Cooperative housing initiative underway

Housing cooperatives are common in the countries around us, but this residential housing option is rare in the Faroes.

This may, however, change soon as former mayor of Vágur, Dennis Holm, has set up a cooperative housing association.

A housing cooperative is an alternative form of home ownership in which dwellers do not have outright ownership of the property in which they reside. Instead, each dweller is a shareholder in a corporation which owns one or more residential buildings.

Holm believes that the biggest problem with current housing market is that new homes are being built with an eye on profit margins. Housing cooperatives, on the other hand, focus primarily on the tenants, he says.

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“If a family wants to buy a flat priced at DKK 2 million, the family needs to take out a DKK 2 million loan,” he explains.

In a housing cooperative, the family only needs to pay a down payment of about 20-25 percent of the property price. The cooperative pays the rest of the property price, and the family then pays a monthly rent to the cooperative. This rent includes maintenance, insurance, heating and electricity costs.

This system, he adds, could make life significantly easier for first-time home buyers.

“We are seeing a lot of positive response for this initiative from financial institutions and construction firms, and we will now be taking up talks with local councils.”

Read the Faroese version of this article here.

More Faroese News in English.