Access to robust support, advice and guidanceis essential for co-operative and mutual housingorganisations. This can be provided in variousways, but the organisation providing supportneeds to provide support effectively andproactively, and needs to respect theindependence of the client organisation.

4 There is no evidence that co-operative andmutual housing is exclusive or discriminates inits tenant and member selection processes. Thesector houses a comparatively higher number ofyoung people and people from black andminority ethnic communities and tends toencourage and support people from diversebackgrounds to participate in the leadership ofthe sector.

5 Co-operative and mutual housing is abouthaving a legal right to participate, but not allmembers exercise this right. Active participationebbs and flows. In some cases, very fewparticipate, but generally the sectordemonstrates far higher active participation thanin other community or housing activity.

6 Like any democratic system of governance, co-operative and mutual housing can be vulnerableto manipulation of democratic systems byunscrupulous individuals, but the occurrence ofthis is rare. Problems of this nature can be moreeasily dealt with through proper checks andbalances in codes of governance and bestpractice, early identification of problems and byhaving appropriate support systems.

7 Whilst there is a need for checks and balancesthrough codes of governance and conduct,backed up by access to support, advice andtraining, there is no evidence to suggest that co-operative and mutual housing is particularlyprone to problems of personal self-interest.

8 Work being done by the CCH, with fundingsupport from the TSA, to develop soundgovernance through accreditation systemsshould lead to fewer governance problems.

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Footnotes84 These sales were carried out under Section 122 of the Housing Act

1980 – this gave the Housing Corporation powers to give consent tosales. Initially sales were only approved where the co-operative waswound up and all its members expressed the desire to buy theproperty they lived in. Although there was a flood of applications towind up co-ownership societies in the early 1980s not all were woundup. By 2008 fewer than 40 of around 900 such societies remained.

85 The Tenant Services Authority RASA Team deals with regulation ofsmall housing associations, including housing co-operativesregistered with the TSA.


87 Quoted from Lambert, B and Bliss, N (2001) Providing services tohousing co-operatives CCH

88 Lambert, B and Bliss, N (2001) Providing services to housing co-operatives CCH


90 CCH (2002) Code of Governance for Housing Co-operatives CCH andNational Housing Federation and CCH (2003) Code of Governance forTenant Management Organisations CCH and National HousingFederation

91 NFTMOs (2004) The NFTMO Good Governance Kite Mark92 NFTMOs (2008) Common Assessment Model93 CHF Canada (2008) On the road to 2020: A guide to becoming a

certified 2020 housing co-operative94 Cairncross, L, Morrell, C, Darke, J, Brownhill, S (2002) Tenants

Managing: An Evaluation of Tenant Management Organisations inEngland Oxford Brookes University ODPM

This chapter looks at:

■ the development of co-operative and mutualhousing sectors in other countries, and whatlessons can be learnt from internationalexamples;

■ why England has not developed similar co-operative and mutual housing sectors, and,based on international experience, whatwould be needed to develop a mature Englishco-operative and mutual housing sector.

7.1 85% of the 35,000 member organisations of theinternational federations that make up CECODHAS,the European liaison committee for social housing,are housing co-operatives. Most are very small,although some are very large, but housing co-opsown 18% of Sweden’s total housing stock, 15% inNorway, 8% in Austria, 6% in Germany and about4% in Ireland. This compares to 0.6% of housing inthe UK. ICA Housing, the co-operative housingsector organisation of the International Co-operativeAlliance, has a membership drawn from 30countries across the world, and information abouteach country’s housing co-op sector is available ontheir website95. As well as being more numerous,co-operatives offer many examples of the long termsustainability of housing co-operatives as affordablehousing providers, such as Co-op L’Aurora in Italycurrently celebrating its centenary.

7.2 As is the case with the development of any systemor method of doing things, there are three elementsor phases that have marked the evolution of co-operative housing systems in other countries fromtheir beginnings in the late 19th century in Germanyand Austria to the present day. These phases are adevelopment continuum and generally do not occurin a rigidly linear progression – it is not the case thatone phase finishes neatly before the next onebegins. Co-operative housing systems in differentcountries have developed different elements of eachphase in different ways and sometimes in differentorders. However, what can be concluded from theexperience of the development of co-operative andmutual housing systems in other countries is thattransition through each of the three phases is a pre-requisite for the development of a mature system ofco-operative and mutual housing.

7.3 Phase I: grass roots pioneering andexperimentation - the first phase or element ischaracterised by grass roots bottom up initiativesby trade unionists or housing and communityactivists experimenting with the development ofhousing co-ops as a means of meeting housingneeds of people who aren’t able to get a decenthome they can afford. Germany, Austria, Swedenand Canada provide examples of this pioneeringphase, with Canada’s first phase coming later andbeing stimulated by the success of Scandinavianhousing co-op sectors. Pioneering co-op housingexperiments in Phase 1 are at greatest risk of failurebecause of the lack of an appropriate legal andfinancial framework in which to develop and a lackof professional and technical support.

7.4 Phase 2: replication and consolidation – phase 2replicates, consolidates and adapts successfulpioneering experiments, leading to the emergenceof a recognisable co-operative and mutual housingsector. Regional and national federations of co-operative and mutual housing start to form; supportservices able to facilitate the development of co-operative and mutual housing begin to develop; andcodes of conduct and best practice begin toemerge.

7.5 The development of secondary co-operativeorganisations, existing to promote, develop andprovide services for primary housing co-operatives,who own the housing and house their residentmembers, are a common feature of this phase. InScandinavia, the relationship between secondaryand primary organisations is described as a motherand daughter relationship, because the secondariesgive birth to the primaries. In Sweden and Norway,membership of the secondary is open to people inneed of a home and interested in living in a housingco-op. The secondary develops a new daughterprimary co-op in which the members in housingneed are housed, at which point they becomemembers of the primary. In Sweden, Norway andGermany, co-operative housing development wasenhanced by the establishment of savings and loanschemes for members wishing to save a deposittowards their co-op membership shares.

