- Scandinavian real estate model
- Cohousing benefits
- Buying and building a cohousing
- Cohousing sale
- Waiting lists
- Property price in cohousing
- Two examples of cohousing in Denmark
- Cohousing in other countries and in Russia
Cohousing is considered today as the best alternative to traditional forms of real estate. It provides people with limited resources with access to housing that they otherwise would not expect. In today’s situation, when the crisis has knocked out millions of families in Europe, cohousing is perhaps the only formula for “saving the drowning.” Read about what he is and about the secrets of his popularity in this article..
Scandinavian real estate model
Still, it’s not for nothing that Denmark, Sweden and Norway are leading in the list of the most prosperous countries in the world! Scandinavian wisdom and ingenuity rarely let them down, just as they did not let them down even then, in the distant 60s, when several Danish families decided to unite in order to improve their living conditions and at the same time not fall into eternal slavery to the bank. They were followed by the Swedes and Norwegians, who immediately appreciated all the benefits of this alliance. This is how cohousing was born – a housing community in which real estate belongs to the entire cooperative, and not to individuals or families. Its members are given the right to housing in exchange for the entrance fee, which they receive back (and sometimes with a good premium!) In the event of their exit from the cooperative. At the same time, all tenants pay monthly rent for the premises in which they live, and take upon themselves the general costs of maintaining the territory, garden plot, etc. Reading these lines, many people may have an image of a commune in their heads, but in fact it is not so, because here each family has a separate living space and independent finances. Cohousing has nothing in common with a traditional cooperative, where after paying the entrance fee, each participant becomes the owner of his home and pays the mortgage on his own. In cohousing, everything always belongs to the cooperative, and its members can never become the owners of the apartments in which they live. In such a community, tenants together pay a bank loan in the form of monthly quotas, the amount of which decreases as the mortgage is paid off..
Such a community is based on democracy and the participation of all its inhabitants in decision-making related to the life of cohousing. By paying the initial payment, each participant has the right to unlimited residence in the cooperative with the right to inherit it, rent it out for a certain period, etc..
A huge part of the population of the Scandinavian countries lives in the regime of such communities. So, every third inhabitant of Copenhagen lives in cohousing today. At the same time, the number of buildings and urbanizations with this form of real estate, as well as their demand, are growing rapidly from year to year and are supported by public funds. The main reason for this popularity is cheap access to housing, low rent and the absence of the overwhelming burden of personal mortgages. In addition, the Scandinavian states generously subsidize cohousing, which is why the size of the initial contributions and monthly payments is noticeably reduced..
Another advantage of such a community is the joint implementation of reforms, possible thanks to the contributions of all its inhabitants. Interestingly, in many cases, Danish cohousing properties are in better condition than their traditional counterparts..
Today, Denmark, with a population of 5 million, has 125,000 co-housing properties. This enables Danish youth and families on modest budgets to gain access to housing without spending most of their salary on paying off the mortgage. Each member of the cooperative makes an initial contribution, the amount of which in Copenhagen ranges from 3,000 to 30,000 euros, depending on the size of the housing and its location.
Buying and building a cohousing
Building or buying a co-house is possible thanks to the initial contributions of its members. However, the bulk of its financing still falls on a bank loan. In this case, the Andel building acts as a guarantee of payment and becomes the property of the bank in case of debt from the cooperative..
Most cohousings in Denmark are not created in new buildings, but in old buildings that are adapted to this form of real estate. The same situation is observed in other Scandinavian countries, where, in addition, the government subsidizes the restoration of no longer new buildings, in connection with which the total amount of the cooperative loan decreases. As a result, everyone is happy: the state is getting rid of dilapidated buildings, and the cooperative is parting with a significant part of its debt.
When it comes to the sale of real estate in cohousing, we mean the transfer of rights to use its housing to new members of the cooperative. Thus, it is not the living space itself that is sold, but the right to live in it. The transaction involves the seller, the buyer and the cohousing policy board, which has the authority to approve or reject the buyer’s candidacy. In turn, the seller must obtain permission to sell from the cohousing board. When making a deal, the directive council checks whether the price of the property is in line with the rates set by the cooperative. If it is too high, they oblige the seller to lower it to the standard value..
Immediately after the sale of a home, the money goes to the cohousing executives. When they are convinced that there are no debts on the part of the seller, the money goes to his account.
