HOUSING COOPERATIVES IN MALAYSIA - A HISTORICAL PERSPECTIVE

THE ROLE OF COOPERATIVES IN THE PROVISION OF HOUSING IN MALAYSIA Dr. Alip Rahim, Abu Hassan Abu Bakar and Dr. Abdul Mutalip Abdullah School of Housing, Building and Planning

Universiti Sains Malaysia

1.0 INTRODUCTION

Of all the basic needs that has attracted attention of development strategiest, housing has received the major attention. The focus has been on the housing supply system for the urban population especially the urban poor. Studies, have clearly show that there is a continum of housing supply system from the private sector to the popular and public sector . Each of these supply system is competing for the limited resources of land, labour, materials and capital and each of the supply system are existing within a complex local forces as well as linked to a broader national and even international patterns of development. It is the intention of this paper to address the role of one of these housing supply system.

This paper attempts to examine the role of cooperatives in the provision of housing in Malaysia. In the following sections of this paper we discuss the production and concumption sphere of cooperative housing. It begins with a general discussion of the history of cooperatives in Malaysia to situate the changing role of cooperative within the national economy and their role in the provision of housing. This is followed by highlighting their distribution in Malaysia. This is accompanied by a general discussion of the production and consumption sphere of cooperative housing with particular emphasise on the success and failures of cooperative role in the provision of housing.

2.0 DEFINITION OF HOUSING COOPERATIVES

There are various types of housing cooperatives . The housing cooperatives as practise in Malaysia refers to cooperatives that ‘acquire land, develop them and construct homes and ultimately transfer them to members when loans are fully and completely settled. The members then take full control and enjoy complete ownership.”

However, according to Haji Abdul Aziz bin Abdul Wahab (the Registrar General of Cooperatives) there are other characteristic of a housing cooperatives which are explicit in the following quotations. - “the housing cooperatives act as “an agent for the members who themselves are the developers desiring to undertake the acquisition of land, preparing of sites and constructional of houses jointly with the view of reducing costs”. - “the society executes contracts on behalf of members with third parties for the purchase, acquisition and development of land, the building of houses, the provision of facilities and the installation of supplies”. - “the house are erected for the developers to own and dwell in” (Section 218 of the Housing Developers Control and Licensing Act, 1966 logically exempts housing cooperatives from all its provisions) - “the housing cooperatives must comply with the Cooperatives Act of 1949 in order to be registered. The act stipulates that members must not be less than 100 Persons and they must have mutual interest that can be enhanced by cooperative set-up. - “the society is first and foremost owned by its members, is autonomous and m anaged by a Board of Directors elected at the Annual General Meeting”. - “the cooperative has a by-law allowing it to own land, receive spesific deposits from members for the purpose of meeting the costs of land the construction of house. It can also borrow funds outside to finance its housing projects."

Based on this definition one can conceptualised housing cooperatives are not just physical entities but a particular life style and value system where members are expect to uphold and cheris such as sharing, self help, mutual support, social and economic cooperation and interdependence. Members involvement in policy planning, construction, managing the cooperatives economic and social affairs wil help to reinforce values of cooperative living.

3.0 OVERVIEW OF THE ROLE OF COOPERATIVE AND HOUSING

3.1 The Early Period 1920 – 1957

The cooperative movement was introduced in Malaya by the colonial government in 1909. The cooperative movement take root in 1922 initiated by the colonial government in response to rural problems relating to credit and indebtness . Hence the earliest societies to be formed were rural credit societies for the peasants, farmers and fishermen. The thinking was that the societies would help to eliminate exploitative middlemen credit sources. Besides the establishemts of credit societies, efforts were directed at forming marketing societies in 1930.

In urban areas there was the development of Thrift and Loan Societies particularly for government servants and latter the demand for consumer societies mainly from the members of the Thrift and Loan Societies .