7.6 The emergence of the co-operative housingsystems in Austria, Germany and Czechoslovakiabefore the First World War, in Sweden in the 1920s,in Norway in the late 1940s and in Canada in the

7 So what’s it like in other parts of the world?

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1970s all show that during Phase 2, co-operativehousing sectors, through emergent nationalrepresentative organisations, can also becomeeffective advocates for affordable housing provisionin general and co-operative housing in particular.The success of this advocacy depends principallyon whether national governments are sympatheticto and see the benefits of co-operatives. In some ofthese countries the success of co-operative housingsystems led to favourable financial support or taxtreatment, which acted as a further spur todevelopment, although in Sweden it was the tenureneutrality of government support for housing in anational housing system that sought to ensure adecent home for all that enabled the benefits of co-operative housing tenure and ownership to emergeas a distinct form of tenure.

7.7 Phase 3: formalisation and public recognition –where specific provision is made for co-operativeand mutual housing within national legislation andhousing systems. This depends on the level ofsupport national governments wish to give co-operative and mutual housing organisations andwhether they wish to encourage their development.Specific Government support for co-operative andmutual housing resulted in the dynamic andsignificant sectors in Canada, Austria, Norway andSweden. Where a government is neutral, co-operative and mutual housing tends to become partof an overall housing system without specialprovision to encourage development. Governmentshostile to democracy, such as the Nazi regimes inGermany, Austria and Italy in the 1930s, legislatedto constrain or abolish co-operative housing asdistinct forms of tenure.

7.8 Phase 3 is characterised by legislation that definesthe nature of co-operative housing tenure and co-operative organisations as corporate entities,including their governance and regulation, andmakes specific provision for them in nationalhousing systems and strategies. At best, legislationencourages co-operative and mutual housingdevelopment through specific tax treatment orfinancial support, and at worst, it constrainsdevelopment. More neutral support would result inno special provisions other than pragmaticrecognition of the nature of the sector. Sweden andSwitzerland, where specific co-operative housinglegislation and representative national co-operativehousing organisations date back to the 1920s areexamples of the most effective legislative treatment.In both, co-operative tenure has been establishedlongest without major political disruption or change.

7.9 Of course supportive co-operative and mutualhousing systems are not immune to the winds ofpolitical change, but international experiencesuggests that achievement of Phase 3 of co-operative and mutual housing puts the sector in abetter position to either recover or adapt to change.Thus German and Austrian co-operative and mutualhousing sectors were able to rebuild after the war,and the Italian sector was able to regain membercontrol. The ending of the Cold War has also seenthe gradual rebirth of co-operative and mutualhousing in former eastern bloc countries wherepreviously co-operative housing had beensubsumed as organs of the state. Less dramatically,Swedish and Norwegian co-operative housingsectors have had to adapt to the removal of pricecontrols on co-operative share values in the 1980s,which drove access to co-operative housing up-market, and Canadian and Turkish sectors have had


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to adapt to the ending of Government assistance inthe 1990s and 2002 respectively. The mature Co-operative Housing Federation of Canada (CHFC)was able to protect low income members duringfederal cost cutting exercises in the 1990s and hasbeen well placed to support the Canadian nationalgovernment’s 2008 fiscal stimulus programme.

7.10 Governments that have supported the developmentof maturing Phase 2 and Phase 3 co-operative andmutual housing systems have used a range of legal,financial and administrative arrangements toencourage development dependent on the nationalenvironment. Federal state countries or those withdevolved regional government have more diversearrangements - USA having the greatest variety ofarrangements. Similarly, international co-operativeand mutual housing sectors have used variousapproaches and instruments to develop into phase3 of development96.

7.11 What happened to the English co-operative andmutual housing sector? Early building societies,building homes for their members, whilst providingthem with savings and loan facilities, might havedeveloped into a co-operative and mutual housingsector, but co-partnership and co-ownership werethe first two recognised experiments into co-operative and mutual housing in England.

7.12 In the early 20th Century, co-partnership societieswere developed as an early form of co-operativehousing. Grass roots resident support did start todevelop in them, but the movement declined afterthe First World War as support for municipalhousing grew. Co-partnership societies had twinprivate investor and resident membershipstructures, and pressure from private investor

members of co-partnership societies to realise theirassets, resisted in some cases by residentmembers, led to co-partnership societies revertingto either conventional home ownership or privaterenting by the 1960s.

7.13 Co-ownership, developed by central Governmentthrough the Housing Corporation in the 1960s and1970s, suffered from not having enough grass rootssupport. Whilst some co-ownership societies do stillexist, the way they were set up did not embed co-operative principles, and not surprisingly manymembers did not understand or value that they livedin a co-operative, and chose to buy their homes,often at very low prices, when given the opportunityto do so. Unprotected, co-ownership did not havethe opportunity to mature into a phase 3 sector.

7.14 Most of the 1970s and 1980s common ownershipdevelopments came out of community activity,leading to a nascent “movement” with a distinctiveculture. The movement progressed to thedevelopment of the CCH97 and a network of supportorganisations, but it was stunted at birth by thechanging Governmental approach through the1980s. This has meant that any equivalent of thePhase 2 development that occurred in othercountries has been slow, awkward and not ascomprehensive as it has ever needed to be.Nonetheless, the continuing benefits derived fromthe development of co-operative housing in the1970s and 1980s suggest that completing Phase 2and entering Phase 3 with sympathetic enablingGovernment policy is possible and desirable.

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7.15 In England two factors have also marked differences from the experience of other countries.Firstly, the absence of specific public support todevelop the “ownership” co-operative and mutualhousing sector has meant that either a smallnumber of communities have done whatever theycan to establish co-operative housing solutionswithout public funding that are fragmentary withaccess to limited support and guidance, oremphasis has been directed at adapting housingdeveloped through other tenures to co-operativeand mutual housing through tenant management ormore recently community gateways and mutuals.

7.16 The tenant management sector has progressed intoPhase 2 with the establishment of the NationalFederation of Tenant Management Organisations(NFTMO), and into Phase 3, with the 1994 Right toManage, the NFTMOs receiving public support andrecent legislative and other steps taken byGovernment to strengthen the sector and streamlinethe process of setting up TMOs for tenants.

7.17 Tenant management and community gateway haveled to the development of strong communityorganisations, but they face the significantchallenge of putting right decades ofdisempowerment in a regulatory and legislativeculture not built for them. For TMOs, their ultimatelack of control of resources means that some mayhave long term financial difficulties, and thedifficulties of establishing tenant management in thehousing association sector have led some TMOs topursue ownership transfer.

