Coming soon for Co-operatives Fortnight!

At Co-operantics we have a few activities coming up for Co-operatives Fortnight.

We are organising some informal co-op networking in Bristol and Southampton, but of more interest to the rest of you, we will be hosting a series of “Co-operantics Conversations“.  We will be talking through some co-operative governance issues with various members of co-ops and publishing their thoughts in a bid to help co-ops learn from each other and spread good practice.  Keep your eyes peeled!

You can find out more about Co-operatives Fortnight on the Co-operatives UK website and using hashtag #coops14 on Twitter.

Is it time to widen the focus of co-operative housing and look at new forms of finance ?

How rent is partially made up of profit for property owners
How rent is partially made up of profit for property owners

Here is a simple proposition.  When people pay rent, it is not used to line the pockets of a property owner (e.g. Buy to Let) but used to cover the costs of providing the accommodation, with a little surplus for a rainy day and towards acquiring more properties so the benefit can be shared.  The resulting rent would be cheaper as the “top slice” of profit required for the landlord is taken out of the equation.

What’s more, if the property is owned and democratically controlled by those tenants, they will take care of their homes and will seek ways to manage and maintain the property that save money, because it is in their own mutual interest. We are talking about a housing co-operative.  It’s a “no-brainer” in a country that is suffering from a housing crisis and in which rent is spiraling out of control to satisfy the needs of investors.

However, there is a problem.  In order to buy the property you need to have sufficient money to put down as a deposit.  This is the primary reason why housing co-operatives are not as prevalent as you would expect given they are a “no-brainer”.  The problem of accessing capital to lever in finance to purchase the house has come up again and again with potential housing co-op start ups. So maybe we need to have another look at the financing of housing co-ops.

I have been involved as a professional advisor to housing co-operatives since 1998 and was an active member of a 70-member housing co-operative which is a Registered Provider (holding various officer roles including Treasurer) for 12 years.   In addition to supporting existing housing co-ops to improve governance or operational matters and to acquire properties, I have also worked with a number of capable pre-start groups who have had their intentions and efforts frustrated.

Blue sky thinking

I am challenging some of my own views here.  I’m not necessarily saying that what I suggest in this piece is how I want the world to be, but if we aim to grow the co-operative elements of the housing sector we need to broaden our horizons beyond our current focus and personal desires.  So, beware…blue skies ahead

 

There has been a tradition of those who speak for the UK Housing Co-op “movement” to focus on public sector housing and public funding for housing co-operatives.  They are doing a great job which needs doing, but this is only part of the housing landscape.  To make demands of the public purse to support co-operative housing while all political parties are committed to reducing public spend – winning a bigger slice of the cake while the cake is being reduced in overall size – should not be our only tactic.   Additionally access to public monies also brings with it the regulation of being a Registered Provider which carries an  administrative burden requiring scale and, from my observations, a tendency to move from a radical to a conservative focus.  I used to find myself fighting a battle to retain the members’ interests over the regulators demands – and winning, I might add.

This means that we have a widely accepted construct in the UK that to be a “housing co-operative” worthy of note you have to a) be of a certain size and operate in a certain way, and b) only provide housing for rent for people in need.  So what of those who are not technically in need but want to avail themselves of co-operative housing?  There’s a gap in the market, and the private rented market is set to boom by all accounts.  A case of need, a market, and co-operatives offering member benefit that provides a better offer than the market is fertile ground for co-operative development.

I believe there is room to encourage entrepreneurialism and growth of the co-operative control of housing by being widerin our definition of co-operative housing.  To grow co-operative housing we may have to challenge our own sacred cows.  There is a difference between what we ought to call “Co-operative housing associations” which is the well developed part of the UK sector and “co-operative housing” meaning housing that has some form of co-operative ownership and/or control.

Moving beyond co-operative housing for renters

In the UK there has been a tendency to downplay any role other than the renter-landlord dynamic.  Why is co-ownership ignored?  It isn’t ignored in the worker and enterprise owned co-operative sectors (notably the agricultural sector).  I am a huge fan of common ownership in general and social ownership of housing but we ought to accept exploring some level of co-ownership as an option if we aim to grow the co-operative movement and to use the advantages of mutuality to address housing issues.

Some people are interested in partial (or whole) private ownership of properties within a co-operative environment.  For instance, I have worked with a group who have potential members willing to sell their homes and invest in a co-operative to provide capital for a development in which they will live.  We had to unpick the difference between a mortgage holder who completes their loan and then has a vastly reduced household outgoing over time and the renter who pays rent in perpetuity.

