Cooperative Housing in Europe

The previous chapter examined the political strategies governments deploy to address Europe's housing crisis—from EU-level initiatives to national programmes and city-level interventions (see Political strategies to tackle the housing crisis). Among the various housing models discussed, cooperatives emerged as a distinctive alternative that merits deeper exploration. This chapter examines housing cooperatives in detail: their principles, history, diverse models, geographic spread, and unique capacity to deliver affordable, sustainable, and community-oriented housing.

Housing cooperatives occupy a unique position in the European housing landscape. Neither purely market-driven nor state-provided, they represent a third way—housing organised by and for residents, governed democratically, and oriented toward use value rather than profit extraction. In an era of financialised housing markets and retreating public provision, understanding how cooperatives work and why they succeed offers crucial insights for addressing the housing crisis—and for building new institutions capable of scaling this model across the continent.

#Part I: Understanding the Cooperative Model

#What Makes Cooperatives Different

Before examining housing cooperatives specifically, it is essential to understand what distinguishes cooperatives from conventional organisations. A cooperative is an autonomous association formed voluntarily by people who unite to meet common economic, social, and cultural needs through a jointly owned and democratically controlled enterprise.[1]*

The International Cooperative Alliance outlines seven principles that guide cooperatives worldwide: voluntary and open membership; democratic member control; member economic participation; autonomy and independence; education, training, and information; cooperation among cooperatives; and concern for community.[1]* These principles ensure that cooperatives remain fundamentally different from profit-maximising corporations—they exist to serve their members rather than to generate returns for external shareholders.

Since 2016, the German cooperative model has been recognised on UNESCO's Intangible Cultural Heritage list, acknowledging its significance as a form of democratic economic organisation that combines economic viability with social responsibility.^[2]

#Housing Cooperatives: A Hybrid Between Renting and Owning

When these cooperative principles are applied to housing, they create a distinctive tenure form that occupies a unique position between renting and owning. Members acquire shares in the cooperative, which entitles them to occupy a dwelling and participate in governance, whilst the cooperative itself owns and manages the property.^[2][3]

This arrangement creates a distinctive bundle of rights and responsibilities that differs markedly from both conventional tenancy and individual homeownership:

Security of tenure: Cooperative members typically enjoy lifelong rights of residence, which can often be passed on to family members. Unlike private tenants, they cannot be displaced by landlords seeking higher returns or by property sales to new owners.^[2]

Affordability through cost-based rents: Because cooperatives are non-profit entities, rents are set to cover the costs of building, maintenance, and debt repayment—nothing more. Over time, as mortgages are paid down, rents often decrease in real terms rather than increase with market pressures.^[2]

Democratic control: Each member has one vote regardless of their financial contribution, ensuring that housing decisions are made collectively by residents rather than by external investors or distant landlords.^[4]

Community and belonging: By engaging members in governance and maintenance, cooperatives foster social cohesion and a sense of shared responsibility that is often absent in conventional rental arrangements.^[4]

This hybrid character explains why cooperatives have proven remarkably resilient across different political and economic contexts—they offer security similar to ownership without requiring individuals to bear full financial risk, whilst providing more agency than conventional tenancy.

#Part II: Historical Development and Contemporary Models

Having established what makes cooperatives distinctive, we now turn to how this model developed historically and the diverse forms it takes across Europe today.

#A 150-Year History: The Waves of Cooperative Housing

#Origins in the Industrial Era

The housing cooperative movement in Europe emerged in the mid-19th century as a response to the desperate housing conditions facing the working classes during rapid industrialisation. The movement drew inspiration from pioneering social reformers, including the Welsh philanthropist Robert Owen (1771–1858) and the German reformer Viktor Aimé Huber (1800–1869).^[3]

Huber initiated the construction of the first cooperative dwellings in Berlin between 1849 and 1852, whilst the first documented consumer cooperative—the Fenwick Weavers' Society—had been founded in Scotland as early as 1761.[1]*[1a]* The Rochdale Society of Equitable Pioneers, established in England in 1844, laid the foundational principles that continue to guide cooperatives worldwide.^[4]

These early cooperatives emerged from working-class self-organisation, often supported by labour movements and mutual aid societies. They represented a practical response to housing conditions that private markets and charitable provision had manifestly failed to address.

#Post-War Expansion: The Golden Age

Housing cooperatives assumed a crucial role after both World Wars, helping to rebuild devastated housing stock across the continent. In Germany, more than half of the cooperative housing stock was constructed between the 1950s and 1970s with significant government subsidies.^[2] Sweden's cooperative movement, which began in 1923, expanded dramatically after World War II with strong support from social democratic governments.^[5]

This post-war expansion paralleled the broader social housing programmes examined in the previous chapter. However, cooperatives occupied a distinctive niche: they combined public policy support with resident self-governance, creating a model that was neither purely state-directed nor market-driven. Governments recognised cooperatives as essential partners in addressing acute housing shortages, providing decent homes for working and middle-class families whilst fostering civic engagement and community responsibility.

