Everything about private housing cooperatives

Housing cooperatives, as we know them today, have existed in Portugal since 1974, when the legislation regulating so-called economic housing was introduced. However, the first housing cooperatives in Portugal date back to the late 19th century, with the establishment of the Cooperativa Popular de Construção Predial in 1894. The cooperative model enabled many Portuguese families to access exceptional housing acquisition conditions. During the 1980s and 1990s, around 600,000 people in Portugal benefited from cooperative housing, highlighting the significant impact this model can have on family life. 

One of the challenges of housing cooperatives is that, due to their nature, some effort is required for their establishment and management. Most people are unfamiliar with the legislation and do not have the time or knowledge to organise and structure a cooperative. Perhaps this is why access to existing cooperatives is often difficult. In reality, general unfamiliarity with housing cooperatives is so widespread that families rarely consider this option when buying a home. In this article, we aim to explain in detail some of the main misconceptions about housing cooperatives and demystify what prevents families from considering this form of home ownership. 

1. Housing units are of low quality – False!

The misconception that housing cooperatives offer low-quality properties is completely unfounded. A brief review of existing housing cooperatives in Portugal shows that there are developments and homes built to very high standards. Pedras.coop, managed by MOME, is a good example, with 13 luxury homes constructed to a high quality standard. Since cooperatives aim to build homes for their members through self-promotion, it would make little sense to construct low-quality houses for themselves. In fact, cooperatives allow higher-quality homes for the same budget compared with the traditional real estate model. Moreover, the involvement of a cooperative manager such as MOME ensures quality, as the project is planned before members join. Another factor that reinforces this misconception is that these homes are sold at cost price, roughly 20% below market value. However, this does not indicate low quality, but rather efficiency, good management, and intelligent planning.

2. They avoid common construction financing bureaucracy – True!

Housing cooperatives with professional management eliminate most of the bureaucratic hurdles that individuals face when building their own home. Land acquisition, permits, architectural and engineering projects, and construction contracts are all handled by the cooperative. Additionally, the cooperative’s financing programme is predefined, so the buyer’s main concern is ensuring their personal liquidity.

3. The cooperative model only benefits low-income households – False!

Because homes are sold at cost, some assume housing cooperatives only serve those with low incomes, which is not true. Regardless of a person or family’s financial capacity, saving money and using income efficiently benefits everyone. All people want to make sound investments and maximise their resources. The cooperative model allows individuals to purchase the best possible home at cost price, regardless of income. A saving of around 20% means a family can either save that amount or afford a home worth 20% more than they otherwise could. This logic benefits both low-income and high-income households.

4. There is no guarantee homes will be delivered – False!

One common concern when buying property during the construction phase is potential delays. In traditional real estate developments, this security depends on the developer’s solidity. In cooperatives, choosing one with professional management provides security based on experience and expertise. Delays are more common in self-build projects due to the complexities of permits, contracting, and coordination with contractors and service providers.

5. Cooperatives are legally risky – False!

Legal concerns about joining a cooperative usually arise from unfamiliarity with the legislation and cooperative operations. Portuguese law clearly regulates housing cooperatives through Law No. 119/2015, which approves the Cooperative Code, and Decree-Law 502/99, establishing the legal framework for housing and construction cooperatives. The aim of this regulation is to ensure that families have access to dignified housing, as enshrined in the Portuguese Constitution, while benefiting from all the advantages cooperatives offer. Social economy is crucial to societies and is encouraged not only in Portugal but also in many other countries, such as Spain, where cooperatives have a strong presence and are well integrated into public understanding. Moreover, cooperatives are characterised by transparent and participatory management, with members actively involved throughout the construction process until they receive the keys, as they are part of the cooperative, not mere clients.

6. In the end, the homes belong to the cooperative, not the people – False!

Once the homes are complete, ownership transfers to the individual member. A standard purchase deed is executed, completing the process. As this article demonstrates, many misconceptions about housing cooperatives stem primarily from lack of knowledge. Housing cooperatives offer numerous advantages, and MOME is committed to clarifying all doubts, because we believe every family deserves access to the best possible home.