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Housing Cooperatives: Uruguay

A housing model based on mutual aid to allow low-income families to access affordable housing

June 3, 2023
Author: Paula Sevilla Núñez

Once established, members of a cooperative work together to finance, build and maintain housing for themselves. Members can contribute through collective savings or through ‘sweat equity’ i.e. the contribution of non-monetary resources such as labor and time. Both new and rehabilitated dwellings have been provided through a system of mutual help and self-management of resources. Cooperatives are autonomously run and decisions are made through democratic participation via assemblies and regular maintenance meetings.

The land and housing unit is owned by the cooperative, and not individual members. This permits households to pass on their home to other family members or sell the housing back to the cooperative for the money and work contributed. However, its sale for profit is not permitted, which prevents speculation and keeps housing affordable. It also means that the house is adapted to the needs of each household, promoting cohesion amongst the members of the cooperative, rather than to increase the market value.

Co-ops are supported by the Technical Assistance Institutes (IAT), which are multidisciplinary, independent, non-profit teams that assist member groups to establish a cooperative, negotiate with lenders, and assist with the construction of housing. The government facilitates the cooperatives’ access to urbanized land from public land banks belonging to cities and national ministries. Cooperatives can access these lands through a system of public lottery or through federations.1


Housing cooperatives began in Uruguay in the 1960s and have continued to this day. Workers organized in trade unions, mobilized, and demanded to work with the government to deliver housing solutions, building on the experience of cooperatives for other sectors. The success of three pilot cooperatives led to the establishment of a 1968 National Housing Law that introduced several critical measures, namely: a five-year plan, the Readjustable Unit (a policy tool to measure income levels based on national average), and the National Fund for Housing, which implemented a system of subsidies and loans at beneficial rates accessible to cooperatives. The government also introduced the legal framework for cooperatives where members can use collective savings to pay off the loans for the home and/or contribute sweat equity to reduce the overall cost.2


Key to the success of the housing cooperatives are the flexible credit schemes provided by the Mortgage Bank of Uruguay, and the subsidies offered by the Ministry of Housing’s National Housing Fund. The latter is financed by both public and private salary contributions of one to two percent. The credits cover 85 to 90 percent of the value of the properties, with the remaining balance provided in the form of sweat equity. The credit is managed by the cooperative’s governing body, so that the payment does not rely on a single individual in the cooperative and funds can be pooled collectively when needed.3


Uruguay’s cooperatives are a well established housing model in Uruguay, and the policy has endured for over 60 years. The FUCVAM model has also been replicated throughout the world, particularly in South and Central America.4