People who have valuable properties may be interested in co-ownership, or may want to invest their equity to enable the creation of housing managed co-operatively in which they can live.  But do they get equity growth or just a reasonable  return on that equity?  And what is reasonable in this context – if the return on equity is not enough to cover the rent?  They have swapped a completed or near completed mortgage for a rental property and locked up their equity.  It throws up challenges.  But we should meet those challenges, not ignore them.

Maybe it is time to blaze a new trail for entry into co-operative housing for people other than renters.  My clients are still absorbing and considering the issues this has thrown up and what the final “offer” will be to the different “types” of member – all of whom will still have equal voting rights in how the co-operative is managed.

Co-housing is relatively small but growing in the UK. Some schemes incorporate private ownership and some Community Land Trusts offer private ownership but co-housing and CLTs are meeting specific needs (shared space and land ownership) that not all private owners will be interested in.

Ageing population

We have an ageing population who are asset rich but may require low level support if they are to stay independent in their homes.  There could be innovative co-operative solutions to meeting the support needs of home owners and the housing needs of others.  One brings equity, the other brings time.  Together they create a mutual solution.

Leaseholders

What of the co-operativisation of leaseholders?  There are many leasholder companies for small blocks of flats that are established as share companies and often run by ex-bankers, stockbrokers or solicitors bringing private sector behaviours of hierarchy.  Co-operative principles could be introduced to these organisations and empower all the leaseholders, while providing the wider social benefits a co-operative brings over those of a private mutual.

“Buy to co-op”

What about “buy to co-op” instead of “buy to let” i.e. instead of establishing housing associations, we establish buy to let entities that just happen to be owned by the people who rent from them (or maybe even allow in investors in a limited capacity, or staff, using a multi-stakeholder model). They could provide a dividend return (profit share)s rather than the model of pre-distribution in the form of lower rents that UK Housing Co-ops offer.

Is access to capital the problem?

The biggest barrier to developing co-operative housing I have come across is access to sufficient capital to acquire a mortgage.  Some co-ops have used loanstock but this is fairly limited.  Withdrawable share capital probably isn’t the right approach if you are fully mutual and only want tenants or occupiers controlling the housing, so should we be considering a different approach that enables outside investors to support the needs of tenants without the tenants giving up control over management – a hybrid of the Community Land Trust model and the Housing Co-operative model.  Radical Routes have been working to establish a secondary co-op that will own some of the equity in new-start co-ops: Co-operative Principles put into action to grow the movement.  Yet the Radical Routes members are a tiny percentage of co-operative housing in the UK. Another innovation could be mutual guarantee schemes (or co-ops mortgaging their existing owned assets to release development capital for other co-ops) which enable new co-ops to establish themselves in the early days when it is not profitability but access to capital that dictates the success, failure or growth rate of a housing co-operative.  Rather than ask the government and policy makers to act, I suggest our own movement does something. (Remember those Co-operative Values of self-help and solidarity?)

One innovation that I am certain we need to promote as a movement is inward investment from the co-operative movement into co-operative housing.   In particular, we could target pension funds held by large co-operative employers. There must be some mechanism that can be created – even in the current legal framework – which would allow a pension fund to invest in housing developments that just so happen to be co-operatives.  Maybe a “co-operative housing fund” that invests bonds or similar – I know nothing about pensions!  And if they are start-ups with higher risk then the returns might be higher in the same way the traditional stock holders approach investments in high risk companies.

This would enable models other than the Registered Provider, which allows for a more diverse sector (lots of small co-ops as well as large ones). Some people I have met have been put off housing co-ops by their experiences in poorly run larger scale co-ops which devalue the individual operating on a tyranny by of the minority basis (like the state socialist approach of the needs of the individual being ignored or undermined for the “greater good”…now intone after me “The greater good”). Yes, part of the answer is to improve larger co-ops, but perhaps we need to question scale and encourage co-ops of all sizes.

Co-operative developers

If we are talking about co-operative involvement in the housing sector (which is what the pre-amble covered), why has the development side been left untouched?  Supply is part of the housing economy.  Mainstream developers have one goal:shareholder return.  What about co-operative developers – either owned by groups of housing co-ops, or as multi-stakeholder co-ops incorporating workers, customer housing co-ops (and maybe even investors) rather than operating purely for profit putting some of their profits into the community by funding CLTs or common ownership housing co-operatives.

