A Model for Cooperative Housing Development in South Africa

A Model for Cooperative Housing Development in South Africa

The term co-operative is used to describe a group of people who collaborate voluntarily to meet common economic, social and cultural needs through a jointly owned and democratically controlled enterprise. Agricultural and financial co-operatives have been around since the 19th century. Co-operative movements are strong in East Africa, Eastern Europe, the United States, Canada and South East Asia. In South Africa co-operatives are mainly agricultural and there is not a developed co-operative housing sector. There are only one or two legally registered co-operative in South Africa. This is partly due to legal reasons (co-operative tenure has only recently been recognise in legislation), cultural (individual ownership has been favoured) and practical (community-based approaches are small-scale and arbitrary compared to developer-driven initiatives). From a financial perspective, co-operatives in the United States can obtain commercial funding more readily than in South Africa where there are strict limits on the amount that can be borrowed from government.

In order to promote a viable co-operative housing sector in any country, including South Africa, there are key areas that need to be present.

  • Cooperatives recognized in the housing policy. The national or regional housing policy needs to recognize cooperative housing as one of the ways to address the housing problems. Ideally, this policy is prepared with the contribution of representatives of housing cooperatives.
  • Cooperative legislation. Legislation for the formation, regulation, and operation of housing cooperatives should exist. New legislation due to be promulgated in early 2002 is aimed at promoting a vibrant housing co-operative sector.
  • Cooperative regulatory agency. A cooperative regulatory agency, usually a public or combination public/private organization, needs to exist to authorize the formation of new cooperatives, including housing, and regulate their operations.
  • Housing finance. Public and/or private financial institutions need to exist to receive the pre-occupancy savings of the cooperative housing members and provide the short-term construction and long-term financing to cooperative housing projects. Often low-income families receive a subsidy for the acquisition of a house. The subsidy has to be made available to cooperative housing projects for such families.
  • Cooperative housing technical service organizations. These organizations, referred to as TSOs, provide a range of services to a group of individuals wanting to resolve their housing problem with cooperative ownership. A TSO can offer, for example, assistance on selection of land, the project design, and supervision of construction; education and training to the members, boards of directors and committee members on their respective responsibilities; securing of the short and long-term project financing; and project operations and management.

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