Presentation on Housing
Co-operatives
By
SAHCA
To the National Housing Portfolio Committee
Parliament, Cape Town
Wednesday , 24 February 2010
Definition of a housing
co-operative
 A housing co-operative is an association of people who
collectively own and govern their housing on a not-for-profit
basis. Using Co-operative principles which are closely
associated with the spirit of 'UBUNTU', here in South Africa.
 Why housing co-operatives?
 By working together, members of a co-operative can provide
themselves with better and more affordable housing than
they could as individuals. Within the housing sector, cooperative housing meets the particular need of people
wishing to build a community, have a say over how their
housing is managed and promote a culture of democracy. A
housing co-operative differs from other forms of tenure in
that residents share responsibility, ownership and
governance of their homes
How Housing Co-ops
Provide Housing
Promoting housing through greenfields
development – new building units;
Conversion of existing public housing stock
(hostel to residential redevelopment)
Rehabilitation and renovation of flats and
high rise buildings for decent accomodation
Upgrading of informal human settlements
through the e-PHP model
Mobilizing capital for housing development
Spillover effects.
Housing co-operatives:
Some Examples
coops
Norway: 300,000 units
Coops :
Canada 900,000 units
Coops
Sweden: 300,000 units
Coops
Germany: 1m units
Coops in
USA: 1m units
Coops
SA ,10,000 units
Common Goal, Common
Bond
Where
individuals
may lack
 ... Capital
 … Power
 … Ideas
 … Skills
co-operative
members
 … Work
together
 … Negotiate
together
 … Innovate
together
 … Learn
from each
other
Comparative Advantages
Economies
of scale
Division of
labour
Representation
Bargaining
power
Security of
tenure
Member
participation
Membership
value
Joint
innovation
Stability
The Triple Role of
Housing co-operatives
Social role
social services
Security
of
community
Tenure
development
environment
Economic
role
Opportunity
Employment
Growth
Finance
LED
Political
role
EmpowerDemocracy
ment
Social
dialogue
Freedom of
association
Affordability and decent
housing in co-ops
Member control and democratic
management
Self-determination
Profit sharing (if the coop has
member share capital ) according to
member participation
Concern for community
Community
Development
Social Care
Social Services Through
Housing Co-operatives
Prerequisites
Capital
Security of
Tenure – coop tenure
Vertical and
Appropriate
horizontal
Organization framework
integration
conditions
Co-op Management
training &
advice
Technolgy
Comparing to other model
Ownership
Monthly cost
Co-operatives
The residents
are
shareholders
in a
corporation
that owns the
property.
Owning a
share entitles
you to occupy
a unit
Members pay
the Co-op for
their share of
the actual
operating
cost, building
mortgage,
and real
estate taxes,
based on the
non-profit
Rental
Tenants own
nothing. On
expiration of
lease, tenants
may be forced
to vacate
Single House
Owners
acquire
individual
title to their
dwellings and
yard
Sectional Title
Unit
"airspace"
owned by
individual,
plus an
undivided
share of
common
elements
Tenants pay
rent specified
in lease
Owner must
make his or
her purchases
of whatever is
needed, often
at higher
retail costs.
Owner makes
mortgage and
tax payments
to lender
Same as
cooperative,
except
mortgage
payments and
taxes are paid
directly to the
lender
Comparison continues.
Move in cost
New members
buy their
share in the
cooperative
and also pay
the first
monthly
charge in
advance
Usually one
month's rent
is paid as a
security
deposit, plus
the first
month's rent
Community
control
Co-op
resident
members
elect their
board of
directors,
which decides
all policy
matters. The
Board usually.
Renters
usually have
no voice at all
in
establishing
and
maintaining
community
standards
Purchaser
must buy the
property,
usually with a
mortgage
with a down
payment of at
least 15%
and closing
costs of 13%
or more
Individual
owners have
no
jurisdiction
over their
neighbors
Same as
single family,
plus first
month's
condo fee and
often a
"contribution
to capital" of
1-2 months'
fee
Condo
owners, like
cooperatives,
elect a board
of directors
Process of establishing a
new housing co-op
 Information session with affected
communities/potential members of the co-op,
relevant govt officials and managers of the coop
 Training (capacity-building) of all the above
 Finalisation of the constitution and the
member user agreements
 Registration of the co-op
 Co-op established and operated according to
values and Principles
Who is SAHCA and what
does it do?
A national Apex body for housing co-
operative.
Formed by primary co-operatives to
Unite, Represent and Serve its
member organisation in the country
Objectives of SAHCA






Educate the public about housing co-operative as another
tool for housing delivery in the country.
Promote housing co-operative model in all spheres of
government and private sector in the country
Register and train new housing co-operatives
Lobby government to develop a policy that will cater for
housing co-operative development and support.
Train the boards and members of the existing housing cooperative members around policy and legislation that govern
housing
Develop pilot projects to promote different models in
different provinces.
Objectives continue.





Mobilise resources like subsidies, grants and land for its
members
Forge partnerships with the provincial and municipality in
terms of housing delivery
Lobby government on behalf of the housing co-operatives
Create networks amongst housing co-operatives to share
knowledge and experiences
Help set up Provincially:
 Property development services
 Property management service
National Membership
Stats.
Gauteng
North
West
Western Kzn
Cape
Eastern
Cape
PHP & Informal
1
1
0
9
11
Hostel Upgrade
0
0
2
0
0
Greenfield
2
0
0
1
0
Flats renovation
20
10
1
0
0
Total
23
11
3
10
11
Total units
105 000
Ownership
70% black, 25% coloreds, 5 Indian &
no whites
Demographics
50% women, 40% youth &
10%disabled
Employment opportunity 1715 permanent employee
Current Programs
 Working with the city of Tshwane and the
Joburg Metro on collective community
housing projects.
 Epwp on training unemployed youth to
learn housing construction and buildings
maintenance
 Working with Youth structure at the
University of Johannesburg to establish the
first student housing co-operative
Success of the Movement
 The demand by communities that seek assistance
to establish housing co-ops is increasing
 Part of the task team on e-PHP
 Drafting team of the Co-operative Act
 Drafting team of the Social Housing Act
 Housing Projects facilitations
 The housing co-operative strategy developed with
NDOH and to be incorporated into the National
Co-operative Strategy
Challenges
 Cross legislations not favourable to the housing
co-ops environment
 Housing Co-op are self regulatory due to lack of
support from municipalities
 Bad publicity by previous management companies
 Lack of co-op knowledge by gov’t officials
 Lack of resources to support the co-op
development in the inner cities
 Competition with established and supported
tenures
 DFI ‘s interference
 Lack of the resources
Recommendations
 A subcommitee to investigate challenges
mentioned in the meantime all litigations by the
NHFC to be suspended
 A briefing from the Policy unit within the NDOH on
their progress on the draft housing co-op policy
 The NDOH to include housing co-ops in its
programs for this financial year with SAHCA as its
partner
 SAHCA to brief the commitee on the progress of
issues mentioned above
 A visit by the commitee to some of the co-ops
during their interaction with the communities
Closure
SAHCA on behalf of its members
would like to take the oppportunity to
thanks the commitee and the
chairperson on the sterling job done
in ensuring that communities live in
sustainable human settlements.
Thank You!