Why Berlin loves co-housing projects
Winfried Härtel | Büro für Projektentwicklung





Why Berlin loves co-housing projects

A call for more democracy: Approaches to and ramifications of the various kinds of co-housing groups

Self-organized housing in Berlin
Anyone who delves into the main forms taken by self-organized housing in Berlin will quickly find out there are two primary approaches. On the one hand are groups that work to allow their members to own a residential apartment (Wohnungseigentum, abbreviated “WEG,” being the term for apartment ownership; Baugruppe or Baugemeinschaft are the usual terms used for these kinds of co-housing groups). On the other hand are groups in which the group itself is the landlord and the members the tenants. When groups of the latter kind decide what form of official business organization they will be assuming for their endeavor, they usually organize themselves into a "Genossenschaft" (cooperative) or "Verein" (club, society, association) – or into other forms such as a "KG" (limited partnership), "GbR" (civil law partnership) or similar such entity. As a project developer, moderator and supervisor, I am well acquainted with both kinds of groups. Since the two approaches – both of which have their own particular characteristics and idiosyncrasies, endearing features and difficult aspects – tend to attract distinctively different kinds of groups, it is impossible to assert either form as preferable for every case.

A boom in self-organized building
Berlin is currently experiencing an unheard-of surge in co-housing communities and communal living groups (GbR/WEG). These cooperatives have clear advantages when compared with conventional real estate development. Buildings of the same or better quality cost as much as 25% less with the co-housing approach than they do when purchased from real estate developers, who face expenditures including the costs and accrued interest for advertising during the advertisement phase, property acquisition taxes and also general profit- and risk-based surcharges. Members of co-housing groups are able to get a customized, ecologically optimal house that includes community spaces they have helped design, all in cooperation with others who also care deeply about the project, and for less money – at the wholesale price. The shortcoming of co-housing and communal living projects, on the other hand, is that the group has to work together to determine how they will be living and in what kind of house; this is not the best option for people who are unable to handle vagueness or uncertainty as to how the end result will look.

Co-housing projects that favor a tenant-based model for living together face many more difficulties. Members of this kind of group typically do not have access to the minimum amount of private equity needed at the outset for construction – that is, about 25% of the construction costs – and this lack of funds can only be supplemented in part by other kinds of “love money” or seed money in the form of donations, direct loans, development loans, long-term building leases or equity from a longstanding cooperative. This means people who want to live in a self-governing community as tenants are coming from a much more difficult starting point.

The process of building – particularly for co-housing groups – is becoming increasingly standardized and professionalized as architects and project developers specialized in working with co-housing groups take over the reins in carrying out the necessary communications, planning, construction and development work during the preparatory phases of a project. But largely pre-designing buildings to fit projected demands within the co-housing scene can lead to a loss of the expressly individual character that emerges when groups go through the communal project design process together. Hence, “pre-designed” projects must inevitably be viewed as a compromise.

Also, if a group can look back on a long history (sometimes even a very long history) of interaction surrounding the original idea they themselves brought into being – that of building and living as a cooperative – then they can typically fall back on a kind of “founding narrative.” And this, of course, cannot be prefabricated, no matter what the level of expertise.

It stands to reason that as long as the niche for this kind of construction project grows and enjoys an increasing amount of public attention, a corresponding number of enterprises will jump on the bandwagon – but without fully understanding the ramifications the contractual and financial structures underpinning any given co-housing project imply for the ensuing mesh of societal, structural and legal interrelationships. Although it makes matters considerably easier for co-housing groups when projects are pre-designed for them by specialized architects and project developers, the inherent focus of this pre-planning method on the physical process of construction can lead to an overemphasis of the ecological and architectonic aspects of living in a space; even though emphasizing these aspects still admittedly represents a significant improvement over and above real estate development and conventional landlords, it can lead to a neglect of the social dimensions of the project as the group is formed. For this reason, I strongly focus on the conceptualization process in my work with groups. In the framework of the Zukunftswerkstatt workshops I hold with groups, we work together to hew out a project’s governing social concept (its social elements) as well as deciding on the way the actual building should look (its construction elements) and then bring these into reality in concrete terms, all in a dynamic process that is irreplicable and unique to each respective group.

Why the city loves (or should love) co-housing and community living projects
In an evaluation of what kind of urban construction is best from the viewpoint of the urban authorities, the co-housing model holds clear promise.

  - This model does not entail parties moving away from the city into the countryside, keeping tax revenue within the city and more closely tying a financially strong clientele into the city (though this generally holds true only for the Baugruppen and Baugemeinschaften types of cooperative building groups).