After the war although there were changes in the colonial policy towards the role of cooperatives, the preoccupation of cooperatives with indebtness was still emphasised. In the post war period saw the establishments of agricultural cooperatives, which was part of the government plans to cooperativise the rural economy. The aim was to nuture and develop an independent society based on the cooperative principles. The creating of RIDA (Rural and Industrial Development Authority) in 1950 help to facilitate the objective of cooperative through self and intergrated rural development. The cooperative expansion into marketing societies expanded from 6 in 1947 to 257 in 1956 whilst for the consumer society in 1956 it was 239 from 7 in 1947 .

Hence, initially the role of cooperative was centered in the rural areas mainly in provision of credits and in marketing. However, with changing socio-economic activities as a result of the war and the rapidly changing urban pattern because of rral urban migration and also the rapid growth of population in urban areas lead to a serious shortage of accomodation . The widespread urban housing problem received the serious attention of the cooperative movement and was addressed and discussed in conferences organised by the movement.

Consequently the cooperative movement were increasingly drawn ino the housing questions . Although the role of housing cooperative in Malaysia started after the war, Thrift and Loan Societies, especially those well established ones had introduced provisions in their constitution to provide mortage loans to enable their members to own homes even prior to the war. The importance of Thrift and Loan Societies during the period of 1925 – 1931 is shown by the total loan given out from 577,057 ringgit to 1,964,022 million ringgit for social and productive investment. This was between 90 – 98 per cent of the aggregate loans, Hawa Mohammed Salleh (1987-29) documents the socially productive expenditure of the Thrift and Loan Societies in the form of land purchases, cultivation expenses, rent assessment and house purchase and repairs. However, these societies ability to undertake such activities were limited because of their short term credit organisation and hence required adequate liquidity funds at all times to issue loans and to refund shares or subscriptions to members as and when required. The amount set aside for mortgage loans were limited to between 25 to 3 per cent of the subscribed capital. In view of this problem and the realisation of the need to extend housing development, the cooperative movement saw the needs for establishing a housing cooperatives. The Cooperative Movement felt it was necessary to establish cooperative specialising in housing construction having powers to raise sum of money and retaining within themselves experienced personnel, knowledgeable in matters relating to long term finnancing, costing, contracts and building works .

3.2 The Period of Expansion of Housing Cooperatives in 1949 – 1970

The first housing cooperative Teluk Anson English School Teachers’ Housing cooperative was registered on April 9th. 1949 and this was followed seven month later by the Kuala Lumpur Housing Cooperative with a membership of 330 and share capital of MR21,700.

With Malaya achieving Independence in 1957 the number of housing cooperatives grew from 2 in 1949 to 30 with an asset of 62 million ringgit .

The reason for this growth was that the housing cooperatives was the housing cooperatives was the alternative housing delivery system in a situation where there were shortage of cheap houses and the related problem of exorbitant charges on loans with short repayment periods .

The manifold increase of housing cooperatives can also be attributed to the setting up of Housing Trust in 1950 based on the Housing Trust Ordinance No. 62 1950 and the formation of the Federation of Cooperative Housing Societies.

The Jabatan Pembangunan Koperasi provides technical assistance and advises as well as source of finance to the cooperatives in addition to its larger function providing house at the national level. The Federation of Housing Cooperatives on the otherhand was set up to coordinate the housing cooperatives and to negotiate with the government for more expeditious alienation of land to the societies and to provide technical experts (Federation of Malaya Annual Report 1957). However, the success of the Federation was questionable. For example in 1965 only 14 housing societies were affiliated and this represented a concentration of 30 per cent. In a five year period from 1961 to 1965, they were neither report or statement on the numbers of loan given out nor any housing activity. Hence, the society exists in name only.

