Why the housing bill will be a disaster for mutual co-ops

Residents of Sanford Walk housing co-op, New Cross, London, in 2009. Co-ops such as Sanford Walk could be under threat from the housing and planning bill’s pay-to-stay clause. Photograph: Frank Baron for the Guardian

The pay-to-stay clause in the housing and planning bill, launched by Grant Shapps in 2011 and currently going through parliament, is potentially disastrous for fully mutual housing co-operatives – small businesses that provide sorely-needed social housing at no cost to the state. Co-op tenants manage themselves on a voluntary basis, paying rents that make co-ops self-sustaining. Pay to stay will force London co-ops to charge much higher rents to households earning over £40,000 (eg a couple both earning £10.50 per hour). 

Tenants on low-to-middle incomes will be obliged either to earn less or leave. Those who can afford to stay will be unlikely to volunteer large amounts of time to manage the housing of those paying much less. Co-ops stripped of skilled volunteers will be unable to continue. Those left behind will need housing at the state’s expense. Co-ops work hard to help themselves and their communities. They provide essential sustainable social housing, and support for vulnerable tenants. It is proposed that fully mutual housing co-operatives be excluded from right to buy. Surely they should also be exempted from pay to stay?
Dr Katherine Woolf
London