Identity principle or the third way in housing

A former share certificate of a housing cooperative

Housing cooperatives are seen as the third way in housing between rental and owner-occupation.

The cooperative are termed the "third way" because they offer an appropriation of the use value of their dwellings with occupation rights approaching quasi-ownership. The exchange value of the housing stock is socialised within the cooperative, removing it from the individual ownership market. The expression the "third way" was used by the first founders of the cooperatives: their basic ideas came from land reformers, who maintained that land should not be alienable, but should remain in common ownership.

Living in a cooperative involves membership and co-ownership of the cooperative enterprise. Members sign two contracts: one for their membership and one for their rental agreement. The stipulation of membership as a precondition for tenancy is termed the "identity principle". Members joining a cooperative have to buy at least one share as well as pay an initial joining fee. When they move into a cooperative dwelling, they are required to purchase additional shares, depending on the size or facilities of the dwelling. Each cooperative arranges this differently according to its statutes. The shares, depending on financial conditions, often yield an annual dividend.

Overall costs for joining a cooperative (membership fee and share purchase) average around €1,500 to €3,000. In recently founded coops this amount can be significantly higher. In addition, the member pays a monthly rent for his flat. An advertisement put it in 1917: "How to become a homeowner and a tenant at the same time?"

Former saving stamps