Uruguay: Housing, Self-Management, Community Empowerment: The Coop Experience

   This document has been made available in electronic format
    by Federation of Mutual Aid Housing Cooperatives (FUCVAM)
        and the International Co-operative Alliance ICA


The experience of mutual aid housing cooperatives developed in
Uruguay provides an example of how non-conventional policies that
have the participation of users at its core can lead to forms of
sustainable and effective social organization.

This experience shows how through self-management and democratic
decisions people can create better urban environments and more
integrated communities. Mutual aid cooperatives have the
potential to initiate the 'enabling process' that seems to be
needed in Uruguay and other Latin American countries.

In a complex and heterogeneous world there are alternatives to
the crude duopoly of 'state and markets'; one of them is the
cooperative way.



The first mutual aid housing cooperatives emerged in the country
in 1966, when three pilot experiences, composed of labor
activists from the Uruguayan hinterland, were sponsored and
supported by a nonprofit private organization: the Uruguayan
Cooperative Center (CCU). These cooperatives became an
alternative housing solution for ninety-five families. This
program was financed by the national government and the
Inter-American Bank (IDB), as part of a bilateral agreement for
the construction of 4.100 housing units. At the end of 1969, with
reference to all the programs built in the country, both by the
state and by the private sector, these co- operatives had
achieved the best results in terms of costs and final qualities.

With the inclusion of the cooperative system in the National
Housing Act, passed in 1968, this alternative was rapidly
replicated throughout the country. The years that followed the
approval of the Housing Act saw the emergence and consolidation
of the cooperative movement: from three projects built in 1969
to a reality of 210 cooperatives under construction in 1971,
meaning housing solutions for more than 6.700 low-income families
of urban areas. Between 1970 and 1973, thousands of members of
labor unions and dwellers of working class settlements organized
and turned to the Institutes of Technical Assistance (IATs) for
support and advice to set up housing cooperatives. Until 1975 the
cooperative movement was the main receiver of loans from the
National Housing Fund; at the end of this period, one of every
two loans provided by the National Mortgage Bank (BHU)
was to mutual aid cooperatives.

The foundation of the Unifying Federation of Mutual Aid Housing
Cooperatives (FUCVAM), in 1970, was a fundamental factor in the
consolidation of mutual aid cooperatives as a social force,
becoming one of the most powerful urban social movements of
contemporary Uruguayan history. During the immediate years that
followed its foundation, FUCVAM obtained important achievements
that contributed to the expansion of the cooperative proposal:
larger and faster allocation of land for housing cooperatives,
acceleration of the administrative procedures for approval of the
legal status, negotiation of better terms and conditions for the
loans, were some of the most important goals achieved.

In the context of the socio-political crisis that characterized
the early 1970s in the country, grassroots cooperatives organized
in FUCVAM were involved in wider socio-political processes. In
the conflicting years before the military coup d'etat of 1973,
the cooperatives were, jointly with other social and political
actors, in the forefront of protests against the authoritarian
government. It is this dual nature of mutual aid cooperatives,
as an instrument of housing development and as a social movement,
what has been a constant feature in their evolution. This
particular nature was also the reason that determined the
systematic repression to which they were subjected to during the
twelve years of military dictatorship.

Together with the collapse of the democratic institutions that
sustained the democratic system, it came the collapse of the
institutional framework for the implementation of housing
policies. All the activities and responsibilities related to
housing programs were concentrated in a financial institution:
the BHU. The 'social interest' criteria embodied in the Housing
Act were substituted by criteria of financial profitability.
Mechanisms previously promoted, that enabled the 'social
orientation' of the credit -cooperatives, social funds and public
housing- were dismantled. In 1976, it was passed a decree by
which the granting of legal status and loans to housing
cooperatives was suspended. These measures contributed to the
decline of the co- operative system, which, from having
represented 45% of the total housing investment in the precedent
period accounted for only 3% in 1980.

As spaces for social and political participation began to open
in the early 1980s, the cooperative movement re-emerged playing
an important role in the process of democratization. In December
1983, the military government passed a decree that established
the passage of housing cooperatives under the communal property
regime to the system of private ownership. FUCVAM's reaction,
making use of an instrument granted by the Constitution, was a
campaign to collect signatures in order to call a referendum to
abolish the authoritarian measure. The unresolved conflict was
inherited by the civilian government that took office in 1984.
After intense political debate, the disputed law was abolished
by the Parliament in 1986.