The role of the government was also important in providing the impetus for growth through the alienation of land to the cooperative for housing. The other important factor for the growth was the credit and finances through the Thrift and Loan Societies afforded to the cooperative, since most of the members of housing cooperatives were also members of Thrift and Loan Societies. The link allowed the flow of finance to the housing cooperative. Towards the later stage, the establishment of Central Cooperative Bank facilitated further the channeling of resources from the Thrift and Loan Societies to the housing cooperatives. The bank policy was to provide loans to the housing cooperatives up to two third of the asset at interest rate of 8 percent per year and pay back period of 15 years.

Between 1957 to 1965 the economic and political situation in Malaya was more stable and through the two five plan – First Malaya Plan (1956-1960) and especially in the Second Malaya Plan (1960-1965) housing received the government’s attention. Housing cooperative was still considered as an important housing delivery system along with the major production system of the Housing Trust. Hence, the growth of housing cooperative was still rapid from 30 in 1957 to in 1964 but less than the figure recorded between 1949 to 1957 from 2 to 30. This substantial growth was still possible inspite of the government policy emphasise was on the rural and agro-based cooperatives. In 1963 for example the number of housing cooperatives was 40 with membership of 5,255 and a working capital of nearly 12 million ringgit.

The establishment of the Cooperative Central Bank in 1958 to mobilise funds from individuals and member societies was also responsible for the increasing number of h ousing cooperative formed. After three years of its establishment, the CCB comprosed of 36 urban Thrift and Loan Societies, 10 cooperative housing societies and one cooperative insurance society.

In 1963 there were 57 urban cooperative societies as members of CCB and 1970 there were 102 urban societies as members and 1,423 individual members. The bank continue to provide loans for cooperative societies to undertake various development projects and also grant loans for individual to purchase house. The figure indicates the important of Cooperative Central Bank in the provision of funds to cooperative housing.

Most the housing cooperatives in the early years raised funds from commercial bank and other financial insitutions by mortgaging their housing schemes. In 1960’s the housing cooperatives faced with difficulty in obtaining loans began to expand their fund based by launching their own deposit scheme to attract new savings. The other method as mentioned earlier was through loans from the Cooperative Central Bank and the Malaysia Cooperative Insurance Society.

The housing cooperative increased further from 47 in 1964 to 66 in 1967. The government also plays an important role in the expansion of housing cooperatives by providing the largest allocation of development funds to housing cooperatives as compare to the other types of cooperatives. The housing cooperative operate on a large scale. Membership subcription is not sufficient to permit these operations. Subscribed capital provide less than 1/5 of working capital. For large part of their capital, housing cooperatives borrow from capital markets, accept deposits from individuals and use trade credits.

3.3 Periods of diversification and consolidation (1970-1980s)

The formation of new housing cooperative reached a pleateau in 1970s to 1985 as compared to the earlier formative period of 1949 to 1957 and 1957 to 1967 where there was two fold increased in the number of housing cooperatives .

In 1970s also saw the reorganisation of the management of cooperatives. The non-agro based cooperatives is solely under the charge of Jabatan Pemangunan Koperasi whilst the agriculture based societies is under the charge of Lembaga Persatuan Peladang. The fishermen’s coopertive is under the jurisdiction of LKIM (Lembaga Kemajuan Ikan Malaysia). This was an effort to stream lined the cooperatives movement in Malaysia.

Inspite of the down trend in the number of housing cooperatives reflecting the general changes in the organisation and management of cooperatives as a whole, the urban dwellers were still attracted to joining existing housing cooperatives. This was attributed to the support given by the government to housing cooperatives for in the Fourth Malaysia Plan they are expected to build 12,500 houses at an estimated cost 933 million ringgit. The increase in the number of members in the housing cooperatives was also partly the result of government policy in middle of 1980s not to encourage the register more cooperative but to be members of existing cooperatives. However, during the 1980’s housing cooperatives were unable to complete their housing schemes when the main financiers CCB faces financial problems. Also by late 1980s the number of housing cooperatives decreased to 50 in 198 from 64 in 1986.

