Housing Cooperatives and their prominent role
Cooperatives have been contributing to development of housing especially by providing access to institutional finance and other options to their members. Their role has, however, been limited. The National Housing Bank (NHB) has made its refinance scheme applicable to cooperatives including Scheduled State Cooperative banks, Central Cooperative Banks, Primary Urban Cooperative Banks and State level Apex Cooperative Housing Finance Societies.
It has also decided to extend financial support to State Cooperative Land Development Banks in respect of housing loans granted by their branches or through the primary land development banks. NHB will subscribe to special Rural Housing Debentures to be floated by them and to be guaranteed by the state governments. These measures are likely to give a fillip to the housing finance activities of the cooperatives.
In Kerala real estate developments have been controlled to some extent by these housing cooperatives. In those times they were the sole agencies and thus was able control the market developments. The end of the license raj and the liberalization of the Indian economy led to great changes. The entry of the private sector into real estate development led to phenomenal changes and thus the housing cooperatives were forced to compete with the private players to stay afloat.
While the loss making and inefficiently managed housing cooperatives literally collapsed, there are scores of success stories all over Kerala. In spite of the entry of both the major realtors with huge national and international investments, the local housing cooperatives could stay in the market because they could gain the trust of the common people by offering better quality housing units at cheaper rates.