In 1990, the recently created Ministry of Housing (MVOTMA)
formulated a Quinquennial Plan. In line with the economic
policies advocated by the national government, the principle that
would guide the Plan is that a free housing market would be the
most adequate instrument to deliver solutions for all sectors of
the population. However, acknowledging that there are sectors of
the population who cannot afford with their monthly familiar
income a housing solution through the market without affecting
other vital needs, the government has adopted a program of direct
provision of housing for these groups. The main instrument was
the construction of the so-called 'Basic Evolutionary Housing
Scheme' (NBEs), a kind of public 'sites and services' without any
involvement of the beneficiaries in the production process. The
failure of this program was evident: they were few, far and
expensive; additionally, they were so heavily subsidized (95%
direct subsidy) that the sustainability and replicability of this
approach have been subjected to criticism by the academic, NGOs
and CBOs networks in the housing sector. Considering this
situation, the mutual aid cooperative system proved once again
being one of the most appropriate alternatives for low-income
housing: with the same costs of a NBE project, pilot experiences
promoted by FUCVAM in partnership with the municipal government
of Montevideo, the Ministry of Housing, grassroots cooperatives
and two IATs (one of them the CCU), demonstrated that trough
community participation it was possible to build dwellings with
much higher results regarding the quality of construction and
with much larger livable areas (more than double than those of
the NBEs).

The housing policies of the central government have been further
put into question when faced with the policies adopted by the
municipal government of Montevideo. Since 1989 the municipality
is in the hands of the opposition. The city has initiated its own
housing programs, based on a different 'enabling approach'. It
has adopted a set of measures for private-public partnership in
order to facilitate conditions for low-income groups to have
access to basic resources. The creation of a land bank managed
by FUCVAM, a series of inner city housing rehabilitation projects
carried out by housing cooperatives and an ongoing project of
technological innovation for housing cooperatives, are some of
the priorities of the Municipal Housing Plan.

At present, negotiations are being held between FUCVAM and the
Ministry of Housing, in order to increase the participation of
mutual aid cooperatives in the National Housing Plan. This Plan,
to be approved by the Parliament at the end of December 1995,
would provide loans for the construction of only 300 new
cooperative dwellings. Until November, the MVOTMA had registered
160 cooperatives (6.500 housing units) with everything in order
to start immediately the building process as soon as they receive
the loan from the National Housing Fund. Meanwhile, at the end
of November, there were 35 cooperatives in the stage of
construction (1.700 units).

The cooperative movement is also actively engaged in the
preparation of the National Plan of Action toward Habitat II.
FUCVAM, CCU and other IATs related to mutual aid cooperatives,
together with several other non-governmental organizations
dealing with urban issues, created at the beginning of 1995 the
'Coordinating Group of NGOs and CBOs toward Habitat II'. The
official National Committee has not yet been created, in spite
of the permanent demands regarding Habitat II presented by the
'Coordinating Group' to Uruguayan government authorities.

                  2. IMPACT ASSESSMENT

After thirty years of the enactment of the National Housing Act
in Uruguay, mutual aid cooperatives have proved to be the system
allowing to obtain the best solutions at the lowest costs (with
more than 13.000 units already built) and the best results as
regards ubpkeeping, maintenance and urban complementation of
housing projects, as well as the one that has best fitted the
needs of the beneficiaries, and that has appreciated and used
the community spaces in the best way.

After construction of the dwellings is completed, the
organization that the groups acquire during the building period
-which is later extended as the collective ownership system which
most of them have chosen as the structure of use and
administration of the common state- has naturally led them to
approach, also collectively, other common social problems; thus,
multiple community-oriented initiatives of social development
have been promoted, as a grassroots contribution to improving the
quality of life of the cooperative members and settlers of the
surrounding neighborhoods to which the cooperative is open.

On the other hand, the identity of the cooperative housing
movement as a powerful urban social movement, turned these
cooperatives into an essential bulwark of the struggle to win
back democracy in Uruguay during the past military dictatorship
(1973-1985). This fact brought about the withdrawal of official
support from the state until the early 90's. At present,
democracy prevailing back in the country, mutual aid cooperatives
struggle to recover the position they deserve within national
housing policies.

Furthermore, some experiences started in neighboring countries,
having this Uruguayan system as their reference, prove it may be
a real popular solution for the housing problem in Latin America,
properly adapted to every local reality.


