HABITATINTL. Vol. 15. No 1Q.p~ 39-M. 1991 Pnnted m Circa~ Bntam

0197-3975/91$5 00 + o.a, 0 19% Pcrgamon Press plc

Assessment of Co-operative Housing*

SAHAP CAKIN King Faisal University, Saudi Arabia

ABSTRACT

Housing co-operatives have contributed to the production of houses since the foundation of the Turkish Republic in 1923. In fact, 39.5% of the total new housing in 1989 in Turkey is estimated to have been built through co-operatives.

This article aims to discuss the major findings of a survey of housing co- operatives in Istanbul, in relation to the problems involving finance, provision of land and utilities, design and construction, maintenance and use, with a view to the determination of future strategies.

HOUSING CO-OPERATIVES IN TURKEY

To meet the housing needs of the population, various organisational forms have resulted in diffcrcnt residential patterns in Turkey. These patterns differ from each other in terms of ownership. dwelling size, quality of construction and the characteristics of the market they scrvc. Earlier studies (Tekeli, 1982; Cakin, 1986a) identified eight major organisational forms of housing in Turkey, which may have similarities to those in other developing countries. These are: (1) production by individuals; (2) production by small builders; (3) production by private firms; (4) production by housing co-operatives; (5) production by associations of housing co-operatives and municipalities; (6) production by state; (7) production by squatters; (8) semi-organised production by squatters.

Turkey is faced with a growing shortage of good quality urban housing. The gap between the number of dwellings needed and those that are built has been largely filled by squatters. The major causes for the current housing shortage in Turkey are: population growth; the increasing number of nuclear families; migration from rural areas to urban centres; natural disasters; and the physical obsolescence of dwellings. [It is estimated that the proportion of people living in cities will be increased from 50.3% in 1985 to 70% by the year 2000 (Keles, 1989).]

Following the foundation of the Turkish Republic, a new bill was introduced in 1925 to encourage civil servants to form co-operatives. However, the first housing co-operative was not founded until 1934 by the civil servants with government incentives. Between 1940 and 1950; 196 co-operative houses were built in the new capital, Ankara. Municipalities were given the authority to sell public land to individuals and co-operatives. In 1945, the number of co-

’ Reported in the proceedings of the IAHS Congress on New Trench m Housing Prqecfs. 1987. The author is solely responsible for the views expressed in the article and for the accuracy of the data quoted. Therefore, the views expressed here are not representative of any organwtlon or Institution.

39

40 Suhnp Cakm

operatives reached 60 with 5.000 members in the whole country. Introduction of the multi-party democracy and the new social policies brought about changes in the housing scene. Trade unions, the Social Insurance Organisation (SSK), and the Ministry of Housing and Resettlements were all founded within this period. Mechanisation in agriculture and the construction of new highways and new factories in cities accelerated urbanisation. From 1946 on, the Housing Credit Bank supported co-operatives by loans. Between 1948 and 1960, 349 co- operatives received such loans to complete 13,585 dwelling units. The Social Insurance Organisation provided loans to workers as well. In 1962. the number of co-operatives reached 1,600 with 150,~ members. However, houses built by the co-operatives between 1945 and 1963 did not exceed 7% of the total houses built in that period.

In 1969 a new co-operatives bill was introduced to create opportunities for co- operatives to purchase land cheaply. During the three successive periods of planned development (1963-1967, 1965-1972 and 1973-1977), the Housing Credit Bank provided loans for 55,000 co-operative members. On the other hand, 119,338 members received loans from the Social Insurance Organis~tion during the same period. The average share of housing co-operatives in the total house production between 1963 and 1975 was 6.3%. the average sizes of individual dwellings built by the co-operatives within the same period was reduced to less than IO0 m’. The first and the biggest association of housing co- operatives (Kent-Koop) was founded in the late seventies in Ankara. Kent- Koop undertook the task of building 55,000 dwelling units during the first phase with the help of loans from the European Settlement Fund and the National Public Housing Fund. The r??Llnicipality of Ankara played a pioneering role by establishing the planned scttlcmcnt of Batikent to house these families.

