WHEN BUILDING SOCIETIES FIRST CAME INTO EXISTENCE as organs of working-class mutual aid at the end of the eighteenth century, they were remarkably like the self-build housing societies of today, and very unlike the money-lending-plus-savings-bank organisations which are the modern building societies. They consisted of groups of people who saved to buy land to house themselves and, when the first house was completed, borrowed money on its security to build another until the whole society was housed, when they disbanded. They changed their character in the nineteenth century to become permanent societies separating the people who wished to save from those who wished to build.
A new kind of society was founded in 1830, the Labourers' Friendly Society, which also changed in 1844 to become the Society for Improving the Conditions of the Labouring Classes. But the early efforts of people to improve their own housing conditions failed to expand for lack of capital. Investors then, as now, found easier ways of getting rich quick than by financing working-class housing. This is where the Victorian philanthropists moved in, satisfied with a "modest return" on their capital.
The housing society movement since then has never lost this "charitable" emphasis, and in this respect is in marked contrast with the co-operative housing associations of other countries, for instance, Sweden, whose achievements are enthusiastically described in Lewis Waddilove's recent PEP report Housing Associations. There, the movement
depended strongly on the initiative of tenants; it did not, as in the United Kingdom, become the instrument of liberal employers and philan-thropists making provision for what were referred to as the "working classes". The tenants' unions of Sweden discovered that the best way to prevent the making of undue profits from a housing shortage and to raise housing standards was to build and administer their own homes. As an example, in 1923, the tenants' union of Stockholm became the Tenants' Savings and Building Society and in the following year similar movements in other towns came together to form a National Association of Housing Societies known throughout Sweden by the initials HSB … A second national body for housing associations has been formed by the trade unions in Sweden concerned with the building industry. HSB remains the largest national body and its very name measures out the difference between the Swedish and the British housing association movement. In Sweden the movement's inspiration and drive come from the tenants; they save for the purpose of raising their own housing standards.
In Britain the initiative in the movement has come from philanthropists and others concerned to raise the housing standards of the "working class". Save in the "self-build" societies, little initiative rests with the occupants of the houses who are simply the tenants of the association.
The visitor to housing estates on the Continent comments most often on the attraction of their lay-out, the care with which common land is cultivated, and the harmony of external decoration. The claim of the co-operative association is that it combines the sense of ownership and the security of tenure of the owner-occupied house with an equally strong sense of responsibility for, and interest in, the neighbourhood as a whole. Moreover it does this as a by-product of its normal organisation; in Britain in new estates we have attempted to achieve the same result by all kinds of artificial stimuli to neighbourhood responsibility.
He describes how the HSB has built up not only resources of expert advice in building, planning and finance, "but has become a centre of research the results of which can immediately be applied in its own large-scale activities. This means that the tiniest housing co-operative in a remote township" has access to the best of advice, architectural and technical, with the result that "the standards of design, workmanship and finish are well in advance of comparable dwellings in this country … So competent is the research, technical and even manufacturing organisation of HSB that municipalities have been glad to avail themselves of it. Many local authority housing schemes are in fact planned and executed by HSB; in some areas municipal houses are built and managed by a 'municipal company' on the directorate of which the local authority and HSB are represented."
In Britain the nearest thing we have to the HSB is the National Federation of Housing Societies, which at the end of December 1961 had 679 affiliated societies consisting of 229 societies for providing general family housing, 244 societies providing old peoples housing, 83 for industrial housing (sponsored by industrial concerns for their employees) and 123 self-build societies. Associations affiliated to the National Federation own 105,000 houses, which is less than one per cent. of the present stock of houses in England and Wales.
Housing societies may borrow money on the same terms as local authorities (they usually do it through local authorities) at the current rate of interest charged by the Public Works Loan Board — at present something over six per cent, and they qualify for any subsidies which are available to local authorities (these have been whittled down by the present government so that in practice subsidies are only paid for old people's housing, slum clearance and "overspill").
All political parties express their support of the housing society idea, and their enthusiasm for co-operative housing societies, and a very great deal has been heard about the provision of £25 million under Section 7 of the Housing Act of 1961, for direct government loans (at the current rate of interest) to housing societies for building new dwellings which are to be kept available for cost rent letting, without subsidy. It is notorious too, that only five societies have actually succeeded in getting any of this money.