Must construction be carried out by private investors, the state
or cooperatives? This question does not probably have one unique
answer. As a matter of fact, it would be wrong to think about
cooperatives as the only system for the construction of
low-income housing with public financing, rejecting every other
alternative. What could be positively insisted on is that this
system should have an outstanding participation in the Uruguayan
National Housing Plan. This statement is founded on the important
comparative advantages shown by the cooperative system in
numerous aspects.

3.1. From the social point of view

The Uruguayan experience of mutual aid cooperative housing,
indissolubly linked to self-management (autogestión) and
grassroots participation, as well as to the application of the
fundamental cooperative principles -in the organizational
structure, in the building process and in the proposal of
community-oriented social development- leads to the conveyance
and deepening of values such as solidarity, democracy, and mutual
respect, that are different and even opposed to those of
individualism and competition, currently prevailing in modern
societies. The execution of mutual aid, as it implies the joint
effort of every beneficiary family, not only of those acting as
leaders of the group, is a fundamental factor for the
consolidation of those values. That is why even if it is possible
to omit mutual aid as an economic need in order to abate housing
costs, it is important to keep it in some way, so as to reach the
aforementioned objectives.

Moreover, the cooperation and self-help capacities achieved are
later transferred to the solution of other family and community
needs, through the cooperative itself or through other forms of
popular organizations initiated within the cooperative movement.
Cooperatives have thus favored, through their own action, or by
seeking both state and community intervention, the solution of
the widest range of problems:

Basic services: Urban infrastructure (water, sewage, electricity,
home waste collection, transportation), culture (kindergartens
and primary schools, day-care centers, popular libraries,
artistic activities, sports and recreational facilities), health
(multipurpose community clinics, preventive medicine, dental and
psychological assistance) and food (popular meals, consumers
cooperatives) community-managed programs.

Solidarity networks: Community support to families affected by
temporary social or economic hardship (unemployment, labor
strikes, and -during the past dictatorship period- also political
repression). This is related to the so-called "relief fund"
(fondo de socorro), constituted in each cooperative with monthly
contributions from the members themselves, another
token of mutual aid.

Non-formal education: Functioning of the cooperative as a social
and economic enterprise calls for a permanent effort from its
members as far as cooperative education and training is
concerned, from the constituent stage to the building and
community living process. This permanent requirement of training
and integration of knowledge and experience acts as a genuine
school of systematic education.

3.2. From the point of view of the use of available resources

The control and management of the projects by those most
interested in their success and effectiveness, the beneficiaries
themselves, allowed a very significant level of efficiency,
without the need of resorting to devices commonly used by
profit-oriented enterprises in order to reach their objectives.

The administration of the building process in a cooperative way
relieves the state from responsibilities and tasks involving
program execution and management.

With reference to the financial investment required, it is lower
in mutual aid cooperatives than in other systems, because:

*    Between 15% and 20% of the total cost of the project is
     saved, as mutual aid building and administrative work
     accounts for it.

*    Intermediaries are eliminated, and so are their profits: a)
     those of the construction firm, representing about 15% of
     the construction cost, and, to a certain extent, those of
     the subcontractors, b) those of private promoters, who
     generally have a 25% profit rate on the total construction
     cost; c) it is finally saved the profit corresponding to
     the real estate agent selling the units, 3% on the cost of
     each unit, amount to be paid by the purchaser. It is
     important to point out that, in spite of the fact that
     large developments of the public system can theoretically
     get lower relative costs, due to economies of scale (at the
     expense of other important social and urbanistic values
     neglected by them), those economies do not translate into
     a lower final cost, as they are accounted for by enterprise

As the cost for users is concerned -that in the case of mutual
aid cooperatives must include the economic value of their labor
input- this is similar to the one of works done through direct
state administration, with an equal finished product and under
equal financial conditions. Likewise, maintenance costs are
reduced in a mutual aid cooperative program, since members have
taken part in the building process they are in a better position
than in any other system to face this work.

3.3. From the point of view of design

Mutual aid building better fits beneficiaries' needs. This is
possible because users can make their choices, starting from the
plot of land -in the most suitable location according to their
needs- to the architectonic and urbanistic details of the
dwellings and social services to be built. Moreover, since the
group is first integrated and the project is elaborated according
to their needs, the system suits both large cities and small
towns, where "social housing" programs do not generally get to,
and where private investors do not build as rates of profitable
return are low or inexistent.

