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Text by Anja Lazar & Rok Ramšak, originally posted by World Habitat

Anja Lazar and Rok Ramšak are members of Zadrugator, a housing co-operative in Ljubljana, Slovenia. Zadrugator is one of the pioneering co-operatives working together with others across Central and South-Eastern Europe as part of MOBA Housing SCE.

In most European cities, housing is becoming an increasingly big issue. The situation is especially alarming when it comes to affordable housing.

In Slovenia it is no different. With housing provision being almost exclusively in the domain of the free market, Slovenia has one of the highest proportions of housing that is not suitable for living – one-in-three (33%).  And almost a third (30%) of families live in housing poverty. It’s becoming increasingly difficult for young people to gain independence with almost two in every three (64%) young adults between 18 and 34 still living with their parents – nearly double the European average!

This comes as no surprise due to the fact that Slovenia spends 10 times less on housing than an average European state, and a whopping 100 times less on housing construction. In fact, the state’s contribution to the construction of public housing has remained at a very stable zero for the last 10 years.

But how does this impact people’s everyday lives?

In the past years we have been discussing the housing crisis with students, people looking for their first apartment, young families and elderly people, who are struggling to find adequate housing in Ljubljana. We are summarising their stories using a fictional person who we have named Tina.

Tina is 34 years old and works in Ljubljana. She grew up in a smaller town but moved to study and has stayed there because it is one of the few places where it is possible to get a job. She applied for a student dorm, but even though her family is well below the median income, she was told that she’d need to wait at least half a year to move in because there are simply not enough. And because of poor public transport, the only option was a private apartment rented with three friends. Despite sharing a room, she worked around 20 hours per week and had to use her entire scholarship to cover the rent and living expenses.

In the last 10 years, she has moved at least six times. The owners would increase the rent or decide to start renting out through AirBnB. But she was quite lucky – she always found good flatmates and for the past five years, since working full-time, she has even been able to afford her own room.

Tina is earning the average Slovenian wage and is among the 30% of highest earners. But she is still spending over a third (nearly 35%) of her income on a small room in an apartment she shares with three other people. Lately, she finally started exploring other options.

After several months, she was not able to find an affordable apartment to rent on her own. The cost of an average sized single room apartment would be somewhere between €500 and €600 – this would be well over half (around 60%) of her income spent on housing costs.

Buying a home would be impossible. With only new luxury projects being built, the prices are so high that even if she could find a good deal for the apartment and a low interest rate for the loan, she would have to spend close to 70% of her income. And even if she dreams of a big promotion and a higher wage, she would simply not be able to save up enough to put down a deposit of at least €25,000.

She considered non-profit rental apartments, provided by national and municipal housing funds. But realised that for each apartment, there are dozens of families in need. Such a discrepancy in fact, that some funds started organising lotteries for applicants.

So, what is the alternative?

Unfortunately, there are no other existing alternatives in Slovenia, resulting in a lot of young people moving abroad or forced to live in apartments, and even more often, in single rooms that do not allow them a decent quality of life.

That is why, four years ago, we established Zadrugator, a housing co-operative. We want to address the lack and inaccessibility of decent housing and have always advocated for not-for-profit public housing provision. But as this requires, above all, significant political will, we have started looking for other, more community-based, grassroots alternatives.

Going through countless examples of housing mechanisms from around the world, we came to realise that not-for-profit rental housing co-operatives are our best bet.

Zadrugator based its model on successful co-operatives in Switzerland – namely More than Housing in Zurich, which we visited on a World Habitat peer exchange in 2017. They inspired us because of their accessibility to different social groups, high standards of living, and a high-level of resident and local community participation.

The Zadrugator model is truly a co-operative model, based on a joint investment by the members, the provision of the land by the municipality, a loan from the national housing fund and resources from external lenders or investors.

The future residents are members of the co-operative, owning shares and having full voting rights – but they won’t own their apartments. Instead, they will rent the apartments from the co-operative for a not-for-profit rent. Because of the very poorly developed housing sector in Slovenia, we estimate that the rent will be at least 20-30% lower than the market rent – and as market rents will surely rise in the future, the co-operative rent will stay the same.

