Housing: Co-operative Housing

Baroness Eaton Excerpts

Thursday 10th October 2013 Lords Chamber

[Baroness Eaton (Con)]

My Lords, I thank the noble Lord, Lord Kennedy of Southwark, for initiating this debate. I also warmly welcome my noble friend Lady Stowell to the Dispatch Box.

In the past 25 years the co-operative housing movement has demonstrated that the application of the co-operative principles to the provision and management of housing delivers cost-effective housing services and creates sustainable communities. As the noble Lord, Lord Kennedy, has said, in spite of its proven benefits the housing co-operative sector remains small.

Housing co-operatives are concerned to ensure that members are educated and informed about the principles and practices of co-operation. This can be demonstrated in a concrete way. One example of the success of a tenant management co-operative is in Glasgow. It dramatically illustrates the benefits of housing co-operatives. The Speirs Housing Management Co-operative has successfully managed its council-owned housing at the end of one street for 20 years. It is a vibrant community contributing to the wider regeneration of the neighbourhood. At the other end of the street, council-managed housing, which has received the same capital investment as that managed by Speirs, has been vandalised, abandoned and ultimately demolished. This is a classic demonstration of best value being delivered by a housing co-operative.

The various types and models of co-operative and mutual housing operate across a range of tenures. The various forms of co-operative and community-led housing are united by having a democratic community membership that has control over their housing in some way. It is from this community membership that the benefits derive.

There are many social and community benefits to providing homes through co-operative and mutual housing, including: the development of community self-responsibility and self-help; much higher levels of satisfaction compared to other housing providers; good, if not better, management, quicker repairs, and so on; provision of forms of intermediate housing that could be attractive to those who would formerly have been first-time buyers; development of local care and community support networks that combat loneliness and help to support active, independent living; and the development of local community vision and of entrepreneurialism, which often inspire people who would not otherwise have been motivated to make local change.

There are a number of models of co-operative housing, some of which have already been mentioned by the noble Lord. Ownership housing co-operatives are co-ops that are owned, managed and controlled democratically by their members and tenants, and usually all tenants are members of the co-op. The majority of ownership co-ops are, at least partially, funded through the government organisation the Housing Corporation, which monitors them in the same way as housing associations. Ownership co-ops are traditionally quite small, but they give the greatest amount of control of any of the housing co-op models. Research carried out in 1996 found that they were the most successful housing providers in the country. We have tenant management organisations—TMOs—which are democratic organisations that are formed by tenants to take on the management of their homes. Council tenants have a legal right—the right to manage—and access to specific funding that enables them to set up a co-op. These regulations were simplified for everyone’s benefit in 2012.

A management co-op has a management agreement with their landlord—the council or housing association, or in some cases both—and receives a management allowance that enables it to run the co-op. Self-build co-operatives are housing organisations where the tenants have been involved in the building of the properties. The labour that they put into the building of the properties gives them equity, and they pay rent for the rest. We also have short-life co-operatives. These take over properties that are in some way unlettable, for a fixed period of time that can sometimes extend for many years. The co-op does not own the properties but has a lease with the landlords. Tenant-controlled housing associations also have a major contribution to make. There are a small number of housing associations registered with the Housing Corporation which are tenant-controlled, having a majority of tenants on the board of the association alongside other representatives.

If your Lordships are particularly interested in specific examples of co-operative housing, Redditch Co-operative Homes provides new-build affordable housing through a co-operative. Winyates Co-operative, one of the self-managed neighbourhoods in Redditch, won an award for innovation and excellence in 2010 and currently manages 57 properties in an area that is home to approximately 14,650 people. Kensington and Chelsea TMO manages around 10,000 properties on behalf of the council and is also an ALMO, which was set up in 1996. Rochdale Boroughwide Housing, formed in 2012, took over housing formerly run by the council. It is a membership organisation owned by staff and tenants and is a charitable registered provider of social housing. The organisation owns and acts as landlord for 13,700 homes in the borough.

The Government are particularly interested in and concerned about tenant involvement in housing, and the Homes and Communities Agency has issued a regulatory framework that places a focus on co-regulation. This means that landlords are responsible for the delivery of housing in line with regulatory standards. It also means that tenants should have opportunities to shape service delivery and to hold the responsible boards and councillors to account. There is a standard on tenant involvement. The HCA is responsible for enforcing proactively against all standards for registered providers. Local authorities are required to meet the consumer standards set out in the framework. However, the HCA will intervene only in cases of serious detriment.

To support the establishment of tenant involvement and tenant panels, the Local Government Association, of which I am a vice-president, worked with the Tenant Participation Advisory Service and other housing bodies on the publication Tenant Panels: Options for Accountability, which sets out the role tenant panels can play to ensure that tenants are provided with a meaningful route to shape service delivery, as well as resolving complaints locally under the new democratic filter set out in the Localism Act.

As we as a society anticipate the need for suitable housing for older people, co-operative and mutual housing for older people could be a more suitable alterative to some of the more current models. If the housing demand in this country is to be satisfied, there will need to be a plural approach to the housing provision, using a variety of approaches to provide homes. There is a need for a greater diversity of supply and for people and communities to be able to innovate, both in tenure and products, to give people more options and flexibility. There is a particular need for greater supply for non-profit driven housebuilding models that enable communities to determine how many houses are needed and for them to be built.