There is also a greater appreciation of community spaces. In a
gradual manner, the users of these cooperative projects have been
integrating and improving the community spaces: internal paths,
streets, squares and gardens. Their contributions to
complementing the urban equipment, in addition to their care of
family private areas, are setting characteristic sectors and
landmarks in the city that enrich the urban image of the housing
projects, regarding the social use of the space as well as
aesthetic aspects (several cooperative projects have won awards
in national and regional contests in the fields of Architecture
and Urban Planning). 

3.4. From the technological point of view

As aforementioned, construction is based on mutual aid labor.
That calls for the use of appropriate building systems and
patterns of design, allowing to obtain the highest output from
a non-specialized labor force and with equipment to be paid off
after only one project, if possible. These objectives have been
reached through a construction system that combines "traditional"
building methods, made more rational by the use +of prefabricated
elements such as slabs for roofs and floors, and by
simplification of finishes. Prefabricated elements are remarkable
as they allow:

- Simplifying tasks, enabling employment of non-skilled labor,
including a great number of female workers (as a matter of fact,
mutual aid cooperatives are the only housing projects in Uruguay
were women are effectively engaged throughout the building and
management process).

- Carrying on tasks independently from coordination with work of
hired personnel.

- Better quality control, as tasks are concentrated, rather than
dispersed in different points in very large sites.

Accordingly, though one and two-storey houses have been
preferred, up to four-storey buildings have been constructed when
the area where the developments were located made a denser use
of the land advisable.

Moreover, during the last five years, several housing renewal
projects have been initiated by mutual aid cooperatives in the
inner city of Montevideo. In this case, taking care of every
detail and recycling building materials was a very important
task, since it was necessary to preserve the architectonic values
of the houses to be restored, some of them being a century old.

Quantity and types of prefabricated elements vary for each
project, depending on geographic location -in cities and towns
of the hinterland a rather "craftmanthsip" prefabrication is
used, whereas in Montevideo methods are more industrialized, as
well as on the size of the works. In the case of large
developments (300 to 400 dwellings), in Montevideo, local plants
were installed, where small slabs and small beams, flights of
stairs, window frames and door cases, part of finishes, etc.,
were made. This production was enlarged and rationalized when
FUCVAM's Central Plant for Prefabricated Elements was set up at
the early '80s. At present, FUCVAM's Plant has become a sort of
"technological laboratory" for housing research, through an
agreement between FUCVAM, the municipality of Montevideo and the
National University.

                   4. NARRATIVE SUMMARY

The mutual aid cooperative housing movement has spread throughout
the country, transforming the concept of property of a great
number of Uruguayan low-income urban settlers. Communal ownership
is defended as opposed to private property.

Being a "user" means understanding the housing unit as a social
asset and not as a commodity. Besides, the permanent need for
collective analysis and decision not only develops a critical
awareness of the cooperative's reality, but also stimulates
mechanisms of social solidarity, promoting responsible and mature
participation and giving a profound meaning to a democratic
decision making process. The tradition of self-construction in
Uruguay always included some forms of solidarity as the
contribution of labor by relatives, neighbors and friends willing
to "give a hand"; but, it is also achieved within an
individualist mentality: the goal is la casa propia (a privately
owned house), conceived as a personal asset. With the proposal
of mutual aid cooperatives the dichotomy between private and
public property -common to all the other building systems- is
outdated. A new mode of possession, controlled and managed by the
entire community, is proposed, allowing innovative alternatives
for neighborhood development in Uruguay.

Moreover, on choosing the collective property, the control and
management of the construction process enables the improvement
of the investment, achieving a better final product. With the
same investment, the cooperative obtains a better quality than
those built by profit-oriented agents or by the public system.

Due to the fact that the cooperative housing projects, with the
longest utility, are built with hardship, both physical and
economic, they also develop a real sense of community belonging
and social identity. The members are wholly identified with their
neighborhood and they carry out, at their cost and effort, the
maintenance and upgrading of the cooperative environment.

As such, the cooperatives not only solve their members' housing
problem, but they have also promoted the planning and development
of complementary services, which benefit not only the cooperative
neighborhood but the whole surrounding urban community as well.
Collective action in a cooperative way has enabled innovations
which differ from the aspirations, interests and values inherent
in the model of housing deliverance and neighborhood management
predominant in Uruguay.

One of the basic aspects that distinguishes mutual aid
cooperativism from other systems of housing production, is the
importance of family participation in the whole constructive
process, allocating a great amount of responsibility and
authority to women and youngsters. 