Time to innovate?

Should we be innovating to address these capital issues (including more member investment) and move into less traditional areas – growing what for the UK would be a relatively new type of co-op housing? I.e. One that moves beyond the social housing sector and into the private sector.

Should our strategic innovation be to move away reliance on state intervention and toward self-responsibility, self-reliance as a movement and promoting Co-operative Principles 6 and 7 in investment away from government back to member users and other investors from the movement?  I am not saying ignore state controlled grant funding, but let’s not be prisoners of it!

More co-operation!

This blog by Co-operantics member Nathan Brown first appeared on his “Social Enterprise? Help!” blog.  Co-operantics has worked with a number of UK Housing Co-ops and continues to provide governance, strategic and business planning support to housing co-operatives, worker co-operatives and community co-operatives.

Co-operatives Fortnight – Let’s Co-operate!

What are you doing for Co-operatives Fortnight?  At Co-operantics we know the Co-operative Values and Principles can be used as a guide to transact business successfully as a co-operative.  This year, for Co-operatives Fortnight, we are focusing on the 6th principle “Co-operation Among Co-operatives”.

During Co-operatives Fortnight we are going to organise some co-op networking in Bristol and Southampton, where our members are based.  If your co-op is in either of those areas, get in touch and let’s see if we can work together to the mutual benefit of our co-ops.

Everyone can get involved in Co-operatives Fortnight.  Check out the Co-operatives Fortnight website for further details.

Co-operantics at the Co-operative City Conference

Sat 8th March saw Co-operantics represented at the Southampton Co-operative City Conference.

In addition to updates from Southampton Area Co-operative Development Agency’s John Merritt & Dave Griffiths, Council leader Simon Letts and Councillor Andrew Pope on the “Co-operative City” idea and its progress, there was an excellent key note presentation from Nick Matthews, Vice Chair of Co-operatives UK and introductions to West Solent Solar Co-operative and Hamwic Housing Co-operative.

During the afternoon Nathan facilitated a workshop on Co-operative Skills.  With only a 45 minute slot we still managed to incorporate information about what co-operative skills are and why they are important along with a group session exploring what makes good and bad meetings.  Despite the time restraints the group even got to the stage of discussing strategies for  avoiding bad meeting behaviours and encouraging good meeting behaviours.  The way the exercise worked provided an opportunity for people to work in teams towards a shared task, which in itself may have helped some participants reflect on the way their co-op works!  Perhaps the most engaged disccussions were around co-operatives having too many meetings and problems with participation in meetings.  Are the two linked? Quite possibly. As participants agreed: there’s got be some purpose to the meeting for it to be worthwhile and if people aren’t attending, maybe it is because they don’t see the value in it.  Wise words.  There was even debate about whether or not incentives such as food are counter productive bringing people for the wrong reasons! The challenge to co-ops is to unpick the answer to “What’s In It For Me?” for members to attending meet – which may come back to ensuring the co-op is truly delivering member benefit and that the members are in agreement about what that benefit should be and what common goals they want to achieve.  That’ll be strategy then!

The fruits of participants’ labour:

Participant work from Co-op Skills micro workshop 8 March
Participant work from Co-op Skills micro workshop 8 March

Participant work from Co-op Skills micro workshop 8 March

If you would like Co-operantics to run a workshop at your conference or event, get in touch!

Welcome to Co-operantics

Our Home page hosts occasional blogs about what we are doing, what we think about what’s going on in the co-operative world and topics of interest. Elsewhere (see links) you will find free tips, tools and techniques to help you work together more effectively, information on our services and how to get in touch.

How Co-operantics maintains a quality service

Cooperantics has recently reviewed the quality of our services in three ways:

  1.  We provided the Co-operative Enterprise Hub, to whom we are a sub-contractor, with evidence of: how we carry out personal reviews to ensure our practitioners are able to deliver a quality service to clients; how we keep track of our practitioners’ ongoing personal development; how we conduct reviews of the service our organisation delivers, and how we provide our complaints procedure.
  2. We took part in a service review session with members of two other Co-operative Development Bodies: Principle Six and Co-operative Solutions. The process enabled us to learn from each other’s practice and identify ways in which we could all improve the service we provide to co-operatives.
  3. Each practitioner in Co-operantics underwent a peer appraisal, in which we reviewed our practice with a client. This process helps us identify our strengths, weaknesses and areas in which we would like to develop skills or understanding, which in turn influences our professional personal development plans.

