Investigating alternatives to privatization of public housing: an analysis based on the Quattro Corti project in Italy

Abstract

After the long-lasting divestment in the Italian public housing system and the privatization of over 20% of the stock, many public dwellings are vacant or in substantial need of maintenance. The article aims at contributing to the literature that addresses the crisis of public housing, by investigating alternatives to its privatization in Italy, a context of heavy divestment and devolution. It draws on original material from the case study of the Quattro Corti project, an unprecedented form of hybrid collaboration between public housing providers and housing cooperatives for the regeneration and management a small portion of the public housing stock in Milan. We investigate the context at different scales (state, neighbourhood, building) and analyze the partnership through extended field work and interviews to stakeholders, tenants and managers. Finally we address opportunities and challenges for a wider implementation of such partnerships in Italy, as part of a strategy to prevent privatization.

Introduction

Crisis and privatization of public housing in Europe and Italy

Public housing is a broad term often encompassing various forms of public intervention into the housing realm, which took place along the XX Century and especially in the post war period. This article considers a narrow definition of “public housing” (coherent with the Italian context) as a direct in-kind rental supply provided by the State via publicly owned and managed agencies, corresponding to a specific form of housing tenure in which:

• the property is owned by a government authority, either national or local;

• the stock is allocated and rented according to some regulations, usually (though not always) prioritizing poorer households and charging non-market rents with long term contracts.

After its expansionist phase in second half of the XX century, when many countries invested in public housing as a way to improve economy and social inclusion at once, public housing has widely incurred in a state of long-term crisis. Starting from the 1980s and ‘90s, various intertwined processes have weakened the role and stability of public housing in most countries. Among those: the promotion of homeownership for low-middle income households (Ronald 2008); the marketization and financialization of housing (Aalbers 2016); widespread unpopularity among politicians, policymakers and the public (Madden and Marcuse 2016), and the related defunding and decrease in production of public housing (Scanlon and Whitehead 2008); in some cases, the subsequnt residualization of public housing (Poggio and Boreiko 2017).

Parallelly, in the wake of new public management, in many countries there has been a shift in the debate around public housing, with the valorization and more effective economic exploitation of the public housing stock at the core of the issue in the policy agenda (Bricocoli and Cucca 2020). Public housing estates were privatized through Right-to-buy schemes directed to the most affluent tenants (Scanlon and Whitehead 2008; Poggio and Boreiko 2017) or securitized and sold en-bloc to financial investors (Aalbers and Holm 2008; Gaeta 2017).

This has often led to a crisis in the supply of affordable housing, contributed to an overall increase in rents and reduced the capacity to respond to housing needs by the public sector (Aalbers and Holm 2008; Poggio and Boreiko 2017; Vollmer and Kadi 2018)¹. While there are few virtuous examples where privatization of public housing has practically never happened² and there seems to be some timid signs of reinvestment into public housing in some cities like Berlin (Kadi et al. 2021), Barcelona and London³, in most European countries public housing is still in a condition of permanent crisis and at high risk of privatization.

Also in Italy, public housing expanded strongly until the 1980s, when the policy environment changed abruptly and privatization started to be intensively deployed as a source of income for public housing providers. Today, after thirty years from such policy drifts, a general restructuring of the public housing sector appears as a necessity. However, the Italian debate is mostly polarized in two orientations: those who favor the privatization, advocating for supposedly more effective forms of social housing provision, and those who refuse it in full, calling for a massive reinvestment into the public housing sector.

Are there alternatives to privatization?

While there has been vast research on the decline of Italian public housing (e.g. Poggio and Boreiko 2017; Storto 2018), less attention has been payed to the possible solutions and researchers often just plea for a structural reform of the sector. While firmly refusing privatization and supporting a broad reform of the public housing sector that includes structural funding and an expansion of the stock, we believe that there is an urgent need to explore possibilities to intervene also in the currently unstable situation.

To do so, we aim at addressing an additional gap in the literature on the Italian context. Recently, in the international context, many authors have investigated the role of housing cooperatives “as an affordable, accessible and (partially) de-commodified alternative” to the (crisis prone) dominant housing provision (Ferreri and Vidal 2021: 2). Increasingly, the literature focuses on the contributions of housing cooperatives to the decommodification of housing and the creation of “housing commons” (ibidem) and on the role of the state and public authorities as “enabler” for the implementation of affordable housing schemes (Ganapati 2010; Barenstein et al. 2021). However, it is important to stress that housing cooperatives are actors and “policy entrepreneurs” in the design of local housing policies (Pirani 2008): “As organizations, housing cooperatives depend in part on their environment but at the same time they are actors capable of influencing their intra-organizational life as well as their organizational environment in which they are positioned” (Barenstein et al. 2021: 4). In the Southern European context, however, there has not been much attention on the role of housing cooperatives as affordable housing providers, actors and policy entrepreneurs of housing policies and especially as potential partners of public housing authorities in the refurbishment and management of public assets. In Italy there has been very small research on the role of housing cooperatives in the implementation of affordability-oriented housing policies, not to speak of the actual and potential synergies with public housing management.

