Co-operative Privatisation Models in the German Housing Industry

Since 1997 about one million tenements in Germany have changed hands. Additionally approximately one million transactions will be carried out until 2010. The public interest in the processes of these substantial transactions as well as in the models they follow is extremely high at the moment as many German towns (e.g. Freiburg) use or intend to use those transactions as an instrument for selling their assets primarily to private equity funds in order to achieve a budget consolidation. The question whether housing co-operatives could represent a socially acceptable alternative form of privatisation is currently seriously discussed in the German public, politics and academia. The paper discusses this possibility. It consists of two parts. The first part includes a theoretical examination of the nature of co-operative property. It deals with a question that is of basic relevance for regulatory and housing policy: Can the allocation of property rights in a co-operative be assumed as a form of private ownership? The second part of the paper examines different examples of co-operative privatisation models in Germany that were currently implemented. The types of models are clustered and factors are analysed determining successful or unsuccessful co-operative privatisation models. In conclusion the paper provides a theoretically based contribution to a current highly sensitive public topic of housing policy in international real estate.