The contribution of cooperative housing societies to the solution of technical and social problems of urbanization

united Rations ECONOMIC AND

SOCIAL COUNCIL

Distr.

LIMITED

3///

19 December 1968 Original: GERMAN

COMI/IIS';IOT FOR AFRICA

AND S FOUNDATION WR DEVELOPING COUHTRIES

Meeting on Technical and Social Problems

of Urbanization ,

(with Emphasis on Financing of Housing)

Addis Ababa, 8-23 January 1969

THE GOKTRIBUTIOK 0? COOPERATIVE HOUSING SOCIETIES TO THE SOLUTION 0? TECHNICAL AID SOCIAL PROBLEMS 0? URBANIZATION

M69-33

E/CN.14/HOU/37

THE CONTRIBUTION OP COOPERATIVE HOUS1FG SOCIETIES TO THE SOLUTION OP TECHNICAL ^D SOCIAL PROBLEMS OP URBANIZATION-

TechninBijmd social problems ofurbanization

•JJ

1. The world-wide trend towards increasing concentration of human settlements is designated by the term urbanisation.

Urbanization is characterized by the, in most cases, very

rapid spread of existing urban communities beyond their tra ditional borders. The original growth of these towns to the size reached before the onset of urbanization was often a process of long duration, following the culmination of which they remained unchanged in size and architectural character

often over centuries.

2. These towns and communities which have experienced a natural growth are usually favourably located from an eco

nomic or geographical point of view. They serve as central

places for trade and industry, cultural activities, admin istration and government and thus attract people from the rural areas who feel that by moving to the town and taking up work there they can improve their standard of living.

3. Urbanization is a visible sign of world population growth, the rate of increase of which is unparalleled in the history of mankind. The formation of agglomeration centres is accelerated by the migration of population from rural to urban areas.

4. Urbanization takes on various forms from country to country and from continent to continent,. There are differ ences both in the outward form and in the distinguishing characteristics of the stages of development of human

settlements (e.g., closely built towns with high population density and extensive high-rise conrtruction; spread-out towns with typically low-building construction; apartment houses and houses of varying quality, depending on date of 1/ Prepared by B. Heinen, Cologne

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construction, location, household amenities, amount ^vested in management and maintenance as reflected in number of staff and condition of the building; dwellings in slum quarters which cannot be considered as normal dwellings). Just as the

forms of urbanization differ, so there are many technical a*d social problems of urbanization which differ according to the various stages of development of the various countries.

5. Principal social problems of urbanization

(a) Estrangement of people from their accustomed surroundings where they have lived with other members of the family, the kin, the tribe often

down through the centuries as a social group

bound together by traditional habits and customs.

;iot infrequently the breaking away from old tra ditions which accompany migration to the town and consequently alienation from the circle of the family and the neighbours leads to a complete loss

of social and moral ties.

(b) People wander to the towns in the hope of finding work there and enjoying a higher standard of

living than that which taey were accustomed to in the country. In many urban aeglomerations,

however, there is already a high rate of unemploy

ment. Unemployment and underemployment, sometimes for years at a time, lead to grave social prob lems which particularly in. the case of the youth seriously affect the rest of their working life and make deep inroads on their willingness to contribute constructively to social and economic

development.

(c) Social alienation unemployment and wages hardly sufficing to cover the bare essentials of life give rise to the growth of slums in their various forms. These slums, in their turn, are breeding places of maladjustment characterized'by a de terioration cf social and moral ties and be

haviour .

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(d) The lack of resistance to disease and the high death rate typical for slum quarters also give rise to social problems =

6. Principal technical problems of urbanization

(a) The unplanned and uncontrolled growth of towns leads to a confusion of built up and free areas .serving specific functions in the life of the

town. Industrial districts, administration build ings, shopping centres, dwellings, transport facilities, recreational and sport facilities, buildings for educational and cultural purposes, parks and open areas, and agricultural land are all jumbled together without rhyme or reason.

