A History of Housing Cooperatives
Cooperatives have long been recognized as a means of providing affordable housing. Since they are owned by their residents, cooperatives offer continuing economic incentives and social opportunities for residents who are interested in controlling their social environment and improving the quality of their lives.
While the history of housing cooperatives dates back to the beginning of time, the greatest legal and organizational progress has been made in the last two centuries. Records of shared-ownership housing have been recorded throughout history since the days of Babylon, where documents describe two owners sharing separate floors of a house; to ancient Rome where the Digest of Justinian refers to separate ownership of a house but shared ownership of a common roof. Compare that to today’s high-end luxury cooperatives, and one can see how far the development of housing cooperatives has come.
Europe’s Historical Role in Housing Cooperatives
The cooperative housing movement began in Europe in the 19th century, primarily in Great Britain and France, as a means to provide affordable housing for persons whose other choice might be rental of a tenement flat from a landlord that controlled the premises much like a king controls his kingdom. Cooperatives also provided a solution to housing shortages that arose when industrial development attracted people into the cities and targeted as working class families who could not afford to purchase a home. They offered sound shelter at affordable prices relying on self-help efforts of members to reduce costs.
The cooperative as a modern business structure originated in Britain during the 19th century. The Industrial Revolution had a profound effect on the way business was organized and on the working conditions and economic situations of many people. In response to the depressed economic conditions brought forth by industrialization, some people began to form cooperative businesses to meet their needs. By pooling their money, people were able to buy food in large quantities at a volume discount, allowing them to buy higher quality food than they could afford on their own.
The first documented consumer cooperative was founded in 1769, in a barely furnished cottage in Fenwick, East Ayrshire. It was here where local weavers first brought a sack of oatmeal into John Walker’s whitewashed front room and began selling the contents at a discount. Thus the first cooperative was formed; the Fenwick Weavers’ Society.
Robert Owen, a Welshman, is considered the father of the cooperative movement. A successful businessman who made his fortune in the cotton trade, Owen believed in putting his workers in a good environment with access to education for themselves and their children. These ideas were put into effect successfully in the cotton mills of Scotland. It was here that the first cooperative store was opened.
In the early stages of the cooperative movement, a group of 10 weavers and 20 others opened a cooperative store in England at 31 Toad Lane on December 21, 1844 with a very meager selection of butter, sugar, flour, oatmeal and a few candles. Within three months, the “Pioneers” expanded their selection to include tea and tobacco, and they were soon known for providing high quality, unadulterated goods. This was the first successful cooperative in documented history, and the Pioneers created a list of principles to guide their mission. These values were so successful that coops today still follow these same Rochdale Principles.
- Open membership
- Democratic control
- Distribution of surplus in proportion to trade
- Payment of limited interest on capital
- Political and religious neutrality
- Cash trading (no credit extended)
- Promotion of education