   - During the phase of collaborative preliminary planning, even properties with a difficult layout that real estate developers would slot as risky find their takers.

   - But the most important thing speaking for communal living and co-housing groups is that they represent a powerful driving force behind a movement that has traditionally been undervalued within the broader field of conventional home construction. Since communal living and co-housing groups consider from the very first moment what running costs and various other factors will come into play once they live in the space, they drive forward ecological and resource-efficient methods of construction. Whereas landlords just divide the market price of a piece of real estate by its Nettokaltmiete (rent without utilities and other running costs) to determine its profitability, the focus in the construction business is generally placed on its sales price per square meter. [Since the latter formula encourages efforts to reduce the costs per square meter,] this has led to co-housing projects being pioneers of ecological construction in Berlin; and it is no accident that the first multiple-family passive houses in Berlin were built by co-housing groups (e.g., “Klimasolarhaus Berlin” and “Living in Urban Units – LUU”).

   - It is a well-known fact that ensuring the stability and affordability of home rental or ownership costs is one of the most important contributing factors in planning for retirement. Cooperatives and home ownership projects – and all other organizational forms that enable people to acquire the permanent right to live somewhere – can reduce the need to draw on external public retirement benefits. Hence, building cooperative housing in a resource-efficient way, so as to lower ancillary costs, is also a proactive provision for retirement.

   - The large percentage of co-housing projects, communal living projects and groups participate within their neighborhood/urban district in one way or another. Even discussions confined to the housing community itself present participation in the smallest unit of polity, and with that a microcosm of lived-out democracy.

More democracy
Co-housing projects interest me deeply because in essence, they are a microcosmic representation of democracy in action. But the density of Berlin, where a large portion of the living spaces are rental apartments, does not allow all people to have a large open space of their own that they can design however they like. For example, there are still numerous houses with just a tiny courtyard outside the apartment – and even the desirability of that space is compromised by its trash cans. This lack of private and partially public open spaces – a fairly Berlin-specific phenomenon – does not make it easy for people to get to know their neighbors, which can lead to a greater lack of interaction within neighborhood life and, conversely, foster a greater degree of isolation. Active participation in a greater community – such as a house community – leads to a greater sense of warmth as surely as friction leads to heat, and moreover, it enriches the community. Discussions about common needs and goals and the process of articulating them inevitably give way to political involvement within a city. All the projects I have worked with actively participate in one way or another in the greater civic process of expressing opinions within their respective neighborhood or precinct. And the non-monetary community, bound together by its sense of solidarity – as exists in numerous co-housing projects – provides the only long-term financial solution to numerous societal problems like the changes the average family structure is undergoing and the increasing average age of the general population. Because even if a living community concentrates first and foremost on itself without any focus on greater society, that in itself functions as a sort of socioeconomic subsidy within greater society, as the community provides members with sufficient mutual support internally.

Public support for self-organized construction
Despite all the above-described advantages of these forms of self-organized construction, it still has its difficult aspects, in that it aims to achieve more quality of content with fewer resources and thus requires more in terms of support infrastructures and particularly in terms of time. This is due to the complex decision process and the above-mentioned greater demands in terms of goal formation that are involved as well as the lack of any guarantees of success because of group members’ lack of experience (or limited experience) within the fields of real estate and construction. The group’s given set of issues and circumstances, its direction and its general program have to be fully clarified and resolved within the group as a whole, and decisions must be made together. Its strengths are thus also its weakness.

Calls for public funding are thus focused on financially offsetting the structural disadvantages inherent within the self-organized construction model. The Bundesland of Berlin alone comprises a total of 16.7 square kilometers of saleable property area; of that, it has put 3.3 km² on the market via the Liegenschaftsfonds Berlin, the public office for communication, planning and construction charged with marketing Berlin’s surplus real estate. Accordingly, it would seem natural to prioritize projects in Berlin that possess all the advantages discussed above as characteristic of co-housing projects.

