Design Process
What is the Housing Right-of-Use Model?
Is access to housing becoming a luxury? With this reflection, we begin today’s article, which aims to present the housing right-of-use model, an alternative to conventional housing that is starting to be implemented in many municipalities to boost families’ access to housing.
Cooperative neighborhood models offer a glimmer of hope in a landscape where money seems to matter more than people or global sustainability. Protected housing is very scarce, and the alternatives are either apartments or houses from large developers that pay little attention to efficiency, sustainability, or health; or old, poorly constructed, or inefficient homes that require significant investment to update them to today’s efficiency standards.
Thus, in recent years, alternative models have emerged such as cohousing, housing cooperatives, or the model we analyze today, the housing right-of-use model, a model that has been present for many years in countries like Germany, Denmark, and Uruguay.
And you may ask, what is the housing right-of-use model? Let’s start by recalling what a housing cooperative is:
What is a Housing Cooperative?
In short, and as we have explained in previous articles, a housing cooperative consists of a group of people who share values and resources to meet their housing needs.
The housing cooperative collectively owns the entire building and the land on which the property sits, typically aiming to generate common and indivisible assets among its members. However, there are cases of housing cooperatives where, once construction is completed, individual ownership is allocated.
The cooperative typically purchases and constructs the building with the help of a developer loan granted by a bank, in cases where members do not have sufficient immediate funds. However, other forms of financing and land acquisition exist, as we will detail later in the article.
It is, therefore, a non-speculative and non-profit system, where housing is considered a use-value rather than a commodity. It actively works to make housing affordable through self-promotion, which involves removing the real estate developer from the equation and their respective ‘fees’.
What is the Housing Right-of-Use Model?
The housing right-of-use model can be summarized in two important points: collective ownership of the property, meaning it is neither public nor private; and the housing right-of-use model itself, a hybrid between renting and buying.
This is a housing access formula based on the establishment of a non-profit cooperative. The cooperative assumes the surface right over the land and ownership of the property, which means the right to build on another’s property. This surface right is limited to 75 years, with the possibility of extension up to a maximum of 99 years.
Similarly, cooperative members have the right to use this property, so they are defined neither as tenants nor as owners, but as residents.
Regarding collective ownership, it means that the ownership of the homes always rests with the cooperative. This strategy is designed to eliminate the possibility of real estate profit, as the member is not authorized to sell or rent their apartment. In this way, the generation of capital gains or individual profit is made impossible, focusing on the use of housing rather than its conventional commodification.
Thus, in addition to lowering the price of housing access, the model entails the involvement and co-responsibility of users both in the development process and during the collaborative life, fostering social and environmental values.
The financial contribution for the use of housing and communal spaces consists of an initial capital, a refundable investment (including the cooperative membership fee), which grants the right of use; plus a stable and affordable monthly fee, similar to social rent. This initial capital is recovered if a member wishes to leave the cooperative, in which case the cooperative assigns the housing to another prospective member, who will always enjoy the same economic conditions as the previous one.
Typically, the land is classified as Official Protected Housing (VPO), as is the case with La Borda, an example of a housing right-of-use cooperative in Barcelona that we will detail later. This classification establishes maximum monthly fees for units and initial contributions for members, also called a use fee. The objective of such regulation is to allow popular sectors to access this alternative housing model.
Next, we will address some of the most frequent questions that may arise when reading about this model:
Frequently Asked Questions about the Housing Right-of-Use Model
By what criteria are apartments allocated?
As we have previously mentioned, the ownership of the property, that is, the right of use, always belongs to the cooperative. Therefore, it is the collective of members that makes the decision and establishes the bylaws, a series of guidelines that will regulate the entry and exit of members, among many other situations.
For example, there may be situations where the transfer of membership is permitted, both inter vivos and by reason of death. Ascendants, descendants, or cases of separation/divorce of member couples will have priority over the list of future users, which operates on a first-come, first-served basis, provided they meet the access requirements stipulated in the bylaws.
Since it is public land, shouldn’t apartments be allocated by lottery, as in any public housing development?
Just as private property mistakenly understands property as an investment asset and public property lacks any decisive capacity on the part of the user, the right-of-use regime reinvents an effective use of the home, provided by a democratic management model that requires a certain level of involvement from the group.
The objective of the housing right-of-use model is to allow individuals to decide where, with whom, and how they want to live. Any legally constituted entity can apply for the transfer of publicly owned land for the construction of VPO. Housing cooperatives, and especially those that are non-profit and have a social interest, also have a land reserve for VPO.
What does it mean to be a prospective member?
Typically, the initiative for a housing right-of-use cooperative is driven by a group of users who form an association or share a common bond. Of these individuals, most will be resident members, meaning they will live in the future property, and others will be collaborators, participating in the project through work and/or money.
These collaborators will be registered on a list of prospective members, who are those waiting for current members to vacate an apartment, thus recovering their initial investment and consequently losing their right of use, which this future member will then occupy with the same rights as the previous one. This registration will require a financial contribution, around 200 euros, equivalent to what a resident member must initially pay, as part of the refundable initial investment for the right of use.
Furthermore, if enough prospective members accumulate, they could form their own assembly and develop a new housing right-of-use cooperative, either under the same name or a new one, with new bylaws more aligned with the needs of this new group. In this way, cooperatives themselves can join forces to reproduce, fostering a model as advantageous as the housing right-of-use model.
How much can I expect to pay in rent in a housing right-of-use cooperative?
The housing right-of-use model allows for the elimination of developer profits through self-promotion, as well as the cost of land purchase through the transfer of publicly owned land. Additionally, the cooperative can access various subsidies depending on the government regulations where the land is located, such as the IBAVI subsidy in the case of the Balearic Islands, promoted by the Balearic Housing Institute.
