HOUSING COOPERATIVES IN PORTUGAL - THE END OF SOCIAL PURPOSES?
POR
Boguslawa Maria BARSZCZAK SARDINHA y Margarida CAGICA CARVALHO*
RESUMEN
En Portugal las cooperativas se desarrollaron mucho a partir de 1975 con el cambio de Régimen Político. El peso en la economía Portuguesa de las cooperativas en el PIB (2005) es cerca del 8,8 % del volumen de negocios y las cooperativas de vivienda suponen el 3,3 de este tipo. Durante los últimos treinta años el funcionamiento de las cooperativas de vivienda ha cambiado, principalmente en su principal objetivo, el de proporcionar una alojamiento a las familias con pocos ingresos y por lo tanto mejorando sus condiciones/calidad de vida. A día de hoy muchas cooperativas funcionan como empresas, quienes promueven viviendas para familias de ingresos medios/medios-altos. Esto parece contrario al objetivo principal de las cooperativas de vivienda desde el cambio de régimen político de 1975. ¿Qué ha pasado? Durante los últimos treinta años muchas cosas han cambiado. La acción política se ha visto progresivamente alejada del control estatal, minando el objetivo social de las cooperativas de vivienda., creando problemas financieros, eliminando la iniciativa (privada), disminuyendo la disponibilidad de terrenos de construcción, y especulación en el sector inmobiliario. Las cooperativas de vivienda están trabajando en un mercado con muchos fallos. Información asimétrica, precios, características únicas del sector inmobiliario y falta de competitividad son algunos de los muchos problemas que existen en este sector. Las políticas públicas también influyen en estas características. Nosotros demostramos en este trabajo que durante los treinta años de existencia de las cooperativas de vivienda en Portugal el objetivo social de proveer de vivienda a los individuos de bajos ingresos ha cambiado considerablemente y que el objetivo de residencia de las casas también ha cambiado. Esto nos lleva a preguntarnos si el objetivo social de las cooperativas de vivienda ha sido cumplido. Hemos usado un cuestionario para descubrir por qué la gente busca las cooperativas de vivienda, cuáles son sus ventajas y cuál es el nivel de ingresos de sus miembros.
Palabras clave: políticas públicas; mercado de vivienda, objetivos sociales; fracasos de mercado
Códigos Econlit: D630; I310; R310
ABSTRACT
In Portugal housing cooperatives (co-ops) developed greatly after the 1975 change of political regime. The economic weight of cooperatives in national GDP (2005) is about 8.8% of total business volume and housing cooperatives make up about 3.3% of this total. During the last 30 years the functioning of housing cooperatives has changed, particularly in the principal objective of providing reasonable accommodation for lower-income families and thereby improving their living conditions/quality of life .Today many housing cooperatives function as companies, which promote housing for the middle or middle-upper income but not for the lower income groups. This seems contrary to the principal objective of the cooperatives since the 1975 change in political regime. What happened? During the last thirty years many things changed. Political policy has seen a progressive retreat of state control, undermining the social objective of housing co-ops, creating financial problems, disappearance of incentives, diminished availability of lands for construction and speculation in the housing sector. Housing co-ops are functioning in a market that has many failures. Asymmetric information, prices, unique characteristics of housing and competitiveness in the market are some of the many problems that exist in this sector. Public policy also influences these characteristics. We demonstrate in this paper that during the thirty years of existence of housing co-ops in Portugal the social objective to promote houses for low-income individuals has changed considerably and the target resident the houses has also changed. This leads us to question if the social objective of housing co-ops is being achieved. We used a questionnaire to discover why people look for cooperative housing, what the advantage of cooperative housing is and what the members’ income level is.
RÉSUMÉ
Au Portugal les coopératives se sont beaucoup développées à partir de 1975 avec le changement de Régime Politique. Le poids dans l'économie Portugaise des coopératives le PIB (2005) est près de 8,8 % du volume d'affaires et les coopératives de logement supposent 3,3 de ce type. Pendant les trente dernières années le fonctionnement des coopératives de logement a principalement changé, dans son objectif principal, d'une en fournissant un logement aux familles avec peu de revenus et par conséquent en améliorant ses conditions / qualités de vie. À un aujourd'hui beaucoup de coopératives fonctionnent comme les entreprises, qui provoquent des logements pour des familles de revenus moyens/moyens-hauts. Cela semble contraire à l'objectif principal des coopératives de logement depuis le changement de régime politique de 1975. Qu'est-ce qui a passé ? Pendant les trente dernières années beaucoup de choses ont changé. L'action politique s'est progressivement trouvée éloignée du contrôle étatique, en minant l'objectif social des coopératives de logement., en créant des problèmes financiers, en éliminant l'initiative (privée), en diminuant la disponibilité de terrains de construction, et une spéculation dans le secteur immobilier. Les coopératives de logement travaillent sur un marché avec beaucoup de jugements. Une information asymétrique, des prix, des caractéristiques uniques du secteur immobilier et dépourvus de compétitivité sont certains de beaucoup de problèmes qui existent dans ce secteur. Les publiques politiques influent aussi sur ces caractéristiques. Nous démontrons à ce travail que pendant les trente ans d'existence des coopératives de logement au Portugal l'objectif social de fournir d'un logement les individus de bas revenus a considérablement changé et que l'objectif de résidence des maisons a aussi changé. Il nous porte à nous demander cela si l'objectif social des coopératives de logement a été compliment. Nous avons utilisé un questionnaire pour découvrir pourquoi les gens cherchent les coopératives de logement, quelles ce sont ses avantages et quel est le niveau de revenus de ses membres.
