Skip navigation

About Estonia

EKYL’s Summer University of Co-operative Housing Associations in 2011

EKYL’s Summer University of Co-operative Housing Associations in 2011

History

Co-operatives in Estonia are relatively new, initially appearing during the first period of independence in 1918–1940. With the arrival of the “perestroika” and the accession of independence in 1991, co-operatives began to flourish and were the first form of private enterprise. The Estonian Co-operatives Act was adopted in 1992 and was subsequently changed for the Commercial Associations Act in 2001.

Housing co-operatives grew rapidly due to the vast privatisation program put in place by the State. The privatisation program, started at the beginning of the 1990s, impacted on all aspects of the economy. The state owned properties and enterprises were all privatised in a very short period of time. Moving from socialism, state property and planned economy to liberalism, individual property and market economy, the necessary financial and legal tools had to be put in place such as a land registry and a mortgage financing system.

The housing privatisation was done in three steps: the privatisation of apartments, the establishment of housing co-operatives or apartment associations, and the registration of housing property. The privatisation of apartments was done through a system of vouchers given to the in-situ tenants. The value of the voucher was dependent upon the number of working years during the soviet period. In less than three years, by mid 1993, more than 3,000 co-operatives housing associations or apartment associations had been formed.

Housing retrofitting was the first task to be undertaken at the time of privatisation. The apartments were located in 20 to 50 year old buildings. They were in poor condition due to inadequate construction and lack of maintenance. The major part of the building portfolio needed complete renovation. However, the economic situation of both the country and the citizens along with high interest rates ranging between 16 to 18% made it impossible to address the situation. The housing co-operative movement lobbied hard to gain better borrowing conditions. Thanks to this effort, a major instrument of housing policy in Estonia was introduced in 2003, namely the state subsidy for reconstruction and technical expertise of apartment buildings. The subsidy covered 10% of the costs of reconstruction works and 50% of the costs of technical expertise.

In addition to this, the City Governments of Tallinn, Paide, and Rakvere had special credit support systems for apartment associations and co-operatives, which enable them to receive very low interest (1% to 3,5%) loan from banks.

In Estonia, unlike other central and eastern European countries that went through privatisation programs, the setting of up of housing co-operatives or associations was made mandatory for the management of the buildings and common space. This obligation created several challenges. People with no democratic tradition and different backgrounds had to work together and to learn building, people and organisational management. The Estonian Union of Co-operative Housing Associations was founded in 1996 expressly to support the new housing co-operatives and to help the newly elected board of directors and managers.

The privatisation program included another aspect that added to the challenges of setting up and managing housing co-operatives. The State recognised the previous apartment owners when appropriate and allowed for the restitution of those units to the people who owned them before the communist period. To ease the transition of the residing tenants, the State ensured low rent and security of tenure until 2002 at which time the previous owners were able to have their units back.

On January 1st 2008 a new law came into force allowing housing co-operatives to change their status to apartment associations. According to the Estonian National Housing Development Plan for 2008–2013, an apartment association is a non-profit association established by apartment owners for the purpose of shared management of the legal shares of the building and plot of land and, representation of the shared interests of the members of the apartment association.

Today only 300 original housing co-operatives remain. All others have been transformed into apartment associations. Housing co-operatives and apartment associations have some legal differences but both terms are used in English language to describe the portfolio.

Context

Today, 96% of apartments have been privatised. These privatised apartments are organized through apartment associations and housing co-operatives.

Special efforts are being made to improve energy efficiency and the co-operative housing movement is working with several private and public partners. Any renovation and refurbishment plans are nevertheless limited by the financial capacity of individual members; housing co-operative membership includes people with diverse socio-economic backgrounds.

The official statistics indicate that Estonia is not lacking housing units. However the fact that, in many instances, several family generations live in the same unit may distort the official statistics. Moreover, there has been only marginal new development over recent years. This has contributed to create a lack of available units; more specifically of affordable units for people with special needs and seniors. This lack of affordable units is more predominant in some regions facing migration due to employment.

The State has adopted a housing strategy, the Strategy of Estonian Housing Policy 20072013. The implementation of the policy is under the responsibility of the Ministry of Economic Affairs and Communications. Three priorities have been identified:

  • Provide affordable housing to the tenants from restituted units.
  • Support the building of new apartments.
  • Improve and strengthen urban planning for better quality living, roads and property lands.