All of this allows for an initial refundable payment of around €15,000-€20,000 for each of the cooperative’s living units or homes, a payment that can usually be split over the first year and will serve to secure the developer loan that will make construction possible. Once the building is constructed, a monthly rent of around €400-€600 will be established, an affordable price compared to the rental market available in Spain today. Added to this is the initial resident member fee we mentioned, which is around €200.
Can one leave a housing right-of-use cooperative at any time?
Unless bylaws stipulate otherwise, one can leave the cooperative without any legal consequences. As we have specified, some fees are refundable, while others are not. Thus, the initial capital will be refunded in case of a change of address, as it corresponds to the right of use of the living unit, the fee most similar to ‘buying’ our share. However, monthly fees will not be refunded, as they are assimilated to ‘rent’ used to cover expenses and the previously requested loan.
What is the key to the success of the housing right-of-use model?
The housing right-of-use model originated in Denmark, with the so-called Ándel Model, the first to understand the advantages of creating a hybrid between buying and renting, between public and private, integrating private initiative into a non-speculative market. The first experience of a cooperative under this regime took place in Denmark in 1866, and today it seems to be gaining significant acceptance in other parts of Europe.
This model best responds to the cooperative principles dictated by the International Cooperative Alliance regulations, a federation that unites cooperatives worldwide: open door, democracy, economic participation, autonomy and independence, education, cooperation, and community interest.
Unlike conventional housing cooperatives, the housing right-of-use model does not lose its social purpose over time by allocating individual ownership to its members. In fact, its conditions even improve over time, with the monthly fee being reduced once the entire loan is repaid.
Furthermore, the flexibility of the housing right-of-use model allows it to adapt to the globalized world we live in and its growing need for mobility, facilitating housing rotation at a time of difficult access to housing. This rotation can also occur at different life stages, as the needs of a young single person are not the same as those of a couple with a large family.
Advantages of the Housing Right-of-Use Model
Throughout the article, we have continuously mentioned numerous advantages of the housing right-of-use model. Let’s consolidate them to clarify the key pillars:
Cooperative housing is based on the concept of housing as a fundamental, unquestionable, and inalienable right, advocating for its de-commodification, understanding it as a use-value rather than an investment.
It is an alternative model that serves to rethink the way of living through self-promotion, making decisions that have been denied to us, such as what model of coexistence we want to promote.
It fosters community living and sharing spaces, promoting greater coexistence and socialization while optimizing certain services and facilities by making them common.
It promotes social values by involving users who will drive the project process through a democratic, horizontal, transparent, and participatory organization.
It expands the references of social and solidarity economy, providing alternatives that only existed in the conventional economy and collaborating with other initiatives such as architect cooperatives and ethical banks.
The process of self-promotion and land transfer allows for a reduction in housing prices, making it affordable and possible for many who did not see themselves as ‘owners’ of a property.
This feeling of presumed ‘ownership’ comes from the stability of knowing you have an indefinite right of use over the home, a very different situation from renting.
At the same time, such stability is complemented by advantageous flexibility, allowing users to leave the project whenever they wish, recovering their investment to enter a new project.
Finally, it introduces the often-overlooked environmental factor, implicit in collective management and passive energy-saving systems, thus reducing the environmental impact of the property.
La Borda, a pioneering experience in Barcelona
On November 30, 2015, the Barcelona City Council established a 75-year surface right in favor of Habitatges La Borda, for a plot located next to Can Batlló, on land classified as Official Protected Housing (HPO).
It is a building with 28 homes ranging from 40 to 70 m2, built by the Lacol Architects Cooperative – winner of the Ciutat de Barcelona award in 2015 – through a participatory process with the resident members. Furthermore, we are talking about a concrete-free skyscraper that seeks to raise awareness – this is the second tallest building in Spain, PB+6, made with a wooden structure. Pioneers in blurring the limits of wood as a construction material, they know how to highlight its advantages – from its quality as a renewable resource to its insulating and health properties (humidity and temperature regulation).
The objective of the building’s construction is to minimize environmental impact and reduce consumption to a minimum, starting with demand reduction. By grouping together and consuming collectively in an efficient building and providing common services like washing machines, they have managed to reduce their ecological footprint by 70%.
The property has only two facades: North and South, as it is a building between party walls, and prioritizes the location of the largest number of homes facing South. It consists of communal spaces such as co-working areas, a kitchen-dining room, laundry, a multi-purpose space, guest rooms, storage, and outdoor areas like a patio and rooftops. All of this is organized around a socialization and circulation patio that incorporates energy efficiency criteria, as it is a central greenhouse with a retractable roof that automatically regulates the temperature.
Its clear desire to create community stands out, from the participatory design process itself to the multiple design strategies that enhance relationship spaces and common areas. The fact that the homes and service areas are organized around a patio strengthens this neighborhood activity.
Testimonies from elderly resident members express their willingness to care for neighbors’ children, aware that such a relationship implies a change of roles in changing life stages: “we will change diapers, but then it will be your turn.” This phrase clashes with current reality, where we are accustomed to living individualized lives without knowing our neighbors on the same staircase.
At Slow Studio, we want to be part of this housing alternative, promoting the criteria present in our firm’s philosophy, such as sustainability, energy efficiency, healthy housing, and community living.
We have currently opened a line of projects in the field of housing cooperatives to advise and find future groups of people willing to rethink their way of living and the model in which they want to spend a large part of their future. For any questions about the housing right-of-use model or other collective housing models, we are at your disposal on our website.