What is cooperative housing?

TUA’s co-director Natalie spoke with Jesse Mulligan on RNZ recently about some of the key findings from our first NZ Housing Survey report; most notably, the gap in nuanced data around what New Zealanders really want for their housing.

In the interview, Natalie spoke about the high satisfaction rates for a lot of home-owners and older residents, but that there are a lot of people - particularly younger people - who are finding that the market isn’t working for them. Whether it’s some of our key workers like nurses and teachers who aren’t finding affordable options to live close to where they work, or families who want more multigenerational housing options, the message emerging from this first tranche of data is clear: New Zealanders want more options.
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“There’s a gap between what we’ve currently got, and what people would like to see,” Natalie explained.

Jesse’s questions about the cooperative housing solution got us thinking about how lots of people don’t know what cooperative housing is; so here's a breakdown!

What is Cooperative Housing?

Cooperative housing is a legal entity, often a cooperative or corporation, that owns real estate consisting of one or more residential buildings. Instead of owning a specific unit outright, residents are shareholders in this corporation, granting them the right to occupy a housing unit. This membership-based model means residents collectively own and manage the property.

How does it differ from renting and other forms of ownership?

• Renting: Unlike renting, where you pay a landlord and have limited say, cooperative housing members have a direct say in the management and operation of their housing. You're not just a tenant; you're a part-owner.
• Individual homeownership (e.g., unit title): In a co-op, you don't own the deed to your specific unit as you would with a unit title. Instead, you own shares in the corporation that owns the entire property. This means the cooperative bears the cost of maintaining, repairing, and replacing the property, relieving individual members of that burden. Co-ops can also be more restrictive than other housing options regarding ownership requirements and the ability to sell or sublet units, often requiring board approval.

The affordability advantage:

Cooperative housing often offers greater affordability due to its unique structure:

• Pooling resources: A primary advantage is the pooling of members' resources, leveraging their buying power to lower costs associated with homeownership.
• At-cost operation: Many co-ops operate on an "at-cost" or non-profit basis, meaning they collect money from residents to cover expenses without generating profit. This can result in lower monthly fees compared to market-rate rentals or traditional mortgages.
• Below market rates: Housing co-ops typically set rents below market rates, aiming to improve access for a wider range of incomes. Some even offer sliding scale rents based on income.

Cooperative housing fosters a strong sense of community and shared responsibility; it offers a unique blend of collective ownership and individual rights. It's a model that prioritises people over profit, making it an attractive option for those seeking affordable and stable housing.

Have a listen to Natalie and Jesse’s chat via the link below, and let us know your thoughts - do you think of cooperative housing as a solution to our current housing challenges?

Listen to the RNZ interview HERE. ‍

Read the full NZ Housing Survey report via our Knowledge Hub HERE.

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