Des mots clefs:
politiques publiques; un marché de logement, d'objectifs sociaux; des échecs
de marché
As cooperative is a group of people working together in a joint economic activity that is owned and operated by its members for their mutual benefit, so affordable housing cooperatives empower low- and moderate-income families, because under the cooperative structure they own and control their own housing (Cooper and Rodman, 1992[2]).
Considering the cooperative principles its role, its activity, the connection of the cooperative management to local communities and, also the knowledge of local problems, the cooperative is very efficient in getting solutions for many housing problems.
The cooperative principles are really important and they define many details of cooperative management. The specific details are[3]:
1. Principle 1: Voluntary and Open Membership
2. Principle 2: Democratic member Control
3. Principle 3: Member Economic Participation
4. Principle 4: Autonomy and Independence
5. Principle 5: Education, Training and Participation
6. Principle 6: Co-operation among Co-operatives
7. Principle 7: Concern for Community
In a housing cooperative (or co-op), a housing development is jointly operated by its members. They own membership certificates in the corporation, giving them the right to occupy a dwelling unit and participate in the operations of the corporation. The housing sector is really very important in any Economy because the national stock of housing achieves a significant percentage of all national stock of capital. A big part of these stocks is managed by the housing co-ops. The managing of this stock depends on the specific characteristics of a good - housing.
The cooperative house is available to the moderate or low-income people also as a result of government actions. One form of intervention concerns the debate over government regulation of the private market via rent control, zoning, building codes etc. A second form of intervention is via tax policy. For example, some argue that a land tax would reduce the cost of urban housing, and thereby increase the availability of affordable housing. Also, there are tax expenditures which subsidize housing via the deduction of property taxes and interest on home loans, accelerated deprecation of investment in rental housing. A third option is supply side policies, which directly increase the availability of affordable housing via capital grants, subsidized operating cost, low interest loans, and loan guarantees. Finally, demand side policies subsidize eligible families to rent housing in the private market.
In Portugal[4] during the last decades many alternatives polices have been offered which changed the circumstances and methods of the affordable housing cooperative movement. All this policy changes alternated market conditions and caused a necessity to adapt to these changes.
The aim of this paper is to analyse:
· How these changes might influence the main objective of housing cooperative: To provide the affordable housing for low-income families?
· Do new members of housing cooperatives represent the same social stratum or has it changed during the decades?
In order to answer these questions, it was made an inquiry addressed to coops members of housing cooperatives of Setúbal District in Portugal. Those members belong to the housing cooperatives building programmes which were constructed under different circumstances and decades.
The good housing is from an economic point of view a good with some specific characteristics.
It is possible to present the characteristics of housing on three different levels;
- Characteristics, which allow the satisfaction of basic human needs;
- Physical characteristics;
- Characteristics, which depend on the functioning of the housing market or economics’ characteristics.
Following Arnott R. (1987), the social characteristics of housing are:
- Necessity – a housing provides the satisfaction of basic needs of every human being;
- Significance – this kind of “good”, considering the importance for humans, has a high value which means that almost everybody is willing to pay a lot of money to purchase this “good”;
The physical characteristics are:
· Durability, which is one of the most important characteristics of housing and which may limit individuals in many different situations of life and significantly influence a decision of buying.
· Immobility – another important characteristics of housing which means the impossibility of moving the house from one place to another. These characteristics also limit the mobility of individuals.
· Indivisibility it’s impossible to divide this “good”.
· Complexity and multidimensional heterogeneity, it is more difficult to compare different types of housing, considering the intrinsic characteristics of this “good”. The consumer is able to compare different types of housing considering the utility of services that the housing is able to provide.