4.0 MEMBERSHIP AND ASSETS OF HOUSING COOPERATIVES

The growth in membership illustrates the appeal of housing cooperatives. From the rough statistic available , from a figure of 330 members in two cooperatives in 1949 to about 51,000 members in 63 cooperatives in 1983. The statistics shows an increasing trend throughout the years . The asset from 143,000 ringgit to 189.9 million ringgit. The membership decreased because of reorganisation of the cooperative societies in between 1970-1973. The slight dropped in membership can be seen generally in the overall growth of cooperatives in Malaysia . The members of the housing cooperatives come from various sectors of the economy from government servants, self-employed members, soldiers and workers from the provate sectors. In the late 1980s there is a drastic dropped in the membership of housing cooperatives probably due to the recession and its effect on the construction industry. In 1986 the membership was 52,327 but 1987 the following year the membership figure was 27,560 members.

5.0 DISTRIBUTION OF HOUSING COOPERATIVES IN PENINSULAR MALAYSIA

The states of Perak and Selangor have the largest number of housing cooperative, followed by Penang and Wilayah Persekutuan. The state of Johore in late 1970s and in 1980 showed that it has the same number of cooperatives as those of Penang and Wilayah Persekutuan. But in 1985 the number of housing cooperatives had fropped to three. The relatively less urbanised states of Kedah, Kelantan, Trengganu have the smallest number of housing cooperatives. From this rough statistic of the distribution of housing cooperatives one can deduce that the housing cooperatives are located within large urban and metropolitan areas and are mostly urban based and serving population in the urban areas.

6.0 PRODUCTION OF HOUSES BY HOUSING COOPERATIVES Based on The statistics provide evidence of the small contribution made by housing cooperatives in the provision of housing in Malaysia. In the first Malaysia Plan period (1971-1975) only 3585 units were built. In the following Second Malaysia Plan (1976-1980) 4120 units were built which represents 34.3 per cent of the target units of houses to be built. In the Third Malaysia Plan the progress of construction was 18.1 per cent even lower that the previous year.

The achievement is even meagre when the housing units produced by the housing cooperatives is compared to the total housing unit completed to the total housing unit completed for each of the five year plans . In the First Malaysia Plan period the housing cooperatives contributed 13.7 per cent to the total housing units constructed. But the following five year plan the production was 1.4 per cent and even lower percentage figure of 0.9 per cent in the plan period of 1976-1980. The poor track record is again obvious in the Fourth Malaysia Plan period, a percentage figure of 1.1 per cent. However, we could generalise some of the problems as common to most housing cooperatives.

The problems faced by the housing cooperatives are follows:- 7.1 Land

I Affordable Land

The value of land in urban areas is determined by number of factors such as the level of demand, its location and its availability for various development projects . The high demand for urban land and the scarcity in land supply help to plushed up the price of land. The strategic location in urban areas would put the price of land beyond the reach of cooperative housing. In the case of most of the land in large urban cities in Malaysia have been bought over by large developers which have diversified interest in mining and estate . These companies have large land banks which the cooperative do not have. This phenomena is an obstacle which restricts the ability of housing cooperatives to participate in the housing delivery system.

(II) Difficulties In Getting Suitably Located Land

Housing development requires main infrastructure facilities (at least power and water supply main lines) should be readily available. The land with access to main infrastructure comand higher price. Whilst land with no accessibility or far from the main infrastructure facilities is cheaper. But in the latter case the housing cooperative have to provide for it and this might increase the development cost . The higher costs in the end is borne by the members who are the developers as well as the consumers of the facilities. In order to over come the problem housing cooperatives in Johore, Negeri Sembilan, Wilayah Persekutuan and Perak have turn to the government for cheaper or subsidised land. However, not all of these land are suitably located. The land alienated to the housing cooperatives are situated in remote areas and it takes alonger time to process and improved the accessibility and infrastructure before it can be awarded to the housing cooperatives. Finally the housing cooperatives have to bear the extra costs of improvement and the needed connection network.