Therefore, the present article contributes to the literature following two main lines:

• First, whether in the present legislative framework of public housing providers, there are possible solutions to prevent and mitigate the privatization of the public housing stock;

• Second, whether the involvement of housing cooperatives in the refurbishment and management of public assets can represent an opportunity or a criticality, in the light of preventing privatization while promoting the affordable rental housing supply.

To fill these gaps and answer those questions, the article focuses on a case of partnership between public housing providers and housing cooperatives, the Quattro Corti project in Stadera.

Case study design

The present article focuses on a specific neighborhood and on a peculiar project in a multiscalar perspective. The case study is chosen because it “allows you to focus in-depth on a “case” and to retain a holistic and real-world perspective” (Yin 2018 [2003]: 36) and “is an empirical inquiry that investigates a contemporary phenomenon within its real context, especially when the boundaries between phenomenon and context may not be clearly evident” (ibidem: 45). This quality of the case study is particularly useful in unraveling the multiple conditions that determine the weakening of public housing, which are reflected into the real “places” and situations created by public housing production, transformation, and management.

Stadera is a public housing estate built in the 1920s in the southern side of Milano city centre. The so called “Quattro Corti” complex consists of four four-storey courtyard buildings in the northern part of the estate. The complex has been abandoned for long time due to chronic obsolescence of the buildings and non-compliance of the dwellings with the minimum surface standards introduced in the 1980s. Rather than privatizing the buildings, in 1999 an unprecedented form of public-private partnership is set within a regeneration program to refurbish them: while the property remains public, two housing cooperatives are entrusted to refurbish the dwellings with private resources and manage them for 25 years with controlled rents. In the context of increasing affordability problems and within the structural lack of affordable rental housing in the Milanese housing system, 97 low-income families have found an affordable rental housing solution since 2004. Additionally, the public housing agency retains the property while being unburdened from the restoration and management costs. Despite some sporadic interest – mainly regarding the housing inclusion of foreign households – the Stadera case had very limited public resonance, it has never been officially evaluated and even scarcely an object for academic research. The reminder of the article analyzes and investigates the outcomes of the Quattro Corti project, and its effects on three scales – building-scale, neighborhood-scale, and city-scale. Stadera is chosen as an interesting neighborhood for many reasons:

• the estate was in very critical conditions in the 1990s – with many vacant and squatted dwellings;

• it’s relatively central position in Milan makes it attractive for privatization;

• it was the target of a place-based Urban regeneration plan at the turn of the 21st century;

• and, last but not least, it featured a pioneering (yet unique) case of partnership between a public housing agency and two housing cooperatives in Milan for the renovation of the so called “Quattro Corti” (four four-storey courtyard buildings in the northern part of the estate).

The Quattro Corti project represents an unprecedented and largely unrepeated form of collaboration between public housing providers and housing cooperatives. A comparative approach was therefore not feasible, and the single case study represented the only meaningful way for its analysis. To overcome the limitations of a single case – the abstraction of the diversity of contexts that exists in reality –, the case study is conducted across three main scales (Fig. 1): the macro-scale, represented by the city of Milan – the scale of management of ALER Milano (Azienda Lombarda di Edilizia Residenziale), one of the two main public housing providers in Milan⁴ and owner and manager of the Stadera public housing estate (which in turn reflects that of public housing in the Lombardy region and in Italy); the meso-scale, represented by the neighborhood and public housing estate of Stadera, located in the south of Milan and target of a regeneration program at the turn of the XXI century; the micro-scale, represented by the buildings of the Quattro Corti, part of the Stadera neighborhood and earmarked in the regeneration plan for an unprecedented form of public-private partnership with two local housing cooperatives. The multiscalar approach allows to benefit from the real-world insights provided by a focused fieldwork, while simultaneously contextualizing it within the scale of the neighborhood – a very important scale in regeneration plans – and that of the city – the most relevant scale for public housing management.

Fig. 1

Source: elaboration by the authors

The Stadera neighborhood in Milan, with the management area of ALER Milano, highlighted the Stadera public housing estate and the buildings of the Four Courtyards (in yellow).