We have made significant progress in developing the first pilot project. We are collaborating with Ljubljana’s local authorities, who are willing to host the co-operative housing development on public land, and advanced on finding funding possibilities. With the support of World Habitat, we have also developed the architectural design for the pilot project.

However, we are also facing many challenges in our hopes to start a strong and viable co-operative movement here in Slovenia. Our main issue is that housing co-operatives are not yet included in Slovenian housing law, which prevents us from working with public partners in a meaningful way and significantly inhibits our possibilities of providing affordable rent. But that is not denting our determination or our commitment to advocate for this to change, and to make community-led housing a reality. This will make good homes more affordable for ‘Tina’ and the countless others like her.

Image: Bryce Edwards (Creative Commons)

Co-operative Housing International and urbaMonde, two partners in the CoHabitat Network organised the webinar “Cooperative Housing Development – Thinking Outside the Box!”, involving Zsuzsi Pósfai – MOBA (Hungary), Bea Varnai – urbaMonde (France), Lea Oswald – urbaMonde (Switzerland), Hans Rupp – ABZ (Switzerland) and Gauthier Guerin – Radical Routes (UK). Take a look!

“Different groups around the world are using innovative financing tools to raise capital for their cooperative housing initiatives. However, they didn’t come by these ideas alone. By forming regional networks, collaborating, and networking they were able to pool their thoughts together to come up with innovative ideas, allowing them to move forward. This webinar is a conversation with cooperators and project managers developing cooperative and community-led housing in Europe and beyond. They will share their experiences and knowledge related to innovative financing models, the benefits of creating a regional network, and the challenges of developing a housing cooperative based on collective ownership in Central and Eastern Europe.”

With the Founding Assembly held in Zagreb, on the 29 February 2020, MOBA becomes a European Cooperative Society MOBA HOUSING (SCE), and the first SCE registered in Croatia!

For over two years, the MOBA pioneers have set out to address structural limitations that block the development of collective affordable housing solutions by building a common platform in Central, South-Eastern and Eastern Europe (CSEE). Our aim is to attract, channel and manage affordable and fair financing for – construction, purchase and repurposing of buildings – of a new generation of rental, non-speculative housing cooperatives.

To take up this role, MOBA now becomes a European Cooperative Society (SCE), with the capacity to act as an intermediary between larger financial actors interested in social investment and cooperatives on the ground – thus empowering the upscaling of housing cooperatives in CSEE. To set up the framework for such an institution, as well as provide a part of the obligatory seed capital necessary to establish it as a legal entity, MOBA received the FundAction Renew grant. FundAction is a participatory fund that supports social movements in Europe, working towards a transition to a just and equitable world.

The MOBA SCE aims to become a partner for established housing cooperative networks from other parts of Europe, enabling international peer-to-peer solidarity in the domain of housing. The first step in this is through collaboration with ABZ (Allgemeine Baugenossenschaft Zürich), Switzerland’s biggest housing cooperative with 7,785 members.

What is an SCE?

The European Cooperative Society (SCE) provides a legal form for a transnational cooperative, existing in the European Union since 2003 its potential has not been much explored so far. SCE’s aim to facilitate cross-border activities amongst their members. An SCE needs to be registered in an EU country – but can include members from non-EU countries. The minimum capital requirement to set up an SCE is 30,000 Euro. 

The decision for MOBA to register as an SCE was taken with the aim to formalise the loose network that existed since 2017 and to provide a legal entity through which its members can pool their resources, share their expertise and access the services and financial resources necessary for the development of housing models on a regional basis. MOBA Housing SCE is registered in Pula, Croatia. The decision to register in Croatia has been based on the possibility for an SCE to formally be recognised as a non-profit organisation. In the case of MOBA, its surplus has to get reinvested in MOBA’s activities.  

Our four founding members (Cooperants, according to the Statutes) – Pametnija Zgrada from Belgrade, Zadrugator for Ljubljana, Prvni vlaštovka from Prague and Otvorena Arhitektura from Zagreb – with support of donations from FundAction and the Swiss Housing Cooperative ABZ, have provided the required initial capital. Apart from full membership (Cooperants), MOBA will include associate members (in the Statutes formally referred to as Investors). 

