A Housing Co-op is a democratic business that owns or rents property for the purpose of housing its members. The rent is so high in Selly Oak because investor landlords are extorting students and making huge amounts of proﬁt whilst providing low quality housing. We are proposing the opposite – to buy property with loans from the co-op bank and cut out the middle man whilst creating affordable and high quality housing.
Members of a group that hope to form the Birmingham Students Housing Cooperative have been working with BCHS a cooperative housing association to develop a viable business plan for buying houses in the Selly Oak area and providing low cost rents. We have been working through the potential problems and risks of creating a company to buy two initial properties that we can live in.
It turns out the problems are few and our initial estimates of the rent rates, including regular repairs, management and a full refurbishment every 15 years our business plan is giving us a weekly rent rate of possibly as low as £38 per person (although this rate could creep up a little when other factors are included). When we entered the discussion with Carl Taylor from BCHS we knew we would probably be able to undercut the profit grabbing investor landlords that dominate Selly Oak but we had absolutely no idea that we would be able to deliver such incredibly low rates and remain financially viable. Given that rents paid by students living in Selly are generally above £60 the cooperative represents a saving of at least £1144 for the students that will live in the houses next year. Over the next forty years, without adjusting rent rates for interest, or adjusting for the fact that the priced of rented properties in Selly Oak is increasing faster than inflation, these houses will save students of Birmingham at least £457600 or half a million pounds!!
I’ll quote the text of a motion that I authored which has been deferred from two councils at the Guild for little to no good reason, but will hopefully pass when it is finally heard in January – to explain quite the extent of housing issues that students in Birmingham and across the country face.
Students across the UK spend 31% (or an average £4004)of their annual expenditure on rent, and the rate that housing costs increases is double that of inflation. Alongside the whole accommodation burns in student pockets, horror stories of ‘lost’ deposits, exorbitant holding fees and nasty landlords are common talking points in student life and have deep repercussions for student welfare across the U.K.
Currently Guild of Student housing policy is contingent on Government policy, lobbying and awareness raising, and provides no concrete and coherent strategy. Given that such a large percentage of student spending goes to accommodation it seems obvious that the Guild of Students should be taking a full and engaged approach to actively improving living conditions and end the widespread rent extortion of its members, One way to do this is to support and facilitate the creation of Housing co-ops which would provide accountability, affordability and security in housing. Housing co-ops fully supported by NUS and in the International Year of Co-operative, and at a time where conventional businesses are failing and rents are soaring it seems a good idea for the Guild to put its support behind the stable form of housing. The Guild has already put its support behind helping the Green Bike Project get off the ground and the People and Planet society have started their food co-op, it seems the time is ripe for housing co-ops with the support of the Guild.
Its clear that the rent is too damn high, we don’t know the full extent of the problem, but a certainty is that lobbying government and running a letting agency won’t fix. Students need to start thinking with their pockets and investing in a sustainable housing solutions like housing co-ops that will benefit them for generations to come. It would be brilliant if the Guild did as much as possible to facilitate the creation of these co-ops and promote them to the student body as much as possible – so if you are a student at the University of Birmingham speak to your councillor and make them aware of this motion and why it needs to pass in this Guild Council and shouldn’t be delayed yet again.
Students involved in the plans for the Students Housing Co-op refining the business plan in the next week or so to prepare for a meeting with Cooperative and Community Finance which is the loan fund from which we will secure the deposit on a ~£450k mortgage with which we are looking to buy two 5 person properties.
As well as the business plan we’ve been busy gathering a group of people who are prepared to live in this new housing co-op which would be open in time for the academic year of 2013-14.
However nothing is yet set in stone and we all in agreement that if the interest is there and people are keen to live in a democratic, cheap and friendly place they should get involved with the project! If you are interested contact me or join the Facebook group, the membership isn’t cemented just yet and this is a real chance to save yourself a tidy grand and be the start of something really positive.