Description

Key characteristics of the Estonian housing co-operatives or apartment associations are:

  • Formed to manage the common areas.
  • Non-profit organisations managed by a board of directors.
  • The board can hire real-estate managers if needed.
  • Units belong to the individual members.
  • Sale of units is regulated at market.
  • Owners pay according to the actual costs.
  • At the beginning of privatisation, one housing co-operative had to be established for each building. The rule was changed and apartment associations / housing co-operatives can have many buildings.
  • Units built during the soviet era (1960s to 1980s) are of poor quality and have high energy costs (30% more than compared to other European countries). The portfolio is in need of major renovation.
Co-operative Housing Association Turu 12A in Tapa

Co-operative Housing Association Turu 12A in Tapa

Financing

Housing co-operatives or apartment associations have access to several financial programs. There are renovation loans and loan guarantees for apartment buildings and the green investment scheme “Support for renovation of apartment buildings” offered by KredEx. The objective of the green scheme is to support the reconstruction and renovation of apartment buildings for achieving indoor climate and energy efficiency, improving the energy-performance as well as using renewable energy in the existing apartment buildings. The financial assistance is available to apartment associations, building associations and communities of apartment owners.

The green investment scheme comes in a form of a grant from KredEx in the amount of 15%, 25% and 35% of the total project cost depending on the level of complexity of the reconstruction of apartment buildings. The grant is primarily meant to supplement the renovation loans of KredEx but the grant can also be combined with owners’ funds.

Information from KredEx shows that the average energy saving of apartment buildings having undertaken renovation with the help of reconstruction grant offered since September 2010 is 37%.

A total of 270 reconstruction grant applications have been submitted to KredEx until today, of which 229 apartment buildings have received a positive decision in the amount of 6,2 million Euros.

More information visit: www.kredex.ee  (some information in English)

Legal Framework

The legal instruments for the co-op housing sector are:

  • The Commercial Code.
  • The Co-operatives Act 1992–2001, Commercial Associations Act since 2001.
  • The Non-profit Associations Act.
  • The Apartment Associations Act.
  • The Apartment Ownership Act.

The most important pieces of legislation for apartment associations or housing co-operatives are: The Apartment Associations Act, The Apartment Ownership Act and The Non-profit Associations Act. The others are pertinent as supportive legal acts.

The Co-operative Housing Movement

In 1996, the Estonian Union of Co-operative Housing Associations (EKYL) was founded by regional unions, the umbrella national organisation for the co-operative movement in Estonia. In 1999, the co-operative housing movement changed its structure to a one-level national organisation. Since then, housing co-operatives have been direct members of the national organisation.

EKYL’s objectives are to offer services to members and to represent them and advocate for their interests at local, national and international levels. Services include: information and advice, training, organisational development, promotion, representation and advocacy and, management. EKYL publish the ELAMU magazine.

EKYL’s Training Centre offers a comprehensive education program to housing co-operatives. This 160-hour education program operating under a Licence given by the Ministry of Education and Research is offered to co-operative housing executive directors. This Licence allows EKYL to deliver certificate of real estate manager upon completion.

EKYL has also a certification program for housing co-operatives. A certificate of “Good Apartment Association” is issued to housing co-operatives upon positive reviews of their legal and financial status and building conditions. The certificate remains in force for two years.

EKYL membership represents 16% of the total co-operative portfolio with 1,400 housing co-operatives for 50,000 units.

EKYL is governed by a Council elected regionally. The Council elects a management board of directors of three people to oversee the day to day management in accordance with the decisions of the members and the Council. EKYL employ 15 employees.

For more information, visit: www.ekyl.ee (Estonian, Russian and some English)

Resources Tagged "Estonia"

Resosurces images

Co-operative Housing in Estonia

Presentation about Estonian Union of Housing Cooperatives  EKÜL by Andres Jaadla, Founder and Chairman of the board - ​and Member  of the board of Housing Europe. The Estonian Union of Co-operative Housing Associ ...Read More

Management Estonia
Resosurces images

Towards the Localization of the Sustainable Development Goals

The Global Taskforce of Local and Regional Governments prepared a report showcasing how cities and regions are fostering alternative housing policies to support the UN's Sustainable Development Goals. With increased urbanization, ...Read More

Advocacy Global
Resosurces images

World Habitat Awards 2017 – Winners and Finalists

As part of our collaboration with urbaMonde, we would like to highlight this years World Habitat Awards.  They tell some fantastic stories of what has been achieved globally to create safe homes where people can live free from t ...Read More

Community Global
Resosurces images

The Blueprint for a Co-operative Decade and its Special Application to the Housing Sector

The Blueprint for a Co-operative Decade is a worldwide campaign to “take the co-operative way of doing business to a new level”. The five key elements of the Blueprint are participation, sustainability, identity, legal frameworks and capital. The Blueprint is particularly relevant to co-operative housing and the Blueprint interpretation for co-operative housing below explains how.Read More