Bctwccn 1976 and I‘M), housing co-opcrativcs contributed approximately 12% of the total house production. Table 1 shows the number of dwellings built by housing co-opcrativcs in proportion to the total number of dwellings needed bctwccn 1963 and 19S9.

Dwellings built by housing co-operatives constituted an average of 11% of the total dwellings nccdcd in the country, as shown in Table 1. The number of co- operatives increased from 1,631 in 1975 to 3,216 in 1984, and to approxim~ltcly 4,000 in 198.5 with a membership of 300,000. The main reason for their slow progress over the period bctwcen 1963 and 1980 can be attributed to the national housing policies which gave prcfcrence to the private sector. However, the new govcrnmcnt set up in 1980, following military intervention, passed a mass housing bill in 1981 that limited the use of the Public Housing Fund to housing co-operatives, thus creating a rapid increase in the number of co-operatives. Since the introduction of the second mass housing bill in 19S4, a substantial portion of the fund has been used by co-operatives. In fact, contribution of the housing co-operatives toward total house production has reached its highest level at 39.5%.

A typical co-operative today is run by a co-operative council which consists of a minimum of seven members. It undertakes most of the tasks and makes decisions such as purchasing land and commissioning design in accordance with the co-operatives act. Financing organisations, through their bye-laws and regulations, control design and construction, which normally is undertaken by an independent builder. In some cases, co-operatives carry the responsibility for the management and the maintenance of dwellings. Conditions imposed by the financing organisations allow for constructing small and medium sized dwelling units only. In general. co-operatives cater for the needs of the middle and middle-low income groups of the population in Turkey. The plans of two blocks of flats in Istanbul and Ankara built by housing co-operatives are shown in Figs 1 and 2.

Assessment of Co-operame Housmg 41

Table 1. Dwelhng units needed and builr by housmg co-operatives

Years Dwelling units needed Dwelling units built by howng co-operatwes %

I963 100.636 I .M)8 I6 196-t 105.433 I .47x I.1 1965 110.469 2.795 25 1966 I I5 785 3.570 3.1 1967 121.311 4.172 34

First plan 533 634 13 623 1.5

1968 141 OGil J 56-t 3.2 1969 I71 cwn, 8 277 48 I Y70 IX4 ho0 l2.654 6.Y IV71 19-l.000 I-I Ml 75 I Y71 205 .YOo 12.277 6.0

Second plan HY9.5W 57.333 57

I Y73 ‘713.m 2.507 12 0 I’)74 231 .M) I3 Yhh 6.0 I Y75 ?42.m IJ.rw)s 5x IO76 764 XM) Ih 643 6.4 lY77 273.200 25.142 Y?

Third plan I .ZN.ool) 95 263 7x

107x ?~S.ol)o 20 OJY 12.0 I Y7Y 277.641 3 I.437 II 3 I ‘Nw 3lY..l60 31.538 Y Y I OS.4 -20.1 I YHO -3’) 5

Source - Turkish Statistical Yearbook 107111Y79/1YXl, State Statl\tical tmtltutc. Ank;lra.

A COMPARATIVE ANALYSIS OF SIX CO-OPERATIVES IN ISTANBUL

In the light of the priority given to housing co-operatives by the new bill, a field study aimed at a comparative analysis of housing co-operatives was conducted in 1984. Results of the interviews held with the officials of the six housing co- operatives are discussed within the framework of some of the problem areas. Interviews have been complemented by site visits to the dwellings in use.

Objectives and methodology

The field study had two major objectives: (I) to identify major problems facing housing co-operatives in practice; (2) to suggest improvements to overcome these difficulties. Six co-operatives, all in Istanbul were selected as case studies for a number of reasons:

since the dwellings were all built in Istanbul, site visits and direct observations wcrc possible; co-operative officials who were interviewed were all friends or colleagues of friends and held responsible positions to provide sufficient information on all aspects from the inception of the co-operatives to the occupancy stage; all the dwellings built by these co-operatives were completed within the last seven years and were in use. The basic data on the co-operatives surveyed are shown in Table 2. Two of the

co-operative officials interviewed were also users, which gave us the chance to collect first hand information on the problems related to the management, maintenance and use. Interviews were conducted at interviewees’ offices with prior appointment. Face-to-face interviews were preferred over questionnaires

42 Sahap faktn

Fig I Block of fiats zn Bzrltk hotcstng co-operutrve, Ortdwy. lrtanhrrf Gross czren - 100 nz’

Sozrrce - Arkgtckt. Vol. JS, No. 375, p 91. 1979.