#Decline and Renewal: The Contemporary Landscape

From the 1970s onwards, many European countries began reducing support for cooperative housing as neoliberal policies favoured homeownership and private markets. In Sweden, public subsidies and preferential land allocation diminished during the 1990s.^[5] In Germany, housing cooperatives lost their special tax status as "non-profit housing for the common good" in 1989.^[2]

However, the 2007–2008 financial crisis and subsequent escalation of housing affordability problems sparked renewed interest in cooperative models. A new generation of housing cooperatives has emerged, often emphasising sustainability, community building, and innovative approaches to affordability.[6] This contemporary wave differs from its predecessors in several respects: projects tend to be smaller and more participatory; they frequently prioritise ecological sustainability alongside affordability; and they often emerge from grassroots activism rather than established cooperative federations.

#Models of Cooperative Housing Across Europe

This 150-year history has produced remarkable diversity in how cooperatives are structured. Housing cooperatives across Europe can be broadly categorised by their tenure arrangements, governance structures, and financing models.^[3][6]

#Rental Cooperatives

In rental cooperatives, the cooperative owns all dwellings and members pay cost-based rents for the right to occupy. Members do not accumulate individual equity, but benefit from secure, affordable housing and democratic governance. This model predominates in Germany and Switzerland, where it has proven highly effective at maintaining long-term affordability.[6]

German housing cooperatives manage over 2.2 million rental units, representing approximately 10% of all rental housing and 5% of total housing stock.^[2] These cooperatives prioritise the use value of housing over its exchange value, with members paying modest fees for flats that belong collectively to all shareholders.^[2]

The rental cooperative model's strength lies in its resistance to financialisation. Because members do not accumulate equity that can be extracted through sale, the housing remains permanently affordable across generations. New members entering the cooperative pay the same cost-based rents as long-standing members, preventing the intergenerational inequities that characterise ownership markets.

#Ownership Cooperatives

In ownership or "tenant-ownership" cooperatives, members purchase shares that entitle them to occupy a specific dwelling. Shares can typically be sold when members leave, though often with restrictions on pricing to prevent speculation. This model is prevalent in Sweden, Norway, Spain, and Italy.[6]

Sweden has an unusually large cooperative housing sector, accounting for approximately 22–25% of total housing stock—the highest proportion in Europe.^[5] Swedish cooperatives emerged in 1923 in response to housing shortages and extreme speculation, aiming to ensure access to high-quality housing through tenant ownership.^[3]

The ownership model provides members with a stake that can appreciate over time, offering some of the wealth-building benefits of homeownership whilst maintaining collective governance and often some affordability protections. However, where share prices are allowed to float freely with market conditions, ownership cooperatives can become as unaffordable as conventional housing markets.

#Right-of-Use Cooperatives

A newer model, particularly prominent in Barcelona, involves cooperatives where members acquire the right to use housing rather than ownership shares. Projects like Sostre Cívic and La Borda secure land through long-term leases from municipalities, ensuring that housing remains permanently affordable and outside speculative markets.[6]

Members typically pay an initial contribution that is returned (with modest interest) when they leave, plus monthly charges covering costs. Because neither land nor housing can be sold on the open market, affordability is structurally guaranteed regardless of market conditions. This model represents a conscious attempt to preserve the affordability benefits of rental cooperatives whilst giving members a greater stake in their housing.

#Community Land Trusts

Brussels and other cities have adapted the Community Land Trust model, which separates land ownership from buildings to ensure permanent affordability. The trust retains ownership of the land whilst residents own or rent the buildings, preventing land speculation from driving up housing costs.[6]

This approach addresses one of the fundamental drivers of housing unaffordability: land price inflation. By permanently removing land from speculative markets, Community Land Trusts can maintain affordability even in high-demand urban locations where conventional approaches struggle.

#Post-Socialist Cooperatives

In Poland and Estonia, cooperatives emerged through the privatisation of state housing following the fall of communism. Poland counts approximately 2.5 million cooperative housing units, representing nearly 20% of national housing stock—one of the highest proportions in Europe.^[3][4] In Estonia, over 60% of apartment buildings were handed over to newly formed cooperatives during privatisation.^[3]

These post-socialist cooperatives differ significantly from their Western European counterparts. Many emerged not from grassroots organisation but from top-down privatisation processes, and they often struggle with governance challenges, maintenance backlogs, and limited experience of democratic self-management. Understanding their distinct trajectories is essential for assessing the potential for cooperative housing expansion in Central and Eastern Europe.

