Buying a house or renting a decent accommodation has become exorbitantly expensive in Nigeria in the last decade or more. Of late, housing cooperatives are being viewed as the solution to the housing crisis in Nigeria. Housing cooperatives serve as a vital solution to Nigeria’s housing crisis by enabling low- and middle-income earners to pool financial resources, buy land and build homes in bulk, and bypass strict traditional mortgage rules. The major advantage is the non-payment of the interest rate that normally comes with mortgage loans. The synergy of the members of housing cooperatives is the unique factor that endears the system to various home owners.
Moreover, the housing cooperative in Nigeria is as old as housing provision in the country. Our forefathers took advantage of this easy and collaborative way of building houses in the past. Housing cooperatives can address Nigeria’s housing deficit of approximately 15 million units. There are two types of cooperation efforts in housing construction in the Yoruba traditions. One is “aro gbigba” which is asking people to support you in your housing development with the promise that you will also support them when they want to develop their houses. The second is “owe bibe” which is hiring people for labour in which you compensate them with food and drinks.
Through cooperative housing systems, people can pool resources together, reduce costs, improve bargaining power, access financing opportunities collectively and build themselves affordable houses. This collective model lowers individual costs and bridges the massive housing deficit through community-driven action. Julius A. Fasakin (1998) defined cooperative housing “as a society that corporately owns a group of houses or flats in which each member participates actively in all matters” in “Cooperative housing: The concept, experience, and applicability to Nigeria’s socio-economic milieu”.
A housing cooperative is a legal association or corporation that owns a residential property, where residents buy shares to gain the right to live there and manage the building together. Co-operative members can buy and sell their shares at any open market price. Limited-equity is the watchword of co-operative associations. Shares are kept at lower prices so lower-income people can afford to live there.
A housing co-operative (housing co-op) is a community of people who voluntarily work together to meet their common needs for affordable and sustainable housing. There is no official global ranking or single data source that identifies one specific country with the absolute highest number of housing cooperatives worldwide, though nations like Germany, the United States and Poland feature massive, well-documented cooperative housing sectors.
Germany features over 2,000 housing cooperatives managing more than two million apartments for over three million members. The United States is home to major cooperative housing developments like Co-op City in New York — the largest single housing cooperative in the world — providing homes for over 1.5 million families. Sweden and Norway contain high percentages of national housing stock managed through cooperative models. Uruguay is noted globally for its deeply integrated mutual-aid housing cooperative networks relative to its population size.
Financial and cost benefits
Pooled funds: Members save and combine money, individually and severally, to buy large plots of land and pay for building materials at cheaper wholesale prices. Members enjoy the benefits of economies of scale by buying large quantities.
Easier loans: Banks and government programmes prefer lending to registered groups instead of single high-risk workers. It is easier to track and recover loans from groups which collect loans as groups with groups’ names than from individuals.
Lower expenses: Sharing professional fees for architects, engineers and legal documents cuts down extra spending. Houses in housing estates usually adopt similar building plans, so architects and engineers’ cost will be negotiated down.
Social and structural advantages
Bottom-up control: Future homeowners make direct decisions about their community layout and building phases. Home owners choose the executive members that will be in charge of services and maintenance of the estate.
Inclusion of informal workers: Artisans and traders who lack formal payslips can still join and build equity over time. Periodical contributions which can be done from their regular incomes is a good way of saving funds for future procurement of housing.
Reduced bureaucracy: Groups avoid the long delays and high costs tied to commercial real estate developers. In some housing cooperative estates, members contribute both funds and labour under the directives of a construction expert in the co-operative.
Cooperative housing allows individuals and groups to pool resources together, thereby making land acquisition, housing procurement and management a lot easier. The same cooperative system that transformed agriculture, thrift systems and microfinance in developing countries can be applied to housing at scale.
Housing cooperatives encourage participatory planning and a bottom-up culture of collective action (Richard Lang and Andreas Novy, in “Cooperative Housing and Social Cohesion: The role of Linking Social Capital”, published in 2014 by European Planning Studies). They enhance community bonds, foster neighbourliness, build social capital and strengthen social cohesion.
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Olufemi Adedamola Oyedele, MPhil. in Construction Management, managing director/CEO, Fame Oyster & Co. Nigeria, is an expert in real estate investment, a registered estate surveyor and valuer, and an experienced construction project manager. He can be reached on +2348137564200 (text only) or femoyede@gmail.com
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