£59.1 billion. That’s the amount of rent paid to landlords in Britain by tenants in 2018, averaging nearly £1,000 a month per tenant. The housing situation in the UK has been growing steadily worse for four decades, and is now a crisis – with affordable housing almost impossible to find in many cities.
The coronavirus pandemic has once again exposed the cruelty of landlords and the private rented system. Research has shown that 12% of tenants have had to choose between food and bills or paying the rent during this crisis. The government has promised that no-one will be evicted, but has refused to intervene to help tenants by deferring or, better still, suspending rents.
The Left, meanwhile, has offered little by way of alternatives. New Labour leader Keir Starmer has backtracked on Corbyn’s demand that rents be suspended rather than simply deferred. But even this wouldn’t be enough – the problem is with the private rented sector itself, not just how it has responded to this crisis.
All of this raises the question, what might a real alternative look like? Well, luckily, private rented accommodation isn’t the only game in town. Dream of paying £70 a month to live in London? Then housing co-operatives might be for you.
Housing co-operatives come in numerous forms. Some, like tenant management co-operatives, are more limited – offering tenants only the right to act as collective agents to a single landlord. But the more substantive varieties involve collective ownership. This is the real essence of the housing co-operative: the collective as the landlord.
From time to time these schemes devolve into spats over equity between participants – but often they work, and in doing so manage to radically reduce housing costs for co-operative members.
In the UK only 196,000 people live in housing co-operatives, but models elsewhere in Europe show how they could grow to provide a real alternative to shelling out to a landlord. In Sweden 22% of the housing stock is co-operatively owned. In Denmark, the figure is 20%. Across the continent, housing co-operatives offer not only more affordable options but a means to building more democratic urban spaces.
In Switzerland the Wohnbaugenossenschaften, a special type of housing co-operative, are responsible for more than 5 per cent of the entire country’s housing stock. The country has a long co-operative history – and in this case it was supermarket co-operatives which acted as anchor institutions for housing co-operatives, helping them buy up large swathes of land on the edge of cities such as Zürich.
The dire state of housing in 1980s and ’90s Zürich played a key role in the rise of the sector. As the city moved towards being a financial capital, it saw rent skyrocket. Apartments were often left empty with their owners focused on profiting from a quick resale, and out of this desperation for affordable housing a mass co-operative movement emerged.
The Swiss model of housing is very different to Britain’s, with only nine percent of the population owning their home due to high housing and land costs. Housing co-operatives in Switzerland offer accommodation roughly 20 percent below market levels. But once loans are paid off co-operatives can offer living costs at the price simply needed to maintain buildings – a radical transformation in the amount people can expect to pay for their shelter.
Many housing co-ops in Switzerland also offer complementary services – childcare, health services, social services and common activities, which reduce living costs and help build community cohesion. And their growth is supported by a popular movement: in a referendum held in November 2011, three quarters of Swiss voters supported a ballot measure mandating that affordable, non-profit apartments make up one third of the city’s total rental stock by the year 2050.
A lesson to learn from the success of the Swiss model is that co-ops flourish where there is a desperate need. One such area that stands out in Britain is student accommodation – and there has already been a growth of co-operatives to meet the need.
Student Co-op Homes has grown rapidly in recent years under the banner of Cooperatives UK. It aims to get 10,000 students living in housing co-operatives through establishing sites in university towns – and ensuring only students can become members.
The Edinburgh Student Housing Co-operative estimates that its rent is £170 per month cheaper than the average for private rented accommodation. Meanwhile, in Glasgow, the Student Housing Co-operative is aiming to provide students with a home for a monthly rent of £300 when the current average for students is £700.
Housing co-operatives have grown to play a successful role in reducing housing costs in other countries – and there is no reason why, with the right political help, they cannot do so in the UK.
If housing co-operatives are to become more widespread, they will almost certainly need state assistance. In other countries where they have blossomed this has typically taken the form of loans or land purchases for co-operative schemes. Co-ops are generally resilient once they form – but are notoriously difficult to get off the ground without some support from larger institutions.
The time for tinkering around the edges of the private rented sector is surely over. And, with the Tories in power for the foreseeable future, council housing may be some way off. Housing co-operatives offer a way for tenants to tack back control over their lives and liberate themselves from the power of landlords – and few causes could be more urgent amid today’s spiralling housing crisis.