New Coop Registration - FCA costs?

Hi Pat,

I'm currently working with a group that wishes to replicate the
model of the CLT and MHOS so could you give me details of the work
you did so we don't reinvent the wheel.

Also to say that the CLT doesn't have to lease to a MHOS but could
lease to any of the other housing co-op models that don't require
equity from the members.

Andy

HI Andrew
If you google Pat Conaty Common Ground you will find the original and seminal MHOS report. This was in 2003 for NEF and CDS Co-ops but the work I did with this action research team and others to set up the National CLT Network after that and get CLTs up and running in England and Wales focused on simpler CLT structures and sadly not linked to co-ops. This is tragic. The problem we encountered again and again with the MHOS model was the financing. It is a shared equity model where members take on a lease aligned to a corporate housing co-op mortgage and with lease payments based on a percentage of income - typically 1/3. You will see the modelling for this in the report. The problem has been that banks are not familiar with this model so we could not get any bank to finance it. The debt amortisation does not decline in a straight line. When new members join, the co-op needs to pay out equity shares based on what equity as a member they have repaid. This normally would increase the outstanding debt. Banks were unwilling to increase the corporate loan when members leave. Lilac has solved this problem with a normal mortgage from Triodos (also unwilling to accept a different amortisation profile) while Lilac has set up an IPS affiliate company to raise capital for members to pay them out when the leave. Leeds Community Homes, Accord Housing in the West Midlands and the Wales Co-op Centre and co-op housing work in Wales have looked into getting a housing association partner to broker the finance as part of large borrowing facilities to assist new MHOS projects get going. A grandfathering model. But in Scandinavia from the 1920s the problem of accessing finance from mainstream banks was so bad, they set up Tenant Savings Banks. Ditto other countries like Austria I believe. We need to consider this here. Talk to Lilac and Carl Taylor at Accord. Some buddies of mine in Vancouver have succeeded in setting up a rental version of MHOS for a huge development of 340 units and different housing co-op and housing association apartments. Maybe this is the way to prove MHOS here as a compromise. But Lilac has succeeded for a 20 unit development. So for most cases, there way forward should be find. Steve Bendle, a joint author of Common Sense, worked out the model for Lilac and with Triodos. Good luck!

Thanks Pat, I'll check that out.

thanks

Andy

If a problem finding the file, email me at [email protected]

Thanks Pat,

the file is down on CDA's website and amazon say it's out of
stock, but I found it on NEF's archive

thanks

Andy

Good. I chaired the Reimagine Housing session at the Co-op Congress last year and we invited many people working on MHOS to speak including: Andy Edwards at the Transition by Design co-op is working on this, Jonathan Lindh at Leeds Community Homes and Gemma Jerome at Terrace 21 MHOS in Liverpool. The session we ran at Congress went down so well there is some talk about a full day event to help crack this development impasse.

I would come to a full day event as am
working with Yorspace and Stirchley Co-operative Development.

I also know Andy through working with him on opposing ATED for
Housing Co-ops. And I did Leeds Comm Homes Share offer SM
assesment.

I would be much more interested though if it was the idea of a CLT
renting to any housing co-op rather than just a MHOS as I work
with a lot of people that don't have any equity but don't want the
traditional social housing (benevolant landlord approach) and do
want the control a housing co-op gives.

Cheers

Andy

ps we also have some other models we have been working on to share
capital between housing co-ops that it would be good to throw into
the mix.

I have raised the idea of a full day event with Co-ops UK. There is interest but it would take work from a steering group. Andy, Leeds CH, Carl Taylor and Redditch co-ops, the Student housing co-ops and Terrace 21 are keen to support this. My friends in Vancouver tried to pursue with the BC Co-op Housing Federation the MHOS as a shared equity co-op but found this tough going for the same reasons in the UK so they opted then for a CLT and rental co-op partnership on land the Mayor and the City Council were willing to provide. I could get one of my friends to give a presentation on the Vancouver breakthrough via a teleconference. Speak to Jon Atherton about the idea. He and I put together the Co-op Congress session that was very well attended last July