7.2 Management and Finance

(I) Difficulty in Getting Finance

Financing housing project is the most crucial task for any development organisation, especially for housing cooperatives well known for their lack of capital. Besides fund from shares and subscription, a large percentage of the capital are borrowed. Getting loans from commercial banks and other financial institutions for both bridging and end-financing is always a problem and even worst if the loan obtained is attached with an unfavourable terms . Quite a number of housing cooperatives are in the unfortunate position for having their projects financed by Cooperative Central Bank. The apex bank for the urban cooperatives in Malaysia is under receivership in 1989. In most cases projects under construction have to be abandoned because of inadequate fund to finance the project to its completion .

(II) Members With Low Income

One of the main objectives of cooperatives is to help the low income earners and this concept obviously attract the low income earners to be members of cooperatives. As mentioned earlier the capital raised through their members is small and even worst in a slow additive process (unless the membership is large). Hence reduce the availability of owned fund for the project and may lead housing cooperative to borrowing . As a result the cooperatives have to pay more for the cost of borrowing and the burden is finally transferred to their members.

(III) Management Problems The management of cooperatives is done on a voluntary basis by board members elected in the annual general meeting to lead the cooperatives. They are mainly members who are influential and experienced. However, the cooperatives are administered by the board members on a partime basis. The management of housing project on the other hand requires a fulltime effort. Furthermore the members managing the project must possess knowledge and the experience in project development which requires years of training.

Most of the board members if not all are lacking in technical knowledge and the experienced which can lead to the project failure . A project beginning from the stage of inception through completion has to go through numerous and various phases of decision making involving planning, loan arrangement, monitoring and impleentation etc. For a none technical person who lack the exposure in building industry will find it extremely difficult and the tendency to fall into make wrong decisions. According to the Registrar of Cooperative Societies , about 1500 summons cases over delays in delivery are recorded .

Breach of trust are common in cooperative movement and are very difficult to curb . This was due to the weaknesses in the Cooperative Act and enforcement itself. There is no involvement of members during planning and implementation of the project. Participation of the members occurs when they were asked of their preference and a vote of approval for the project to proceed if it is viable study is complete). Hence most of the members are not happy with the project outcome and leads to partial rejection in the finished project.

7.3 Cost of Production (I) Costs of Infrastructure

The cost of infrastructure in housing project is high. It comprises more than 10 per cent of the total development cost. Depending on the size of the project, this may costs cooperatives million of ringgit and would be a burden to the housing cooperatives and their members.

(II) Lack of Expertise In Building Our case study revealed that all housing cooperatives do not have in house expertise or lack members who are technically qualified in building. They rely heavily on provate consultants. Most of the housing projects carried out by housing cooperatives used traditional approach in design and production, ie. Using architect as the head of the project team with the rest of the consultants serving a supportive technical role under him. The fees incurred by these appointments are between 10 – 15 per cent of the building cost. 7.4 Policies and Other Institutional Requirements

(I) State Government Policies Case study in the state of Johore shows that a number of housing cooperatives indicate their discontentment over the state government policy on allocation and distribution of their houses. The state government pre determine the percentage of quotas to be set aside as well as the location of the lots. The listed lots and houses will be given to certain politically linked groups of people. According to the board membeers this is an undair practise and voiced out that members should be given first preference to choose their own houses.

The 40 percent quotas imposed for low cost housing units by the state government is too high for the housing cooperatives to have a reasonable project return. To compensate for this, the cooperatives have to cross subsidised where losses incurred in low cost units is covered by the returns from the balance 60 per cent units developed.

(II) Other Requirements In our case study of Johore housing cooperatives, one of the requirements for the cooperatives is to set aside 20 percent of the total units for political parties. The political parties would then sell the house set aside to their political members are not members of the housing cooperatives. As a result, chances of owning a unit by members were denied and they have to wait for another project.