#Limited-Profit Housing Associations

Austria, particularly Vienna, has developed a distinctive model of limited-profit housing associations (gemeinnützige Bauvereinigungen), which include both cooperatives and other non-profit providers. As noted in the previous chapter, these organisations operate on a cost-recovery basis, reinvesting surpluses into new affordable housing rather than distributing profits. Austrian cooperatives manage approximately 460,000 homes, accounting for about 10% of households.[6]

#The Geographic Spread of Cooperative Housing

This diversity of models translates into highly varied market shares across the continent. Housing cooperatives manage at least 7.9 million housing units across EU and EFTA countries.[6] The Housing Europe network alone includes over 22,000 housing cooperatives, whilst Cooperative Housing International represents members spanning 30 countries globally.^[4]

Cooperative housing is predominantly an urban phenomenon, concentrated in multi-storey buildings in cities where housing pressures are greatest.^[2] Several cities stand out as cooperative housing hotspots:

Zurich represents perhaps the most successful example of cooperative housing policy anywhere in the world. One in five Zurich residents lives in a cooperative, and the city has set a target for one-third of housing to be cooperative-owned by 2050.^[7] The cooperative movement in Zurich has roots dating back over a century, with the first cooperative established in 1907, and has been sustained by consistent municipal support including favourable land leases and loans.^[7]

Copenhagen features approximately 33% cooperative ownership—a model virtually absent in Southern Europe—demonstrating how cooperative tenure can become a mainstream housing option with appropriate policy support.^[4]

In contrast, cities like Barcelona and Lisbon have social and cooperative housing stocks below 2%, leaving most residents exposed to volatile private markets.[8] However, as noted in the previous chapter, both cities are actively working to expand cooperative housing through innovative new initiatives.

#Part III: The Value Proposition of Cooperative Housing

The preceding sections have established what cooperatives are, how they developed, and where they exist. But why do they matter for addressing Europe's housing crisis? This section examines the specific mechanisms through which cooperatives deliver value—economically, ecologically, and socially.

#Economic Sustainability: Affordability Through Non-Speculation

The fundamental economic advantage of cooperative housing lies in its non-speculative nature. Because cooperatives exist to serve members rather than generate profits for investors, housing costs reflect actual expenses rather than market valuations or profit margins.

Studies consistently show that cooperative rents are 15–20% lower than comparable private market housing.^[2][3] In Switzerland, cooperative housing is typically 20% cheaper than market rates.^[7] This differential compounds over time: as cooperatives pay down mortgages and benefit from historical cost structures, their advantage over market rents grows.

Members typically invest a modest sum to acquire shares—in Swiss cooperatives, this ranges from approximately 7,000 to 25,000 Swiss francs (roughly €7,500 to €27,000)—which enables them to access housing at cost rent.^[7] This financial contribution remains with the cooperative and is returned (with modest interest) when members leave, preventing speculative gains whilst providing members with a stake in their housing.

The financial model of cooperatives also provides stability during economic downturns. Research from the Vienna University of Economics and Business demonstrates that cooperative housing successfully spreads the effects of crises among residents, cushioning the impact of inflation and energy price increases.[9]

#Ecological Sustainability: Long-Term Investment in the Building Stock

The previous chapter noted the tension between housing affordability and environmental sustainability—the imperative to decarbonise buildings whilst keeping housing costs manageable. Housing cooperatives are uniquely positioned to navigate this tension.

Unlike corporate landlords who may prioritise short-term returns, cooperatives have a generational perspective that favours long-term investments in building quality and energy efficiency.[6] Without pressure to serve external shareholders, cooperatives can invest continuously in maintaining and improving their buildings, including energy-efficient renovations that may have long payback periods.^[2]

Many contemporary cooperatives have become leaders in sustainable construction, incorporating features such as:

• Passive house standards and high levels of insulation
• Renewable energy systems including solar panels
• Shared facilities that reduce individual resource consumption
• Sustainable building materials including timber construction
• Car-free or car-reduced living with shared mobility services

Projects like Mehr als Wohnen in Zurich have achieved outstanding environmental performance whilst maintaining affordability, demonstrating that ecological and social sustainability can be mutually reinforcing.^[2]

#Social Sustainability: Community, Wellbeing, and Democratic Participation

Beyond affordability and environmental benefits, cooperative housing fosters social sustainability through community building and democratic participation. In an era of increasing social atomisation and declining civic engagement, cooperatives offer spaces where collective action remains embedded in daily life.

Research from Catalonia on cooperative housing under a grant-of-use model found significant improvements in residents' mental health, social support, and overall wellbeing after moving into cooperative housing.^[10] The percentage of residents experiencing housing problems such as dampness and temperature control improved dramatically, whilst strong social support networks increased from 34% to 47% of residents.