One result is that the dwellings are of less value, since confortable and healthy living is difficult, if not impossible. The exercise of important functions of life (work, recreation, education) to an optimal degree is rendered difficult by unsolved technical problems, the establishment of modern enterprises with an adequate rate of productivity is beset with difficulties, and the supply market for goods and services cannot function efficiently in con sequence of the fact that no clear picture of this supply can be obtained. The citizenry is not aware of the role of the local community in the larger national community and is therefore unable to develop a positive civic attitude.

(b) Where there is no adequate zoning and real

estate legislation, active real estate specula tion follows rapidly in the wake of urbanization.

This, in turn, places technical and economic barriers in the way of envisaged town develop ment and renders » thoroughgoing urban redevelop ment impossible.

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(c) The shortage of suitable dwellings and related institutions and facilities can.-ot be traced ex clusively to a lack of funds. Another cause i£

frequently the failure to establish the entre preneurial and administrative prerequisites

(building industry, housing industry),

(d) In many urbanized areas infrastructure has been completely neglected- There has been no systematic land development providing for adequate transport and public utility systems and for community in stitutions and facilities serving administration, trade and industry, education, recreation, sport, entertainment, etc.

(g) A serious legislative and administrative problem results from the lack of laws and regulations, since these form the very basis of all efforts to implement rural and urban development and solve the many technical and social problems of urbanization.

Housing policy objectives

1. Housing, town planning, physical planning and regional planning measures mu.t be implemented in order to solve the technical and social problems of urbanizntion. The experience of many industrialized countries shows that non-industrialized and developing countries would be well advised to coordinate housing measures with the overall development of the rural

areas, the urban areas, the regions arid the country itself, 2. Housing measures must be elaborated on the basis of a

sound housing policy. Housing policy implies the elaboration of realizable plans by means of which the state can provide the broad masses of the population with housing facilities of a quality serving to improve living conditions and raise the general standard of living.

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3. Cooperative housing societies fulfil their tasks to an optimum degree when their objectives are in harmony with the housing policy of the state. They must therefore be fully familiar with the aims of the official housing policy-—-set up on the basis of experiences gained in this field through out the world —and, following the example set over the past 100 years in many countries, contribute decisively to the future development of the official housing policy by way of practical influence supported by adherence to ideals.

4. The aims of housing policy may be identified as follows (a) In order to above all meet the desire and need

of the broad masses for suitable■dwellings, a number of dwellings sufficient to meet the de mand for housing in the various areas must be constructed. The housing units must on the one hand constitute a lasting improvement in living conditions and on the .other hand be available at a cost (rent, maintenance, etc.) to the . tenant which is reasonable, for him in his cir

cumstances.

(b) Public funds for the construction of housing

units for the broad masses must be made available under such terms (e.g., interest-free or low- interest-rate loans.; grants) as will permit the fixing of rents a-t a level within reach of the income of the tenants. Support is to be given in particular to the socially underprivileged, the large and young families* .the aged and-those population groups which for social or economic reasons—also with an eye to the rapid develop ment of neglected sectors—must be given priority within the housing programme.

(c) The legal bases for the renting of housing units

must take the social needs of the tenants and their right to a suitable dwelling into account,

14/H0U/3Y 6

(d) In order to meet the capital requirements for

housing construction, available capital reserves must be mobilized by government measures. Suitable

steps to this end are tax measures, favourable amortization rates, extended periods of grace, premiums, guarantees, etc. As has been oonfirmed through experience the world over, such measures

can be justified by the fact that capital invest

ed in modern housing and town planning programmes

have a high multiplier effect on the national

economy, thanks to the key position held by the

building industry, and foster production on a broader base. This, in turn, accelerates the

growth of those economic sectors of the national

economy which are of long-term importance.

(e) Government measures within the framework of

housing policy must serve to stimulrte self-help;

the person seeking better housing should con tribute his own effort and interest in locating new living quarters and keeping them in order.