7.18 Secondly, international co-operative and mutualhousing sectors are aimed at a wider cross sectionof the population. For example, most Scandinavianco-operative housing is aimed at an intermediatemarket, the Norwegian co-operative housing beinga sector of choice for middle income earners, and inthe Swedish sector, having had periods where itwas forced up market by government policy,occupancy rights are traded at an unrestricted pricein a co-operative housing market. Even theCanadian rental sector is accessible to a greatercross section of the community, with Canadianhousing co-ops receiving “rent to income related”subsidy for low income members, but charging acloser to market rent to higher income members.

7.19 In England, the predominance of individual homeownership as well as the dismantling of the co-ownership sector, has inhibited the growth of anyintermediate co-operative and mutual housingsector. This has meant that the UK co-operative andmutual housing sector has been polarised into theprovision of homes solely for low income people inthe social rented housing sector, a sectordependent on the taxpayer for capital subsidies.

7.20 Based on US and Scandinavian models that haveenjoyed Phase 3 public recognition and support, afledgling co-housing sector has emerged in recentyears in the UK to provide a community approach tohome ownership, with some interest fromGovernment, particularly in relation to the provisionof a mutual approach for elderly people.


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7.21 More recently the difficulties of the housing markethave led to proposals that the Government shouldprovide support to stimulate the development ofcommunity land trusts and mutual home ownershipto provide permanently affordable intermediatehousing market solutions in rural and urban areaswhere house prices have moved beyond the reachof a majority of working households on averageincomes. Little in terms of structured support isbeing provided for these innovative forms of tenure.

7.22 The challenge for these initiatives is to ensure thatthey are clearly seen as part of the co-operative andmutual housing sector so that they do not becomesubsumed into the home ownership market in thefuture in the way that co-ownership was.

Key conclusions

1 There are strong co-operative and mutualhousing sectors in many other countries, mostnotably in Scandinavia, Germany, Austria,Canada, in emerging former eastern bloccountries, Turkey and India.

2 These co-operative and mutual housingmovements have come about through acombination of bottom up grass rootsdevelopment, development of appropriaterepresentation and support frameworks includingnational representation, and national recognitionof the distinctive nature of co-operative andmutual housing and various levels of nationaland local Government support – features of threephases of development that occur in differentways, but pre-requisite hallmarks of a processthat leads to mature co-operative and mutualhousing sectors.

3 National and local government support for co-operative and mutual housing, in partnershipwith effective co-operative and mutualrepresentative structures, can lead to highlystable and sustainable forms of affordable,democratically controlled housing provision thatmaintains high quality housing in vibrantcommunities and neighbourhoods.

4 The English co-operative and mutual housingmovement never developed into a mature sectorbecause the three phases never came together.Early systems, including co-ownership, never gotout of the starting gates because they were notrooted in the grass roots and were too easilydismantled. Ownership housing co-ops diddevelop from the grass roots and representationand support frameworks did emerge, but afterthe 1980s, they ceased to enjoy any significantGovernment recognition and support.

5 However, there is nothing to suggest that the UKco-operative and mutual housing movementdoes not have the potential to develop into amature phase 3 sector if appropriate financial,legal and administrative arrangements aredeveloped in partnership between a supportivegovernment and effective sectoral bodies.

6 The tenant management sector has featured allthe necessary elements of development, but it ismore challenging to develop a widespreadtenant management movement within a housingsector that is alien to it.

7 The English co-operative and mutual housingmovement has also suffered by being polarisedinto the provision of homes in the low incomesocial rented housing sector. This has not beenthe case in other international co-operative andmutual housing sectors.

8 There are signs that co-housing, community landtrusts, mutual home ownership and mutualretirement housing may offer ways of wideningthe social and economic base of co-operativeand mutual housing, but unless these forms arerooted in the co-operative values and principlesand the mutual housing sector and developedwith positive government support, they run therisk of becoming marginalised and providing onlythe temporary approach that co-ownershipplayed.

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Footnotes95 Profiles of each country’s co-operative and mutual housing sectors

can be found on the ICA Housing website – www.icahousing.coop.These include details of the number of homes provided and the legal,financial and administrative arrangements in each country.

96 Examples of positive Government support arrangements andapproaches and instruments used by third phase co-operative andmutual housing sectors are shown on the Commission’s website.

97 In fact, it led initially to the development of the National Federation ofHousing Co-operatives, an organisation that collapsed due to an overreliance on state support which was suddenly withdrawn. Perhapsthis was an over ambitious attempt to progress to Phase 3 incircumstances that would never have enabled it.

This chapter:

■ sets out what needs to happen to make co-operative and mutual housing an optionavailable to more people in the country;

■ states how existing housing organisationsshould move towards co-operation andmutuality;

■ includes specific and practical action pointsto stimulate the co-operative and mutualhousing sector;

■ leads to a summary of what steps should betaken by different statutory and non-statutoryorganisations.

8.1 The following are needed to develop a mature co-operative and mutual housing sector:

1. support from national and local Government -a national and local Government framework thatsupports the development of co-operative andmutual housing.

2. a supportive housing sector – a housing sectorthat throws its skills and expertise behindenabling people and communities to develop co-operative and mutual housing.

3. a supportive co-operative movement – a co-operative movement that identifies that housingis a key part of the co-operative family and usesits dynamism, vision and assets to foster co-operative housing.

4. a strong co-operative and mutual housingsector – a stronger and more focused co-operative and mutual housing movement thatbrings together all its different strands.

5. financing and enabling structures – a systemto enable access to finance and an enablingstructure to help establish co-operative andmutual housing and provide appropriateguidance and support.

6. promotion and vision – a national vision for co-operative and mutual housing, providinginformation for the general public, localauthorities, housing associations and others thatmakes it clear what co-operative and mutualhousing is, how it can be developed and howpeople can access it.

8.2 This is not a call for additional funding from thetaxpayer, but it is clear that public and privateinvestment in affordable housing is needed if thehousing needs of our country are to be met. TheCommission is calling for available resources andhousing strategies to be realigned to enable thedevelopment of co-operative and mutual housing,and doing so because co-operative and mutualhousing delivers good value for money, particularlyin terms of wider social and community benefits thatwill save public money in the medium to longerterm.