Cooperative governance—where every member has an equal voice in decision-making—provides practical experience of democratic participation that is increasingly rare in contemporary society.^[11] This engagement fosters a sense of ownership and responsibility that contributes to well-maintained buildings, stable neighbourhoods, and reduced social isolation.

Many cooperatives have expanded beyond housing provision to include:

• Community spaces and shared facilities (guest rooms, laundries, workshops)
• Social services for elderly or vulnerable residents
• Neighbourhood cafés, shops, and cultural programmes
• Childcare and intergenerational activities

#Part IV: Evidence from Practice—Lighthouse Projects

The value proposition outlined above is not merely theoretical. Across Europe, both traditional large-scale cooperatives and innovative recent projects demonstrate what cooperative housing can achieve in practice.

#Traditional Large-Scale Cooperatives

Established cooperative federations demonstrate the model's capacity to operate at significant scale:

Sweden's HSB and Riksbyggen are cooperative federations that together manage over 1.5 million apartments. HSB, founded in 1923, encourages pre-members to open savings accounts to accumulate deposits for future cooperative membership, with nearly $500 million in collective savings supporting the development of new cooperative housing.^[12]

German housing cooperatives, with over 2,000 cooperatives managing 2.1 million apartments and housing approximately 5 million people, demonstrate the model's capacity to operate at scale whilst maintaining local governance and community orientation.^[13]

Vienna's limited-profit housing sector, whilst broader than cooperatives alone, illustrates how non-profit provision can achieve transformative scale. As detailed in the previous chapter, the city's housing system—combining municipal housing, limited-profit associations, and regulated private rental—demonstrates what sustained political commitment over a century can achieve.

#Innovative Recent Projects

A new generation of cooperative housing projects has emerged since the 2008 financial crisis, often combining traditional cooperative principles with contemporary concerns around sustainability, participation, and social innovation. The following projects exemplify the range and innovation of contemporary cooperative housing:

Mehr als Wohnen (Zurich, Switzerland) exemplifies this new generation. Developed through collaboration among 50 small cooperatives, this project includes 395 dwellings, 35 retail spaces, and extensive shared facilities. 10% of apartments are allocated to charities and non-profits. The project emphasises diversity, with apartment types designed for changing lifestyles beyond the standard nuclear family, and has received prominent architecture awards for its innovative design and participatory planning process.Lived Solidarity: Housing Co-operativesBuilding Equity: Housing as a Key to a Low-Carbon Society

Möckernkiez (Berlin, Germany) stands as one of Germany's largest citizen-led cooperative housing projects. Located in Kreuzberg adjacent to Gleisdreieck Park, the development comprises 471 apartments housing approximately 900 residents across 14 buildings completed in 2018. Initiated entirely by Berlin citizens, the project achieved passive house standards with annual energy consumption below 15 kWh/m², whilst prioritising accessibility, intergenerational living, and ecological sustainability.[32]

Kalkbreite (Zurich, Switzerland), developed by Genossenschaft Kalkbreite and completed in 2014, represents a pioneering mixed-use cooperative complex built above a tram depot. The seven-storey timber-hybrid structure houses 97 apartments alongside 5,000 m² of commercial space, a cinema, and a public courtyard. The complex demonstrates how cooperatives can achieve car-free urban living whilst creating vibrant, socially diverse neighbourhoods.^[33]Building Equity: Housing as a Key to a Low-Carbon Society

La Borda (Barcelona, Spain) represents a pioneering right-of-use cooperative on public land secured under a 75-year lease. With 28 units, the project prioritises sustainability, self-governance, and anti-speculation. Members pay an initial contribution of approximately €18,500 and monthly fees of roughly €8.71 per square metre—significantly below private market rents. The cross-laminated timber construction and passive house standards demonstrate outstanding environmental performance, whilst the innovative financing model offers a replicable template for cooperative development without conventional bank financing.Building Equity: Housing as a Key to a Low-Carbon Society[26]

Die Hauswirtschaft (Vienna, Austria), completed in autumn 2023, represents an innovative model for combining living and working in a radically mixed-use building. Developed as a member cooperative of freelancers, creatives, and small businesses, the project demonstrates how cooperatives can blur traditional boundaries between home and work whilst fostering community amongst independent workers.[37][38]

De Warren (Amsterdam, Netherlands), completed in 2023, represents the Netherlands' first self-build housing cooperative. The 36-apartment development demonstrates how the cooperative model can be established in countries without strong cooperative housing traditions, supported by Amsterdam's €50 million loan fund for housing cooperatives.[39][40]

UTOP (Paris, France), completed in 2024, represents France's first resident-led housing cooperative, pioneering the habitat participatif model. UTOP demonstrates that cooperative housing can emerge even in cities without established traditions, offering a replicable model for collectively-owned, affordable housing in high-cost urban markets.[43][44]

#Part V: Understanding the Barriers to Expansion

The previous sections have demonstrated that housing cooperatives deliver substantial value and that successful models exist across Europe. Yet a fundamental question remains: if cooperatives work so well, why aren't they spreading faster?

