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Find out how to take control of your housing situatioin

Find out how to take control of your housing situatioin

Taking control of your housing

On Saturday 1 June, Emily Johns and others from Walden Pond Housing Cooperative in St Leonards-on-Sea are running a workshop to explain how to set up a housing co-op. Read on to find out more about how you can create an affordable and long-term housing solution.

How can it be possible for people on very low incomes, or relying on benefits, to buy their own home and provide themselves with stable, low-cost housing?

One answer comes from the mid-1980s, when Margaret Thatcher was imposing her own version of ‘austerity’ on the country. A group of full-time activists were setting up a libertarian (freedom-based) educational project for adults in Birmingham, something they called ‘The New University’.

They decided that to give the project a solid foundation, they should buy a permanent home for it in inner-city Hockley. They worked out a 100% legal way for a group of people on benefits to buy a house, and then pay off the mortgage using housing benefit payments. The set-up was straightforward, honest and aboveboard. It worked because the group had chosen a special legal structure which bans any private profit or personal gain for members of the co-op.

The New University group shared its discovery with other social change activists and helped to form a network that became known as ‘Radical Routes’. Since then, the same co-op structure has been used by dozens of groups of low-income people to buy property and to provide stable, low-cost and democratic housing for themselves.

Radical Routes is a secondary co-operative or a ‘co-op of co-ops’, It’s a co-operative whose members are also co-operatives. The RR network has made over 35 loans to member co-ops since the late 1980s, lending over £1m in total, and helping to buy more than £4m-worth of property.

Some of those loans have helped to buy buildings for member-controlled social centres (like the Cowley Club in Brighton), but most of the loans were to housing co-operatives for buildings for people to live in. This includes homes in Birmingham, Brighton, Cornwall, Leeds, Manchester and Oxford, and in rural Wales as well as rural Scotland – and the house in St Leonards that we’ve lived in since 2001!

 

What’s special about a Housing Cooperative?

There are lots of different kinds of collective housing.

For example, in a lot of ‘co-housing’ projects, when a member joins, they have to put in money to buy (or build) their house or flat, and then they get to take money out again if they leave, or if the project goes out of business.

In some kinds of housing co-operatives, if the co-op comes to the end of its life and is ‘wound up’, the profits from selling off the property are split between the members. This is not possible in the Radical Routes type of housing co-op – which is known technically as a ‘common ownership’, ‘par value’ and ‘fully-mutual’ housing co-op.

The key point is that an RR co-op is set up legally so that no individual member can ever benefit financially from the sale of a house purchased by the co-op.

If a Radical Routes co-op sells a property, none of the money from that sale (after loans are repaid) can legally be taken by or given to any individual member. If an RR co-op is wound up, the surplus from any property sales must be given to another co-operative or to another body sharing the same aims or values. Profits from rising house prices cannot be privatised by the members, but must remain in common ownership or in social change work. This is the ‘common ownership’ bit.

Members of an RR co-op each put in £1 when they join the co-op, to get an equal share of the co-op. This is the ‘par value’ bit: no member has any financial interest in the co-op except the ‘par value’ or ‘face value’ of the almost-worthless share. When someone leaves, they get their £1 back. They can’t get paid more than that £1, however much the wealth of the co-op may have increased since they joined.

One thing is that, in a Radical Routes housing co-operative (as opposed to some other kinds of housing co-op), the members of the co-op are all tenants of the co-op – and the tenants are also the directors of the co-op. This is the ‘fully mutual’ bit.

One important thing to remember is that the co-op is a legal body in its own right. It is something bigger than and separate from all the individuals who are members. The co-op can sign contracts and have a bank account and so on.

So the tenants are the management committee. The members of the co-op are democratically in charge of their housing, which gives them important benefits in terms of stability, control and lower rents.

But the RR structure means that they can’t gain any financial benefits as individuals which means that a group of people on benefits or low wages can buy a house together and pay the mortgage through housing benefit – that is – as long as they are willing to make collective democratic decisions about things, give up the idea of making any money personally from rising house prices, take the responsibility that home ownership brings with it, and do the hard work of setting up and running a small (democratic) business.

We should make clear that the Radical Routes version of a housing co-op is not for everyone. And even if you choose that legal structure, it doesn’t mean you have to join Radical Routes itself.

Being in RR means giving up four weekends every year to take part in network decision-making, and doing voluntary work for RR, and taking on other responsibilities and commitments. RR also comes out of a culture of activism which suits some people – and others not so much! What I can say is that Radical Routes has made a huge difference to my life and to the lives of lots of other people I know.

You can find out more about Radical Routes from the website.

The ‘How to Set Up a Housing Co-op’ workshop is FREE and takes place on Saturday 1 June: 2–5pm at the White Rock Hotel, Hastings TN34 1JU. Please spread the word on Facebook!

 

Posted 16:14 Saturday, May 11, 2019 In: Home Ground


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