Allocating publicly owned real estate

As a Berlin taxpayer and as an advisor to exemplary and visionary co-housing project groups, I would love to see Berlin using proven systemic means to bring about a transformation in its official real estate policy strategies, effectively departing from the current focus on just “making a quick Euro.” Berlin might, for example, allocate a publicly owned piece of real estate as, say, an Erbpacht (hereditary lease) – something that would be especially beneficial for co-housing projects, since they actualize inexpensive rental housing on a small budget. Berlin’s auction-based sales, too, could take into account a group’s planned usage of the property as a deciding factor – thus promoting high-quality, long-term urban development. In this scenario, if a group’s basic concept focuses on multi-generational living, families and dialogue and has an integrative and/or ecological focus, it would be weighted with greater priority, meaning a given property would be allocated to such a group even if the group bids 10,000 EUR less than the next party. After all, the short-term costs likely constitute just a fraction of the long-term gains; for the one-off price of about 20,000 EUR, the Bundesland of Berlin could win long-term gains in terms of quality of life, socioeconomic stability and ecological surplus. The price reduction would also go hand-in-hand with specific agreements in terms of the intended property usage and occupancy. For example, a specific house might be slotted to be built that meets at the very least the energy-efficiency standards of a KfW-40 house, or specific apartments might be designated for occupation by people with disabilities. Direct for-profit resale and excessive profits that only benefit individual parties would be precluded. This would lead to public property being allocated within auctions on the basis of the underlying concept and a plausible cost-efficiency calculation. If the goals listed in a group’s basic concept are not reached, the group would be obliged to repay the price reduction amount. This is the only framework that would enable co-housing projects to actually win public property bids and have a year’s time to solidify their concept into concrete plans and contracts before having to sign the sales contract. Shaping the procedure in this way would translate into a tremendous increase of stability for the group process as well as a greater degree of security in planning and a reduction of up-front costs for co-housing groups. Many decisions could be made more easily by minimizing the amount of insecurity in the early stages in this way, and many of the negotiations with banks and other entities could be carried out with greater confidence. This would benefit Berlin’s greater public in that it would result in solid, cost-efficient projects; it would lead to the best of all possible concepts being realized on any given corner of the city, concepts that will cost taxpayers the least in the long term.

Co-housing agency

Much discussion has been devoted to the need for a co-housing agency such as the one that already exists in Hamburg. In support of the motto “Wachsende Stadt Hamburg” (“The Growing City of Hamburg”), it publicly finances and organizes services to provide citizens with information on co-housing groups and cooperative forms of living and to coordinate the founding of new groups and projects. At the same time, under the aegis of the Baubehörde (planning commission), the agency makes the process easier by smoothing the way in terms of administration and bureaucratic red tape. “The construction undertaken by co-housing communities strengthens members’ sense of individual responsibility and their identification with the surroundings in which they live,” the Senate states in praise of the model. In many cases, the Hamburg model contributes to the socioeconomic stabilization of entire city quarters. When Hamburg slots properties for residential construction, explicit attention is focused on how suitable they might be for self-governed and cooperative communities. Despite all the praiseworthy goals achieved by existing co-housing communities in Berlin, goals deserving of funding, we are still far from having such a working system of allocation, coordination and consultation. While it is true that the Senate Administration for Urban Development in Berlin recently commissioned a preliminary study, nothing has yet been stated as to content, tasks, structure or financing. Except for a handful of passages in the coalition agreement, Berlin still has nothing comparable or utilizable of which to speak.

As negotiations are currently underway regarding the underlying framework of such an agency, the following four points should not be forgotten:

   - Berlin has an unbelievably rich tradition, culture and contemporary scene in the area of self-organized and cooperative planning, constructing, living and working. For that reason and because they are primarily better situated in terms of individual capital, co-housing communities and groups (organized as “GbR”/“WEG”) tend to quickly find advisors, architects and financiers to help them meet their goals of a new apartment once they have managed to get past the shortfall of available properties. The wealth of corresponding internet resources and literature provides a valuable contribution to this as well.

   - The problems inherent to developing projects in difficult areas for financially disadvantaged clientele, even when these projects may at the same time encompass more sophisticated goals (such as non-profit property usage or strong ties to non-profits), can hardly be overcome in terms of private initiatives. The highly limited number of successful rental initiatives that have continued being successful after all public funding in Berlin expired all owe their existence to clearly atypical circumstances or the exceptional engagement of an individual – engagement of the kind that most people are only able to render once in their lifetime. We are far from having any sort of coordinated system that offers public support for projects such as these, projects focused on the life of the community and/or the stabilization of a particular part of the city.