Governance Global
Resosurces images

The Co-operative Housing International Good Governance Test

The purpose of the Governance Test is to provide a means for housing co-ops affiliated to CHI to measure their standards of governance and to help them develop a good governance action plan to improve governance in weaker areas.  ...Read More

Governance Global
Resosurces images

Students and Housing Cooperatives

Student housing cooperatives have become very popular in the USA and many of these housing co-operatives are members of organizations such as NASCO. Unlike a resident who acquires shares at market rates to earn the right to occupy ...Read More

Community Global
Resosurces images

Building Strong Development Cooperation: Partnership Opportunities between Cooperatives and the EU

In 2000, United Nations (UN) member states recognised the need to build global partnerships for development and the exchange of expertise as one of the Millennium Development Goals. Across the international development field, part ...Read More

Financing and Development Global
Resosurces images

Sustainable Use of Forests: an Urgent Global Challenge

The unsustainable exploitation of our planet’s forests is a major contributor to global warming and threatens the future of humanity. Co-operative Housing International believes that the co-operative family has a role to play to prevent the ongoing degradation of the forests and is calling all co-operatives to support its Sustainable Management Forest Initiative.Read More

Sustainability Global
Resosurces images

Raising Capital: The Capital Conundrum for Co-operatives

New report: The Capital Conundrum for Co-operatives "The Capital Conundrum for Co-operatives", a new report released by the Alliance’s Blue Ribbon Commission explores ideas and options available to co-operatives that need suitab ...Read More

Financing and Development Global
Resosurces images

Financing Housing Co-operatives in a Credit Crunch

Financing the development of housing co-operatives is a challenge and more so in time of financial restrictions and uncertainty.  CHI members discussed the issue during a seminar held in November 2009 in Geneva.  Presentations w ...Read More

Financing and Development Global
Resosurces images

The Guidance Notes on the Co-operative Principles

Updated Guidance Notes on the Co-operative Principles, edited by David Rodgers, former President of Co-operative Housing InternationalRead More

Governance Global
Resosurces images

Promoting Cooperatives – International Labour Organization (ILO) Recommendation 193 on the Promotion of Cooperatives

The ILO views cooperatives as important in improving the living and working conditions of women and men globally as well as making essential infrastructure and services available even in areas neglected by the state and investor-driven enterprises. Cooperatives have a proven record of creating and sustaining employment – they provide over 100 million jobs today; they advance the ILO’s Global Employment Agenda and contribute to promoting decent work.Read More

Legal Global
Resosurces images

What’s new in Sustainable Forest Management?

 The Forest Products Annual Market Review 2013 reports that the development of new refinement processes has led to the production of new and more affordable wood based products such as cross-laminated timber (CLT). The report sta ...Read More

Sustainability Global
Resosurces images

Profiles of a Movement: Co-operative Housing around the World – Volume One

This first volume includes the co-operative housing profile of 22 countries. This report presents the history and the current realities of co-operative housing around the world.  CHI is currently in the process of updating the ...Read More

Community Global
Resosurces images

Profiles of a Movement: Co-operative Housing around the World – Volume Two

Volume 2 of the Profiles of a Movement concentrates on the African continent. We are pleased to present the remarkable work achieved by the African co-operators, work accomplished in a very challenging environment. These profil ...Read More

Community Global
Resosurces images

Environment Sustainability and Climate Change Seminars

To further our commitment towards sustainable sources of timber and forest products and to provide co-operators more information on the certification programmes and successful sustainable initiatives, CHI organized a seminar on S ...Read More

Sustainability Global
Resosurces images

Housing Co-operatives and Climate Change

ICA members adopted a resolution at the 2007 General Assembly calling on the co-operative movement to do its share in combating climate changes. The resolution suggests three ways on how the co-op movement can act now: Measure and ...Read More

Sustainability Global
Resosurces images

Legal Frameworks for Housing Co-operatives: Seminars

As part of CHI's plan to map its activities to the International Co-operative Alliance's Blueprint for a Co-operative Decade, CHI held a seminar on one of the Blueprint elements:  Legal Frameworks for Housing Co-operatives. “Co ...Read More

Legal Global
Resosurces images

Good Governance Charter for Housing Co-operatives

 The Good Governance Charter for Housing Co-operatives was launched at the ICA Housing Plenary in Manchester in November 2012.It has three parts:A 10-point set of good governance practicesAn interpretive statement for each good p ...Read More

Governance Global
Resosurces images

Financing and Climate Change Seminars

Seminars about continued public sector investment in co-operative housing in Austria and Canada, innovative funding arrangements created by the co-operative housing sector in Italy and harnessing member investment through co-opera ...Read More

Financing and Development Global
back to top