8.0 SUGGESTION AND RECOMMENDATIONS In this section some suggestions and recommendations are suggested to overcome the problems.

8.1 Land

(I) Affordable Land and Main Infrstructure

Affordable land is one of the key factors determining the participation of housing cooperatives and government should intervene to overcome this. The state government should consider awarding suitably located state land to the housing cooperatives at a premium or affordable price. The advantage is that is will transfer the role of government as a producer of affordable housing to the cooperatives. The cooperative with the help of government would help to meet the target of providing low cost housing in the Sixth Malaysia Plan (In the Fifth Malaysia Plan $2,880 public low cost housing were planned but only 26,172 units were completed). Alternatively using the power invested in the land code the state can acquire suitably located private land and sell it to the cooperatives at an affordable price.

This can be done in two ways. Firstly, is to adopt a direct approach by prepating a feasibility study of the housing project and forward it to the government for their scrunity and approval. Second, ANGKASA the apex body can play its intermediary role as a representative of the housing cooperative to negotiate for land from the state government.

The government view housing cooperatives as private developers, but most housing cooperatives are not like large housing developers firms which are linked to other sectors of the economy. They are merely “small firm” run like a developer firm but do not have the economic and political clout. It is likely that the housing cooperative to negotiate for land from the state government.

The government view housing cooperatives as private developers, but most housing cooperatives are not like large housing developers firms which are linked to other sectors of the economy. They are merely “small firm” run like a developer firm but do not have the economic and political clout. It is likely that the housing cooperative would cease their operation (completely or temporarily) after they have completed a project. For it take a while before the housing cooperative would be able to have access to land for housing production. The above recommendation would help to cooperative to expand and survive and fulfill its function as a viable alternative to the present government delivery system.

8.2 Management and Finance

(I) Coordinated and Intergrated Programme Cooperatives from the same region should come together and plan for intergration of all the common and essential work and resources. For example members of other cooperatives can participate in a large project carried out by one of the neighbouring cooperatives. In the case of small projects, housing cooperatives can band together to intergrate and coordinate the resources and management pool. This type of arrangement should be able to lower cost of production for example in bulk purchasing of building materials. Housing cooperatives in Latin American countries have banded together to procure construction materials at wholesale price. The construction materials are then distributed to the various housing cooperatives at a lower cost.

(II) Employ Profesional Management Personnel

For a large housing project, fulltime attention should be given by a person or a team to manage the project on behalf of the cooperatives. With a qualified project manager, the management of the project could also be more efficiently and effectively carried out. His role if to advise the housing cooperatives over decisions and take the responsibility over the management of the project .

This can be done in two ways, firstly by employing a qualified person as a project manager. He is part of the cooperative management team. Secondly, is to appoint a profesional project management firm to manage the whole project for the cooperatives. The scope of tasks of the project manager should cover from the inception through its completion and if necessary the scope of work be extended to cover the management of the completed project for the cooperative .

(III) To Improve the Cooperative Leadership Management to the cooperative is on a voluntary and part time basis. Ideally it is essential for the leadership to be people with dedication, sincerity, that are trustworthy, motivated, accountable and responsible. In practice persons with such qualities is hard to come by. Hence leadership in cooperatives management should be go through a proper formal training related fields.

(IV) To Educate Members

Education and training for members in cooperative concept is vital. This is to increase greater awarness amongst members of their roles, ringhts and responsibilities toward strenghtening the cooperative values. From information collected in the case study, involvement and participation of members in housing is minimal or in other work eneffective and apathetic. The role and scope of the Cooperative College be expended to include education and training for general members as well.

(V) To Establish An Alternative Financial Source One of the main difficulties facing cooperatives is to get loan at a favourable and reasonable condition. To overcome this problem the housing cooperative should coperate and work towards the establishment of a bank with the sole objective to serve the cooperatives. By the end of 2006, the total value of shares for the cooperatives is about 3.3 billion ringgit . If each cooperative is able to invest a portion of their savings, a Co-operative Bank with a commecial license to serve them could be established with no difficulty.

