Yes, We Rent! - Observatory of Public Sector Innovation

Yes, We Rent! has transformed the private rental market by creating a new agent working in partnership with the municipality (hybridization of public policies). Successfully established on 2/2021, “Bloc cooperatiu” is an unprecedented cooperative that gather together tenants willing to search, renovate and rent collectively scattered empty flats, as a way to (self) generate affordable and stable housing targeting low-to-medium income households. It is already managing 61 flats and 105 members.

Innovation Summary

Innovation Overview

The Yes, We Rent! initiative from Mataró City Council (and co-funded by the Urban Innovative Actions Programme) supports citizens’ right to housing. The project takes on two of the challenges facing local housing policy:

How can private rental property –particularly property that has been vacant and off the market for an extended period– be used to provide affordable housing? Mataró City Council encourages landlords to lease their empty flats to the Yes, We Rent! affordable housing scheme by offering up to €18,000 euros to cover renovation works (including energy saving measures) and organizational support to do this, a guaranteed rental income (albeit below market value) and the management of the rental payment.
How can the potential of community initiatives and cooperatives be harnessed to generate and develop affordable housing in partnership with initiatives like Yes, We Rent! (collaborative housing).

As part of the Yes, We Rent! initiative, Mataró city council initiated and supported the creation of the tenants’ cooperative "Bloc Cooperatiu", with a view to harnessing the potential for self-help and empowerment inherent in such structures. The idea was that Bloc Cooperatiu become a new agent on the local housing market with the potential to reconfigure the balance of power between landlords and tenants. With its experimental and innovative setup, Yes, We Rent! hopes to create a replicable organizational and economic model for generating affordable housing stock through public-cooperative collaboration.

The project response to the situation of Mataró´s housing market, which is characterised by deregulation, a high share of owner occupied housing (75%) and a social housing sector (281 units) that is totally incommensurate to demand (1400 households are currently on the waiting list). Representing just 19% of the market, the rental segment has little elasticity and prices are highly volatile. There is a significant renting demand and a considerable amount of vacant flats, although, there is a lack of supply. This situation is because most empty apartments need a massive investment to be renovated. Also, owners distrust tenants for possible non-payment. Hence, the first objective of this project is to make rental housing in Mataró more affordable by getting control over a critical mass of affordable flats in the hands of private owners, renting them out at below-market prices to people in need of affordable houses. The project attracted 61 flats and put them into commercialization through the tenant’s cooperative.

The second objective is to promote a specific replicable organisational and economic model for achieving these objectives. This will consist on a "top-down" impulse by the city council to set up and provide start-up finance for a mixed multi-stakeholder cooperative; to generate small benefits out of the usage of private flats and to build capacity to increment market control with each new flat that is under the control of the coop; and to empower tenants to take over the cooperative once the housing scheme is running. In this regard, it will be important to guarantee that the positive impact of the scheme is sustainable from an economic and organisational point of view. Both objectives together form the third objective, which is to provide a model for a standard housing intervention consisting of the elements described above, with a solidly evaluated input and output that can be replicated by other city councils.

Finally, a new objective emerges to explore and test an innovative approach of public-communitarian governance amongst the public administration and the organised civil society through the cooperative created within the framework of the project and other possible replicas.

The expected key results and benefits include:

Mobilising a significant stock of empty flats, preferably long-term vacant flats.
The renovation of the city’s stock of long-term empty flats, focusing in energy efficiency through the application of energy saving measures.
Setting up a stock of flats that will be rented below market price, fostering affordable housing. The stock of flats mobilised by the projects hold be sufficient to grant the sustainability of the cooperative in the long-rung, so that the model can be tested and replicated.
The creation of tenant’s cooperative that will gather and empower engaged citizens. The cooperative will contribute to balance the relations between tenants and owners.
The establishment of a new public-communitarian framework of cooperation between the local council and the cooperative set up within the framework of the project. This new way of cooperation could be replicated with other cooperative or organised civil society organisations that may arise targeting other housing initiatives. Public-communitarian cooperation would broaden the scope of public housing policies regarding the number of units and the diversity of beneficiaries.

Innovation Description

What Makes Your Project Innovative?

Yes, We Rent! proposes the idea of renovating empty flats of private owners and renting them out below market prices to tenats that form a cooperative. This new model of public-communitary cooperation increases the flats supply and the affordability of rental housing, faster than if the municipality would had to build a social houses.

Another innovative idea it’s the set up of the Cooperative Rental Housing scheme to promote self-sufficiency in the long term. An approach based on the social and cooperative economy to generate an alternative supply of affordable and stable housing in the city of Mataró. The project proposes incentives to those owners who choose to include their housing units in the program.

