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Housing Cooperatives a breeding ground for organised corruption

Housing Cooperatives a breeding ground for organised corruption

Housing Cooperatives (HC) in Zimbabwe started in the 1980’s as a model that was adopted by government in trying to create pools of financial resources among low income earners to buy land and develop low cost houses. HCs were a bridge for low income home seekers who did not qualify for bank or building society supported mortgage plans. Over the years the Ministry of National Housing and Social Amenities, has noted that the demand for housing is high as there are approximately 1.2 million people on the government’s national housing waiting list. Demand for housing against a diminished capacity by banks and building societies to offer lines of credit for mortgages have made citizens prey to housing schemes.

 

Legal cooperatives are government-registered entities that enable a private individual or group to acquire land through the local municipal councils, develop it and then allocate houses to members of the cooperative who buy into the scheme. However signing up to one can cost as much as US$5,000.

 

In recent years, cooperatives have become the sole medium of home ownership as many formal building societies and banks fail to offer mortgages. As the number of people relying on HC increases, so does corruption linked to the financial management of these cooperatives and mushrooming of illegal cooperatives. Illegal cooperatives are seemingly more affordable but are run by land barons in cahoots with municipal officials. These syndicates occupy land which they have no legal right to, but still develop it and allocate properties to unsuspecting members, often asking for hefty bribes in the process. In certain areas, illegal cooperatives have even sold residential stands in protected wetlands, with devastating effects on the environment. Citizens who buy into such illegal schemes run the risk of their houses being demolished during government clampdowns on illegally occupied land.

 

TI Z`s Advocacy and Legal Advice Center (ALAC) has received complaints that implicate housing cooperatives failure to adhere to government procedures and regulations that govern their operation. Apparently many of them operate outside of the regulatory framework, making many home seekers easy to manipulate by corrupt officials.

 

TI Z has handled over 25 cases related to HC misconduct and failure to adhere to the Cooperative Act. Problems emanate from management committees not wanting to comply with rules and regulations. Some HC management committees are found disposing stands without approval of owners, refusing to hold elections, spending money without approval from members and illegal expulsion of members without following proper procedures as well as double allocation of stands scandals.

 

Housing co-operatives have become havens of all sorts of corruption related crimes, embezzlement, fraud, and bribery. With increasing frequency political parties are fingered in housing cooperative corruption. Recently political party youths were accused of extortion: ZANU PF Youth League in a housing scandal, The Zimbabwe Independent 22 May 2015. TI Z implores the Ministry of Small to Medium Enterprises to improve regulatory transparency and accountability of all housing cooperatives to protect the poor.