South Africans eager to get housing could learn a lot from the way Afrikaners used co-operatives, argues James McGregor
All of South Africa’s citizens are aware of the challenge ahead in aiming to house the nation’s lower- income population. The recently published White Paper quantifies the problem: 40% of all households earn less than R800/month; 150,000 units per year need to be produced for 10 years to address the present backlog; an additional 200,000 units per year need to be produced to stop that backlog increasing.
The two biggest problems facing people in attaining housing is access to land and access to money, and of course affordability, that is, the ability to pay for the purchase or to repay a loan.
Most people have trouble saving money, cannot buy a plot and cannot obtain a loan to build a house. However, in other countries, many people have managed to achieve these goals through community associations or co-operatives.
In Zimbabwe, housing co-operatives have enough financial strength to negotiate and obtain loans from the building societies for the lowest income families.In the Philippines, the co-operative system has attained a size that allows it to offer lending to co-operative and act as a credible financial intermediary.In Canada, co-operatives gave the French Canadians the key to a multi-billion dollar financial sector. In Sweden, housing co-operatives generate enough saving to produce housing at will.
Co-operatives involve people who want to solve a problem and see the need to join forces. Saving and credit co-operatives talk of common bonds.
Farming co-operatives, such as Outspan, provide their members direct access to markets. In the case of housing, the purpose would be the desire to achieve housing security and possibly to live together and develop a community.
Co-operatives derive their strength from combining small means of many people such that they may have an impact which is bigger than the sum of the parts. Stokvels work on this principal, combining the savings capacity of many people such that each member attains an objective that would be very difficult individually.
Many organisations look and act like co-operatives. This is the case of the community development trusts, housing associations and housing clubs that are presently being used to promote various community an housing development projects in South Africa.
However these forms of organisation lack three elements: they may not be controlled by the users, member training may or may not be systematically undertaken and they do not work together to provide mutual support and representation.
Co-ops are democratic organisations with a body of local and international guidelines for their operation and development. The first principle of co-operatives is one member, one vote. Another is the importance accorded to member training. Members must understand in order to participate and administration must be credible in order to maintain member confidence in the
The Philippines has a widely recognised program for low income housing and squatter upgrading based on associations. Co-operatives were not used with the consequence that training was neglected and the associations never organised together.
By contrast, the thirty odd NGO’s that initiated the projects have formed an organisation to present their concerns and interests.
Of course, co-operatives too have their weaknesses. They are organisations of their members and can only be as good (or bad) as their members.Furthermore, co- operatives require time and effort. They involve meetings, compromise and working to assist others. But they do work.
The Government White Paper provides an excellent overview and offers a number of concrete programmes and guidelines towards confronting the challenge of housing the nation.
It clearly states that “there is no single formula for solving South Africa’s housing dilemma”. Policies and strategies will be “directed at enabling and supporting communities and mobilising private saving”.
This significant framework that can only be improved by including a co-operative approach to saving mobilisation and to land development and housing
Starting immediately to build a co-operative system, based on savings and the initiative of their members must be added to the national priorities.
This cannot be done overnight. The nature of such a system is that it can snowball. If a thousand families start saving in the first year, two thousand in the second and so on, by the fifth there could be 16 000. If 100 000 started in the first year, 1,5-million could be saving by the fifth year, representing over two billion rand yearly.
As important as the funds being mobilised is the fact that as many people will be taking an initiative to address their housing needs. They will have the means to purchase land, the credibility to borrow funds and the political strength to obtain support from government and private actors. Eventually they could own enough funds to provide for their own lending needs!
James McGregor is a South African- born urban planner who has worked in low-income housing for 20 years. Recently, he spent two years establishing a co- operative housing resource group in Zimbabwe.