Cooperative education and training is another important task of
this movement, applying the methodology of the so-called "Popular
Education." From the first stage, when the cooperative applies
for the loan from the state, and continuing throughout the
cohabitation process, there is a need to develop educational
practices comprising the complex process of community building
that entails living in a cooperative: analyzing the proposals for
cooperative growth within the social, political and economical
context of contemporary Uruguay. The proper management of the
operational components of the cooperative as a social enterprise
is also concerned, through the implementation of appropriate
training projects. 

The role played by FUCVAM during the past dictatorship has proved
that the struggle for housing, the struggle for a place in the
city motivates, convokes and organizes the grassroots. In other
words, generates dynamics and social actors; initially just
"urban" actors, but in a further projection "historical" actors.
That is the case of mutual aid housing cooperatives. The
relationship between the satisfaction of the housing needs and
a satisfactory and solidary cohabitation show a deep contrast
with other possible solutions to the housing problem. Unlike
other social movements -that emerged around the identification
of a common need or inequality that they want to overcome, the
members of the cooperative housing movement do not seek to
overcome their present condition, By the opposite, they struggle
for the extension in quantity and quality of the strive that
constitutes their identity as cooperators.

During the last three years, due to the worsening of the urban
crisis that affects Uruguayan cities, many housing cooperatives
composed by households with family incomes below the poverty line
have been formed. This reality constitutes a new challenge for
the cooperative movement. Up to now, the majority of the
cooperative members were wage-earners -factory workers, civil
servants, office clerks, teachers, etc.-, most of them with a
previous expertise of organization as members of labor unions.
This new type of cooperative is mostly integrated by workers from
the informal sector.

Which are the conditions that have determined the ability of
mutual aid cooperatives to develop as an effective instrument for
the provision of housing to low-income urban groups? Those
conditions, namely access to basic resources such as land,
finance and technical assistance, plus the existence and well
functioning of a supportive institutional framework, unavoidably
implies a transfer of social resources to the groups organized
in cooperatives. This is not a mechanical operation, but is
linked to and dependant on economic, social and political
circumstances. Therefore, the re-emergence of housing
cooperatives in the 90's cannot be simply understood as the
adoption of an alternative "building solution" for those sectors
of the urban population not reached by the market. It must rather
be understood as negotiating with a consolidated social force
with its own principles and practices. Furthermore, mutual aid
cooperatives have managed to overcome adverse socio-political
circumstances and have, over the last years, also managed to
negotiate with the state -both at the national and the local
levels- the transfer of resources necessary for their
development. Cooperation, therefore, can recreate cooperation.

Mutual aid cooperatives, as democratic structures of
self-management and decision-making have, under these
circumstances, the potential to initiate the "enabling process"
that seems to be needed in the country. An enabling strategy in
Uruguay should be in the first place a process of re-formulation
of the institutional framework in the field of housing provision.
This should involve the democratization decentralization of the
few existing institutions and the creation of new spaces of
participation and decision-making where all actors in the process
of housing can be present: state-markets and people.

Uruguayan mutual aid cooperatives have taken up a number of
traditions that they have re-created in order to reshape them and
give them new contents: those of cooperatives as an
organizational form, those of self-help builders, those of
popular movements as labor unions from which most of their
members derive. The final product, the mutual aid cooperative
housing movement, is inevitably marked by the characteristics of
the society that yielded it. The "pattern" does not perfectly
suit other national realities, other social and historical
contexts, not even those of Latin American countries,
notwithstanding the many common features and the common origin
of the problems and the proposals to face them. The basic idea,
however, that of searching for alternative solutions by means of
popular self-management, appears necessarily linked to every
experience intended for improving the living conditions of the
great majority of our peoples. That is the reason why the
experience of mutual aid cooperatives is a permanent reference
for other attempts made in Latin American countries. The
information has already disseminated through multiple
international meetings on housing, congresses, publications, and
also through direct transmission of the main actors themselves
-users and technicians-. As a consequence, experiences are
presently being developed in Brazil, Argentina, Paraguay, Chile
and Mexico, which take up many aspects of the accomplishments of
the Uruguayan mutual aid cooperative movement.

FUCVAM - Eduardo Victor Haedo 2219, 11200 Montevideo, Uruguay
      Telephone: (598-2) 484298 - Fax: (598-2) 419874 
              E-mail: fucvam@chasque.apc.org