Housing cooperatives are widespread throughout Uruguay, extending from the capital, Montevideo, and its surrounding metropolitan area to small towns in the interior of the country. The key drivers behind this development have been the principles of cooperation, active participation, direct democracy, and the presence of a supportive legal framework and public financing.
As at 2022, Uruguay has a quantitative housing deficit, estimated to be between 50,000 and 60,000 housing units. The Ministry of Housing and Land Use Planning is responsible for the corresponding policies. The country’s total permanent housing stock is slightly over 1.1 million, while the total population is less than 3.5 million.
In the past five decades, despite having a powerful law, the situation has not substantially improved. There are over six hundred irregular settlements where more than fifty thousand families, totalling around two hundred thousand people, live. These settlements suffer from legal insecurity, physical deficiencies, and lack basic services.
The state implemented various programs to address this issue, which are now consolidated under the Directorate of Social and Urban Integration. These programs include Neighborhood Improvement, relocations, and a mitigation program known as “Plan Juntos” (Plan Together).
The Cooperative Model
The cooperative model is the most efficient at providing low-cost urban housing through self-management and individual contributions. This can either be in the form of mutual aid cooperatives, where members contribute work, or pre-savings cooperatives, where members contribute money. In addition, by collectively owning the housing complexes and granting the right of use and enjoyment to its members, cooperatives prevent speculation in the social housing market.
Legal Framework
Since 1968, Uruguay has had a national housing law that legally recognizes the cooperative system and establishes financing mechanisms. These mechanisms provide access to housing for all sectors through subsidies that consider the income and family composition of the groups involved.
Although there is a relevant legal frame of reference, housing investment remains low. Social housing pays taxes, while private investment is exempt, causing a cost increase of 12 to 20%. Additionally, loans are offered at market interest rates instead of social interest rates, forcing them to consume a significant portion of public housing resources through subsidies.
For the cooperative movement to succeed, it requires support from the state in the form of legal status and public financing, including loans and subsidies to facilitate housing payments.
Dictatorship Years
During the dictatorship from 1973 to 1985, the cooperative and housing movements were practically outlawed. Leaders and activists were persecuted, loans and legal status was suspended, and there were attempts to eliminate collective ownership. However, with the resurgence of democracy, the housing cooperative movement has been growing and consolidating. Today, it is recognized as the most efficient tool for providing access to decent housing for the popular sectors.
Federations
Despite the challenges mentioned earlier, the country has more than seven hundred housing cooperatives organized into two main federations: FUCVAM, focused on mutual aid, and FECOVI, which emphasizes previous savings. These cooperatives, with several decades of history, bring together around thirty thousand families and over one hundred thousand individuals. Considering the size of the country and the historical lack of support for cooperatives, these numbers clearly demonstrate the significant impact of the housing cooperative movement, making it an important social player.
CUDECOOP represents more than 3,500 grassroots cooperatives from all sectors active in the country, involving more than one million cooperative members.
The Uruguayan Federation of Mutual Aid Cooperatives (FUCVAM) is a trade organization established in 1970. Its mission is to strengthen the right to housing by uniting cooperatives under the principles of mutual aid and collective property. The founders and workers of FUCVAM recognized the cooperative model as a solution to housing challenges in lower-income sectors.
Mutual Aid is a unique feature of the Uruguyan cooperative movement. Over time, Mutual Aid has evolved to not only contribute financially to housing construction but also to involve future cooperative members in the design and creative process, shaping an alternative social model. It also sets the stage for harmonious coexistence and fosters social awareness within the community.
The Cooperative Housing Movement for Mutual Aid emerged from the working class to address the housing problem and create neighbourhoods that provide a dignified and decent life for residents. Originally, housing cooperatives were closely tied to the Uruguayan Trade Union Movement and adopted strategic definitions with a strong focus on class. This class-based approach allowed cooperativism to encompass a wide range of needs as a unified class, rather than focusing on a specific sector of society.
Since the early 2000s, the Uruguayan Federation of Mutual Aid Housing Cooperatives (FUCVAM) has been collaborating with international partners and other organizations to adapt its housing cooperative model for Central American countries such as Guatemala, Honduras, El Salvador, Nicaragua, and Costa Rica.
Starting in 2004, We Effect’s Regional Housing and Habitat Program in Latin America aimed to facilitate and promote the transfer and replication of this cooperative housing model from Uruguay to other countries. Since then, the cooperative housing sector in the Mesoamerican region has experienced significant growth and progress.
Members of Castalia Housing Cooperative in Montevideo, Uruguay
FECOVI
The first housing cooperatives in Uruguay were established in 1966, based on three initiatives promoted by the Uruguayan Cooperative Centre (CCU) in towns across the country. In 1968, the Uruguayan Parliament passed the National Housing Law, which provided a legal framework for the promotion of social housing programs, institutionalizing the housing cooperative system through two management modalities (mutual aid and prior savings) and two forms of ownership (user cooperatives and owner cooperatives).
By the end of 1969, the prior savings cooperatives formed the National Federation of Housing Cooperatives (FENACOVI) to advocate for the savings system as a solution to the housing issues faced by the country’s workers. However, with the establishment of the military regime in 1973, a series of challenges hindered the development of housing cooperatives. In 1976 the prior savings cooperatives were discontinued by a decree of the dictatorship. Although the Federation closed down the cooperatives continued to represent a democratic stronghold, organizing themselves to resist the military regime. FENACOVI was reinstated institutionally in 1984, opposing the unfair and illegal adjustments in interest rates for loan repayments.
Through an extensive effort to promote new cooperatives and attract existing ones, both in Montevideo and the interior of the country, FENACOVI currently comprises around 105 prior savings cooperatives with members at various stages: completed, under construction, and in the formation phase, representing over 5,000 families.
The institutional objectives of FECOVI are defined as:
the vindication of the pre-savings system as a solution to the housing problem
the trade union defence of pre-savings cooperatives
the promotion and creation of new housing cooperatives
the planning and execution of cooperative training programs
the coordination of actions with other organizations that seek to eliminate the housing deficit
the coordination of actions with organizations of other cooperative modalities in the defence and promotion of cooperatives
Watch the video below about Castalia Housing Cooperative in Montevideo.
Malecón Mauá cooperative on the Montevideo Promenade in the Sur neighbourhood housing 46 families.
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