The material that constitute the basis of the present article is the result of research conducted in the last thirty years – the period in which public housing in Italy went in a state of crisis (Fig. 2). A retrospective reconstruction of the situation of the Stadera neighborhood is done through the use of original primary and secondary sources. One main secondary source is the unpublished material collected by Martina Gerosa, during her Master Thesis in Architecture (1992–1993) and for her Ph.D. research (1994–1997), which included field study, interviews, collection of relevant official documents, and the notes taken by Livulla Lanza during her traineeship as social worker in the neighborhood (1994–1995). These original and unpublished materials represent a vivid and real-world description of the conditions of the neighborhood prior to the start of the regeneration plan. In the text, reference to those materials are labelled with “notes by MG” and “notes by LL”, respectively. In addition, we carried out our own research between 2018 and 2022. For our research, we relied on primary sources to reconstruct the history of the Quattro Corti project. We collected documents and conducted fieldwork, including interviews to inhabitants and key stakeholders involved in the Quattro Corti project and in management of the public housing estate. Interviews are listed in Annex 1 and referred to with acronyms in the text.

Fig. 2

Source: own translation and adaptation from Regione Lombardia 2011

Schematization of the case study.

The material was elaborated with different coding strategies according to three main research layers:

• (1) The conditions of public housing management in the Stadera neighborhood and the Quattro Corti buildings in the 1990s, related to those in Milan. Here, coding of the information regards the conditions of use and maintenance of the housing stock (i.e., presence of empty and unused dwellings, squatting);

• (2) The process that brought to the partnership with the housing cooperatives. Here, coding regards the role of the various actors in promoting the partnership and the formal conditions established with the partnership;

• (3) The outcomes of the partnership. Here, coding regards the implementation of the partnership and the change in the conditions at the three scales (city, neighborhood, buildings), especially: how many dwellings are made available, to whom, at which rent, with which costs and revenues for the actors involved, with which effects on the life of inhabitants.

The organization of the remainder of the article reflects these coding strategies, with jumps in scales and times that allow for the elaboration of the empirical material.

The crisis of public housing in Italy and Milan: a planned obsolescence?

The first national public policy act on public housing was issued in Italy in 1903, but the first public housing dwellings were realized in the 1910s. In the post-war era, public housing became a tool for economic development and social inclusion, creating visible landmarks on the peripheral areas of most Italian cities. In the 1950s, public investment represented more than 17% of the total housing investments in the country, and between 1951 and 1971 around 800.000 public dwellings were built (Padovani 1991: 202). Between 1949 and 1963, public housing production in Milan ranged from 5 to 28% of the yearly new housing production. Overall, 18,4% of the newly produced housing stock in these fifteen years was by public initiative, mostly whitin the framework of the INA-Casa plan, a compulsory insurance scheme for workers that guaranteed the economic resources for public housing development (Boriani et al. 1986).

Since the 1960s, new laws provided stable funding – via the GesCaL income tax for public housing (Law 60/1963) – and cheap land – via the Plans for Public and Affordable Housing plans (Piani di Edilizia Economica e Popolare, Law 167/1962). These policies expanded the public housing stock of that time, which was than organized around three different forms (Padovani 1996): public housing at social rent (edilizia sovvenzionata), also called Edilizia Residenziale Pubblica (hereafter, Public Housing), built, managed and allocated by public agencies through means-tested criteria; subsidized owner-occupied housing (edilizia agevolata) and special programs including subsidized rental housing (edilizia convenzionata), mainly built and managed by housing cooperatives. Thanks to this institutional framework, in the 1960s and ‘70s in Milan around 20% of the overall construction activity was either public or subsidized housing (Campos Venuti et al. 1986: 100).

From the early 1980s onwards, however, funding for public housing was often redirected to public debt repayment and policies that provided cheap land became suddenly unavailable due to legal reasons. At the same time, a new public management agenda inspired a reform which turned local housing authorities into publicly controlled companies, generating growing expectations of economic sustainability (if not profitability) without any form of compensation. The disinvestment on public housing happened simultaneously to the regionalization of housing policies, started in the 1970s with the introduction of Regions in the Italian administrative system, and culminated in 2001 with the creation of regional agencies for the management of Public Housing – in Lombardy, called Azienda Lombarda per l’Edilizia Reisdenziale and often addressed with the achronym “ALER” – regulated by the Regions based on national directives.

In practice, with the end of the GesCaL tax in 1993, the regional agencies have been put in charge of the management of the existing stock (with practically no funding for new construction activities) according to the Regional regulation for eligibility and allocation criteria⁵ and for the determination of the “social rent” (canone sociale). The calculation of social rent in Public Housing results from the calculation of a “standard rent” – based on dwelling’s objective characteristics but much lower than market rents –, then discounted or increased of significant share depending on the income of tenants and, finally, reduced to a cost-to-income affordability threshold for lower-income tenants (as in Fig. 3).

