Co-op Strandparken in Kalmar, photograf Mats Samuelsson web
Co-operative housing, also known as a tenant ownership co-operative, was a response to extreme housing shortages and severe housing speculation. In 1923, tenant organisations founded HSB Riksförbund to promote and make the necessary representations to political bodies in support of co-op housing development. The original goals of the tenant organisation activists were to give everyone a way to control their housing situation as well as to provide good housing to large groups in society. The tenant ownership system, using the mother-daughter development model, was successfully developed. Under this model, large co-operative associations (mother or secondary cooperatives) build and sell the units to the co-operatives (daughter or primary co-operatives). Even though housing co-operatives have the freedom to choose their management service, most of them buy their administrative and maintenance service from their HSB regional organisation (or Riksbyggen respectively) which also contributes to keeping close links between the housing co-operatives and their umbrella organisations.
After the Second World War, the tenant ownership organisations became an essential key player in housing development. Riksbyggen was founded by construction workers during that time. Simultaneously, in 1945, the first governmental housing committee made an historic decision: Sweden was to provide the same kind of subsidies, regardless of the housing tenure whether it was rental housing, co-operative housing or private ownership. This neutrality between tenures would give people the capacity to choose the best suited housing for their family. Several mechanisms were then put in place to prevent speculation and housing co-operatives got access to direct subsidies maintaining affordability to any citizen independent of their economic situation. The direct housing subsidies were abolished in the 1990s and the financing system was reorganized.
The housing policy’s aim in Sweden is “well functioning housing markets in the long term” where consumer’s demands are met with an adequate supply of housing responding to their needs. The co-op shares have been sold on the open market since the 1970’s, without any internal stabilisation mechanisms. For example, in a new development today, the members-homeowners must finance around 75–80% of the development cost, the remaining costs being financed through a loan taken by the co-operative.
However, it should be noted that even with more expensive co-op shares, housing co-operatives often remain the most long-term price worthy tenure. Housing co-operatives are known for good quality housing and good maintenance which makes them cheaper in the long run.
Recent surveys state that 94% of Swedes live in a municipality where there is a lack of housing. Young people, newly arrived and the elderly have a particularly difficult situation on the housing market. Swedish municipalities state that their main problem when handling lack of housing is high construction costs and a lack of land in attractive areas.
Housing co-operatives (HSB and Riksbyggen’ portfolio) key characteristics are:
Mostly located in urban areas, the co-operatives have between 20 to 100 apartments, with an average size of 80 units. The largest co-operative in HSB portfolio has 1,033 units.
Most of the housing co-operatives are located in urban areas.
The properties (building and land) are owned by the housing co-operatives.
Tenants must be members of the co-operative. The Board is responsible for approval of membership. An individual who is not accepted as a member can lodge a complaint with the local rent tribunal.
Members buy shares giving them unlimited occupancy rights as long as they fulfill their obligations. Shares are sold at market value. HSB and Riksbyggen own the right to sublet or sell the apartments in the rare cases of new co-op development where units are not completely sold.
Members pay a monthly fee that covers interest and amortisation expenses of the co-operative’s loans as well as the operating expenses and scheduled future maintenance. The monthly fee is related to the size of the units the member occupies.
Members are responsible for the repairs and maintenance of own units and the co-operative is responsible for the maintenance of common areas and facilities.
Members can sublet their apartment with Board’s approval. Members can lodge a complaint with the rent tribunal if subletting is refused by the Board.
There is no governmental financial assistance. Depending on the project, members/tenant-owners finance between 75 – 80% of the development cost and the rest of the financing is raised by the co-op organisations through loans from the banks and other private financial institutions. Tenant-owners can normally get a loan from the banks equivalent to 85% of the down payment required.
HSB has set up a saving mechanism whereby individuals can save to buy their future co-operative housing shares. Individuals who use this mechanism receive priority on new developments. It is also possible for members, upon positive credit assessment, to get a loan from a financial institution to pay for his/her shares using the value of the shares as collateral.
HSB Security Guarantee protects the financial security of the housing co-operatives for the first 7 years by purchasing any unsold apartments and taking financial responsibility for them. Riksbyggen has a similar mechanism, immediately buying unsold apartments, although this rarely occurs.
Housing co-operators – homeowners –benefit from a 30% tax reduction of interest expenditures for loans either for co-op shares in the open market or for new flats.
The legal instruments for the housing co-operative sector are:
The Co-operative Housing Act which determines the co-operative’s organisational rules, including their business conduct
The Co-operative Societies’ Act which determines the association’s organisational rules, including their business conduct.
The Co-operative Housing Movement
Unlike many countries, housing co-operatives in Sweden are not represented by a single one organisation at the national level. A majority of the co-operative housing portfolio is linked to two organisations: HSB Riksförbund and Riksbyggen, HSB being the largest with around 335,000 co-operative apartments. HSB and Riksbyggen develop, manage, offer services and represent housing co-operatives in the country.
HSB Riksförbund, the Tenants’ Savings and Buildings Society, has a three level structure. The National Federation, custodian of cooperative values, is mainly responsible for lobbying and providing services to the regions, the Regional Societies are responsible for developing and servicing housing co-operatives and the third level is the tenant owner housing co-operatives. In this structure, individuals interested in becoming members of an HSB housing co-operative join a HSB association. Once the individual buys shares and moves into a housing co-operative, he/she becomes a member of a housing co-operative and keeps the membership in the HSB association.
HSB Riksförbund membership consists of:
580,000 members (and around 110,000 home-savers*)
3900 housing co-operatives that are members of the HSB Regional Associations
29 HSB Regional Associations
* The home savers are saving money on a monthly basis to eventually become a co-op tenant owner. While saving and waiting for the proper unit or the appropriate time to buy, they have the opportunity to rent a flat.
Riksbyggen, the Co-operative Building Organisation of the Swedish Trade Unions, is owned by the trade unions of the building sector, tenant ownership housing co-operatives and other national cooperative organisations. It has a two level structure: the National level and the Local tenant owner co-operatives. The local tenant owner co-operatives are organised in regional associations who act as delegate bodies and monitor questions regarding ownership rights, lobbying and other interests of the individual co-op. The regional association also provides education and information to the co-ops.
Riksbyggen membership consists of:
1,610 housing co-operatives, which are developed by Riksbyggen
33 delegate bodies
24 local associations, which are voluntary organizations consisting of local union and popular organizations.
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