The economic characteristics:
· The market problems especially the insufficiency of market - due to the length of the time of production of housing means that sometimes there is scarcity of housing in one place and excess in others. This adjustment problem is also related to the physical characteristic of immobility.
· The lacks of convexity of the production function, which means then the economic law of diminishing marginal productivity does not always apply to this market, with important economic implications.
· Imperfect information in the market - buyers do not have the same information as the sellers. This situation has a very important implication, considering the rational choice of buyers and the owners of the dwellings who do not know the renters‘characteristics, especially considering the proper use of housing.
· The importance of transactional costs – the search and acquisition of housing involves sometimes large transactional costs, like time, taxes etc.
· Relevant insecurity considering the future of the market – bearing in mind that housing is an expensive and durable good, the instability of the market may harm the housing market.
Most transactional goods have these characteristics, but only in the “good” housing are those characteristics so explicit. The interaction of all these features is a source of a very different performance of the housing market.
In the housing market it is possible to identify two types of supply: supply for buying and supply for renting. The most important agents on the demand side are families. When a family buys or rents a house, they obtain much more then housing services, they acquire also the neighbourhood, some public services and publics rights and obligations that are determined by the location of the house. Security problems are one of the most important.
As it was expressed earlier, the housing market has many specific features. These features provoke many differences or even failures in market functioning. The most important of them are efficiency failure and equity failure.
Efficiency failure in the housing market is associated with the imperfect functioning of the financial market, discrimination, imperfect information and externalities. There is also in the short run, the lack of supply adjustment problem
The imperfect functioning of the financial market is one of the most important issues in the housing market. Usually families do not have enough money to purchase a house, so they apply for medium or long term loans in the financial market. The uncertainty in this case is a usual issue, because both families and banks do not know the future behaviour of the housing market, the situation of families‘ income or the changes in the financial market itself. Risk aversion funders in order to diminish the risk have a tendency to exclude the families with fragile income possibilities or with older members. This situation implies that those fragile families face the worst conditions when they want to purchase the house or even sometimes those families are pushed to renting in markets were they face the discrimination power of owners.
Perfect information is a fundamental issue for the good functioning of any market.
In the housing market this situation is particularly important. Almost everyone who wants to purchase a house does not have exact information about the quality of the “good” he or she wants. This situation may lead to higher prices and abnormal profit for the supplier. To have access to information means time, money and some educational preparation. Usually the lack of educational preparation is a characteristic of the poorest individuals. In the renting market the situation is even worse. The owner has the discrimination power to offer a higher price for the more fragile, from the economics point of view, individuals, which means this these individuals, will pay more for the housing services then others.
The eternality problem is revealed many times in the housing market. Fire securities, cleaning of common spaces and noise are the most frequent situations. Decision to purchase the house is always influenced by the neighbourhood. The location of new construction depends also on the quality of neighbourhoods, event the conservation of existing houses. The degradation of a neighbourhood determines the construction of good quality housing and creates the conditions for appearance of slums and other sources of poverty. This problem is particularly important in the renting market because the renters ignore the negative impact of the lack of conservation on future renters. The resident does not spend anything to maintain the house in good condition.
The problem of lack of adjustment – inelastic supply n the housing market is created by some characteristics of housing (Grand J. e Robinson R. (1992) like:
- Immobility;
- Available spaces;
- Productivity of the construction sector.
The immobility problems are that, the available stock of housing in one place is impossible to transfer to another place. This situation of course implies the relative immobility of individuals especially due the moving costs (family problems, children schools, friends, work etc.) Another adjustment problem is related to scarcity of available space for constructions. The productivity of the construction sector is not very high. On average about one or two years is needed to build a house and a construction needs a lot of labor. As the construction sector is very sensitive to conjectural changes, the constructors have a preference to employ the labor force instead of investing in equipment. It is easier to dismiss a labor force then to maintain or sell equipments.
The equity problem is linked to some social or even moral issues like a basic need of every human being to have a house. On the pure functioning of the market it is impossible to provide a dignifying house to everybody. The housing need is many times the principal cause of other social problems. The equity on the housing market would imply the capacity of every family to have a dignifying house to live in. It is possible to talk about the lack of horizontal and vertical equity in the housing market. (Barr, 1987[5]). The lack of horizontal equity is related to two situations: the access to loans for buying a house and access to a proper house.
We discussed the problem of access to loans (discrimination problem); and access to house is related to the knowledge about the quality of a proper house. (Imperfect information problem). Considering the last situation it is important to refer to some particularities like a situation in which the individual does not have information about the necessity to consume certain types of housing services, a situation in which the individuals do not have enough money to consume an adequate level of housing services and a situation in which the individuals do not realize that the result of their decision to use some type of housing services may influence other individuals.( externality problem).