The idea of this project is easily replicable. Its experience allows other municipalities to learn about the process and the challenges.

What is the current status of your innovation?

This project demonstrates the importance of collaboration and sustainability in building an ecosystem among the various stakeholders in the housing sector. The establishment of a hybrid structure which allows to accelerate the processes and solve problems from all perspectives is a must for the public institution.

The project is about to finish, but the cooperative is ready to continue for itself with the model of affordable housing. To make a real impact on the rental market, the municipality and the cooperative need to be able to attract more apartments. This will stabilize the cooperative and increase homeowner confidence. Regarding this the municipality will support technical and advisor the cooperative, as well, is going to pay the insurance to guarantee payment to the owners. Also it’s on the table continuing helping owners to manage and fund the renovation works. One of the challenging it's generate an operative cooperative and an economic sustainable to allow them grow.

Innovation Development

Collaborations & Partnerships

The municipality has developed the project together with 5 partners.
FUCM is a non profit entity promoting cooperative values.
Diputacio Barcelona is a regional government supporting local governments.
Salesians Sant Jordi (NGO) designed a professionalization programme for vulnerable young adults.
IGOP (UAB) and Tecnocampus University have been carrying out the evaluation.
Bloc Cooperatiu, is the newly set cooperative responsible to manage the flats.

Users, Stakeholders & Beneficiaries

The citizens have the most benefit from the project. The project pursued the mobilization of empty flats, so we put a supply of affordable housing for tenants, the same that set up the cooperative.
The owners who put their flats into the project have received incentives to improve their apartments and support doing all renovation work and paperwork.
The municipality has created an alliance between citizens and other private companies to improve and speed up the problematic situation of housing.

Innovation Reflections

Results, Outcomes & Impacts

61 flats have been renovated and rented with a rent minimum 30% below market prices (1m€ investment).
24 vulnerable youngsters have been trained in renovation skills
An unprecedented cooperative of tenants has been set up to manage the scheme (105 members so far) as new instrument for housing policies.
An innovative public-communitarian governance scheme to generate affordable housing has been set up, empowering community to (self)generate affordable housing.
Qualitative and quantitative evaluation has been conducted by the two research institutes involved in the consortium.
A number of international transferability actions had take place during the project.

Challenges and Failures

At the start of the project, a number of 3500 vacant houses was calculated. Afterwards, it was seen that most of these houses were property of big landlords or banks, which didn’t show interest in putting them in the market. To overcome these circumstances, we activated the Contingency Plan. We set up a disciplinary service to inspect all homes that had been vacant for over two years. When the disciplinary office found an empty house without any justification, we suggesting the owner join the project to avoid penalties.

Another challenge was that the city council wanted to pay two months’ rent in advance to ensure payment stability to the owners. However, this wasn’t possible, so we initiated a public-private collaboration between the City Council and the Cambra de la Propiedad. This external agent was in charge of financial and contractual management of the rental contracts. Also, the Covid pandemic represented an important slowdowm during the project.

Conditions for Success

The project has benefited from the cooperative historical tradition of the city and the fact that there existed already a proper ground for this approach. It has been needed as well to have a open-minded administrative and political structure that has accepted to go beyond the monopoly of the state as the only provider of housing policies. For sure, the support of the Urban Innovative Action programme (3,2 million funding) has helped to accelerate the whole process attracting flats to the schemes to test the viability to approach rent as a collective good.

Replication

The solution can be implemented in most of the cities in which the access to private rental housing if a challenge. It enables the community to be responsible for the self-provision of affordable housing in collaboration with the municipality. It has the potential to transform the whole market rebalancing the power between landlords and owners. During the project several other cities in Europe has approach to know better how to implement the project. Yes, We Rent! has been awarded with in the Responsible housing awards 2022,organized by housing Europe.

Lessons Learned

One of the lessons we learned is about reach our target. We launched a communication campaign around the city to contact owners with empty flats. Afterwards, we realised that there were a significant number of owners with vacant apartments in Mataró who do not live in Mataró. We had the luck that the TV regional talked about our project, and after that, suddenly we had ten interested. So we needed to be more aware that we're a city project, but perhaps our target wasn't from the city. Another experience we learned from was the importance of communication. When we set up the tenant co-op, we had to sit down with the citizens, who showed interest in it. But the town hall dinamics are difficult to understand from the outside, sometimes. Some decisions can be misunderstood, so it is essential to meet and explain the decisions at the outset, even if it might be logical for municipal council workers. We want to mention the importance of outsourcing certain tasks in private companies.