Limitations of a Housing Co-operative Society

For all their value, housing co-operative societies also suffer from real weaknesses, and an honest study must set these against their advantages. The main limitations are:

• Shortage of funds / high cost of land — Land in towns and cities is extremely scarce and costly, and members are people of small means. Many societies find it hard to raise the huge sums needed to buy land and build, and depend heavily on loans and government help.
• Delay in construction — Getting land, obtaining the many approvals from local authorities, arranging finance and completing construction often take a very long time, so members may have to wait years for their homes while costs keep rising.
• Untrained and honorary management — Managing committees are elected from among ordinary members who may lack the technical, legal and financial knowledge needed to handle land dealings, building contracts and large loans, which can lead to poor decisions.
• Disputes among members — Sharing common property and services often gives rise to quarrels — over allotment, parking, maintenance charges, repairs and use of common areas — which can weaken the harmony and working of the society.
• Malpractices and corruption — In a few societies office-bearers have been guilty of favouritism in allotment, misuse of funds, or collusion with builders and land dealers, harming the members' interests.
• Overdependence on government and loans — Heavy reliance on government schemes, subsidies and outside loans can weaken the self-help spirit, and any change in government policy or difficulty in repaying loans can put the society in trouble.
• Limited area and small size — Because a society's operations are confined to one project or locality and a limited membership, it cannot enjoy the economies of a very large builder and its capacity to take up big projects stays small.