Concluding and following Culyer (1980) “good housing is so important from a social point of view, which all individuals ought to be obliged to consume a certain minimum level of housing services.” Housing in this situation is treated as a “merit good”.
There are many reasons for the State intervention in the housing market. Some of them may be justified by discrimination to access financial markets, inadequate income to the necessities of this market. Anther problem is related to the lack of efficiency in this market. The principal objective of this intervention is to increase the consumption of housing above those, which may be provided by normal market functioning.
In order to achieve this objective governments have used several policies and instruments not only on the renting market (for example the control of rents contracts) but also building the new houses itself and also on the buying market (fiscal policy, subsidies).
The intervention of the State in the housing market many times led to the emerging of some contrary effects.
In order to increase the consumption of housing services on the renting market, many times renting control has been used, which fixed the maximum value of rent for renter and owners. At the same time there is some legislation for protection of renters. As the owners are not able to adjust the price of renting to market situation they prefer to invest in other markets were this adjustment is possible and the results of this kinds of policy is the shrinking of the renting market and scarcity of supply.
The State may also promote the construction of housing itself through municipality construction. The objective is to increase the number of houses available in the renting market and to provide houses with lower renting prices for more economically fragile families. In general municipality provided housing has better quality then many private houses. Many times these municipality houses are more desirable then market houses, also for individuals with higher income. Those individuals are able borrow for a house at market price. Culyer, A. J. (1980) criticized this policy stating that:
- Municipality provided houses lead to the appearance of a waiting list which may reduce the mobility of the labour force;
- Diminishing of equity because it is really difficult to avoid that the better income families have access to this houses leaving behind the poorest families.
Because of these critics there is a big pressure to sell these houses lower then market prices.
The most usual instrument of public policy used as an intervention in the housing market is fiscal policy, for example: subsidies to young people for the acquisition of housing or pressure on banks on their debt policy for some facilities to constructors and many others.
All these kinds of intervention in the housing market may cause the excess of investment in this market (as we said a market of low productivity) and damage other markets with higher productivity levels, which may harm the increase of the national product.
Concluding, intervention in the housing market may be inefficient and also presents real problems on increasing equity.
The Housing Co-op considering these economic problems may present an alternative solution, presenting more flexibility; knowledge of local problems and better condition to respond to actual housing needs.
The habitation policy may be analysed considering three dimensions: social, economic and territorial.
The social dimension is related directly to the objective content of the Constitution of many democratic countries. This dimension considers
- The policy of social action which in housing situation means that the state may provide housing services for the poorest individuals without any possibility to acquire a house,
- The redistribution policy, which has to facilitate the access to housing, through fiscal benefits, subsidies etc.
- The social integration policy, which ought to combat ghettos in peripheries of big cities, responsible for many social problems.
The economic dimension of the habitation policy is related to ante-cyclic policies, which intend to create dynamism in the construction sector in recession periods in order to diminish unemployment and to increase family’s savings.
The territorial dimension is related to planning and territory order. The objective of these policies is the rehabilitation of urban historic centres, to combat the chaotic development in peripheries, the construction of basic infrastructures and leisure spaces.
The State has some important instruments which may be used to bias the economic agents functioning in the housing market. The most important are:
- Territory disposition;
- Financial system;
- Fiscal system.
The territory disposition has a big impact on the localization of new construction. This is often a big limitation of construction of certain areas. Sometimes problems with this issue of housing policy leads to land speculation and abnormal profit for land owners.
The interest rate, financing of social construction and house-saving accounts are the most important instruments which a State may use on the financial system.
The fiscal charge is very significant in the housing market. In this market there are fiscal charges in all stages of construction and both before and during the project stage there are municipality licenses. All participants in the housing market during their intervention in this market will face fiscal payments. They are: households; financing institutions, housing administration and constructors.
Households participate in four different stages of market housing in the demand stage (purchasing and renting); self construction; financing the construction; management and conservation of houses. In all these stages there are fiscal charges.
The state may increase/decrease the fiscal charge of financial institution and on that situation biases the housing market.
The housing administration biases the market defying the priorities for the housing market including the available land for the emission of housing utilization licenses.
The promoters/constructors of housing might be municipalities, privet companies, housing co-ops, families etc. They provide houses for purchase.
When on 25th of April 1974 the “old regime” fell the situation of the housing sector was very bad. There were on the one hand many old houses almost without infrastructures in many places, a lack of housing and on the other hand there were some empty houses. In the final period of the old regime the Housing Development Fund (FFH) 1969, Sate Secretary of Habitation and Public Company of Urbanization in 1971 was created. Some standards related to the using of urban soil, clandestine construction, big habitation constructions forecasted in Construction Plan (Planos de Fomento[6]) were also planned. About one fourth of the population lived in overcrowded houses without minimum habitation conditions (drinking water, electricity and drainage).