“The development of co-operative and mutualhousing requires something put in place toencourage and develop co-operative and mutualhousing and to inform communities about theoption.”98

8.3 Support from national and local government -agreed in 2002, International Labour OrganisationRecommendation 193 made a number ofrecommendations with regards co-operativesgenerally. Stating that “the promotion of co-operatives should be considered as one of thepillars of national and international economic andsocial development”, the recommendationspecifically made it clear that it referred to allsectors and all countries.

8.4 With a requirement that national governments reportto their parliaments how they are responding to therecommendation, key points in therecommendation99 include that:

■ co-operatives should enjoy equal treatment withother types of enterprise;

■ national governments should create an enablingenvironment and facilitate access to supportservices;

■ national government should provide a conducivepolicy and legal environment; should grantsupport when justified by circumstances; andshould develop partnerships with co-operativeswhere appropriate;

■ co-operative organisations should work withsocial partners to create a favourable climate forco-operative development.

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8.5 The Commission concludes that the Governmentshould, in partnership with the co-operative andmutual housing sector, develop a strategy to applyILO recommendation 193 to housing provision,supporting co-operative and mutual housing withinthe framework of a national housing strategy aimedat meeting national affordable housing needs.

8.6 The Commission proposes that Governmentestablishes a co-operative and mutual housingworking group to bring together various statutoryand non-statutory representatives with the co-operative housing sector to plan a crossdepartmental strategy to develop and support co-operative and mutual housing within the frameworkof Government’s national housing strategy. TheCommission welcomes the TSA announcement thatit will set up a working group to consider elementsof this strategy.

8.7 The Government should encourage and support allforms of co-operative and mutual housing – housingco-operatives, tenant management, mutual homeownership, co-housing, mutual retirement housing,and community gateway, with a view to thembecoming part of the standard menu of options forlocal communities in determining what housingmodels are right for their neighbourhoods.

Action point 1The Government should, in partnership with the co-operative and mutual housing sector, develop astrategy to apply ILO recommendation 193 tohousing provision, supporting co-operative andmutual housing within the framework of nationalhousing strategy.

Action point 2The Government should establish a co-operativeand mutual housing working group through the TSA,bringing together representatives from statutory andnon-statutory bodies with representatives from theco-operative and mutual housing sector to plan thisstrategy. The Commission welcomes the TSAannouncement that it will set up a working group toconsider elements of this strategy.

Action point 3The Government, the Homes and CommunitiesAgency (HCA), the TSA and local authorities should:

■ recognise the benefits and distinctive nature ofhousing co-operatives, ensuring that newaffordable housing development is carried outthrough existing or new housing co-operatives;

■ continue to promote and develop tenantmanagement to existing tenants of localauthorities and housing associations;

■ recognise the potential of mutual homeownership as a new intermediate market tenure,facilitating the development of exemplar projectsto widen the tenure choice available tohouseholds who are not able to sustain individualhome ownership;

■ support the need, in an ageing society, todevelop co-housing and other forms of mutualretirement housing for older people to enablethem, as far as is possible, to maintainindependent living through living in housingcommunities that facilitate mutual aid andsupport;

■ review the development of community gatewayto identify its progress and to enable other largescale housing organisations to draw lessons fromthe model.

Action point 4The Government, through the HCA, should:

■ ensure that affordable housing investmentstrategies enable any local community in Englandthat wishes to do so to develop housing co-operatives and other forms of mutual andcommunity owned and managed housing.Because of the benefits they bring and the needfor promotion, co-operative and mutual housingshould be incentivised as an option for localcommunities;

■ judge its affordable housing investment strategiesto be failing unless a significant part of affordablehousing investment each year is invested in co-operative and mutual housing development;

■ ensure that the ‘value for money’ methodology ituses to assess investment in affordable housingdevelopment values the personal, social,economic and environmental sustainabilitybenefits of investing in housing co-operatives andother forms of mutual and community owned andmanaged housing.

Action point 5The Government, through the TSA, should ensurethat:

■ arrangements for registering co-operative andmutual housing are fit for purpose and designedto enable communities wishing to do so torelatively easily register co-operatives and mutualhousing organisations;

■ the regulatory and inspection regime recognisesthe benefits that derive from co-operative andmutual housing and are designed to be

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appropriate to the scale, operation and membercontrolled nature of co-operative and mutualhousing providers.

8.8 Local housing strategies – developing co-operative and mutual housing requires the supportof local authorities and local people. Localcommunities need to be aware of co-operative andmutual housing options and the contribution theycould make to their neighbourhoods. Co-operativeand mutual housing should be seen as an essentialingredient in local housing strategies, capable ofmeeting various housing and community needs.

8.9 As part of promoting co-operative and mutualhousing models, local authorities should review theirallocations systems to enable people to express aninterest in co-operative and mutual housing and forthat to be considered in the allocations process.

8.10 Laura Shimili attending the Commission’s localauthority hearing on behalf of the Local GovernmentAssociation (LGA) said that “the LGA is enthusiasticto work with interested councils to develop co-operative and mutual housing. Our campaign toallow councils to retain locally raised income andhave more access to funding could provide moreopportunities for councils to meet locallydetermined priorities through co-operative andmutual housing.”

8.11 The Commission’s Local Authority hearing made itclear that the development of local co-operative andmutual housing strategies needed to be tailored tothe needs of local circumstances. RedditchBorough Council set tough criteria for thedevelopment of Redditch Co-operative Homes,which have been achieved, including:

■ affordable rents within 10% of Redditch BoroughCouncil’s rents;

■ 100% nomination rights from a council waitinglist of people who had expressed an interest tolive in co-operative housing;

■ high levels of tenant involvement in managementand development;

■ high quality homes with a high specificationinterior, tenant choice and environmentalefficiency;

■ having a local office based in Redditch;■ council membership of the Redditch Co-

operative Homes board.

8.12 Cllr Bill Hartnett from Redditch Borough Councilsaid “it’s been a story of great success. Initiallycouncilors were sceptical about co-operativehousing, myself included, and we had to beconvinced that it was going to work. But now all thepolitical parties in Redditch support it, and I am oneits greatest advocates. We are proud that it hasdelivered so many of the things that people inRedditch wanted.”

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Commission case study – Redditch Co-operative Homes was developed in the late 1990s through apartnership between Redditch Borough Council and Accord Housing Association. Through RCH, six independenthousing co-ops have been developed in the borough, who buy services from RCH.

