Council and Community Owned (CoCo) Housing is a new optionfor social housing that is currently being considered by government, thenational federation of ALMOs and by some local authorities. It may become thegovernment’s preferred model for future housing stock transfers. However, thefirst CoCo has yet to be established.
This paper provides a summary of what is meant by Counciland Community owned (CoCo) housing.
In June 2011 the National Federation of ALMOs published areport ‘Building on the potential of ALMOs to invest in local communities’. Thisreport considered three options for the future of ALMOs of which the ‘CoCo’ wasone. The report examined the viability and business case for each modelconcluding that ALMOs that require significant further investment to developtheir communities would be most suited to the ‘CoCo’ option. ‘CoCo’ means aCommunity and Council-owned Organisation that is jointly-owned by the Council,tenants and independents and is set up to receive a transfer of housing stockfrom the Council.
With this option, the Arms-Length Management Organisationwould become a ‘CoCo’ and would take over the ownership of the Council’s homes.The ‘CoCo’ would be jointly owned by the community (two thirds) and the Council(one third) so the Council would retain ownership of a third of the housingstock.
The Council would retain the housing debt that was agreedunder the reform of the council housing funding system. The ‘CoCo’ would makepayments from its income to cover that debt. This would mean that the new CoCowould still have strong financial ties with the Council.
Therefore, the ‘CoCo’ would not be a conventional stocktransfer because the new body would retain a financial relationship with theCouncil. It would do this through a covenant to meet the council’s interest andrepayment obligations on its HRA loans.
The ‘CoCo’ model is intended to provide a much greater rolefor tenants in the running of their estates whilst being attractive to privatelenders. However this option would require government approval before it couldtake place as under the current financial regime, ALMOs are unable to accessprivate finance.
Rents would increase at the same rate as they would if theCouncil continued to manage the homes. Tenants would still be able to claimhousing benefit from the Council in the same way.
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