He must be assisted in this by the state, which must provide information and instruction. The co operative housing societies, whose main function it is to provide the required housing units on the basis of self-help, are also suitable in

struments for the dissemination of knowledge in the form of information,.instruction, schooling and

training.

(f) Cooperative housing societies, non-profit housing societies and other non-profit institutions in the field of housing should be encouraged and supported by the state, since, in contrast to commercial enterprises, they seek no profit and plough back all surplus into improvement meas ures. Fruitful cooperation between the state and the commercial enterprises as well as the so cieties ensures optimum effectiveness of the government measures in the field of housing.

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(g) " The timely coordination and establishment of measures in the fields of housing, rural and

■urban development, regional planning and phys ical planning provides the possibility of long- term housing decisions, simplifies the dis

position of all housing factors related to production, financing and administration, and avoids Disinvestments and the waste of valuable national assets- .."'..

(h) Another prerequisite is adequate legislation in

the field of building construction, zoning and real estate. Only on the basis of such legisla tion can town planning be successfully carried . through and real estate speculation be avoided,

which latter would seriously impede the accumu lation of building plot reserves required in long-term urban development.

(i) In order to satisfy the requirements and needs

of the population in residential areas, infra structure measures covering basic services and community facilities (public utilities, trans port facilities, market places, schools and other institutions of learning, recreational and sport facilities, health clinics and hos- pitalSj centres-of culture and entertainment, public administration, etc.) must be implement ed. These measures constitute an essential part of an overall housing policy,

(j) An effective housing policy with its comprehensive

building programme draws upon the reservoir of ex perience gained throughout' the world in connection with the rationalisation of building activities ajid renders such experience applicable to the specific conditions and needs. In this way the available capital is used with maximum economic and technical efficiency in the interest of better housing.

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(k) A-particular-task of the housing policy is to foster in the broad masses of the population the private ownership of dwellings. This effort must be supported by an income and property policy aiming at correcting the uneven distribution of wealth and providing equal chances for all in the housing sector.

The nature of cooperative housing societies

1. Cooperative housing societies, in the sense of the co operative ideas of the pioneers von liochdale, von Raiffeisen, Sehulze-Delitzsch, V, A. Huber, etc.,.are institutions of self- help. In these cooperatives, as in other types of cooperatives,

individuals join together in a spirit of self-help in an effort to realise a certain aim, in this case the fulfilment of the need for satisfactory housing.

2. Main features of a housing cooperative:

(a) Association on a voluntary basis of an unrestrict ed number of members with the aim of fulfilling the task of s cooperative housing society, which is primarily that of assisting its members eco nomically and secondly that of serving an ideal

purpose■

(b) The basis of membership in a cooperative is the ownership of share capital. It is not, however, determined by the number and value of shares bought, respectively the amount paid in.

(c) The task of a housing cooperative is to have

housing units (apartment buildings) built for its members and their families and to manage them.

These housing units are either run on a cooperative basis for occupancy or sold to the members ae

private property.

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(d) The voluntary establishment of a housing co operative is supplemented by the establishment and management of a joint business enterprise which is required in order to attain the goals set.

(e) These measures and objectives are the result of a desire for mutual self-help; they are not, however, aimed at obtaining high returns on capital invested.

(f) Tasks are fulfilled in accordance with the prin ciples of democratic self-administration and self*

responsibility and within the framework of the appropriate legal and statutory conditions. The basic principle is "One man, one vote." Shares are non-transferable.

3. Another common feature of cooperative housing societies is the cooperative ideology, also referred to as the coopera tive spirit. This ideology played a crucial role in the early development of the cooperative movement, and the social move ment, also initiated by the cooperative housing societies, would not have been possible without this cooperative spirit.