   - It has been demonstrated that, of all those portrayed, political support is the highest for projects organized in the business form of a “GbR” or “WEG” because they represent the least complex form with the most reliable (quick) results. They allow a demonstrable yield volume in terms of construction to be projected on the basis of a given input; the commonly used fractions of 1:65 in Leipzig and 1:35 in Lübeck spring to mind, for example. These numbers mean that the support invested in co-housing communities and groups yields a 65- or 35-fold profit – but only for those in the position to pay the purchasing price of 1600 Euro per square meter. Support for a broader socioeconomic spectrum is greatly needed, however; a healthier proportion of forms, including the “WEG,” “KG,” “GbR” (“WWG”), “Genossenschaften,” and self-administered rental houses, still remains to be desired. Such a mixture of business forms is especially preferable since, when it comes to business forms that do not aim for personal property, democratic participation (see above) is statistically higher instead of being limited to individual case examples, as it is not possible for members to retreat to their own private property in the end after all.

   - I know from the ups and downs of my own experience that with even halfway profitable privately owned property, the wish of members to move in as tenants leads to a manifold increase in the number of interested investors (see p. 16). This reveals an irresolvable conflict: Financing the construction of a new building is just not affordable for many Berliners. In view of this fact, in addition to focusing on Erbpacht (“hereditary lease”) models (see below), focus should also be placed on new strategies for already existing buildings in cooperation with larger proprietors (see below) and particularly on strategies for dealing with the ongoing privatization of the inventory of publicly owned residential properties.

The following, thus, are the three main arguments and strategies in examining the right models that can provide support for self-governed and community-oriented co-housing projects that want to rent.

Given the fulfillment of certain criteria, financial support enables people without access to the necessary capital to participate and live in these kinds of living arrangements. The premise, however, should be to give them a form of aid that can later be made available to others as well. The self-help support provided by the Senate in the 80s and 90s hence exhibits an extensive but only somewhat successful example of this. Numerous people were empowered to restore existing homes and construct new ones cooperatively in the framework of agreements to also contribute a considerable amount of their own labor to the project in terms of construction work. Today, 25 years later, no financial support is needed for tenants and cooperative members in most cases due to the low rental costs, which have remained nearly unchanged since they moved in. The long-term public financial support that was granted, however, seldom finds its way back into the public purse or the community budget. Hence, it is necessary here, too, to rethink matters and alter the underlying strategy – namely, to set up a complex working system that will be available to future initiatives in place of non-repayable grants (see pp. 61, 62 and 63).

Erbpacht (“hereditary lease”) forms allow for ownership of a building on property that is not owned. If a public authority or non-profit entity (e.g., a foundation), as the owner of this property, allocates the property as an Erbpacht to a co-housing community (organizing the group in the form of a “WEG” for an Erbpacht property is also possible) or to a (rental) co-housing project, the leasing entity of the Erbpacht leaser can not only stipulate specific property usage to some extent but can also retain the rights to ownership and domain of that piece of real estate, generally for a time frame of between 33-99 years. In addition to a savings of up to €0.50 per square meter per month on rental costs, its ownership would then remain bound to a public or non-profit entity (see p. 64).

Cooperations with housing associations / private owners. Rental projects such as Al WiG and m13a (see p. 56) demonstrate yet another possibility: A framework contract or group rental contract can be made with a housing association or a house owner whereby the association assumes the legal form of a Hausverein (loosely translated as “house co-op”) and, to a greater or lesser extent, takes on the administration of an apartment and its accompanying open spaces. It is no accident that both of these particular groups are found in already existing buildings and generally less sought-after neighborhoods within Neukölln and Wedding – might this be the only way to find an inexpensive, mostly uninhabited house? In these sorts of cases, political and financial support for the project development can greatly contribute to the socioeconomic stabilization of a specific city quarter and second, as can a reorganization of the policies of the large Berlin proprietors.

Conclusion
   This paper demonstrates how and why co-housing communities and groups should be supported in terms of ideas, structures and finances – while at the same time not losing focus on the interconnected nature of that support and the common welfare. After all, in the face of all the welcome attention on co-housing projects and groups, there is also a proportional measure of sorrow about all the rental-based co-housing projects that were unable to be brought into being over the course of the past few years.

Especially in view of projects in which apartments are being sold after many years – partially at high profit – it is highly recommended to structure a group’s business form such that the growth in value or profit of a project does not go to private persons but instead to communal or public purposes/entities. In this respect, it is evident that the “GbR”/”WEG” forms, despite all their compelling simplicity, cannot be regarded as the be-all and end-all of co-housing. Berlin is generally happy about its co-housing scene but still left wanting a little more love and support in the details.

This article, translated by Gratia Stryker-Härtel, is excerpted from the following brochure:
“Berlin - Wohnen in eigener Regie,” , published September 2007

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