Action point 6All local authorities should incorporate co-operativeand mutual housing into their housing strategiesand local area agreements based on the followingsix points:

■ ensuring that various models of co-operative andmutual housing are available to provide housingoptions for local communities;

■ linking with people from the co-operative andmutual housing sector to publicise co-operativeand mutual housing to local communities andgenerating a local authority wide debate aboutdemocratic housing options;

■ ensuring that co-operative and mutual housingoptions are publicised to the public anddeveloping allocations systems for social rentedhousing that enable people to express apreference for co-operative and mutual housingand this be taken into account in the allocationsprocess. Local authorities should also enablepre-allocations for new build co-operative andmutual housing schemes;

■ creating links with, encouraging and supportingexisting co-operative and mutual housing in thelocal authority area;

■ requesting partner housing associations todevelop co-operative and mutual housing;

■ using publicly owned land or buildings at lessthan the unrestricted use or open market value inorder to generate co-operative and mutualhousing solutions.

Action point 7The LGA should promote co-operative and mutualhousing options to local authorities, and assist themto incorporate co-operative and mutual housing intotheir housing strategies.

8.13 A supportive housing sector – considerabledevelopment and other expertise exists in thehousing association and local authority housingsectors, and access to this expertise is needed todevelop a co-operative and mutual housing sector.Particular ways the housing sector should assistinclude:

■ developing new homes – developing homes forco-operative and mutual housing organisationsis quite different than current housingassociation approaches and would require a re-alignment of existing skills sets, but housingassociations in a position to develop new homesshould develop new co-operative and mutual

housing organisations – affordable housing co-ops in the social rented sector; co-housingschemes for elderly and multi-generationalcommunities; mutual home ownership schemes;community land trusts;

■ “short lifing” empty homes – a tried and testedroute, where appropriate, housing associationsand local authorities should continue to “shortlife” homes to housing co-ops where they areunable to make use of empty homes in the shortterm;

■ rationalising homes – a process has nowstarted whereby large landlords are examiningtheir stock portfolio to transfer ownership ofhomes where it makes more community sensefor them to be owned by another landlord.Currently this stock rationalisation is beingconducted in a competitive fashion, wherehomes are transferred to the landlord that offersthe most competitive bid, with minimalinvolvement of those living in the homes.Rationalising homes to co-operative and mutualhousing would require a different approach butcould yield a range of benefits for the peopleliving in the homes;

■ providing other services – where appropriate,existing housing organisations should provideother services to co-operative and mutualhousing organisations.

8.14 Steps towards mutuality – during the course of itswork, the Commission was asked to identify stepsthat existing housing organisations might be able totake to move towards mutuality and derive some ofits benefits. The Commission is not making anexclusive claim that social and community benefitsin housing can only derive from co-operative andmutual housing. Where a housing organisationwishes to take steps towards mutuality, the pointsset out below are based on the evidence of workdone with community gateways, a model specificallydesigned to import democracy, co-operation andmutuality into large scale housing organisations. Thefollowing are actions that large scale housingorganisations could take towards co-operation andmutuality:

■ membership - as recommended byCommunities Scotland, housing associationscould offer their tenants and other service userslegal membership of the housing organisation100.This is not necessarily a simple step, and tosimply introduce large numbers of tenantmembers to a housing organisation withoutdeveloping tenant capacity or ensuring thatmembership is meaningful could lead to

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problems. However, the more power themembership has, and the greater the percentageof tenant members, the more mutual theorganisation becomes, and the more the potentialbenefits that might derive from co-operation andmutuality. Community gateways were initiallydefined as having a tenant majority membership,but there have been some informal discussionsamongst the gateways that the membershipshould be redefined as exclusively tenant;

■ representation of the tenant constituency –most housing organisations are now introducingsome body that enables representation of thetenant constituency, and this is a necessary steptowards building mutuality in housing. Thecommunity gateways in Preston and Watfordhave established membership elected gatewaytenant committees to work alongside their boardsand management as an integral part of thegovernance framework and to enable the tenantleadership to participate in all decision-makingand to lead the process of involving tenants andmembers generally;

■ local decision-making – a key part of makingmembership meaningful and developingcommunity identity relies on enabling tenants andcommunities to make decisions and have input ata level that they recognise as being in their localcommunity. The TSA have proposed that sociallandlords should negotiate local standards withtheir service users, and community gateways arerequired to carry out structured communityoptions studies in community defined “LocalCommunity Areas” to encourage and supportlocal people to identify the future of theirneighbourhoods;

■ power at the local level – options availablecould include local people being able to takecontrol of decision-making in localneighbourhoods through tenant management orleasehold housing co-ops;

■ community empowerment strategy – theprocess of empowerment is consideredfundamental to community gateways and theyare required in their rules to present a report totheir Annual General Meetings on the progress oftheir community empowerment strategy. Takingon public accountability to show what steps arebeing taken to democratise the organisationwould be an important step towards mutuality.Community gateways are expected to agree theircommunity empowerment strategies with theirtenant representatives;

■ sufficient resources – any “steps towardsmutuality” require sufficient resources,

particularly with regards staffing input into beingable to have dialogue and create interaction withresidents. Community gateways are generallyexpected to agree their community empowermentresources and the way that they will be used withtheir membership representatives;

■ cultural change – achieving benefits throughco-operation and mutuality is dependent onwhether or not the will and the means are thereto genuinely involve tenants in decision-makingand to transfer power to tenant representatives.For the community gateways this has andcontinues to involve a considerable culturalchange where all aspects of the housingorganisation have to be considered from theperspective of involving tenants in decision-making. It particularly involved establishingcommunity empowerment at the top of thestaffing structure that is then cascaded downthroughout the organisation.

Action point 8Housing associations should providedevelopment and other support to co-operativeand mutual housing organisations asappropriate. In carrying out stock rationalisationprogrammes, housing associations should offertenants the option that their homes aretransferred to existing or new co-operative andmutual housing organisations.

Action point 9The NHF should provide support and guidanceto its members to develop co-operative andmutual housing.

Action point 10Housing associations, local authorities and armslength management organisations shouldconsider applying “steps towards mutuality”appropriate to their circumstances.

8.15 A supportive co-operative movement – the 2001Co-operative Commission Report set out a blueprintfor the future of the UK co-operative movement,which has led to the movement redefining its visionand its ethical, social and commercial purpose.