We are confident our ongoing review process maintains and improves the quality of the support we provide and feedback from clients indicates that view is shared!

Get help with your co-op from Co-operantics for free!

If your co-operative is located in the South East of England or London, we may be able to provide with some support for free.  As part of the regional co-operative consortium South East Co-operative Support we are able to work with co-operatives who apply for support from The Co-operative Enterprise Hub.  To make sure you identify the right sort of support, and that the work is allocated to Co-operantics, we advise having a chat first.  Nathan is our contact for these areas so contact him using the form or email address on our Contact Us page.

People interested in starting a new co-op can also receive assistance through The Co-operative Enterprise Hub.

Co-operative skills and motivation

It doesn’t take a genius to work out that a workforce, team or any other group of people will perform better when it is motivated. But how do you go about motivating people? In the world of motivation there is a theory that unpicks how to get the most from your workers, volunteers or members called the “Hygiene-Motivation Theory” developed by Fredrick Herzberg and published in “The Motivation to Work” in 1959.

The crux of this theory is that there are the factors which satisfy people in the work place and others that dissatisfy them. Motivation occurs where there is satisfaction and demotivation occurs where dissatisfaction prevails. However, contrary to what you might expect, what motivates people at work is not just the opposite of what causes dissatisfaction.

Hygiene factors must be met in order for people to stop being dissatisfied, but halting dissatisfaction does not itself provide satisfaction. This involves extra activity. If you like, the hygiene factors are the foundations upon which motivation can be built. Meeting basic hygiene needs provides only momentary satisfaction – in much the same way that finding a deserted building as shelter on a rainswept moor would provide momentary relief: you would not want to live there! Satisfaction, and sustained motivation, comes from meeting separate motivation factors. But, failure to address hygiene factors makes any work on motivation factors a waste of time and energy.

Herzberg identified typical examples of these factors which we can take as a starting point, but it may be possible to identify specific factors in your organisation which have either a motivational or demotivational effect on members:

Hygiene and motivation factors
Hygiene & motivation factors diagram

There is a useful introduction to Herzberg’s theory on the BusinessBalls website: http://www.businessballs.com/herzberg.htm

How can we apply this theory in our co-operatives?

A first step would be to get members talking so the co-operative can establish how they feel about these issues. One person’s idea of status may not be the same as another’s, and what is for one person an adequate salary (or total pay if you include profit share) may not be enough for another. Desirable terms and conditions can vary between people with different circumstances e.g. the parent might rather be able to work flexibly around school start & finish times whereas the hardened festival goer may want to take the bulk of their holiday in the summer. What does achievement mean to your members? At what point for individuals does responsibility provide motivation and at what point does it constitute unnecessary pressure? Do they want individual responsibility or shared responsibility?

What does this have to do with co-operative skills?

To benefit from this motivational theory, your co-operative might look at management decisions and organisational changes. However improving co-operative skills will address some of these motivational factors at a fundamental level:

  • Developing good communication skills and learning how to deal with conflict helps people to maintain relationships for longer (a hygiene factor).
  • Improved efficiency and effectiveness of the organisation through better meetings can generate better conditions, remuneration and job security – each of them an acknowledged hygiene factor.
  • Recognition of status as an equal in the business is an important hygiene factor in co-operatives. Poor co-operative skills such as bad communication can undermine the status of a member. If some members feel their views are not heard or taken on board they may feel they do not have equal status – despite what the governing document says about one member one vote. Behaviours that have developed over years and some policies, procedures or systems can also contribute to this .
  • Direct influence on company policies (a hygiene factor) and the way work itself is organised (a motivation factor) are more likely if your organisation adopts good decision making processes that take into account all members – not just the majority or the most vocal.
  • Well organised meetings encourage individuals to share responsibility (motivation) giving all members opportunities to gain recognition as important joint players in the organisation (motivation)
  • Training in co-operative skills is motivational as it provides advancement and personal growth.
  • A co-operative that functions well is a less stressful, more supportive place to work.

It is worth looking at the free resources on the Co-operantics website to develop the co-operative skills in your organisation, or you can bring us in to help.

We can also assist you to identify factors that can assist motivation or advise on improvements to your governance structure, policies and procedures.

Email us at nathan@cooperantics.coop