The growing popularity of the Scandinavian cooperative model has led to ever-longer waiting lists. Cohausings themselves determine those who have priority access to housing on their territory. This means that when a cooperative member decides to sell his share, he has no right to transfer it at his own discretion, but is forced to conclude a deal with those on the waiting list..
Property price in cohousing
The cost of housing in a cooperative depends on its area, the reforms done, the general condition and the presence of furniture and household appliances in it. Many co-houses are owned by syndicates and other social organizations. In such cases, the cost of housing does not change over the years and may only slightly increase due to the reforms.
In other cooperatives, the price of real estate rises, adapting to the realities of the market. However, this increase in any case cannot exceed the maximum established by the standard..
Today in Copenhagen, the down payment for a 50 m2 cohousing apartment2 is 7000 euros, and the monthly rent, including heating – 220 euros. For comparison: buying the same apartment in the private sector would cost 140 thousand euros.
Two examples of cohousing in Denmark
The Boligforening Finlandsgade urbanization in the center of Copenhagen is an example of a small Danish cohousing. It consists of 72 apartments ranging from 45 to 116 m2. The community has an internal waiting list: when one of the apartments is vacated, the members of the cooperative have a priority right to use it in the order of priority. The residents themselves have developed a 10-year plan to renovate their building. To date, they have completely renovated the roof and built a courtyard garden, and are planning to replace all windows and plumbing in the near future..
The rent here is from 2200 to 4200 kroons per month (from 293 to 560 euros depending on the area of the premises). Most residents pay less than 400 euros per month. On the free market, the cost of renting the same apartment would be at least 3 times higher.
On the territory of the cohousing there is a common dining room, where all residents have lunch or dinner together several times a week (if desired), celebrate holidays and birthdays, as well as a spacious children’s room in which children play under the supervision of parents, a library, a gym, a sauna, etc. playground. The members of the cooperative take turns taking children to school, organizing excursions, trips to nature, etc. The age of local residents is very different: from students to pensioners, although the vast majority here are young families with children.
Another cohousing model is the AAB (Arbejdernes-Andel-Boligforening) housing complex, an example of the largest and oldest cooperative in Denmark. It consists of 17,482 apartments and 82 buildings, each economically independent and electing its own board of directors. The highest authority in the AAB is the public representation, which elects a president and a vice president. To become a member of the AAB, you must be a member of a syndicate or be registered as an active housing applicant. In most cases, the waiting list exceeds 15 years. This is because AAB has buildings in different districts of Copenhagen and allows its members to have cheap housing wherever it suits them. The average monthly rent of an apartment in AAB costs 300 euros, which with an average salary of a Dane of 4,000 euros is quite a harmless amount.
Cohousing in other countries and in Russia
Since the wave of the crisis swept the world, even the most conservative countries in Europe have become actively involved in creating their own model of cohousing. Great Britain, Ireland, Spain, Italy, France have adopted invaluable Scandinavian experience and are continuously building cooperative complexes on their territory. Cohousing became widespread in the USA and Canada, where it is called “condominium”, as well as in Australia and New Zealand, where it is called strata title.
In Russia, which has fully drank the charm of compulsory communal values, the idea of cohousing has not yet found a decent number of followers. Russian psychology, history and even the climate are not very conducive to the introduction of this form of real estate in the country. Still, there are prerequisites for this, although not quite in the classic style of cohousing. We are talking about the so-called ecovillages, where all participants live in a community, have common installations and equipment: a canteen, a food warehouse, a refrigerator, a laundry, etc. There is also a free clothes exchange office, where everyone can leave things they do not need in exchange for a neighborhood library, a community library, a car park, TV, DVD, sauna and shower, and small shops where locals sell their products. One of the main differences between ecovillages and cohousing is the absence of independent finances for each of its members and the system of internal money that community residents use to pay each other. According to them, this way they maximally avoid the bondage of “external” banknotes, which gives them an incomparable feeling of freedom. The eco-community principle is built on complete mutual trust, therefore there are no door locks, keys, guards and other attributes of an external civilization. However, we are talking about a communal community, not a cohousing model. But it is in Russia, where the vast majority of residents do not have access to housing due to a lack of budget, that the cohousing system could become a real way out and an excellent alternative to traditional forms of real estate. In the jungle of modern society, where everyone is fighting for their own survival, the Scandinavian model of cooperatives would allow many to solve their housing problems and together create conditions for life that cannot always be achieved alone.