&, contribution to date of cooperative housing societies to the so_lutij3n_^j3_^_prablemB

1. Cooperative housing societies, understood as institu tions established by the economically weak groups of the population on the basis of mutual self-help, have combined

the small resources of their members for the purpose of providing adequate housing. Cooperative housing societies were established in many countries, ?.nd in p.^rticul^r in Germany, in localized rrens by population groups living

under similar sociological? vocntionrl nnd economic con

ditions. It whs their common need for housing which gr.ve

impetus to the common effort. There rre n grerjt number of

cooperative housing societies whose members ptq teachers

and public officials, othere were formed fit the initiative

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of trade unions, clergymen, or highly qualified people of public life. The unselfish, assistance of members on an hon orary basis has jfroii the very beginning been of crucial im portance for the work of cooperptive housing societies.

2. Under the term "adequate housing supply." cooperative housing societies understand the supply of housing in confor mity with the idea of housing reform. The dwelling and its im mediate surroundings are considered to be of decisive im-

portrnce for the development of both the human being and human life as n whole.

3. Housing reform is a permanent tr.sk, since demand for housing is influenced both quantitatively and qualitatively by the general change in social and economic conditions, For this reason it is necessary for the cooperative housing so cieties to constantly direct their attention towards wnys of improving their housing supply. By reforming housing, the co operative housing societies contribute towards the improvement of the common weal, supplying housing for the brood masses end mobilizing at the same time their readiness for self-help, and indirectly stimulating competition both on an ideal basis—

providing exemplary solutions for housing, housing installa tions and related facilities-—ajid on nn economic basis—in fluencing the rent values and selling prices (active price policy).

4. The supply of housing in line with housing reform is ensured by the cooperative enterprises with their technically qualified personnel. Utilizing the most recent developments in technology, they provide housing units which meet all:financial, economic and technical requirements.

5. These enterprises draw benefit in their work from the■

non-profit character of the cooperative housing societies.

In the Federal Republic of Germany and West Berlin this finds expression in legal restrictions on profit-making, in the ob ligation to adhere to the principle of cost price, and in the tying of assets and earnings to the tasks of housing supply and

management.

K

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6. The cooperative capital share is an essential pillar in the work of cooperative housing societies. A. capital share is a contribution to national savings and ss such is worthy of encouragement by means of tax concessions or premiums. All surplus earnings are ploughed back9 and all possibilities of capital formation are fully exploited in the best interest of the nationrl economy. Internal savings institutions broaden the possibilities of cooperstive

capital formation, and internal guarantee facilities foster investment possibilities. General risks are covered by

blanket group insurance,

7. Important from the economic point of view for the work done and to be done by the cooperative housing so cieties is the entrepreneurial self-responsibility which these cooperatives bear and meet in full autonomy, per mitting them to turn their experience and technical knowl edge to full use in the field of building and housing management. By keeping costs low, the cooperative housing societies are able to make dwellings available at reason able rental or purchase prices,

8. The cooperative housing societies attain this goal by taking advantage of all possibilities open to them on the various markets, promoting and. employing rational methods of construction, assuring competent maintenance and economic administration of dwellings, and operating at optimal size.

9. Important for the fulfilment of all tasks under a long-term operating policy is the timely purchase of building land, which, in turn, exerts a favourable in fluence on the prices for land and puts a stop to real estate speculation,

10. Internal production jnterprises for building ma terials and profabrication and the wholesale purchase of building materials and furniture permit the construction and equipment of housing units at low cost.

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11. A determinant factor in the business success of coope rative housing societies is the adoption^ of modern manage- ment practices which ensure efficient coordination of the work of members serving either on an honorary or part-time basis or as full-time employees, promote the sound expansion and development of cooperative enterprises and further the training of prospective junior staff. It is impossible to strengthen the competitiveness of cooperatives without these measures, which are supplemented by public relations work.

12. The cooperative housing societies have from the very beginning voluntarily set up auditing unions whose task it is to periodically check the economic, financial and tech nical activities of the member cooperatives and provide guidance and counselling.

Original: German, TS