First, there was traditional student accommodation that offered students rustic terrace houses, many of which adorned with flaking paint on the front doors and window frames. Then came the private halls that were driven by institutional money that poured into the market unabated; skyscrapers offering premium student accommodation started popping up left, right and centre and boasted some of the most impressive (and expensive) facilities that made young professionals green with envy. Now, students are looking to reclaim their territory with student co-operative housing, but what are these 'co-ops' and how do they work?
Of the people, by the people, for the people
Fundamentally, a co-operative is an association of people who participate in mutually beneficial co-operation. This concept, based on the principles of self-help, self-responsibility, democracy and equality, can be applied to everything from banking and insurance to retail and housing. In the case of housing, participants who have bought into the co-operative, typically with a nominal sum of £1, secure a mortgage as a collective. As the co-operative is set up as a not-for-profit organisation, rents are typically set at a rate that is just sufficient to cover mortgage payments, bills, repairs and renovations; this results in rents that are typically at, or below, the going market rate which ultimately translates into quantifiable savings for those involved - a boon for those who are cash-strapped or from disadvantaged backgrounds.
Decisions around the use of funds is taken democratically by members of the co-operative; in the case of student housing co-ops, members of the co-op can vote to allocate any excess funds towards redecorating, renovations or just redistribute it back to members to help lower the cost of living. As students move on to employment or just choose to leave the co-op, they sell their nominal stake in the collective to another student eager to get involved.
Incumbents beware, a serious contender
Over time, a student co-op will pay down the mortgage, resulting in an asset on the balance sheet. The members can then opt to either lower the rent in light of the fact that there is no longer a monthly mortgage repayment, or instead choose to expand by taking on other properties. The Berkeley Student Cooperative (BSC), a US student housing co-operative, started out during the Great Depression to help provide affordable housing and food for Berkeley students. Since 1933, the BSC has ballooned and now houses in excess of 1300 students in 17 houses and 3 apartment buildings.
As for the UK, the popularity of these collectives has been a little more modest. Having said that, February saw the inception of the 'Edinburgh Student Housing Co-op', which aims to offer cut-price rooms (in the order of £260 per month) to student members from September 2014. The project has already secured a 106-bed property in the highly sought-after area of Bruntsfield Links and is in the process of accepting applications from students. Similar initiatives are also springing up in Aberdeen, Birmingham and Sheffield, and 'Students for Cooperation', a federation of co-ops who 'aims to develop and support the growing student co-operative movement', have set up a nationwide network of cooperative projects to support the movement.
Whether or not the UK student co-operative initiative manages to maintain its momentum remains to be seen, but it should be taken seriously by landlords, agents and halls providers. Either way, it certainly is an interesting twist to the ever-changing UK student accommodation saga.
Image courtesy of Flickr