MOBA Housing SCE’s Statutes can be found at the following link.

Text by Ana Džokić, originally posted by World Habitat

Ana Džokić is a member of the association Ko Gradi Grad (Who Builds the City) in Belgrade, who are the initiators of Pametnija Zgrada (Smarter Building) – a new kind of collectively owned housing co-operative in Serbia. 

For those who walk the streets of Belgrade, construction frenzy is a usual sight – from smaller-scale developments at sites of former modest free-standing houses, to demolished privatised industrial complexes, to vast swaths of public land along the waterfront where high-rises claim prime view of the city. Following the financial crisis, the last few years have also brought a sizeable annual increase in real estate prices – 18% in 2016, 5% in 2017 and 12% in 2018. You might think that things are going well, but the question is – for whom?

Although statistics may sound ‘nerdy’, they help us understand the growing divide. According to recent Eurostat data, Serbia scores the second-lowest in housing affordability in Europe, with only 1.9% of households free from financial burden due to housing costs. At the same time, the average citizen of Belgrade needs 20.4 years of entire income for 60m2 of a newly built apartment. While more than one-in-three (34.6%) homes are overcrowded, over 100,000 apartments in Belgrade stand empty. In addition, only a select one-in-20 (5%) of the population buys real estate and yet, more than four-in-every five (82%) apartments sold in Belgrade are bought in cash! It’s clear that the ongoing construction boom provides no widespread solution. It only boosts speculation and eats up valuable urban land, much needed for other housing options.

In 2012 when Ko Gradi Grad (Who Builds the City) started to figure out how, in Belgrade, housing can be made possible for those who cannot acquire it under the current market conditions, little did we know about the path we would take. We started with an open call that read:

“Are you interested in building a decent apartment somewhere in Belgrade at 300-400-500 euro/m2? Impossible? For the majority of people getting an apartment at these prices is the only reasonable option – without getting yourself into debt and unpayable loans, living in impossible conditions or waiting for your relatives to move to the countryside or Heaven. Who, why and how can this impossible be made possible?”

Over the next two years, a number of open discussions resulted in us starting the process to form a housing co-operative. In a society where private ownership (98.3% since the early 1990s) is practically the only way to resolve housing needs, and social housing is sporadic (under 1%), picking the housing challenge apart becomes the first task.

Step by step, the group questioned the seemingly inescapable norms of how “housing works”. We dissected its cost, questioned individual ownership and profit-making, explored forms of collective finance and shared aspects of living, and imagined new possibilities that might introduce the notion of equality into a society largely based on inequality – a collective stance has now taken shape.

Even so, we were isolated, and in an environment where collective action has disappeared as a viable horizon for change. We understood it’s essential to start building alliances. From bringing together various housing activists and groups, commenting on the new housing law, awareness campaigns, and involvement in forming an anti-eviction and right to housing collective – in Belgrade, today, housing issues have the public’s attention.

At the start of 2019, we finally established the first housing co-operative in nearly 20 years in Belgrade – Pametnija Zgrada (Smarter Building). We are now preparing a pilot project for about 50 people, with about 20 housing units and collective space. What makes it the first of its kind in Serbia are the principles of mutual homeownership and taking housing off the market, while being affordable (at about 60% of current market rent) and even remarkably energy efficient – to keep living costs low in the long term. The pilot project naturally serves as a stepping-stone for other projects to come.

Without proper governmental embedding, the challenges ahead remain significant. Affordability is challenged by unfavourable taxation for collective ownership, and unsustainably low energy prices undercut low energy measures. Nevertheless, the most significant endeavour ahead is how to get affordable finance or institutions that would provide capital to housing co-operatives. Consequently, in 2017, we were excited to meet several other pioneering groups from cities in the region facing very similar issues. Soon we would form MOBA Housing Network. This exciting path we took together allowed us to acquire the skills to enter into negotiations with lenders and gain expertise in figuring out finance – we even developed an open-source calculation tool called OpenFRM.

