Development:Meeting20061125:AffordableCoop
From AshWiki
This was a workshop by Charlie Baker about a model for building affordable co-ops.
Contents |
Possible funding models and the rent
Assumptions
He had produced a spreadsheet of calculations for possible rents based on different funding models. He assumed
- a one acre block of land (costing £2 million)
- 4 or 5 floors would be built
- 75% would be housing (94 2-bedroom flats)
- 25% would be work space
So the cost would be
- housing - £15 million
- work space - £2 million
Housing Corporation Grant
Then he looked at various options. First he considered the case where the Housing Corporation fund 50% of housing (as a grant). In that case all flats cost £178/week. However this is fairly unlikely these days.
Mixed Model
So he also put together a model where there are 3 different types of tenant, paying different rents. See below for what 'owning' a flat means ...
- Owners - they effectively buy their flat outright and 'own' it.
- Hire-purchase - they pay additional money on their rent so if they are in the property long enough, they 'own' their property.
- Renting - they just pay rent, as is the case in Argyle St Housing Co-op.
With 40% owning, 40% hire-purchase and 20% renting the rents are
| Type | Rent per week |
|---|---|
| 'Owner' | £287 |
| Hire-purchase | £260 |
| Renting | £121 |
'Owning' part of a co-op!
So what does it mean to 'own' part of a Housing Co-operative?
Ultimately it depends on the rules the co-op decides to set. But one model is effectively to view any money beyond the basic rent as a saving scheme administered by the co-op and tied to the property price of the co-op.
So someone 'owning' a flat cannot sell it to someone outside the co-op. Instead they would hand over money to the co-op when they became a member and would then only have to pay the "service fee" of the co-op (covering money for upkeep etc. similar to a flat).
The money they would hand over would be equivalent to the property value of their share of the co-op. When they moved out they would receive from the co-op a value equivalent to the their share of the new property value of the co-op.
This allows people to move between the housing market and the housing co-op whatever the fluctuations in house prices.
The idea can be extended to part owning your share. A lump sum (or none) could be handed to the co-op on moving in. The hire-purchase rent is paid, so the member effectively owns more of the co-op (up to their share) as they stay in the co-op. And they get this value on moving out.
This allows people to move into the co-op with no capital, but with a decent income, and move out with capital to get into the housing market if they needed to do that.
It should go without saying that all members of the co-op have just one vote, however much they own of the co-op.