Despite strong demand and demonstrated benefits, housing cooperatives remain marginal outside a handful of countries and cities. Understanding the systemic barriers to cooperative expansion is essential—not only for designing effective support mechanisms, but also for identifying what a Pan-European initiative would need to overcome.

Research across Europe consistently identifies interconnected challenges spanning finance, land access, regulation, organisational capacity, and political economy. These barriers operate differently across regions and countries, but their cumulative effect is to make cooperative development far more difficult than conventional private housing, even when the cooperative model would better serve housing needs.[6]^[15]

#Financial Constraints: The Capital Conundrum

#The Fundamental Mismatch

The financial challenges facing housing cooperatives represent perhaps the most fundamental barrier to their expansion. Housing projects require large capital investments upfront, with returns materialising only over decades through cost-based rents. This temporal structure sits uneasily with conventional financial markets, which favour shorter maturities and predictable returns.^[14]

The International Cooperative Alliance's Blue Ribbon Commission on cooperative capital identified what it termed the "capital conundrum": cooperatives need substantial external capital to grow, yet their foundational principles—democratic member control, limited returns on capital, and prioritisation of use value over exchange value—make them inherently less attractive to conventional investors seeking profit maximisation.^[14]

This mismatch has become more acute in recent years. Rising construction costs across Europe—driven by material price inflation, labour shortages, and increased regulatory requirements—have significantly increased the capital required for new developments. Between 2020 and 2024, construction costs in many European countries increased by 20–40%, fundamentally altering project economics.[6]

#Interest Rate Sensitivity

Housing cooperatives are particularly sensitive to interest rate movements. Because cooperatives finance construction through loans rather than equity investments, the cost of borrowing directly affects the rents members must pay. The sharp increase in interest rates following the 2022 inflationary surge has made many planned cooperative projects unviable.[6]

Unlike profit-driven developers who can absorb higher financing costs through higher sale prices or rents—passing costs to consumers in markets where demand exceeds supply—cooperatives are constrained by their commitment to affordability. If financing costs rise to the point where cost-based rents exceed market rents, the cooperative model loses its fundamental value proposition. This creates a "scissors effect" where cooperatives are squeezed between rising costs and their affordability mandate.

Research on cooperative housing in Central and South-Eastern Europe found that interest rate volatility represents a particularly acute challenge for emerging cooperative sectors. In regions where rates can fluctuate significantly, projects planned during low-rate periods may become unviable before construction begins.^[16]

#Bank Unfamiliarity and Risk Perception

Commercial banks across Europe remain largely unfamiliar with cooperative housing models, often perceiving them as higher-risk borrowers despite evidence suggesting the contrary. This perception stems from several factors:^[15][16]

• Non-standard legal structures: Many banks lack internal expertise to assess cooperative creditworthiness or structure appropriate loan products.
• Limited collateral: In rental and right-of-use cooperatives, dwellings cannot be individually mortgaged, which banks perceive as limiting recovery options.
• Absence of profit margins: Banks may view cooperatives as having less financial resilience, even though their lower cost structures actually reduce vulnerability to market downturns.
• Track record gaps: In countries without established cooperative sectors, banks cannot reference historical performance data—creating a catch-22 where cooperatives cannot access finance without a track record.

Research conducted across eight Central and South-Eastern European countries found that banking sectors dominated by large international groups tend to be particularly conservative, "avoid innovation or risk-taking connected to the development of specific new products" for cooperative housing, and are "calibrated to for-profit real estate developers building apartments for sale."^[16]

#The Patient Capital Gap

Housing cooperatives require what practitioners term "patient capital"—financing with long maturities (often 30–50 years), modest interest rates, and investors willing to accept returns below market rates in exchange for social impact. Such capital is scarce across Europe.^[16][14]

The MOBA network's research identified a critical gap: "currently available loans for organisations have a very short maturity and are thus not appropriate for rental and cooperative housing." Where bank loans are available, they typically offer maturities of 10–15 years at variable rates—fundamentally mismatched with cooperative housing's generational perspective.^[16]

In Western Europe, some specialised financial institutions serve cooperative housing: GLS Bank in Germany, Banque Alternative Suisse in Switzerland, and Coop57 in Spain provide long-term, low-interest loans aligned with cooperative principles. However, such ethical banking institutions are absent in most European countries, and even where they exist, their capacity is limited relative to demand.^[15]