Now, two years later, we are together forming a legal entity – a financial instrument of sorts – that will include a collective investment fund to kick-start co-operatively owned housing projects. Throughout history, such funds have been crucial for the co-operative movement. With MOBA we are looking forward to collaborating with long-existing, successful co-operatives from other parts of Europe. In the still unwelcoming contexts in Central and South-Eastern Europe, and certainly in Belgrade, such funds might bring a breakthrough for non-speculative mutual homeownership.

While working to build a regional financial infrastructure for cooperative housing, MOBA collaborates with other initiatives that seek financial solutions for social needs – and combat anti-social finance.

What if our money, tax and finance systems could be radically transformed? It’s not only possible, in some places, it’s already happening. Find out more in the new book, co-published by MOBA: Public Finance for the Future We Want. On the launch page you can find  7 interesting infographics, the executive summary and the complete book!

The chapter 7, Building bottom-up finance solutions for cooperative housing in Central and South-Eastern Europe by Agnes Gagyi, speaks about the institutional framework that MOBA is building offering a model for systemic transformation of local housing markets everywhere.

The book was edited by Lavinia Steinfort and Satoko Kishimoto, and published by the Transnational Institute, in collaboration with The Democracy Collaborative, Change Finance, Focus on the Global South, New Economics Foundation, Fairfin, Tellus Institute, and MOBA Housing Network.

https://www.facebook.com/TransnationalInstitute
#ChangeFinance

During the International Social Housing Festival in Lyon, on 5 June (14.00 – 17.30) – European collaborative housing day – MOBA Housing Network and urbaMonde organise together a round table and workshop “(Re)inventing the culture of finance for collaborative housing and city-making”.

MOBA Housing Network, La Borda Housing Cooperative, HSB, ABZ, Affordable Housing Institute, FMDV, Housing Europe, World Habitat, UrbaMonde

ROUNDTABLE & DISCUSSION One of the main obstacles for creating and scaling permanently affordable and community-led housing is the lack of financial resources for these initiatives. This roundtable will look on what we understand by “enabling frameworks” and in which ways they determine future permanent affordability and accessibility of housing, and analyse the financial needs of collaborative and cooperative housing projects that are not being met. A particular focus will be given to the Central and South-Eastern European context and European-level finance. Speakers will include established cooperative housing networks, larger commercial and non-commercial (EU-level) financial actors who have an interest in entering this field of housing-related investment, alternative banks and funders with experience in financing this niche sector, as well as project initiators that have overcome barriers to finance their projects by establishing partnerships at different levels and combining funding sources.

WORKSHOP The roundtable will be followed by a workshop, which will focus on Central and South-Eastern Europe – particularly case studies from Hungary and Serbia, which are part of the MOBA Housing Network. MOBA was launched in 2017 as a collaboration of emerging cooperative housing initiatives from Belgrade, Budapest, Ljubljana, Prague and Zagreb. MOBA aims to bridge the gap between housing needs and housing finance in this part of Europe, which is facing the absolute lack of social housing, by creating channels for affordable financing – construction, purchase and repurposing of buildings – for a new generation of housing cooperatives. The initiative of transforming MOBA into a European Cooperative Society as a financial intermediary for cooperative housing initiatives in the region, will be presented and confronted with expert opinions.

Text by Zsuzsi Pósfai, originally posted by World Habitat

Zsuzsi Pósfai is a member of the Rákóczi Collective (RC) in Budapest, Hungary. Members of this collective have been working for around seven years to establish the first collectively owned, rental-based housing co-operative in Hungary. 

At the end of January, we moved into the first co-operative house set up by members of Rákóczi Collective – which will hopefully become a precedent for many similar houses in the future.

It was the result of many years of effort and organisation to arrive in this sunny and peaceful house in the Zugló neighbourhood of Budapest. Seven of us are now living here, with much more space and better living conditions than were had before. The housing situation has become increasingly difficult in Budapest, with house prices and rents rising sharply – some have nearly doubled in the last five years. Renting is also risky as it is under-regulated and tenants are not protected from landlords – you can be evicted at short notice or subjected to any rise in rent.

Collective ownership of our new house means that we share all decisions and responsibilities collectively. There’s no landlord, and this housing can become stable and secure in the long run – which is a relief for those who’ve been moving almost every year between different rented places. The rules we’ve established mean all residents contribute both time and finances.