Fig ,7 Olork of flats zrz &zlgzz~ housing co-opertztive, Ankuru Grorr arrcl - RJ mJ. Sorcrce - Mlmarhk. No. 156. p 84. IYfNI3.

to obtain detailed information on a variety of issues and to clarify questions which may not be understood in a questionnaire. All questions included in the interview form were open-ended and these were grouped into six aspects of inquiry: (1) basic characteristics and the history of the co-operative; (2) financial aspects; (3) provision of land and utilities; (4) programming and design; (5) construction; (6) management, maintenance and use.

Resrdts

Results of the survey arc discussed in six major headings as parallel to the major areas of inquiry where problems related to a number of crucial issues have been identified.

Problems encortntered during the initial formation of the housing co-operatives. In accordance with the current co-operatives act, seven members and a modest capital are sufficient to obtain necessary permits and found a housing co- operative. Interviewees expressed no major problems encountered at this stage.

hsesrment of Co-operu~~ve Housing 33

E ;

ShJp (-LAirI

ttssessmenr of Co-operame Houwtg 45

Problems related to finance. The financial conditions of the housing co- operatives surveyed are shown in Table 3. All of the members received loans from the Social Insurance Organisation. Members of co-operatives 4 and 5 used loans from the Public Housing Fund as well as the Social Insurance Organisation. The increase in loans over the years could not match the inflation rate. hence the proportion of loans in total housing costs gradually decreased. Members’ main difficulty lay in paying this growing difference which often resulted in the failure of the housing co-operative to complete construction. The high inflation rate resulted in high credit cost and its variability over time. The inability of borrowers to afford the interest rates sometimes eroded the demand for loans. The lender was also faced with the risk of tying up funds with a fixed return when inflation was so variable. Another major problem seemed to be the relatively long time taken by the financing organisation to assess members’ applications for loans. In the meantime, increases in building materials and labour costs had to be met by the co-operative members.

The conditions set forth by the Social Insurance Organisation to offer loans were instrLlmental in the whole process and to a significant extent shaped the houses built by the co-operatives. Some of them were as follows: (I) the applicant co-operative member should not possess another house or flat: (2) the applicant should not be a member of another housing co-opcrativc; (3) the applicant as a current or retired worker should have paid a minimum social insurance premium for 1,800 work-days; (4) the site should have an arca plan and the co-operative should have obtained a building permit; (5) dwelling units should not be sin&-storey and not larger than IO0 m’ in gross area; (6) dwellings should meet the ~lrc~~it~~tur~~~ and structural standards and norms set up by tho nl~lni~ip~liiti~s.

Probktm crmmtltered in tire provision of ltnd atrd ~ctilities. The provision of land and utilities in the housing co-operatives surveyed is shown in Tahlc 4. Traditionally, financing organisations in Turkey did not offer loans to purchase land and construct utilities. Therefore, housing co-operatives preferred purchns- ing expensive land with existing utilities in the planned sections of cities. In casts whcrc the site was outside the planned sections of the city, it took a long time for the housing co-operatives to get local plans completed and approved by the municipalities. Most of the housing co-operatives could only afford to purchase land in instalments, thus members obtained their title deeds after the total

Purchase of land _--____

Sttr location Mettlod of paymcnr

for land

sire arc;,\ Provfsion of ulllities (m’)

_- -..-.-

1 L;tncl 1, purch.rscd by In the unpl,~nned I? monthly instaiments the co-opcr;~we wctton of the city

2 dlrecrly from the In the unplanned 16 monthly mstalments owner(b) section of the city