#Land Access: The Urban Affordability Paradox

#Scarcity in High-Demand Areas

Access to affordable land in urban areas presents perhaps the most intractable barrier to cooperative housing expansion. The locations where housing need is greatest—major cities with employment opportunities, public services, and transport connections—are precisely where land costs have escalated most dramatically.^[17][18]

This creates what might be termed an "urban affordability paradox": cooperative housing is most needed in expensive urban centres, but land costs in these locations make affordable cooperative development nearly impossible without substantial subsidy or public land allocation. In many cities, land costs represent 30–50% of total development costs, fundamentally constraining what is achievable through cooperative organisation alone.

Research on Finnish housing cooperatives illustrates this dynamic vividly. Despite national government support for cooperative housing through loan guarantees and a pilot programme, cooperatives in Helsinki consistently struggled to access land. As one project representative explained: "We talked with the City, but they said we cannot assign this plot for you, this land is too expensive, this is just too valuable."^[17]

#Entrepreneurial Municipal Land Policies

A crucial—and often underappreciated—barrier is the shift in how municipalities approach public land ownership. Across Europe, cities have increasingly adopted "entrepreneurial" approaches to land management, treating municipal land portfolios as assets to be optimised for revenue generation rather than deployed for public benefit.^[17]

This transformation, accelerated by EU competition rules and fiscal pressures on local governments, has profound implications for cooperative housing. When municipalities must demonstrate that public resources (including land) are not providing "state aid" that distorts markets, allocating land below market value to cooperatives becomes legally and politically fraught.

The Finnish case demonstrates these tensions clearly. Despite housing policy rhetoric supporting cooperatives, Helsinki's land department refused to allocate below-market land because cooperatives were deemed "not social enough" (not serving disadvantaged groups under EU definitions) and "not lucrative enough" (unable to compete with commercial developers in land auctions).^[17]

This reveals a fundamental tension: cooperatives serving middle-income populations—precisely those priced out of market housing but ineligible for social housing—fall into a policy gap. They are too "middle-class" for social housing land allocations but cannot afford market land prices.

#The Zurich Exception

Zurich's success with cooperative housing—where one in five residents lives in a cooperative, with a target of one-third by 2050—demonstrates what sustained public land policy can achieve. The city has allocated municipal land to cooperatives through favourable long-term leases for over a century, and "not a single cooperative has left this programme."^[18]

However, this success reflects historical path dependencies that other cities cannot easily replicate. Zurich's cooperative sector was established when land costs were lower and public land ownership was more extensive. Cities attempting to build cooperative sectors today face fundamentally different conditions.

#Regulatory and Institutional Barriers

#Ambiguous Legal Frameworks

In many European countries, cooperative housing occupies an ambiguous position within legal and regulatory frameworks designed around conventional tenure types (ownership and rental). This ambiguity creates practical obstacles at every stage of cooperative development.^[17][18]

• Legal recognition: Some countries lack clear legal definitions for housing cooperatives, forcing them to operate using legislative tools not designed for their purposes.
• Tax treatment: Tax systems designed for individual ownership or commercial rental often disadvantage cooperatives. Germany's housing cooperatives lost their special tax status in 1989.^[2]
• Planning regulations: Zoning frameworks typically distinguish between owner-occupied and rental housing, with cooperatives fitting awkwardly into neither category.

#EU State Aid Constraints

European Union competition law casts a long shadow over cooperative housing policy. The EU's state aid rules require that public subsidies be targeted at "Services of General Economic Interest" serving disadvantaged populations. This framing creates structural tensions with cooperative housing models serving middle-income populations—those priced out of market housing but above social housing income thresholds.^[17]

#Regulatory Fragmentation

Housing policy in most European countries is fragmented across multiple levels of government. National governments control housing finance; regional authorities set planning frameworks; municipalities control land use. This fragmentation creates coordination failures that particularly affect cooperative housing, which requires alignment across finance, land, planning, taxation, and social policy domains.^[17]

#Organisational Capacity Constraints

#The Complexity of Cooperative Development

Developing cooperative housing requires navigating extraordinary complexity. Projects must simultaneously manage architectural design, construction procurement, financing, legal structure, community organisation, and regulatory compliance—all whilst maintaining democratic participation.^[15][16]

Unlike private developers with professional teams, resident-led cooperatives typically rely on volunteers learning these skills whilst maintaining employment and family responsibilities. Successful projects typically require 3–7 years from initial organisation to occupancy.

