Soma Housing Co-Operative
Which Model is right for us ?
The housing co-op is in the later stages of the development phase. We have been looking at various legal forms the housing co-op could take and trying to work out which Model Rules will be the best for our group.
Our first enquiries were answered by the Co-Operative Enterprise Hub, who provided the funding for a co-operative development worker from Co-Operartive Futures to give us some help and advice. We investigated other groups who are either interested in housing co-ops, or are actually developing housing co-ops locally. See the list below.
Unfortunately, forming a housing co-op is not as simple as it would seem, as there are many types of co-ops, not just housing co-ops. Understanding the variations in their legal structures and the reasons for these differences takes quite a while and is best acheived through a lot of talking to knowlegable people and reading a lot. It's wise not to take the word of the first person who advises you, even if they insist that they know the right "expert". We wasted quite a bit of time before we realised two things, (i) that we weren't getting the help we'd been asking for and (ii) that we were being steered towards a solution that would have proved in the long run, to be totally unsuitable for many of the members of our group. We also learned that the term "affordable housing" has more than one meaning. In as far as "affordable to buy" and "affordable to rent" are concerned, these are on different planets and should not be confused, as we did. If you are wondering why this posed a problem for us, please read on.
The last government decided that there was not enough houses to rent in the Social Sector, because "Social Housing" was not being built. They consequently declared that all housing developers would have to designate a number of any new properties they build as "Social Housing", in order to meet the short fall. In our ignorance, we were led into the legal swamp that is MHO, or Mutual Home Ownership. This is a form of housing co-op where you need funds in order to by your shares. There are several models that MHO's can take, CDS has one model and there are others. Some encourage investors who wish to make a profit, while others involve an "asset lock", which prevents the assets from being sold by share holders. We were being steered towards the former, which we soon realised would entail swapping one budget bound landlord for a different one with no track record of providing for the health and social needs that some Social Housing tennants require because of their illness. We realised that the type with an asset lock would be able to provide the level of security of tenure that is required by our members.
We then discovered the list of approved Sponsoring Bodies who have FSA accepted Model Rules. We found from this list that we can register as a Housing Co-Op with CDS for about £35. We now have in our posesion for perusal a draft of their new Model Rules. These documents are still to be validated by the accountants. This will take a couple of months before we are finally registering the Housing Co-Op. 10th March 2011.
