In several cases, existing housing co-operatives have substantial assets, either in their existing homes and/or as cash in the bank, which could enable them to support the development of new homes. Most existing housing co-operatives developed their homes many years ago and have now either paid off their original loans or are close to doing so.
How existing housing co-operatives could help
Existing housing co-operatives could use assets to develop homes:
- as part of their existing co-operative.
- through supporting another existing CCLH organisation.
- through supporting another new CCLH scheme.
Developing new homes
In England, the high rates of grant that existed many years ago (through what was then called the Housing Corporation) when most existing housing co-ops originally developed their homes are not available. At best, public grant in England is only available for rented homes let at affordable rents, which may be as high as 80% of market rents.
In Wales, Social Housing Grant (SHG) is available when working with a Registered Social Landlord. SHG can be used to provide housing for rent or low cost home ownership through new build or the use of existing buildings. Several CCLH schemes in Wales have recently accessed SHG when working in partnership with housing associations.
Nonetheless, some housing co-ops have been able to develop small numbers of new rented homes for their co-ops without using public grant. Existing co-ops can use cash reserves to support the development of new homes, but they are also likely to have to loan fund new developments. Where co ops have paid off loans on their existing properties, they can be used as collateral for new loans, meaning that their costs are likely to be greatly reduced.