In the unplanned IX monthly instalments section of the city in the uIlpl~nned 12 monthly ins~aImen~s section of the city In the unplanned 13 monthly instalments sectton of the sty

In rhe unplanned 12 monthly instalments sectton of the sty

By the co-operarwc 32.wO

Electrtcal power generator MM)0

is provided by the State. other utlhties are supplied by the co-operartve By thr co-operawe 13.000

By the State 3MX)

Electrical power generator is provided by the co- operatwe. other utihties are provided by the State Septic ranks are prowded by the co-operative. other utllmes are supplled by the State

4700

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J6 Sahup Cakln

payment was made. Some members even stopped monthly payments as a result of mistrusting co-operative administrators. Another problem for the members was the cost of utilities adding to the overall costs.

Problems related to the programming and design. Data on the programming and design process in dwellings built by the co-operatives surveyed are shown in Table 5. Interviews indicated the lack of a comprehensive programme based on user needs and requirements. Instead. planning and building regulations to a large extent dictated the built form. Although these constraints and the limitations of the site might necessitate different plan types and flats of different sizes, flats in the end were allocated randomly among members, thus causing conflicts between the spatial requirements and the plan types. Approval of projects by the municipality and the financial organisation took a long time and prolonged the process. All of the flats had two or three bedrooms and areas ivcre obviously constrained by the conditions of the financing organisation. Opportunities to elucidate users’ opinions systematically on plan types and built- in furniture had been missed in all of the co-operatives surveyed.

Problcm.~ erzcowltered druirrg constntctiorl. Data on the construction arc illustrated in Table 6. In all of the co-operatives survcycd, a builder was selected through bidding. Members’ loans wcrc paid monthly by the financing organis- ation to builders after controlling the amount of construction work completed on the site. In all casts. labour intcnsivc tcchnologics wcrc utiliscd in construction with simple mcchnnisation, which prolonged construction periods and incrcascd costs.

Technology uwd In con\tructwn

Construction pcrlod

(month\) Type of hIddIng

Number of flat\

cwbtructed

I Tradltlon,ll technology has been uwd in con\tructlon

2

3

4

5

6

DHclllnp h.lvc hccn Proposals for biddlng con\tructcd hy were rcquestcd from prtratc hulldcrs independent bulldcrs

2%

79

xx

72

96

70

Assessment of Co-operatrve Housing 47

Problems related to the management, maintenance and use. The ownership pattern, management and use process in the co-operatives surveyed are shown in Table 7. In some housing co-operatives, the legal existence ends after the completion of the dwellings. In others, new members are admitted and a new project starts. In the latter case, all duties are assumed by a professional administrator. None of the co-operatives surveyed undertook management and maintenance functions. Instead, each block of flats was managed and maintained independently by its residents in accordance with the flat ownership act. Common areas between blocks were maintained poorly, if at all. Lack of an efficient management and maintenance organisation often caused conflicts among residents over financial matters.

CONCLUSIONS

The problems listed above tend to be related to each other and the financial ones had an overafl effect on all others. The major financial bottlenecks were found in purchasing the land. provision of utilities and in construction. Generally, the long periods taken by the bureaucracy in approving the plans and projects was found to bc instrumental in the failure of many housing co-operatives. Thcrc was no co-operative training for the members. Communal spaces between blocks, in particular, wcrc poorly maintained. Co-opcrativc members did not participate fully in the process. p~~rti~L]l~~rly in casts whcrc the co-operative was organised by profcssior~al pcoplc. It was found that most of the co-operatives in Istanbul were organ&d by professional managers, whose goals in some cases, conflicted with the goals of the co-operative members. The housing co-npcrativc then bccamc a profit-oricntcd cntcrprisc and it was quite common to meet professionals who opcratcd like a dcvclopcr; provided land in advance, commissioned design and admitted mcmbcrs for the co-opcrativc. Fraud was not uncommon in those cases.

In the light of the case studies, a number of suggestions can be made to improve the functioning of housing co-operatives and increase their contribution towards total house production in the developing world. These suggestions cover the organisational. economical, site and utilities, programming, design, con- struction, use and maintenance aspects.