During this time, the State adopted strong interventionist measures like:
A conditional rent;
· Creation of Service For Local Support (SAAL- Serviço de Apoio Ambulatório Local) program;
· Support for the creation of Housing Co-ops;
· Reinforcement of social habitation program- municipalities support, soil use planning; urbanization policy;
· Creation of program for Houses Recuperation (PRID);
In 1976 the Ministry for Habitation was created of which the first measures pointed to the liberalization of housing policy with major support for houses acquisition and diminishing of direct intervention in the housing market (decreasing support for municipalities and co-ops construction of housing). This policy of reinforcement for houses which originated more facilities for loans for acquisition instigated the increase of house demand and the disappearance of available stock. The production of houses increased (1977-1981) by 32.390 but the loans increased at the same time by 109.921 for new loan contracts.
The liberalization of housing policy originated the lack of available funding for housing co-op construction and increased the interest rate almost strangling the coops construction during this period. Only at the beginning of 1980 was it possible to start with new coops construction. In May 1982 the Support Fund for Habitation Investment (FAIH- Fundo de Apoio ao Investimento Habitacional) was created whose objective was:”Financing social housing considering the criteria of commercial rentability”.[7] Based on this objective, the FAIH during its short existence did not finance any construction. Since 1981 to 1986 the coops financing for new construction were “frozen”.
In 1984 the FAIH was substituted by INH (National Institute for Housing).The INH financed during this period about 7.697 houses per year. After 1985 some important institution for the housing policy was created. The Urban Rental Scheme (RAU) and the Programme for the Renovation and Retrieval of Buildings (RECRIA) were the most important. It was also introduced new loans legislation especially for the youngest.
The “laissez-faire” policy is clearly viewed during that decade; the State blamed the municipalities for all problems of housing market and insisted that the market forces were able to solve all housing problems.
In 1996, the Special Re-Location Programmes was created, which were launched by Portugal’s major cities in an attempt to re-locate those households of low incomes that still lived in poor neighbourhoods. The Programme of Solidarity and Assistance with the Retrieval of Housing Stock (SOLARH) initiative had a similar objective but focussed on families with financial difficulties living in older areas or in the inner city. The SOLARH initiative helped families purchase their homes with their renovation and maintenance. Another program introduced during that time was Re-Housing Programs (PER). The objective of this programme is to re-house the population still living in slums in low cost dwellings.
Rehabilitation of old low-rent stock is also a priority. Land prices have increased due to the recent construction boom and associated speculation. The cooperative ought to deal with that speculation since that time.
At the same time (1998) new fiscal policy principles were introduced. Within this change the co-ops sector in Portugal finally received the “The fiscal codex of benefits “. This new document allows to conjunction of all remaining benefits and introduced some limitation to the housing co-ops. That limitation is related to the quality of construction. The reduced tax rate is only possible for cooperative housing since the coops construct a low costs, low quality and small areas dwellings. The evaluation of any coops construction is be done by INH.
Reduced interest loans for the acquisition of houses was one of the factors leading to a high rate of construction during the 90’s when over 100.000 dwellings were constructed annually, i.e. Approximately 10 dwellings per 1000 inhabitants were built. More than 235 000 contracts between credit institutions and individuals were signed annually for the acquisition of dwellings under the home-ownership scheme. This situation leads also to speculation on housing market and to overinvestment.
More recently however, the financial constraints that characterise the situation in Portugal, and the abolition of reduced rates on loans for the acquisition of houses, have resulted in a significant reduction in the construction rate of dwellings.
Recently the new legislation addressing the problem of unadjusted rental contracts was introduced, some constrains on the normal rental market remain. To address these, a new package of legislative measures for the urban rental sector is being developed, that in conjunction with support and incentive measures for urban regeneration is designed to transform the rental sector into a viable alternative to satisfy the country’s housing needs.
6. METHODOLOGY
For this investigation, it was made a questionnaire applied to the cooperatives members of housing Co-ops of Setubal District between January and April of 2006. We decided to choose the Setúbal district because in this particular region, better than in all of Portugal we have found more diverse housing cooperatives including an unique situation in Portugal in which the co-op maintains the ownership of the housing.
The simple was chose from universe of coop about 5000[8] members. It was possible to obtain 174 responses, which corresponded to about 75% of the distributed questionnaires and about 3.5% of all population. The most important condition was that the inquired members had to belong to historically different housing programmes in order to cover all of the different stages of housing cooperatives buildings. We received 47 valid questionnaires from members which belong to the 1st stage of cooperative buildings, 43 answers from members from the 2nd stage, 64 from members of the 3rd stage of buildings and 20 from the 4rt stage.
