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Nonprofit Housing

Most North Americans own their own home or rent their housing in the private marketplace, from individual landlords or from corporations that own multiple buildings. These arrangements are considered the usual practice for the provision of housing, not only in Canada and the United States but also in much of Europe and elsewhere. In addition to its most basic function as shelter, housing is also a commodity that can be bought and sold to generate either individual or corporate profit. Any homeowner who has seen the value of his or her property rise—or fall—can attest to the role of the market in shaping the value of their asset. Nonprofit housing offers an alternative model wherein the housing is owned by the state or local government, or by a cooperative or nonprofit nongovernmental organization (NGO). Nonprofit housing is managed on the basis of there being no individual gain or profit from the housing investment or from the housing rental. This latter point is a critical descriptor; it is the absence of private or individual gain that is a basic tenet of nonprofit housing. Nonprofit housing almost always requires some level of state financial contributions, at the very least mortgage backing, in order to be viable. The involvement of the state in what is seen to be the private market is one important aspect of the controversy over nonprofit housing, accompanied by the negative images associated with the large public housing projects built in the 1950s and 1960s.

Public housing is only one of several types of nonprofit housing, which also includes housing cooperatives and housing developed and managed by not-for-profit nongovernmental organizations (NGOs). Nonprofit housing, in contrast to other housing types, is generally seen to make distinctive contributions in three areas. It adds housing stock that becomes more affordable over time, it ensures secure housing for vulnerable population groups that may be less competitive in the free market, and it enables the purposeful building and redevelopment of communities.

Nonprofit versus For-Profit Housing

In North America, the standard housing arrangements of the vast majority of citizens are through the private sector. Homeownership is seen as the most desirable form of housing tenure, and for those able to afford to purchase their own home, such ownership represents a major investment on which homeowners may, over their lifetime, build a sizable asset. With growing income disparity in North America and some of western Europe, homeownership is becoming more elusive for a larger share of the population, which may ultimately elevate the significance of the debate about nonprofit housing.

In the Unites States, nonprofit housing, when supported by public funds, is often seen to be an unwarranted intrusion by the state into the free market. These views are less rigorously held in Canada and European countries. In Scandinavia, for example, nonprofit housing remains the housing source for millions of households and its development has, at various points, been a significant government policy focus.

A Reserve of Good Quality Housing Stock

Nonprofit housing provides good quality housing stock that remains sustainably affordable. Whether run by local or state government or by cooperative and nonprofit organizations, it can include a variety of forms, from apartment buildings and townhouses to single-family homes. In many non-Western countries, there is a wider acceptance of the role of the state in the development of housing and a wider level of support for it. It is not seen as suited only for a residual market of people who have few if any other housing options. In Sweden, for example, the government, fearing a housing crisis that could have resulted in underhousing and overcrowding, undertook the construction of a million housing units over a 10-year period from 1965 to 1975. This high-quality housing stock took a wide variety of building forms across many different regions and communities. The potential for a housing crisis was averted, and in this case, the issue addressed by nonprofit state-developed housing was one of supply rather than affordability (although these are interrelated). In Sweden, nonprofit housing, largely operated by municipal government, is not restricted to low-income households, and thus, it has avoided the negative associations that are sometimes attached to public housing in North America.

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