The Minister of Housing describes his twenty-five million as a "pump-priming" operation, meaning that he wants to encourage private capital to go the same way. This is of course the same pious hope that was expressed by the philanthropists a hundred years ago, and it will be equally unsuccessful today. But why has he had so few takers anyway for his present loan which is expected to build 7,000 houses?
In the first place, since it is designed to provide for the letting at cost rents of houses costing (with land) about £3,500, which means that the tenant, to meet his obligations would have to be earning £1,500 a year. But the average in this country is £15 7s. a week. In the second place, because of the system of taxation and tax allowances, a man earning enough to rent one of these houses will find other forms of householding a better proposition. This was pointed out with surprising figures in the PEP report and the point is underlined by J. F. Roper of Manchester University in a letter to the Guardian (26/9/62):
Although the possibility of housing associations borrowing over a period of 40-60 years enables them to charge lower gross rents than the mortgage repayment of an owner-occupier with a 20-year building society mortgage, this advantage is more than offset in most cases by the effects of taxation. As the law stands at present, while the owner-occupier can claim tax relief for the interest portion of his mortgage repayment the housing association cannot … This allowance means that assuming enough tax was paid at the standard rate, the net payment will be higher for the housing association tenant than for the owner-occupier, who will in any case have acquired after 20 years a marketable asset. This situation will become more anomalous
The National Federation of Housing Societies, 12 Suffolk Street, Pall Mall, London, SW1, (Telephone: WHItehall 1692-4), publish a half-crown pamphlet "A guide to the formation, constitution and purpose of Housing Associations", and a sixpenny leaflet "Self-Build Housing Associations". Among their other publications are "Model Rules" for housing societies of all kinds — charitable, general family housing, industrial housing, self-build, tenant co-operative and 'cost-rent' societies.
The P.E.P. Report "Housing Associations" costs 4s. from Political and Economic Planning, 16 Queen Anne's Gate, London, SW1. if the abolition of Schedule A taxation for owner-occupiers, which has been promised by the Chancellor of the Exchequer, is not extended to non-profit housing associations.
Unless the law is changed it will be impossible for co-operative housing to succeed in this country, as it has in Scandinavia, in providing an additional solution to our housing problems.
Here we have the crux of the matter. But there is a third reason. The whole damn thing is so hard to understand! In spite of the outstanding effort, on a limited budget, by the National Federation, we have made a simple thing like housing, so complicated, that only experts can unravel it. For this reason the only people likely to be able to make use of the £25 millions are likely to be offshoots of existing societies which have the know-how, to overcome the difficulties in getting the correct legal and architectural advice and above all, in getting sites. "You cannot get the loan without the site and you cannot get the site without proving that you have the money."
But leaving aside the Minister's addled egg, there are advantages in attempting, here and now, to form tenants' co-operatives on the Scandinavian pattern. (A housing co-operative can be defined as a group of tenants who have pooled their limited capital resources and pledged their collective credit-worthiness to purchase an estate of houses or flats or both which they then own, manage and control jointly). As Harry Moncrieff of Co-operative Planning Limited, put it at last summer's AGM of the National Federation:
The biggest opportunity for tenants' co-operatives in this country is in the big cities, such as London, in building flats … A great number of people are purchasing flats today which are being built by development companies. In these developments there are three profits: the profit on the land, the builder's profit and the developer's profit. You cannot do anything about the first two but under tenants' co-operatives you do save the developer's profit … (which) is £500 to £1,000 per dwelling in the South of England. A tenants' co-operative can build flats in London at between £500 and £1,000 per flat less than private enterprise is selling them at today. This is of real financial benefit. This is equal to a saving of 30s. per week, and plus the benefit of being able to buy it over sixty years you can get a house which is £2 a week less. This makes it possible for an entirely different stratum of the income group to have a home.
There are already several successful housing co-operatives, owned, managed and controlled by their tenants. The oldest is the Dronfield Pioneer Health and Housing Society, started in 1946, under the inspiration of the Peckham Experiment at a town between Sheffield and Chesterfield. There are the Adys Lawn Tenants' Association and the Rutland Park Gardens Association in Willesden, and the Regent's Park Housing Society in St. Pancras. Housing Partnership Limited after their original success at Wimbledon (it took them three years to find a site) have formed a new association on a cost-rent basis which has actually got the first slice of the Ministry's money.
At least these pioneers have demonstrated that it is possible to find a more rational and satisfying system of organising housing than any of the very limited range of methods we are used to.