8.16 However, the small size of the UK co-operative andmutual housing sector has meant that housingremains the poor relation in the co-operative family.Whilst the members of co-operative societies areoften keen to support co-operative and mutualhousing options when they are explained to them,the co-operative movement has generally notrecognised the potential of co-operative and mutualhousing to create what the Co-operativeCommission Report described as the “virtuous

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circle of co-operation”. Consequently there has beenlittle consideration in the co-operative movement ofco-operative and mutual housing, and stakeholdersfrom other co-operative sectors rarely distinguishbetween co-operative and mutual housing and otherforms of affordable or sub-market value housing.

8.17 The combination of the co-operative movement’smarket facing consumer societies and the grassroots nature of the co-operative and mutual housingsector should place the co-operative movement atthe forefront of the emerging local communityagenda, potentially rebuilding co-operation andmutuality into the public consciousness as part of alocally controlled democratic housing movement,and potentially generating a new generation ofmembers and customers of other co-operatives.

Action point 11The co-operative movement should ensure that:

■ it uses its financial, organisational and politicalstrength to help the co-operative and mutualhousing sector develop new financial, legal andoperational frameworks that support andencourage the growth and development of theco-operative and mutual housing sector;

■ its asset management strategies and proceduresshould contain positive policies and actions toensure that, when the disposal of land andsurplus assets is considered, communities areenabled to develop co-operative housing for theircommunity when it is possible and makes socialand economic sense to do so.

8.18 A strong co-operative and mutual housing sector– the Commission particularly recognises andsupports the valuable roles that the CCH, theNFTMOs, the Co-housing Network and RadicalRoutes have played to build representation in theco-operative and mutual housing sector. Due to alack of scale, these organisations are severely under-resourced, and their coverage of the co-operativeand mutual housing sector is not comprehensive,with some parts of the sector, including communityland trusts and community gateways remainingunrepresented.

8.19 The co-operative and mutual housing sector needsto start to believe in itself – its success, what it cando to change people’s lives, indeed that it is aunique sector with a unique message to the world –so that it is better able to articulate its vision andmessage. Moving forward to a mature co-operativeand mutual housing sector that can offer a spread ofhousing options will require more co-ordinated andprofessional representation, based on a firm financialstructure.

8.20 A debate needs to take place where all thoseinvolved determine how best to structure therepresentation of the co-operative and mutualhousing sector in the future. This debate needs totake place in conjunction with a range of otherstakeholders including Co-operativesUK and otherparts of the co-operative movement, the CIH, theNHF, the Development Trusts Association andothers. Whilst the co-operative and mutual housingsector needs to generate its own funding in thefuture to represent itself, a responsibility also fallson Government to facilitate co-operative and mutualrepresentation until scale and capacity isestablished so that the sector can support itself.

Action point 12The co-operative and mutual housing sector needsto recognise its success and sign up to its uniqueidentity - so that it is better able to articulate itsvision and message.

Action point 13Representatives from the different co-operative andmutual housing sectors should come together, withthe support of Co-operativesUK, the CIH, the NHFand the Development Trusts Association and jointlydetermine how best to represent the sector toensure a more co-ordinated and professionalapproach.

Action point 14Government should provide seedcorn funding tosupport sectoral representation until sufficient scaleis developed to enable the sector to fund its ownrepresentation.

8.21 Financing and enabling structures – theconsequence of the global financial crisis, whichhas increased public sector debt and reduced thecapacity of commercial lenders to invest in housing,is that the pre-crisis affordable housing deliverymechanisms, which subsidised affordable housingfor rent by profits made by social landlords fromdeveloping housing for sale and shared ownership,no longer work. Rather than divert the content ofthis report into detailed technical discussion ofpossible new financial mechanisms in a rapidlychanging financial world, the Commission haspublished a discussion paper on mechanisms forfinancing the development of co-operative andmutual housing on the Commission’s website.

8.22 Key conclusions that can be drawn about financingthe expansion of the co-operative and mutualhousing sector at a time when access to bothprivate and public funding is difficult are that:

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■ new and innovative financing mechanisms arerequired if the co-operative and mutual housingsector is to develop and the demand foraffordable housing is to be met;

■ the unique member controlled nature of some co-operative and mutual housing organisations givesthem a capacity to raise finance in ways that differfrom other affordable housing providers. Forexample, some member controlled housingorganisations can secure investment using theopen-market asset value of their housing, onlypolitically and ethically acceptable where residentsare in control of the asset and risks;

■ any public or private sector funding or assetsinvested in co-operative and mutual housingshould be invested in such a way as to avoid thedemutualisation of the assets so that co-operative and mutual housing remains affordablefor the community it is built to serve and forfuture generations. It should not be possible forcommunity assets, some of which may havebeen developed through private individuals ororganisations donating assets at sub-marketprices for social and community benefits, to beeasily dismantled as was the case with co-ownership societies.

8.23 More dynamic funding approaches have beenadopted in other countries particularly in theNorwegian and Swedish co-operative housingsystems. The potential diversity of co-operative andmutual housing models lends itself to a variety offunding approaches, such as where community landtrust owned land may be used to develop affordablehousing co-operatives, mutual home ownership,mutual retirement housing and co-housing schemesalongside one another. An example of this diversityof approach can be seen in the variety of fundingmechanisms used by US community land trusts.

8.24 The Commission has received a number ofsuggestions and proposals regarding access tofinance for co-operative and mutual housingschemes, some regarding existing financingmechanisms and some suggesting alternativeapproaches:

■ TPAS recommended that some public fundingshould be ringfenced for new co-operativehousing developments.

■ CCH recommended the establishment of a co-operative sector Real Estate Investment Trust, amodel used widely in the US and recentlyintroduced in the UK, into which co-operativemovement assets could be invested, so as toenable both the ethical development of co-

operative and mutual housing and returns oninvestments required by co-operative societymembers.

■ the Co-operative Housing Finance Society Ltd(CHFS) recommended (and is investigating) theissuing of tradable co-operative housinginvestment bonds, a potentially attractiveinvestment for pension funds and life assurancecompanies due to the dependability of thereturn, the open market value security, the longterm ownership and maintenance of housingassets, and enhanced security through twelvemonth interest cover provided by CHFS as aloan guarantee society. However pension fundsseek to invest large sums and so this approachwould only be possible if co-operative andmutual housing development fundingrequirements were pooled and if there is asignificant scale in the development of co-operative and mutual housing.