(III) Membership Drive and Reorganisation Due to a number of failures in coopertive organisation and their activities, the public cannot be blamed for having a poor and pessimistic perception of cooperative organisation and its movement. Mismanagement, breach of trust lack of management skill ton name but a few of the weaknesses and drawbacks suffer by the cooperative movement. The main task now is to restore the cooperative image. Publicity and promotion of the cooperative values be carried out in a more aggressive and extensive effort. This would be able to restore public confidence for the coopertive values and it would augurs well for the future of the movement. Finally, the cooperatives would go for a big membership drive which is vital for cooperatives to build up their owned financial resources.

8.3 Cost of Production

(I) Cost of Infrastructure

Where the land is located at a disadvantage loation, the government should intervene and provide the main infrastructural network to service the site. Immediate and special attention should be given in order not to jeopardise the completion time of the project.

(II) Centralised Consultancy Services

The cost incured due to the engagement of consultants for the project can be a burden to cooperatives. This cost can be reduced if the cooperatives have a centralised consultancy service solely for housing cooperatives. The experienced fo the consultancy centre in dealing with other housing cooperatives development problems can then be applied to other cooperatives facing the same kind of problem. Angkasa would be in a better position to exploit this idea which is in line with its role as an apex body for the cooperative movement. If the centralised consultancy service is unable to cope with the demand for its services, a regional consultancy centre be set up in each planning region. The professional fees charged for the services should be much lower than standard practise.

A professional consultancy service would help to solve the problem of mismanagement, poor decision making in feasibility studies, in management of the cash-flow in the process of development and implementation of the housing project. However, uppermost in the consultancy service is the cooperative values and meeting the social and cultural housing needs of the cooperative members.

8.4 Policies And Other Institutional Requirements

(I) State Government Policies and Other Requirements

The state government policy regarding quotas for political parties, for low cost housing, and for bumiputra participation should be reviewed. Basic needs for shelter for the fenuine member of the cooperative should be given first priority. There are many approaches to foster racial integration and should be explored. The reduction of bureaucratic demands would ensure survival of housing cooperatives.

9.0 CONCLUSION

Although housing cooperatives production system only contributes a small percentage of the housing needs of the population, its potential has a housing delivery system has not been dully exploited. As mentioned in the introductory section, housing cooperatives should not be considered merely as a physical entity – the provision of housing but a value system which would help to foster intergration and interdependence of the community. A cooperative housing scheme which meets the social, economic and cultural needs of the society is an advancement in the designing of a housing system.

The failures of some housing cooperatives to deliver houses should be seen in a structural perspective. The production subsystem which it relies upon is being dominated by large developers’ firms which monopolised the sources of land finances. The housing cooperatives in order to compete effectively and become an important housing delivery system should have a strong production subsystem to provide it with the component of land, infrastructure and utility services, building materials and design, labour and consumer finance. The role of the government is important has a facilitator in order for the housing cooperative to compete with the other delivery system. The institutional support it receives in finance, main infrastructure and facility provision, access to state and provate land and sources of supplies for building materials would ensure its future role. Hence, a strong government supoort to overcome the structural problems is crucial.

With such institutional support the production subsystem could be strengthened. The housing cooperative would be able to sholder part of the burden of meeting the target of production of houses for the Sixth Malaysia Plan period from the private and public delivery system. This sharing of burden could be realistically pursue especially in the light of the shortfall of public sector in meeting the needs of housing in Malaysia.

The promise of housing cooperative to provide affordable house could be met with a strong production subsystem. The plus point of housing delivery system such as cheap house, low cost of production, pooling of resources, house design based on the social, cultural and economic needs of the members, could be enhanced further.