New Calls for the Revival of the Co-operative Basis

    This document has been made available in electronic format
         by the International Co-operative Alliance ICA
                         June 1994

               New Calls for the Revival
               of the Co-operative Basis

                    by Ralf Kunert*

Future Challenges

"New ways for the future" was the theme for representatives
from residential co-operatives from all over Germany at the
first South Western Co-operative Workshop, with top speakers
from the scientific and political fields, along with experts
in residential economics. 

The building co-operatives in particular, with their
construction and residential activities and their social
engagement, truly justified their existence in these times of
social change. In the light of increasing housing shortages
and economic difficulties, with all the related increases in
social tension, special priority is being given to the
co-operative approach. The main themes are self-help with an
underlying principle of solidarity, self-administration and a
willingness by groups to accept responsibility for themselves.

The Director of the South West German Residential
Co-operative, Paul Leo Giani, underlined the current relevance
of these underlying co-operative principles. With the upheaval
in the former Eastern bloc states, these concepts reflect the
latest objectives and modern principles.

Emphasis on Self-responsibility

A gradual growth, even in some instances a re-awakening, of
co-operative thinking, benefits both the State and society, as
well as a large number of very varied groups of people such as
families, single-parent households, disabled persons and
elderly people.

Accommodation is becoming ever more expensive. With above
average land prices and building costs, and despite state
grants or tax benefits, building one's  own house remains
impossible for many people, added Giani. He went on to state
that accommodation with good security of tenure, enough space
to live comfortably and a pleasant environment counted now
more than ever as part of a person's fundamental needs.

This explains the yearning for one's own house or apartment. 
For financial reasons, many families are unable to attain this
dream. And, given the ongoing price rises, the number of
people in this category is growing as fast as the number of
young families who search in desperation for an apartment of
any kind.

Against a background of increasing privatisation of services,
Paul Leo Giani outlined the subsidiarity principle: "The state
and society itself are both based on the citizen, and both
must have an interest in as many citizens as possible helping
themselves and taking responsibility for solving their own
problems when it comes to housing, without calling on the
state's resources."

To this end, stated Giani emphatically, the state must
establish a suitable legislative infrastructure so that co-ops
can develop.

Legislative Infrastructure 

Development of co-operative thinking, however, flies in the
face of the public sector's demand for a certain proportion of
subsidised social housing and of the limitations imposed by
tenancy legislation. The legislative infrastructure must be
changed: for example, property owned by co-operatives should
be treated in the same way as property in individual private

It is no longer acceptable that the state should spend
billions in tax subsidies to encourage private ownership, yet
should penalise co-operative ownership. In the medium term, a
constitutional review of this inequity in tax legislation
cannot be ruled out. In addition, the campaign against
legislation which holds back co-operative thinking and
legislation on co-operatives will continue.

One particularly restrictive factor in this context was the
Federal Building Ministry's refusal to increase the income
limits for social housing construction. For residential
co-operatives in particular, the fact that the income limits
relating to the provision of social accommodation have not
been increased for more than ten years, whilst real incomes
have increased, has been taken to absurd extremes. 

Increasing numbers of residential co-operatives are no longer
able even to provide their own members with social housing,
despite the fact that paragraph 1 of the co-operative Law
states that promoting the members of the co-operative is the
main raison d'etre  and concern of co-operatives.

The Federal Building Ministry's inactivity, described as
"stagnation politics", is also leading to increasing amounts
of ghettos in many cities, to a worrying degree. As landlords,
residential co-operatives have the lowest rate of fluctuation.
For some of these property enterprises, an annual change of
five or six per cent in accommodation stock is deemed high.
But even a five per cent fluctuation adds up over a five or
six year period to a change in housing stock amounting to 25
to 30 per cent.

The only way to counter the substitution over the years of one
third of the residents in the housing stock of one of these
enterprises by the socially weakest families is through
timely, realistic increases in the income limits. This is the
only way to minimise potential conflict in the housing stock.

Finally, tenancy legislation and fair rent legislation fly in
the face of co-operative thinking. The main objective for
their members and the principle of equality (in the sense of
solidarity and self administration) contradict tenancy

For example, if a member of a co-op lives alone in an 80
square meter apartment, whilst another member of the co-op 
with a family of four has to be housed in the same locality in
a 60 square meter apartment, the co-operative principle of
equality, solidarity and self administration would necessitate
examination, with appropriate encouragement if necessary, of
the possibility of swapping apartments. Current tenancy
legislation, however, forbids such a reasonable measure
because it is based on the assumption of a strong landlord and
a weak tenant who must be protected.

GdW president Jurgen Steinert also applied the solidarity
principle to the question of the generation distribution in
housing. Besides the public purse, financing of appropriate
quantities of new residential accommodation would only be
possible if one took the solidarity principle and applied it
over the long term to rent levels.

Consequently, we should consider using appropriate rent
increases for the older generation's relatively low-cost
housing stock, in order to involve them in the generation
redistribution from old to young so that there is sufficient
living space available for the next generation.

However, this model is not applicable for co-operatives, since
they themselves decide on the criteria for housing usage and
allocation, based on the principles of self-determination and
self administration. Tenancy legislation must therefore
acknowledge the specific peculiarities of co-operatives by
making provision for their derogation.

* Mr Kunert is the Head of Public Relations Department at
Gesamtverband der Wohnungswirtschaft e.V. (GdW), Cologne.
This article appeared in the WI (Wohnungswirtschaftliche
Informationen) issue 42 in October 1993.