Cooperatives The Answer to Wide-Spread Home Ownership

There is a lot of talk nowadays about a post-industrial economy.  Some of the ideas being floated have much in common with Distritubutism – an economic philosophy that developed in Europe in the late 19th and early 20th century and was based upon the principles of Catholic social teaching. Distributists claim property ownership is a fundamental right. They, therefore, advocate for a society marked by widespread property ownership and, according to co-operative economist Race Mathews, maintain that such a system is key to bringing about a just social order.

It’s a nice idea, but how can it be accomplished from a practical standpoint? Cooperative societies may be the answer. 

In an article posted in Business Day, the editorial staff sees cooperatives as an important and cost effective way to provide for the home ownership greatly lacking in Nigerea:

Empirical evidence has shown that it is a lot [more] cost effective and more convenient to build as a co-operator than as an individual, and according to experts co-operators enjoy better economy of scale through collective bargaining.

For us, it is important to point out that as a co-operative, buying land is cheaper; building the house proper is equally at lesser costs, because the design, building approvals, building materials procurement and even securing loan for the project come at lesser costs and easier through collective bargaining.

They recognize that:

Many mortgage institutions are eager to finance co-operative housing estates because they are sure of capital inflow for mortgage repayment, and it is on the basis of this that we commend the Federal Mortgage Bank of Nigeria’s (FMBN) informal sector National Housing Fund (NHF) initiative. 

And believe:

If these emerging synergies and processes take root, no doubt, the goal of  achieving home ownership for the majority of Nigerians will no longer remain a mere dream.

Cooperative Housing is not a new concept.  Amalgamated Housing Cooperative was started in 1927 and is the oldest limited equity housing cooperative still operating in the United States.

Sponsored by the Amalgamated Clothing Workers Union under the leadership of Sidney Hillman, it is the first co-op created by Founding President and Manager Abraham E. Kazan, known as ‘The father of cooperative housing in the United States.

Amalgamated has been the example and inspiration for the moderate income cooperative housing which followed.  The United Housing foundation, which built tens of thousands of homes for families of moderate income, was crated by leaders from Amalgamated. 

With the support of the Mayor of New York City and Governor of New York State, UHF developed Co-op City which now houses over 15,000 families, or about 40,000 people. UHF built schools for the project and turned them over to the Board of Education of New York City for operation. In addition, the community has three shopping centers with co-op supermarkets, branches of New York City banks and specialty shops and service stores necessary for service of this size community.

Cooperatives, now being championed by many of today’s economists as the basis for a new economy, were an effective means of providing home ownership to individuals with limited means in the past.  Clearly, they can be used as a modern-day vehicle to expand property ownership in our fast changing economic landscape.