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 organizations 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 organization 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). ). From the start, the apartments came with modernities such as hot and cold water, gas stoves and bathrooms, things that were considered a luxury. HSB worked to make them standard for all households.
Even though housing co-operatives have the freedom to choose their management service, many of them buy their administrative and maintenance service from their HSB regional organization (or Riksbyggen respectively) which also contributes to keeping close links between the housing co-operatives and their umbrella organizations.
After the Second World War, cooperative housing organizations 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 a 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. 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 consumers’ 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 1970s. For example, in a new development today, the members must finance around 75–80% of the development cost, the remaining costs being financed through a loan taken by the cooperative.
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. For example, in 2021, median household expenditure was 86,000 SEK/year for single-family homes, 77,000 for rental apartments and 73,000 for housing cooperatives. (Hushållen använder en femtedel av inkomsten för att betala för boendet år 2021 (scb.se))
Recent surveys state that 87% 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 in the housing market. Swedish municipalities state that their main problem when handling a lack of housing is high construction costs and a lack of land in attractive areas.
Housing co-operatives (HSB and Riksbyggen’s 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 properties (building and land) are owned by the housing co-operatives.
Tenants must be members of the cooperative. The Board is responsible for the 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 amortization 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 their own units and the cooperative is responsible for the maintenance of common areas and facilities.
Members can sublet their apartments with Board’s approval. Members can lodge a complaint with the rent tribunal if subletting is refused by the Board.
There is no government 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 organizations through loans from banks and other private financial institutions. Tenant-owners can normally get a loan from the bank equivalent to 85% of the down payment required.
HSB has set up a saving mechanism whereby individuals can save to buy their future cooperative 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 determines the co-operative’s organizational rules, including their business conduct
The Co-operative Societies Act determines the association’s organizational rules, including its business conduct.
The Cooperative Housing Movement
Unlike many countries, housing cooperatives in Sweden are not represented by a single organization at the national level. A large part of the cooperative housing portfolio is linked to two organizations: HSB Riksförbund and Riksbyggen. They both develop, manage, offer services and represent housing cooperatives in the country.
HSB Riksförbund has a three-level structure. The National Federation is responsible for creating value for the regional associations and the members, for efficiency and sustainable growth in the organization and for lobbying. The Regional Societies are responsible for developing and servicing housing cooperatives and the third level is the housing cooperatives. In this structure, individuals interested in becoming members of an HSB housing cooperative join an HSB association. Once the individual buys shares and moves into a housing cooperative, he/she becomes a member of a housing cooperative and keeps the membership in the HSB association.
Riksbyggen, the Cooperative 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 organizations. It has a two-level structure: the National level and the Local tenant owner co-operatives. The local tenant-owner co-operatives are organized in regional associations that 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 (2023) consists of:
1,750 housing cooperatives, which are developed by Riksbyggen
29 delegate bodies
24 local associations, which are voluntary organizations consisting of local unions and popular organizations.
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