St Lucia Housing Cooperative
St Lucia Housing Cooperative
What is cooperative housing?
Housing cooperatives rely on shared ownership of a development without private ownership of a unit, with variations in how this model is applied. In general, they are viewed as a sort of hybrid between rental and ownership, with many of the benefits and drawbacks of each. Housing cooperatives are often considered a form of social housing in the Caribbean context because this type of tenure helps low-income households access adequate housing.
Housing cooperatives resemble condominiums in that members own a stake in a multi-unit complex, but it also resembles renting because they do not individually own a unit. Instead, cooperative members pay a monthly fee that entitles them to rights of occupancy of a particular unit. These fees are also used by the cooperative to pay the collectively held mortgage, cover operating expenses, and contribute to reserve funds.
Examples of housing cooperatives
In Canada, there are two types of co-ops. In non-equity continuing housing co-ops, the co-op owns one hundred percent (100%) of the units and each member is entitled to occupy a home based on a contract or agreement. Members pay a monthly fee to cover co-op costs. In contrast, equity co-ops apply to properties in which individuals purchase a percentage share of the development based on the square footage of their unit. Therefore, the owner of a larger unit will have a larger share in the co-op. Equity co-ops have an easier time securing financing and they are often seen as an alternative to creating a condominium.
Canada has a lengthy history of co-ops as housing for low and middle-income Canadians going back to the early 20th century. Building cooperatives were popular from the 1930s tothe ‘60s. These were housing corporations in which individuals or families worked togetherto construct their homes and would own their individual homes directly once completed. Members would reduce costs by purchasing building materials in bulk and assisting each other in construction. In some instances, common elements such as road and community facilities continued to be owned collectively.
In the 1970s, federal and provincial governments introduced legislation to assist new housing co-ops with start-up funding and financing through mortgages insured by the Canada Mortgage and Housing Corporation (CMHC). Federal loans required that co-ops reserve a portion of their units (at least fifteen to thirty percent [15-30%]) for “income tested residents.” These residents would pay reduced rents and the government would providefunding to bring their unit revenue up to market rate. This resulted in mixed-income housing that improved the financial health of lower-income residents.
Throughout Scandinavia, the equivalent of co-ops are “tenant-owner’s associations,” a typeof joint property ownership in which the entire property is owned by a co-operative association, which in turn is owned by its members. Members hold shares proportional to the area of their apartment; tenant-owners of larger apartments have a bigger share in the coop and pay a larger membership fee.
In Sweden, sixteen percent (16%) of the population lives in housing cooperative apartments, making it one of the main forms of homeownership in the country. When an apartment is owned, rather than rented, it usually entails membership in a housing cooperative, making them equivalent to condominiums. Most co-ops are a block of flats owned freehold by the cooperative. They each have their own bylaws and members hold annual meetings to elect a board of directors. Tenants of rental builders have the option to form a housing cooperative together and offer to buy the property from the owner.