7. HYPOTHESES
The aim of this paper is answer to the following questions:
· How these changes might influence the main objective of housing cooperative: To provide the affordable housing for low-income families?
· Do new members of housing cooperatives represent the same social stratum or has it changed during the decades?
Those questions could be transformed in the following hypotheses:
Hypotheses 1: Changes in housing policy and in market conditions influences the main objective of housing cooperative
Hypotheses 2: Housing cooperatives provide housing for moderate-income families
In order to analyse the changes of some characteristics of the members of housing
Co-ops of Setubal District a questionnaire was carried out and it was possible to obtain 174 responses, which corresponded to about 75% of the distributed questionnaires.
We distributed the questionnaires through members who are living in coop houses built in different periods of co-ops construction.
Table 1
|
CO-OP Members |
Total |
In actives |
Unemployed |
Self-employees |
Works for others |
Business man |
Other |
|
1 stage of construction (1974-1980) |
100.0% |
10.6% |
17.0% |
12.8% |
55.3% |
4.3% |
0.0% |
|
2 stage of construction (1980 - 1990) |
100.0% |
7% |
16.3% |
14.0% |
53.5% |
4.6% |
4.6% |
|
3 stage of construction (1990-1998) |
100.0% |
10.9% |
4.7% |
7.8% |
60.9% |
10.9% |
4.7% |
|
4 stage of construction (1999-2006) |
100% |
7% |
- |
11% |
71% |
11% |
- |
Source: inquiry
Analyzing the working situation of co-ops members it is possible to conclude that there is some evolution, the number of employed and business men is increasing while the number of unemployed people is diminishing. As the prices of houses are increasing it is impossible to maintain increasingly more expensive houses.
Table 2
|
CO-OP Members |
Total |
Technicians scientific, artistic; Workers |
Commerce, services and office |
Industry agriculture workers and fishermen |
Other |
|
1 stage of construction (1974-1980) |
100.0% |
12.8% |
51.0% |
27.6% |
8.6% |
|
2 stage of construction (1980 - 1990) |
100.0% |
9.3% |
46.5% |
37.2% |
4.7% |
|
3 stage of construction (1990-1998) |
100% |
25% |
36.7% |
33.3% |
5% |
|
4 stage of construction (1999-2006) |
100% |
11% |
33% |
28% |
28% |
Source: inquiry
Considering the professional situation of co-ops members we did not identify major changes.
Table 3
|
CO-OP Members |
Total |
Primary or less then primary education |
Lower secondary education |
Upper secondary education and more |
|
1 stage of construction (1974-1980) |
100.0% |
46.8% |
40.4% |
12.8% |
|
2 stage of construction (1980 - 1990) |
100.0% |
46.5% |
37.2% |
16.3% |
|
3 stage of construction (1990-1998) |
100% |
32.8% |
43.8% |
23.4% |
|
4 stage of construction (1999-2006) |
100% |
10% |
47% |
43% |
Source: inquiry
Analysing the educational level it is possible to identify big changes. The educational level increases quickly between members of housing coops from the first to the last period of construction. Of course the members of the last period are much younger that the first one. What is very interesting is that the average level of education is much higher among the cooperative members then the Portuguese average in education. The Portuguese average is nearly 20% and considering only the youngest individuals in the labour market (25-34 years old ) this percentage was about 38 %[9] and in the forth stage of construction where the average age is almost the same the percentage is 43. Individuals with higher levels of education have much more opportunity to be better paid in the labour market. We may assume that, housing co-ops attracted those individuals, because others do not have the possibility to acquire a residence in housing co-ops.
Table 4
Income level of co-ops members
|
CO-OP Members |
Total |
Lower then 500€ |
Between 500€-1000€ |
Between 1001€-2000 € |
More then 2000€ |
|
1 stage of construction (1974-1980) |
100.0% |
40.4% |
42.6% |
17% |
0% |
|
2 stage of construction (1980 - 1990) |
100.0% |
27.9% |
55.9% |
16.2% |
0% |
|
3 stage of construction (1990-1998) |
100% |
37.5% |
45.3% |
17.2% |
0% |
|
4 stage of construction (1999-2006) |
100% |
7% |
57% |
29% |
7% |
Source: inquiry
As we may see the income level of members of coops housing is slowly increasing. It might be much higher for the members of the fourth stage of construction during the future few years as we said the members of this stage are the youngest so it might be expected that their income will increase. We also must remember that those members are much more educated than others.
