Housing cooperatives provide affordable housing to members. They are formed by purchasing land and developing or constructing houses that are then allotted to members. There are different types including those where members own the houses but the land is held by the cooperative, and those where members have ownership in both the houses and land. Housing cooperatives are governed by cooperative laws and provide benefits like democratic control and elimination of middlemen profits for members.

1. CO-OPERATIVE
HOUSING SOCIETY
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2. WHAT IS A HOUSING
COOPERATIVE?
 Housing cooperative has been defined as:
“A legally incorporated group of
persons, generally of limited
means, pursuing the same cause of
meeting the common need of housing or
its improvement based on mutual
assistance.
 In such a cooperative, the membership is
voluntary and control is democratic, and
members make an approximately equal 2
contribution to the capital required”.

3. CO-OPERATIVE HOUSING SOCIETY
 These societies are formed to provide
residential houses to members.
They purchase land, develop it and construct
houses or flats and allot the same to members.
Some societies also provide loans at low rate of
interest to members to construct their own
houses.
Examples of housing co-operative society The
Employees Housing Societies and Metropolitan
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Housing Co-operative Society

4. DIFFERENT TYPES OF HOUSING
COOPERATIVES
Housing cooperatives at the primary level
can broadly be classified into four groups
as detailed below:
 Tenant Ownership Housing Societies
 Tenant Co-Partnership Housing
Societies
 House Mortgage Societies
 House Construction or House Building
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Societies

5. TENANT OWNERSHIP HOUSING
SOCIETIES
Under this category the land is
held either on leasehold or free
hold basis by societies, and
houses are owned by members.
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6. TENANT CO-PARTNERSHIP
HOUSING SOCIETIES
These housing societies hold both
land or building, either on
leasehold or freehold basis and
allot flats to their members.
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7. HOUSE MORTGAGE SOCIETIES
Such societies lend money to their
members for construction of houses.
The members have to make their own
arrangements for building their houses.
This type of societies are really credit
societies as distinguished from other
credit societies as per the objects for
which they lend, the duration of the loan
and the security they demand. 7

8. HOUSE CONSTRUCTION OR
HOUSE BUILDING SOCIETIES
Societies of this type spend
money on behalf of the members
for building the houses, and the
houses are handed over to
members when ready and the
money spent is recovered as loan.
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9. CHARACTERISTICS OF CO-OPERATIVE
HOUSING SOCIETY
 Open membership
 Voluntary Association
 State control
 Democratic Management
 Service motive
 Separate Legal Entity
 Distribution of Surplus
 Self-help through mutual cooperation 9

10. HOW TO BECOME A MEMBER OF HOUSING
COOPERATIVE?
 Have necessary qualifications as provided in the Bye-laws of
cooperative.
 Reside or intend to reside permanently within the area of
operation of the housing cooperative.
 Have paid necessary admission fee.
 Have purchased minimum number of shares of the
cooperative and paid other stipulated charges as per the Bye-
laws.
 Make necessary down payment within the time limit as per the
norms laid down in the Bye-laws.
 Make necessary declaration whether he/she owns any plot, flat
or accommodation in his/her own name or in the name of any
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other family member.

11. GOVERNMENT POLICIES
The Union Cabinet first time approved
the National Cooperative Policy, aiming
at:
Minimizing the share of the
Government in Cooperatives.
Redefining the role of Registrar of
Coop. Societies as a facilitator for
Cooperative Societies.
Repatriation of the Government’s equity
in the Cooperatives by infusion of
equivalent cooperative shares. 11

12. COOPERATIVE LAW
 Multi-State Cooperative Societies Act-
2002 ensures functioning of Cooperatives
as autonomous Institutions on sound
Cooperative Principles.
 The new legislation reduces the role of
Government and provides
professionalism in Cooperatives to
withstand competition.
 Government participation in the equity is
allowed only when requested by the
Society.
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13. WHAT IS THE LEGISLATION THAT GOVERNS
HOUSING COOPERATIVES?
The activities of housing cooperatives in various
States are regulated through
 Respective Cooperative Societies Act and
 Cooperative Societies Rules administered by
the Registrar of Cooperative Societies
appointed by the Government.
 The national level cooperative organisations and
the multi-state cooperative societies are
governed by the provisions of Multi-State
Cooperative Societies Act and Rules.
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14. FINANCE
A housing cooperative is normally non-profit, since
usually most of its income comes from the rents
paid by its residents , who are invariably its
members.
 There is no point in creating a deliberate surplus
except for operational requirements such as setting
aside funds for replacement of assets.
 It is relatively difficult to start a housing co-op
because if the idea is, for instance, to build a
building or group of buildings to house the
members, this usually takes a significant mortgage
loan for which a financial institution will want 14
assurances of responsibility.

15. CONTD……
 In the lifecycle of buildings, the replacement of
assets requires significant funds which can be
obtained through a variety of ways:
 Assessments on current owners.
 Sales of Treasury Stock to new shareholders.
 Draw down of reserves.
 Unsecured loans.
 Operating surpluses.
 Fees on the sales of units between
shareholders and new and increases to
existing mortgages. 15

16. ADVANTAGES OF HOUSING
COOPERATIVES
 A housing cooperative is neither a public nor a profit seeking
organisation.
 Its principal objective is to eliminate economic exploitation as it
is controlled by members only.
 Contrary to public housing, cooperative housing provides
opportunities to its members to control the house designs at the
planning stages.
 The maintenance of the estate is also in the hands of
members, which leads to maintenance at lesser expenses and
in a better way.
 Cooperative housing satisfies quantitative as well as qualitative
aspects of housing. 16

17. Advantages Disadvantages
• Easy formation • LimitedCapital
• Open membership • Problems in
• Democratic Control Management
• Limited Liability • Lack of Motivation
• Lack of Cooperation
• Elimination of
• Dependence on
Middleman’s Government
Profit
• State Assistance
• Stable Life 17

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