Research on MOBA network cooperatives found that "implementing these ambitious and complex objectives requires the participation of motivated and highly and diversely skilled persons." Yet "the work associations perform for MOBA is mostly done on a voluntary basis. This can be challenging given the enormous workload and complexity of tasks involved."^[15]

#Limited Institutional Infrastructure

In countries without established cooperative housing traditions, the institutional infrastructure to support new cooperatives is largely absent. Established sectors benefit from federation support, knowledge networks, established financial relationships, and professional service providers experienced with cooperative development. Where these supports are absent, each new cooperative must reinvent fundamental processes.^[15][18]

#Political Economy: Structural Impediments

#Homeownership Ideology

Across much of Europe, housing policy has been dominated by what researchers term "homeownership ideology"—the belief that individual property ownership represents the natural and desirable tenure form. This ideology shapes policy through tax incentives favouring ownership, subsidies supporting individual purchase, and regulatory frameworks treating ownership as the default.^[18]

#Financialisation Pressures

The broader financialisation of housing—the transformation of homes from places to live into financial assets—creates structural pressures against cooperative models. Cooperatives represent a fundamental challenge to financialised housing: they remove dwellings from speculative markets, prioritise use value over exchange value, and prevent wealth extraction by external investors.^[15][16]

Research on cooperative housing pioneers in Central and South-Eastern Europe explicitly frames their work as "de-financialisation of housing"—developing "mechanisms that decouple housing from the financialised logics of housing development."^[15]

#Regional Variations: A Three-Tier Europe

The barriers to cooperative housing expansion operate differently across European regions, creating what might be characterised as a three-tier landscape:[6]^[15][18]

Tier 1 — Established cooperative sectors (Switzerland, Germany, Austria, Scandinavia): These countries benefit from historical cooperative traditions, established financial infrastructure, and supportive regulatory frameworks. Barriers relate primarily to maintaining and expanding existing models amid rising costs and competitive pressures.

Tier 2 — Emerging cooperative movements (Spain, Netherlands, France, UK): These countries have seen renewed interest since 2008, often driven by grassroots activism and municipal support in specific cities. Barriers include developing appropriate legal frameworks, building financial infrastructure, and scaling from pilot projects to mainstream provision.

Tier 3 — Nascent or absent cooperative sectors (Central and South-Eastern Europe, Southern Europe): These regions face the most fundamental barriers: absence of cooperative housing traditions, underdeveloped financial products, limited organisational capacity, and regulatory frameworks that do not recognise cooperative models.

Understanding these regional variations is essential for designing appropriate interventions—and suggests that any Pan-European initiative would need strategies tailored to each tier's specific challenges.

#Part VI: How Cities Are Overcoming These Barriers

The barriers outlined above are formidable—but they are not insurmountable. Several cities across Europe have developed comprehensive policy frameworks that enable cooperative housing to flourish. Their experiences offer crucial lessons for any initiative seeking to expand cooperative housing at scale.

#Zurich: The Gold Standard

Zurich represents the most successful example of sustained municipal support for cooperative housing. The city's policies include:

• Favourable land leases: Municipal land is made available to cooperatives at below-market rates through long-term leases, with not a single cooperative having left this programme since it was introduced over a century ago.^[18]
• Financial support: Zero-interest loans and loan guarantees reduce financing costs.
• Political commitment: The city has set a target for one-third of housing to be cooperative-owned by 2050.^[7]
• Inclusionary requirements: New developments must include proportions of affordable and cooperative housing.

#Barcelona: Building a Cooperative Ecosystem from Scratch

Barcelona demonstrates that cities can rapidly develop cooperative housing sectors even from a very low base. Despite having social and cooperative housing stocks below 2%—among the lowest in Western Europe—the city has developed a comprehensive ecosystem of municipal support, innovative financing, and grassroots organisation.[22]

Key elements of Barcelona's approach include:

The right-of-use model (cesión de uso): A deliberate innovation ensuring permanent affordability by structurally preventing speculation. The cooperative holds property in perpetuity; members pay contributions that are returned when they leave; monthly fees are calculated on costs, not market values.[23]

Sostre Cívic as an umbrella cooperative: This organisation supports individual cooperative groups to develop, finance, and manage projects whilst advocating for the sector. It now coordinates 25 projects totalling over 500 units, with nearly 1,200 units completed, under construction, or in development.[25]

Multi-level financing architecture: Barcelona has combined municipal guarantees, land allocation, regional and national funding (€140 million agreement with ICO and ICF), and European financing (€31 million CEB loan to Sostre Cívic backed by InvestEU).[23][29]

Evolution from pilot projects to partnership frameworks: The ESAL framework agreement moved from adversarial tendering to collaborative partnership, treating cooperatives as partners rather than competitors.^[27]

Barcelona's experience demonstrates that determined municipal support, innovative financing, and grassroots organisation can rapidly expand cooperative housing—but also highlights that scale remains a challenge, with the 400-unit target over 10 years representing only a fraction of annual housing need.