Table 5
Reason for choosing the co-op house
|
CO-OP Members |
Total |
Less expensive |
Like the place |
Less work for acquisition |
Other |
|
1 stage of construction (1974-1980) |
100.0% |
53.2% |
21.3% |
17% |
8.5% |
|
2 stage of construction (1980 - 1990) |
100.0% |
53.5% |
30.2% |
16.3% |
0% |
|
3 stage of construction (1990-1998) |
100% |
59.4% |
29.4% |
4.7% |
6.2% |
|
4 stage of construction (1999-2006) |
100% |
71% |
29% |
0% |
0% |
Source: inquiry
The principal reason for choosing the coops house is to be less expensive. This reason is slowly increasing. As the price is a principal reason for choosing cooperative houses, any changes which may influence the houses prices are punitive for the social layer of housing coops.
Table 6
Advantages to live on co-ops houses
|
Advantages |
1 stage of construction (1974-1980) |
2 stage of construction (1980 - 1990 |
3 stage of construction (1990-1998 |
4 stage of construction (1999-2006) |
|
Don’t’ have any |
17% |
16.4% |
11% |
8% |
|
Easer to solve the houses problems |
51.1% |
53.5% |
78% |
46% |
|
Good relationship with neighbours |
19.1% |
0% |
0% |
0% |
|
Easier to solve common spaces Problems |
12.8% |
9.3% |
11% |
8% |
|
Other |
0% |
20.8% |
|
38% |
Source: inquiry
As principal advantages of housing co-ops the majority of members say that it is easy to solve problems related to their residence and common spaces. As the coops usually are responsible for management of the common spaces, it is easy to understand.
Table 7
Disadvantages to live on co-ops houses
|
Disadvantages |
1 stage of construction (1974-1980) |
2 stage of construction (1980 - 1990 |
3 stage of construction (1990-1998 |
4 stage of construction (1999-2006) |
|
Don’t’ have any |
42.6% |
25.6% |
34.4% |
13% |
|
Small areas |
2.1% |
16.3% |
15.6% |
20% |
|
Quality of house interiors |
46.6% |
53.5% |
45.3% |
60% |
|
Localization |
8.3% |
4.6% |
4.7% |
7% |
Source: inquiry
The biggest disadvantages of the housing co-ops of Setúbal district is the quality of house interiors. The house interiors are usually an issue where it is possible to save some money in order to offer a cheaper house. The members, except from the first stage of construction, are also discontent about the areas of the houses. Since eighty were introduced on cooperative housing, which want to apply for the public finance, the area limitations.
In conclusion the characteristics of housing coops members have changed during the last thirty years. They have higher levels of education, higher income, they are more demanding, and more price sensitive. For them other cooperative principles are not so important. (Like helping each other or better relationship with neighbours)
Considering the general well-being, there are many advantages for housing coops construction. The first is related to the local connection of coops. They know local housing needs better and the cooperative construction always creates some added value through the mobilization of social capital and civic entrepreneurship stimulation for local sustainable development.
The management of public spaces which is the municipalities’ responsibility, in coops building is usually guaranteed by housing coops which are a better solution because people are much more interested in maintaining a pleasant environment.
Another very important advantage of housing coops is to diminish some of the housing market failure problem – the asymmetric information problem. When the coops construct or promote construction they are also responsible for all construction problems, which may happen after the selling or renting of their houses. The members have always a right to ask for the solution for those problems. This generates a bigger trust and diminishes uncertainty in the housing market. The externality problems are also easier to solve inside the housing coops. Financing the housing coops for construction dwellings for rent, allows avoiding the discrimination of financing system. In that situation the co-ops management is responsible for the financing issues.
To maintain the functioning of affordable cooperatives are contrary to the traditional welfare mentality prevalent is more important that subsidized rental housing policy because with co-ops, residents not only take responsibility for their actions, but they experience the direct consequences of these actions on the cost and quality of their housing (Miceli, Sazama, 1994[10]).
The investigation questions were the following:
Hypotheses 1: Changes in housing policy and in market conditions influences the main objective of housing cooperative.
Hypotheses 2: Housing cooperatives provide housing for low-income families.
Considering the analysis of the questionnaire it’s possible to conclude that the functioning of co-ops housing during thirty years co-ops changed. Housing co-ops had access to available and urbanized soil and because of the very favorable fiscal policy coops have been able to offer dwellings at a very good price or even offer for renting. Housing coops maintained the ownership of the dwellings. The first policy change modified the benefits of the interest rate which lead to the increasing cost of rent. This situation leads to members of co-ops needing to pay much more for the dwelling.
The liberalization of the economy in the middle of the eighties finished the financing of co-ops for housing for renting. Since then coop members have only been able to purchase the house. The liberalization of housing policy also leads to housing coops being obliged to compete for the available land with other private companies.