Suggestions on the organisational striictiue

Since the existing housing co-operatives in most developing countries are small scale and one-off enterprises, one solution for their inefficiency would be to organise them under co-operatives’ associations which would be run by experienced and trained professionals undertaking the technical services needed. Hence the individual co-operatives would no longer need the costly project managers, and the possibilities for financial irregularities, both as a result of inexperience and fraud, would be less. New co-operatives would become new members and the co-operatives association would exist for a long time in order to complete its mission. Associations of co-operatives would be powerful enough to co-operate with other co-operatives, trade unions, public agencies and especially with the municipalities. They could be founded in every large city, and even organised at the regional level to obtain loans from international organisations and to utilise advanced construction technologies and research on local materials and the use of solar energy. The regional associations could then form a national federation of housing co-operatives. However, a new housing co-operatives act would be needed to implement these organisational changes.

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Assessmenf of Co-operative Housmg 39

Suggesrions on the financial aspects

As in Turkey, it would be useful to form a national fund for housing in other developing countries. The proportion of loans in the total cost of houses needs to be increased to the level of 60-70%. Bureaucratic delays could make loans insignificant in countries with relatively high inflation rates. Therefore, assessment of the applicant members and projects* eligibility for loans should be completed by the lending organisation in the shortest time possible. Co- operatives should be able to save loans offered to them in a special savings bank to protect them from the high inflation rate. Each co-operative needs to prepare a realistic repayment and construction schedule.

The ministry of Public Works should update building cost indices every three to six months in line with the inflation figures. To protect the lending organisation from the high rate of inflation, indexation could be introduced (Wheaton, 198.5).

Suggestions on the provision of land and utilities

In some sections of the cities, land costs accounted for 50% of the total cost for housing. To reduce the burden on the co-operatives, municipalities should make suitable land available for the association of co-operatives. Similarly, public agencies should provide utilities in the planned areas of cities. Kent-Koop in Ankara is one of the most successful examples of this approach where Ankara municipality provided land and assisted in providing utilities and maintenance.

Suggestions on the pre-design programming and design

Co-operative housing projects were prepared by architects who were selcctcd by the co-operative managers. Architects’ fees wcrc in most cases minimal, thus not allowing for a detailed study of user needs and requirements. User participation in programming and design was minimal despite the advantages offered by the co-operative organisation in this rcspcct. Technical services organisation within the co-operative association could utilisc various techniques for user partici- pation and environmental education, such as user surveys, charctte and forums between users and the architects and building large models to convey design ideas to laymen.

Suggestions on the technology to be used in construction

Considering the growing housing demand in the emerging nations of the world, new technologies need to be used to build more houses, more economically and in a shorter time. Although some private firms employed industrialised methods in construction, it was found that traditional technologies were predominantly used in constructing dwellings owned by co-operatives. Regional associations of co-operatives could initiate industrialised techniques of building and even set up their own plants, bearing in mind the regional conditions such as the availability of labour and local materials. Use of prefabricated elements could save time and reduce construction costs.

Suggestions on the management and maintenance of co-operative housing

After the completion of construction, ownership of dwellings was transferred to the co-operative members in Turkey, as in the co-operatives surveyed. Lack of a permanent organisation after occupancy made the management and mainten- ance of the communal areas very difficult. In contrast, in Scandinavian countries

50 Suhup Cukin

where the individual dwellings were owned by the co-operative even during occupancy, a high quality of maintenance services was possible. A viable solution in this regard would be to transfer the ownership of dwellings to members, but to keep the ownership of land in the co-operative, thus making an acceptable level of management and maintenance possible (Cakin, 1956b).

Housing co-operatives could and are very effective forms of organisations to provide shelter for the low and middle income groups. However, a number of steps need to be taken to enable them to function more effectively; such as to organise them under associations. thus enabling them to undertake larger projects, to make legal changes towards increasing loans to ensure completion of construction on time, to implement national and local policies enabling local and central governments to assist co-operatives to purchase land and provide utilities. to enable members to participate in programming and design and finally to educate members in the co-operative organisation.

REFERENCES