■ reference was also made to potential ethicalinvestors who might be particularly attracted toco-operative and mutual housing, which couldrange from large scale investors to smallinvestors such as Triodos and the EcologyBuilding Society. Ethical investment may alsoinclude private land or property owners beingprepared to transfer assets at less than fullmarket value where they are satisfied that theirassets will be permanently owned and controlledby the community – a certainty that is onlypossible through co-operative and mutualhousing.

■ for small schemes, co-operative and mutualhousing can make use of “loanstock” to raisesome finance, whereby investors receive areasonable return on shares. Loanstock is usedby the small co-ops developed by RadicalRoutes and was used in the 19th Century by theearly co-operative consumer societies.Loanstock is not dissimilar to communityinvestment methods used by Asian communitiesto facilitate home ownership.

Action point 15Government, through the HCA and TSA, shouldsupport the development of new and innovativefunding mechanisms for co-operative and mutualhousing in concert with the co-operative and mutualhousing sector and the wider co-operativemovement.

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Action point 16Government should ensure, through legislation andregulation, that public and private investment in cooperative and mutual housing is preserved as acommunity owned asset for future generations thatcannot easily be dismantled or demutualised.

8.25 Enabling support - whilst occasionally co-operativeand mutual housing development has come aboutentirely organically, most has come about becauseof the availability of specialist support that isdedicated and committed to co-operative andmutual housing.

8.26 Support is needed to provide communities with thetechnical assistance needed to set up co-operativeand mutual housing. As well as support ondevelopment and funding issues, this involvestraining and capacity building support to developthe initial membership, from which some membersemerge to govern the organisation and takedirectorial decisions. How this is done needs toreflect the circumstances of the organisation beingestablished, but it requires specialist skills andexperience. TPAS have specifically recommendedthat the Government should provide revenuefunding to provide training and advice to developstrong and effective governance. The use of existingtenant empowerment grant funding that currentlyenables the development of TMOs needs to beextended to support the development of otherforms of co-operative and mutual housing withsystems that will include working with prospectivetenants for new build schemes. For successful newbuild schemes, empowerment grant funding couldenable a revolving loan fund, where grant providedto successful projects could be recycled bycapitalising the grant funding into the business planfor the new organisation.

8.27 Some co-operative and mutual housingorganisations manage successfully without accessto any ongoing external support. Very smallorganisations usually do not need much support,although membership turnover and access to up todate guidance can present problems. Some largerorganisations employ their own staff, but even theyare likely to need access to some support toprovide them with specialist information. Most co-operative and mutual housing organisationstherefore need access to some level of ongoingsupport, either through service providers or throughsectoral representative bodies and this supportneeds to be tailored and accredited specifically forco-operative and mutual housing.

8.28 If co-operative and mutual housing options are tobecome more widely available, consideration needsto be given to these support structures. Apart froma small number of support organisations whocontinue to provide services to co-operative andmutual housing organisations, support that iscurrently available tends to be fragmentary, unco-ordinated, and at times haphazard, with noconsideration of what will deliver the best results.

8.29 The CCH has recently started to develop anaccreditation system for housing co-operatives andfor organisations providing services to housing co-operatives based on the Canadian co-operativehousing sector’s 20/20 vision. This accreditationsystem needs to be developed, and extended toinclude other forms of co-operative and mutualhousing and organisations providing services tothem.

Action point 17Government should extend the use of tenantempowerment grant funding to include thedevelopment of all forms of co-operative andmutual housing.

Action point 18The CCH’s accreditation system, underdevelopment for housing co-operatives with fundingfrom with TSA, should be extended to cover otherforms of co-operative and mutual housing andorganisations providing services to them.

8.30 Promotion and vision – co-operative and mutualhousing can only become a successful part of theUK’s housing options if it enters the hearts andminds of ordinary people and communities as arealistic option available sitting alongside traditionalhome ownership, private renting and social renting.

8.31 But the Commission’s research with everyone apartfrom those already involved with co-operative andmutual housing has shown a staggering lack ofknowledge of and misconceptions about the sector.The CIH’s Sarah Davis referred to a need toincrease awareness amongst the wider population,in housing organisations, and in Government, withtemplates and guidance available on how toestablish organisations. TAROE stressed the needfor “clear, accessible and easy to understandinformation.”

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“There is an evident need to raise the profile of whatco-operative and mutual housing can offer as amore apparent credible option. There has been anunmet level of interest in such provision due to theone-dimensional approach to new housingprovision. Co-operative and mutual housing hasbeen pigeon holed as being a part of the socialhousing sector, but there is a need to promote itsattraction to households who would not be likely toaccess social tenures.”101

8.32 The CCH has told the Commission that it fields twoto three enquiries from members of the generalpublic about forming housing co-operatives permonth. The Co-housing Network field a similarnumber of queries. There is limited accurateinformation available about Community Gateway,and even in tenant management, there is onlylimited activity to promote the model to localauthority tenants, and next to none to housingassociation tenants. Cllr Bill Hartnett referred to co-operative and mutual housing as “Britain’s best keptsecret”.

8.33 In the absence of accurate information, a folk lore ofmisconceptions has driven public policy, or lack ofit, towards the sector. The information andknowledge that is in existence is largely as a resultof handfuls of very frayed but enthusiastic volunteertenants or staff from organisations supporting co-operative and mutual housing. The sector requires a“one stop shop” approach, where members of thepublic, local authorities, housing associations andother practitioners are provided with acomprehensive vision and information about co-operative and mutual housing solutions.

Action point 19Government should promote a co-operative andmutual housing vision and produce guidance forcommunities, local authorities and housingassociations on co-operative and mutual housing –setting out options available, and how they can bedeveloped.