We encountered a number of difficulties along the way – many because this kind of housing doesn’t exist in Hungary. Collectively-owned housing is practically unknown here, so municipalities, financial institutions or any other external party believe it’s too risky.

First of all, it was very hard to find a house that would be suitable for what we wanted: where 10-15 people could live together, including large common spaces and ideally a garden too, and that wouldn’t be too far out of the city.

We negotiated with several municipalities, but the deals they offered us weren’t right, so we decided to look on the market. Most houses we found were either derelict and would’ve been too expensive to renovate, or if they were in a good enough condition, they cost too much and we had no way of finding that much starting capital.

In the end we made a compromise on the size and started looking for smaller, cheaper houses for just seven of us – using a larger proportion with the money we’d already raised among ourselves and then only had to find a smaller amount from external resources. This is how we found this house in March 2018 – and we quickly decided that we would try to buy it.

Our next, possibly greatest challenge, was there’s no readily available financial channel for housing co-operatives in Hungary. So, we first tried to take a couple of individual housing loans, but we were refused because our incomes were not high enough, nor seemed stable. Our set-up of several people in a non-family relationship was also unconvincing. We were shocked when we were refused the loan and all our own money had already gone into the first two payments for the house. We had about one month to gather the other half of the money, about 100,000 euros.

Our idea was to collect loans from people around us. In just two weeks we had the money. This was really important for us, as it showed that all the work done in previous years wasn’t pointless, and that we were credible with those people who were willing to invest their savings to make it happen.

Next was the renovation. Our plan was to do most of the work ourselves, as we had very little money left. Some of our members had nowhere else to live when we got the keys to the house, and all the others had expiring rental contracts. So, we had hardly any money and very little time available. We planned for six weeks to complete the work but we finished it in just over ten – with everyone physically exhausted, but with a wide-range of new skills.

One of the best experiences with the renovation was that the essential work – plumbing, electricity, masonry – was provided by members of Gólya Co-operative, which is a bar and political space who are our friends and close allies. This whole renovation process is a great example of how networks with similar aims can work together to achieve so much.

All of the challenges we’ve faced are similar for all pioneering housing co-operative groups in Eastern Europe, which is why we collaborate as part of MOBA. Besides building a supportive network, we also help each other in very tangible ways to overcome these challenges.

Our next challenge is legally registering our co-operative, which means we’ll formally agree on and confirm its principles, and register it with the court. We also need to find the money to refinance the loans we got from our friendly direct creditors. We’re planning a systematic, reliable financial resource that other groups will also be able to use in the future. This is essential for creating a model that’s truly accessible to a wide segment of Hungarian society, who have difficulties paying for their housing.

In the meantime, we are busy creating a home and a community, and not merely a pilot project out of this house that has huge and lasting potential.

In October 2017, during a conference in Berlin aimed to find new solutions to Europe’s housing crisis, several groups from Central and South Eastern Europe met and discovered that they had many things in common while starting their own community-led, cooperative housing projects.

In January 2018, a meeting was set in Ljubljana, Slovenia. The groups started to wonder how to work together as the financial and institutional barriers in neighbouring countries are very similar, and to build a strong network providing support to overcome those challenges.

The meeting turned out to be very successful and groups have been working together since. Either online or in different workshops, there has been a constant support and a will to strengthen the network with the collaboration of each member.

There have been four large workshops to date, and each of them has helped the network not only to acquire a name – MOBA (coming from “self-build through mutual help” in South Slavic languages) – but to altogether give the network a well-defined structure and a vision.

Along 2018, MOBA has been officially set as a network aiming to be a point of reference for those who are willing to start a community-led, cooperative project in Central and South Eastern Europe, an area where housing ownership is the most common practice (despite its inaccessible prices).

The different workshops have also been a platform to share experiences with initiatives from other countries in Europe, such as the Community Land Trust Brussels (Belgium) or Lilac (UK). Having people sharing their successes when starting their projects has been an inspiration for MOBA. This reflects one of the features of the network, which plans to connect people from different backgrounds, who can work together in the development of CLH. MOBA is a ‘’pool of expertise’’, where diverse skills, experiences and initiatives are reunited in a network accessible to everyone.