#Freiburg: Common-Good Orientation

Freiburg's Kleineschholz development represents a pioneering attempt to create a housing district entirely oriented toward the common good:

• Concept-based tendering: Land is allocated based on the quality of proposals rather than the highest price.
• Exclusive allocation to collaborative housing: Only collaborative housing organisations participate, rather than profit-oriented developers.
• Leasehold models: Land is offered through leasehold to prevent speculation.
• Subsidised housing requirements: At least 50% of residential space must be subsidised rental apartments.^[21]

#Categorising Support Mechanisms

Across these cities and others, support mechanisms for cooperative housing can be grouped into several categories:

Land policies: Below-market land allocation, long-term leases, land banking, inclusionary zoning requirements.

Financial support: Subsidised loans, loan guarantees, grants for development costs, tax benefits, housing allowances for residents.

Regulatory frameworks: Legal recognition of cooperative models, tenant protections, restrictions on conversion to private ownership.

Capacity building: Technical assistance, knowledge sharing networks, support for cooperative federations.

Political commitment: Targets for cooperative housing share, dedicated municipal offices, integration into housing strategies.

#Conclusion: From Local Success to Pan-European Scale

This chapter has traced the full arc of cooperative housing in Europe: from its origins in 19th-century working-class self-organisation, through post-war expansion and neoliberal retrenchment, to contemporary renewal. It has documented the diverse models that have evolved across different national contexts, the substantial value cooperatives deliver across economic, ecological, and social dimensions, and the barriers that prevent them from scaling.

The evidence is unambiguous: housing cooperatives work. Where they receive adequate support—through land access, favourable financing, and enabling regulatory frameworks—they flourish and make substantial contributions to addressing housing needs. Cities like Zurich demonstrate that cooperative housing can move from a niche alternative to a mainstream tenure serving significant proportions of the population.

Yet the evidence is equally clear that cooperatives alone cannot solve Europe's housing crisis. The barriers documented in this chapter—insufficient patient capital, entrepreneurial land policies, fragmented regulatory frameworks, limited organisational capacity, and structural pressures from financialisation—are not accidental. They reflect political choices embedded in housing systems across the continent.

#The Case for a New Approach

Several insights from this analysis point toward what a more systematic response might require:

Transnational coordination is essential. The MOBA network's experience demonstrates that isolated local initiatives struggle against structural barriers. As researchers observed, "we came together to tackle these large-scale processes with cross-border alliance and with an inherently international approach."^[16] Individual cooperatives—even successful ones like La Borda—cannot individually shift the institutional landscape. But coordinated action across borders can build the scale, expertise, and political influence needed for systemic change.

Patient capital requires new institutional forms. The gap between what conventional financial markets offer and what cooperative housing requires cannot be bridged by individual projects negotiating with individual banks. What is needed are financial institutions explicitly designed to serve cooperative housing—revolving funds, guarantee mechanisms, and ethical banking infrastructure operating at European scale.

Cities need partners. Even the most committed municipalities—Barcelona, Amsterdam, Freiburg—operate within national regulatory frameworks and EU competition rules that constrain their options. They cannot individually create the legal recognition, tax frameworks, or financing infrastructure that cooperative housing requires. But coalitions of cities, working with cooperative movements, could collectively advocate for the policy changes needed.

Knowledge and capacity must be systematised. Currently, each new cooperative project must reinvent fundamental processes—legal structures, financing approaches, construction procurement, community organisation. Established cooperative sectors benefit from federations that have codified this knowledge over decades. Newer movements lack this infrastructure, dramatically increasing the difficulty of development.

Multiple stakeholders must be aligned. The complexity of cooperative housing—spanning housing policy, land use, finance, planning, and community development—means that no single actor can deliver systemic change. What is needed is an approach that brings together cities seeking affordable housing solutions, citizens seeking secure and community-oriented housing, impact investors seeking social returns, and policymakers seeking alternatives to failed market approaches.

#Toward the Next Chapter

These insights suggest that addressing Europe's housing crisis through cooperative housing requires more than supporting individual projects or advocating for better policies. It requires building new institutional infrastructure capable of operating at European scale—coordinating across borders, mobilising patient capital, building coalitions with cities, systematising knowledge, and aligning diverse stakeholders around a shared vision.

The following chapter examines how such an institution might be designed: a Pan-European multi-stakeholder cooperative that could combine the proven strengths of traditional cooperative models with the innovative approaches of contemporary movements, whilst marshalling the resources and partnerships needed to overcome the structural barriers documented here. The European Housing Coop represents one vision for what such an institution could look like—and how it could transform Europe's housing landscape.