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Footnote98 Jamie Martin from Open Communities, speaking at the

Commission’s Liverpool hearing99 Based on a summary by Stirling Smith (2004) Promoting co-

operatives – a guide to ILO recommendation 193 The Co-operativeCollege

100 This would be possible for some housing associations, although itwould be legally challenging for charitable trusts. In thesecircumstances, a form of tenant membership could be establishedthrough other means. The precedent of Kensington and ChelseaTMO shows that it is possible to develop tenant membershipthrough an Arms Length Management Organisation providing thehousing service for a local authority

101 East Midlands Development Agency (2009) – call for evidencesubmission

THE CO-OPERATIVE AND MUTUAL HOUSING SECTORSHOULD:

■ recognise its success and sign up to its unique identity- so that it is better able to articulate its vision andmessage (Action point 12)

■ ensure that its sectoral representatives come togetherto jointly consider how best to represent the sectorwith a more co-ordinated and professional approach(Action point 13)

■ extend the CCH’s accreditation system for housing co-operatives to other forms of co-operative and mutualhousing and organisations providing services to them(Action point 18)

THE CO-OPERATIVE MOVEMENT SHOULD:

■ use its financial, organisational and political strength tohelp the co-operative and mutual housing sectordevelop new financial, legal and operationalframeworks that support and encourage the growthand development of the co-operative and mutualhousing sector (Action point 11)

■ develop asset management strategies and proceduresshould contain positive policies and actions to ensurethat, when the disposal of land and surplus assets isconsidered, communities are enabled to develop co-operative housing for their community when it ispossible and makes social and economic sense to doso (Action point 11)

LOCAL AUTHORITIES SHOULD:

■ incorporate co-operative and mutual housing into theirhousing strategies and local area agreements based onthe following six points (Action point 6):

a) ensuring that various models of co-operative andmutual housing are available to provide housingoptions for local communities

b) linking with people from the co-operative andmutual housing sector to publicise the sector tolocal communities and generating a local authoritywide debate about co-operative and mutual housingoptions

c) ensuring that co-operative and mutual housingoptions are publicised to the public and developingallocations systems for social rented housing thatenable people to express a preference for co-operative and mutual housing and this be taken intoaccount in the allocations process. Local authoritiesshould also enable pre-allocations for new build co-operative and mutual housing schemes

d) creating links with, encouraging and supportingexisting co-operative and mutual housing in thelocal authority area

e) requesting partner housing associations to developco-operative and mutual housing

f) using publicly owned land or buildings at less thanbest consideration in order to generate communityowned housing solutions

THE LOCAL GOVERNMENT ASSOCIATION SHOULD:

■ promote co-operative and mutual housing options tolocal authorities, and assist them to incorporate co-operative and mutual housing into their housingstrategies (Action point 7)

THE CHARTERED INSTITUTE OF HOUSING SHOULD:

■ promote co-operative and mutual housing options tolocal authorities, and assist them to incorporate co-operative and mutual housing into their housingstrategies (Action point 7)

■ support and facilitate the development of a partnershipbetween the co-operative and mutual housing sectorsto consider how best to represent the sector to ensurea more co-ordinated and professional approach(Action point 13)

HOUSING ASSOCIATIONS SHOULD:

■ provide development and other support for co-operative and mutual housing organisations asappropriate. In carrying out stock rationalisationprogrammes, housing associations should offer tenantsthe option that their homes are transferred to existingor new co-operative and mutual housing organisations(Action point 8)

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■ consider applying “steps towards mutuality”appropriate to their circumstances (Action point 10)

THE NATIONAL HOUSING FEDERATION SHOULD:

■ provide support and guidance to its members todevelop co-operative and mutual housing (Action point 9)

GOVERNMENT SHOULD:

■ develop a strategy to apply ILO recommendation 193to housing provision, supporting co-operative andmutual housing within the framework of nationalhousing strategy (Action point 1)

■ establish a co-operative and mutual housing workinggroup through the TSA, bringing togetherrepresentatives from statutory and non-statutorybodies with representatives from the co-operative andmutual housing sector to plan this strategy (Action point 2)

■ recognise the benefits and distinctive nature of housingco-operatives, ensuring that new affordable housingdevelopment is carried out through existing or newhousing co-operatives (Action point 3)

■ continue to promote and develop tenant managementto existing tenants of local authorities and housingassociations (Action point 3)

■ recognise the potential of mutual home ownership as anew intermediate market tenure and support, andfacilitate the development of exemplar projects towiden the tenure choice available to households whoare not able to sustain individual home ownership(Action point 3)

■ recognise the need, in an ageing society, to developco-housing and other forms of mutual retirementhousing for older people to enable them, as far as ispossible, to maintain independent living through livingin housing commumities that facilitate mutual aid andsupport (Action point 3)

■ through the HCA (Action point 4)

a) ensure that affordable housing investment strategiesenable any local community in England that wishesto do so to develop housing co-operatives andother forms of mutual and community owned andmanaged housing. Because of the benefits theybring and the need for promotion, co-operative andmutual housing should be incentivised as an optionfor local communities

b) judge its affordable housing investment strategies tobe failing unless a significant part of affordablehousing investment each year is invested in co-operative and mutual housing development

c) ensure that the ‘value for money’ methodology ituses to assess investment in affordable housingdevelopment values the personal, social, economicand environmental sustainability benefits ofinvesting in housing co-operatives and other formsof mutual and community owned and managedhousing

■ ensure, through the TSA that (Action point 5)

a) arrangements for registering co-operative andmutual housing are fit for purpose and designed toenable communities wishing to do so to relativelyeasily register co-operatives and mutual housingorganisations

b) the regulatory and inspection regime recognises thebenefits that derive from co-operative and mutualhousing and are designed to be appropriate to thescale, operation and member controlled nature ofco-operative and mutual housing providers

■ through the HCA and TSA, support the development ofnew and innovative funding mechanisms for co-operative and mutual housing in concert with the co-operative and mutual housing sector and the widerco-operative movement (Action point 15)

■ ensure, through legislation and regulation, that publicand private investment in co-operative and mutualhousing is preserved as a community owned asset forfuture generations that cannot be easily dismantled ordemutualised (Action point 16)

■ extend the use of tenant empowerment grant fundingto include the development of all forms of co-operativeand mutual housing (Action point 17)

■ provide seedcorn funding to support sectoralrepresentation until sufficient scale is developed toenable the sector to fund its own representation(Action point 14)

■ promote a co-operative and mutual housing vision andproduce guidance for communities, local authoritiesand housing associations on co-operative and mutualhousing – setting out options available, and how theycould be developed (Action point 19)

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Commission Secretariatc/o

Accord Housing Group178 Birmingham Road

West BromwichB70 6QG

T 0121 500 2334E [email protected]

Documents

Edited by Nic Bliss people in co-operative and mutual housing ... communities can’t be trusted to make decisions. ... National and local political will has to