With land speculation and available loans for acquisition of houses there were significant increase in house prices, changing from affordable housing cooperatives for more expensive housing cooperatives. Now the new coop member must have a much higher income to purchase the co-ops houses. The financing system as we said discriminates against families with lower incomes.
All those changes are leading to the modification of social layers, which look for the housing coops.
At the beginning the housing coops constructed dwellings for low income people. During those years the coops also provided the houses for rent. .
The new social layers want different quality houses. They are more demanding, looking for high quality interiors, bigger areas and that causes the increase of construction costs. As housing coops lost most fiscal benefits, which might help to maintain lower costs, the managers of housing coops, in order to respond to members necessity, are obliged to construct the houses which their member want.
As a result of this market evolution the coops which initially constructed for the lower income individuals, now are constructing for much higher income individuals, leaving the State to solve the housing problems of the poorest social layers.
Analysis of questionnaire results seems to confirm the hypothesis H.1 “Changes in housing policy and in market conditions influences the main objective of housing cooperative”, that the policy changes during the studded period altered the housing cooperatives objectives and curved the target population from low-income families to medium-income families. Considering this result we reject the hypotheses H.2 “Housing cooperatives provide housing for low-income families” and may conclude that the initial social objective that housing cooperatives in Portugal promoting the affordable housing for low-income individual changed.
During all those periods housing cooperatives have lost more and more public support moving contrary the EU recommendation which advise that” “National, regional and local governments should encourage the development of cooperation forms including a broad range of actors. It is recommended that local authorities take over the lead in developing and coordinating partnerships.” [11]
Now we may put the following question “What is social objective of housing cooperatives in Portugal nowadays?
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* Boguslawa Maria BARSZCZAK SARDINHA; bsardinha@esce.ips.pt; y Luísa Margarida CAGICA CARVALHO; lcarvalho@esce.ips.pt ; IPS, ESCE, DEG, Campus do IPS; Estefanilha, Setúbal, Portugal.
[1] Hays, A. R., editor. (1993). Ownership, Control, and the Future of Housing Policy. Westport, Connecticut: Greenwood. ISBN: HD7287.8.09
[2] Cooper, M; Rodman M. C.. (1992). New Neighbors: A Case Study of Cooperative Housing in Toronto. Toronto: University of Toronto Press. ISBN: 0802059929
[3]International Alliance Cooperative
[4] In Spain the situation of housing cooperatives are as the follows authors reporting “El origen de las cooperativas de viviendas incide de modo sensible en sus posibles riesgos y ventajas. Dado que la compra de solar -elemento básico y fundamental-normalmente se realiza en los primeros momentos de la vida de la cooperativa, es básico que esta disponga desde sus inicios de una buena capacidad de gestión. En España son múltiples los agentes que las han promocionado, no obstante en los últimos años, en que han realizado una importante actividad, lo más frecuente es que hayan surgido gracias a ofertas públicas de suelo en condiciones especiales para la promoción de vivienda social por cooperativas, a partir de las cuales las gestoras han estructurado la demanda y la promoción cooperativa” (Móron , 1994, p145).
“La promoción de viviendas en régimen cooperativo ha alcanzado en España resultados cuantitativos y cualitativos estimables. El tipo de vivienda, siempre en acceso a la propiedad, ha sido muy variado. Los socios cooperativistas adjudicatarios de las viviendas, han pertenecido a todas las clases sociales. Su configuración es de viviendas colectivas en edificios de altura, viviendas unifamiliares adosas y viviendas unifamiliares aisladas. En la mayoría de los casos, una o varias Cooperativas, han promovido núcleos integrados cooperativos. En España, el tratamiento oficial ha sido discontinuo, subordinado siempre a la política económica del momento; el desarrollo cooperativo ha superado dificultades y vicisitudes de todo tipo, manteniendo una actividad permanente, con más o menos intensidad, según los casos” (Oñate , J., 1995, p.141)
[5] BARR N (1987) The Economics of the Welfare State, Stanford University Press Stanford - California, ISBN-13-978-01264971
[7] op. cit. p. 46
[8] Data from 2005 – Cooperative Union of Setubal District UCHEDES)
[9]Data from 2005 OCDE
[10] MICELI T. J., SAZAMA G. W. SIRMANS C. F. The Role of Limited- Equity Cooperatives in Providing Affordable Housing, in Housing Policy Debate Vol. 5, University of Connecticut. (1994); pp 469-472.
[11] From the EU report ON GOOD PRECTICE IN COOPERATION TRANSFERABLE LESSONS. Project “Integrated Form of Cooperation in Housing Policy for Housing Provisions for Risk Groups”.