This section provides a review of theories related to this study, housing concepts, factors affecting housing affordability and previous studies which have focused on housing market.2.1 Theoretical review2.
1.1 Social capital Theory According to Sabatini, (2005) defines social capital as sum of the resources possessed by individual or a group by virtue of good relationship with reliable network hence social capital is a community owned resource through structural relationship between or among actors. Social capital is contextualized as a critical resource in housing co-operative in terms of collective action and collective participation among members and other stakeholders.
According to Valentinov (2004) argues that ownership characteristics of housing co-operative and collective decision making makes co-operative governance complex but Beugelsdijk and van Schaik (2005) argues that social capital is concept that addresses complexness of the situation and facilitates cooperation, relationships, and trust among members. Social capital is more essential in cooperatives than in other types of governance structures for instance capital is collective owned, houses are build, owned and managed collectively by members. According to Nilsson et al. (2012) argues that due decline of social capital in housing co-operative, members have lost control of their co-operative accelerated by economic changes markets. Members’ commitments to their organizations and the trust between members and managers have been weakened (Hogeland 2006). Moreover, there is less communication, collaboration, and meaningful interaction among members (Nilsson et al.
2012).2.1.2 Stakeholder TheoryAccording to Freeman, (1984), defines stakeholders as individuals and groups who can affect or affected by the activities of the organization. Stakeholders’ theory argues that changes are invertible in any organization once they happen they interfere with smooth running of the organization, in addressing this issues cooperation must be nurtured by all stakeholders. Stakeholders in co-operative have double economic function as user and shareholder.
According to Tirole, (2001) and Thomas (2004) argues that efficiency and voluntarism in housing co-operative is as result of greater involvement of stakeholder through member participation. Levi (2001) and Pezzini (2006) argues that housing co-operative is not only focusing member’s goal but also the community welfare (concern for community). Van Opstal and Gijselinckx, (2009) argues that housing co-operative may not sufficiently meet members demand particularly funding due to member patronage and member control as result multi-stakeholder co-operative has emerged to take lead in innovation and networks of partners.2.2 Review of housing concepts2.2.1 Housing co-operativeAccording to ICA (2002) defines housing co-operative as legal association of persons mandated to delivery housing needs in continuing basis to their members. Housing co-operative is owned and controlled by its members.
It is differentiated from other form of housing association by its ownership structure and commitment to co-operative principles.2.3 Measurement of affordable housing The indices that will be developed include, Housing Affordability Index, Guideline, location affordability Index, Amenity-Based Housing Affordability Index, Self-Sufficiency Standard, and Shelter Poverty Measure (These housing affordability measures will be evaluated by one criterion on three dimensions; Standards, Data accuracy, and Comprehensiveness.).