Cooperative planning: how to save money on buying an apartment with the help of housing cooperatives

The government has expanded the list of privileged categories of the population who will be able to buy real estate through housing cooperatives. The innovation will affect families with many children, workers in the fields of education, healthcare, science, sports, the public sector and more. The expansion of the list of housing cooperative participants is a step towards achieving the goal of the state program to provide citizens with affordable and comfortable housing, Deputy Minister of Construction and Housing of the Russian Federation Nikita Stasishin told Izvestia. But there are pitfalls to consider as well. More details – in the material “Izvestia”.

Unconditional pluses, and not only them

In housing cooperatives, they usually go for low interest rates and convenient lending programs comparable to the level of mortgage rates. Now some Russians have a chance to buy a new apartment at 50% below market value. The government supplemented the decree with a list of citizens who can become members of housing construction cooperatives (HBC) and claim land for construction for free.

– The adopted resolution provides for the expansion of the circle of citizens who can become members of the housing cooperative by expanding the list of categories of citizens and the grounds for their inclusion in the list of those who have the right to be members of such cooperatives, – Izvestia was told in the office of Russian Deputy Prime Minister Marat Khusnullin. – Citizens with three or more children will be included in their number.

It is expected that “the proposed changes will significantly increase the number of housing construction cooperation projects and, accordingly, will lead to an increase in housing commissioning up to 1 million square meters. m per year. “Also, taking into account the proposals specified in the draft resolution, these changes will help improve the living conditions of more than 90 thousand citizens a year,” the Deputy Prime Minister’s office noted.

We are talking about the inclusion of large families with three or more children in the list of participants in the housing cooperative. Also, young professionals of all categories who have been working in the field of science, education and culture for more than one year can now become members of housing cooperatives. Expanded the Cabinet of Ministers and the list of organizations whose employees can become members of the housing cooperative. All-Russian sports federations got there. They can start construction on their own land plot or apply to DOM.RF with a request to transfer the federally owned land plot to them, the press service of the federal cabinet of ministers said. As the press service of the Ministry of Construction added, the amended list also includes state corporations and development institutions, legal entities in which the state corporation’s share in the authorized capital is more than 50%.

new buildings

“Earlier, before the changes were made, it could be said that one of the barriers to participation was the requirement for at least five years of work experience,” said Pavel Varaksin, director of housing construction cooperatives at DOM.RF, in an interview with Izvestia. “Today, this requirement has been reduced from five years to one year and applies to all categories, except for young scientists, employees of internal affairs bodies and military personnel, for whom experience is now not taken into account.

The decree also refers not to discounts on housing, but to a special method of essentially self-construction through the use of auxiliary mechanisms DOM.RF. In the Soviet Union, this was called cooperative housing, and enterprises were still involved in the main organizational part.

“The main reasons for the possible reduction in the final price of housing are the free provision of a land plot and savings at each stage of construction due to a shorter chain of builders, their standard planned profit and optimization of other possible actions,” says Sergey, Chairman of the State Duma Committee on Construction and Housing and Communal Services Pakhomov. “These are undeniable advantages.

According to the deputy, there are some disadvantages for new categories of citizens: it is worth noting the increased risks at all stages of the implementation of such projects, from the selection of contractors, quality control specialists to the fact that shareholders need to periodically make consolidated decisions.

“At the same time, from the guarantees that the house will be completed, there is only the decency and professionalism of those who took up the organization of the process itself,” notes the head of the profile committee of the State Duma. — I am not exaggerating, these risks are the price for possible significant savings. Whether they are appropriate or not is up to consumers to decide. But the fact that such mechanisms are emerging is good, and they require development.

According to Pakhomov, it is too early to talk about this segment of the market as an established one; after all, this requires time and a hefty portfolio of successfully implemented projects. They exist today, but they are still not enough for final conclusions.

construction

“Young people are not among the target groups of the new program, and this is the most promising contingent, given the fact that since 2020 the maternity family capital program has been operating at the birth of the first child,” says the chairman of the commission of the Civic Chamber of the Russian Federation on demography, family protection, childhood and traditional family values ​​Sergey Rybalchenko. — But there are not so many mechanisms for its implementation in the housing sector.

This form of housing improvement is analogous to construction savings banks in Western countries. It has already shown good results in some Russian regions. One example is ZhNK ZhBK-1 in the Belgorod region, where several thousand families have already solved housing problems in this way.

Part of an iceberg underwater

ZhSK is not a professional developer. As a rule, the main problems that may arise during the construction of multi-apartment housing or individual housing construction facilities are associated with this factor. It is also true that the cost of housing construction in this case can be significantly lower than the object of equity participation with the assistance of an experienced general contractor.
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– Construction safety is significantly reduced in housing cooperatives, which is also confirmed by the attitude of credit organizations. Today, banks do not offer mortgage products for this type of construction,” says Valeria Kozlova, head of the committee for improving the regulatory framework of the Russian Guild of Realtors (RGR). – Standard mortgages in banks are not issued for shares.

It is also important to note that a family that becomes a member of a housing cooperative loses the right to a one-time free acquisition of a land plot. And the right to join such a housing cooperative is a one-time one. For example, some LCDs in Yekaterinburg are built according to this model, and each time the participants worry about whether the facility will be completed. There are no eksrow-accounts in housing cooperatives, only the reputation of the general contractor and attractive price saves the sale of shares, Valeria Kozlova noted.

The housing cooperative makes it possible to increase the affordability of housing by eliminating the profit of a commercial developer, since the cooperative itself acts in its role. The main problem today for members is the inability to take out a loan during the construction phase, since there is no collateral: until there is an apartment, there is no mortgage, and the collateral of a share is prohibited by law.

“It is necessary to legally solve this problem, because few people can afford to invest all the funds at once in housing construction,” says Nadezhda Kosareva, head of the Commission on Housing Policy of the Public Council under the Ministry of Construction of the Russian Federation, president of the Institute for Urban Economics. – After the completion of construction and the full payment of a share in the cooperative, the apartment becomes the property of a member of the cooperative, that is, in fact, the usual problems of managing an apartment building arise. In countries where cooperative housing is developed – for example, in Sweden, Finland – the entire house remains the property of the cooperative, which manages this house. By the way, this is exactly what happened in Soviet times.

Here it is worth adding that the highest governing body of the housing cooperative is the meeting of shareholders, respectively, citizens build their own housing. This is the main problem, construction market insiders complain. If the construction gets out of the budget, then you will have to pay extra out of your own pocket. Thus, the final cost of the apartment can be known only after commissioning, notes Natalia Kuznetsova, general director of the Bon Ton real estate agency. If the housing cooperative violates the deadlines for the construction of the house, then there will be no one to present the penalty, since the shareholders, in fact, are the owners of the developer.

Of course, housing cooperatives with state support are fundamentally different from those that were organized earlier. Due to the fact that the register of shareholders is maintained by the cooperative itself under the control of the companies that employ its members, the risks of defrauded equity holders are eliminated, assures Anton Moroz, Vice President of NOSTROY, Vice President of the St. Petersburg Chamber of Commerce and Industry.

“At the same time, at the legislative level, a ban on the voluntary liquidation of a cooperative is enshrined before the transfer of housing to all its members,” says Moroz. “In addition, it is much easier to replace the developer in case of bankruptcy than in shared construction, and the cooperative members will be able to complete the construction of the facility with a new contractor.

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