Since the beginning, MOBA has been characterised by the strong commitment of their members and “not losing time’’ attitude. Work has been distributed regularly and when workshops weren’t feasible to do, smaller groups had been set with the objective of working in different important aspects of the network, such as: securing financial support, meetings to discuss funding opportunities, organisation of the network, consideration of business plans and finance setup of each of the hubs or how to access funds.

During this year, many achievements have been accomplished, among others: Zadrugator (Ljubljana) won tender to lease public land from local authority and 50% of necessary sum from the national housing fund, Rákóczi Collective (Budapest) had their first tenants moving in, formal registration of Housing Cooperative Pametnija Zgrada (Belgrade), support of various financial and international organisations (including World Habitat, FundAction, Heinrich Böll Foundation), development of project portfolios, design of website and logo for MOBA, among others.

Each organisation is at a very different stage of their project, where some of them have already bought a house or land, and others still fighting with the rigid institutions. This has been a positive feature of the network, where mutual support is granted, the success of each group is celebrated, and lessons learned are exchanged.

MOBA has high expectations, for example: working towards offering a vast database, where all the ongoing and finished projects will be registered, facilitating the identification of actors, objectives and giving details about their structure and functioning. It will also inform about the financial resources, funds or grants available to community-led, cooperative housing projects, helping people to identify where and how to apply for funds, another big challenge in the current panorama.

Although MOBA doesn’t have it easy, for reasons beyond its control, is moving fast towards becoming a point of reference in the region. The network’s ambition is to connect all of us, people, interested in seeing community-led, cooperative housing spread as a model, responding to social and housing needs. Despite the challenges faced, if we take into account the progress achieved during its first anniversary, the potential of the network speaks by itself.

by Lorena De Ferra (World Habitat)

One of the key decision to be made in setting up a new housing project, is around financial participation of the residents in the assets (the building). When delving into this question, a range of choices seem possible: from mimicking individual ownership (through a members’ full share of an apartment) up to mimicking a clear-cut rental model (through a model entirely based on monthly contributions, but not requiring a collateral deposit from members). For contribute equitably reasons those two extremes are unlikely candidates. During the recent MOBA meeting (25-27 January 2019 in Budapest) the discussion around this question has brought up a few insights.

First of all, the very format of a cooperative – due to adherence to the 7 cooperative principles, a set of rules that have guided this movement for over 175 years – assumes the direct economic participation of the members. This means that they contribute equitably to, and (democratically) control, the capital of their co-operative. In practice, this starts often with requiring new members to bring in their own capital (equity) in a certain percentage of the total investment (say 10-20%). While a large share of member capital brought in helps massively in securing additional capital (because it counts in as ‘collateral’), it obviously also is a barrier for access, as not everyone will be capable of raising that amount of capital.

On the other hand, a clear-cut rental model would not bring such barriers, but as we have seen the requirement of equitable member participation excludes it as such, and the necessity of forming a pool of own capital (as ‘collateral’) makes the approach very unpractical. Some (more significant) form of investment and co-ownership by the members thus looks like the way to go.

Doing a round along the approaches envisioned by the MOBA members, not only the size of this initial investment is crucial in this discussion, but also the question whether members through their monthly contributions over time increase their share in the cooperative. Imagine that through a monthly payment a member contributes to repayment of the loan that the cooperative took to finance the building. While the loan thus gets repayed, the ‘investment’ of the member increases. Through a model of virtual shares, it is possible to link the built-up equity to the members. And when a member leaves the co-operative, that equity could (if chosen so, and to a degree set) be returned to a member. There a pro and cons to this. If implemented, the co-op has to reserve a pot of capital to pay out members, and a new member (likely helped by the co-op) will have to finance the amount of capital taken out – obviously a burden to the coop and a new member. But on the positive side, it is a savings scheme that gives security to members and ensures that even upon leaving the co-op there is at least some capital to make a start in the tricky world outside. Or, in other words, it may prevent you from getting “locked” into the co-op, as you can financially not afford to step outside of it.

Finding a balance that provides easy access as well as long-term security will be something that MOBA will be undertaking in the time to come.