Fig. 3

Scheme of the calculation procedure of social rent in Lombardy. Source: elaboration by the authors on Lombardy region documents

Theorethically speaking, the procedure would guarantee the right to an affordable housing solution to eligible households⁶. Indeed, rents are often significantly lower than the market, and adjusted to income. However, the absence of economic compensation to the regional housing companies jeopardized the economic sustainability of public housing providers. Due to structural housing need of the most vulnerable parts of the population, the percentage of Public Housing dwellings allocated to very poor families has increased (Poggio and Boreiko 2017). In the province of Milan, 43% of ALER tenants have very low or no income, and on average pay a rent of 60€ per month (ALER Milano 2021b: 4). Additionally, between 2015 and 2020, ALER Milano has examined 3.527 cases of rent arrears for a total of 61,7 million €, the 90% of which was judged unguilty – due to objective inability to keep at pace with the payments – (ALER Milano 2021a: 55–56).

This phase of devolution and defunding can be described as a process of “passive subsidiarization”, as the devolution of competence and of responsibility of housing the poorest part of the Italian society to the new companies was not followed by devolution of funding sources but rather by a cut of previous funding schemes (Kazepov 2010). Management and maintenance problems are systematically put to the forefront to argue the unsustainability of Italian public housing and to call for the sale of the public housing stock. With low rents collected from mostly poor and low-income tenants – providing revenues that do not cover the costs of maintenance and management – and no structural compensation, at present part of funding for overheads of public housing providers comes from sale of the stock. Due to the age of buildings – and often to their state of decay –, the public housing stock usually features a high “rent gap”, or the margin of valorization when the housing stock is brought to its current potential market value (Smith 1979; Rusci and Pozzobon 2021). Privatization was legally integrated as a structural source of revenues for public housing authorities in the 1990s. This paved the way for an agenda of selective privatization of the most valuable part of the public housing stock and in the framework of austerity policies, publicly owned land and built assets have been increasingly treated as a source of revenue through asset privatization and financialization of public providers (Adisson and Artioli 2019; Belotti and Arbaci 2021). The sale of public housing became very attractive for both investors and homebuyers. Since the sale of the stock was integrated into the policy for balancing expenditures, more than 20% of the national public housing stock has been sold to privates, very often at prices far below market (Corte dei Conti 2007). Around one third of the public housing stock has been sold in the city of Milan, strongly weakening the municipality’s ability to respond to housing need⁷.

Residualization resulting from stop to new production, Right-to-buy schemes and targeted allocation has further worsened the economic conditions and created a situation of “planned obsolescence” for the public housing system. In an analysis of the public housing system carried out by the Italian Court of Audit (Corte dei Conti) in 2007, still substantially valid, it is stated that: “the public housing system as a whole […] has not yet identified solutions to some fundamental problems, relative above all to the necessity to identify the subjects who must take on the “social cost” of public housing, and of predisposing the means to do so, within management criteria aimed at ensuring the economy of management” (Corte dei Conti 2007: 68, translation by the authors). In such a precarious financial situation, ordinary management becomes very complex (Saporito and Perobelli 2021), not to speak of extraordinary intervention and refurbishment. For these reasons, ordinary and extraordinary maintenance of buildings and common spaces is often lacking, and the presence of empty public dwellings and unused assets has become a structural problem, which is addressed as an opportunity for further privatization. These structural problems, described on the national and city scales, can be vividly observed in the deterioration of maintenance and management conditions of the Stadera public housing estate in Milan in the next section.

An additional structural problem, linked to the chronic lack of funding, is the paradoxical permanence of vacant and unused dwellings – with squatting emerging as a practice to “fill these voids” and bring spaces back into use (Belotti and Annunziata 2018). In Italy, despite the shrinking availability of affordable housing, many public dwellings remain vacant, due to the need of maintenance in the face of scant public funding for renewal or to management issues. The issue of the under-utilization or abandonment of the public residential stock has a national significance, with around 6% of Public dwellings that are vacant (Federcasa & Nomisma, 2020). Regarding ALER Milan, in 2021, out of an overall stock of 54.873 public dwellings, around 7.896 (14%) are vacant. Renovation of empty dwellings has become a politically pressing need, calling for strategies against its privatization. In this sense, the national legislation has recently developed an interesting orientation, the so called “alternative valorisation to selling out” (valorizzazione alternativa alla vendita) introduced by the national law 80/2014 and the Lombardy regional law 16/2016. In the face of scant public resources, public housing assets that are in a state of decay and require renovation may be temporarily allocated and rented out through an agreement signed between public housing providers and non-profit organizations, that refurbish and manage the assets for a limited number of years under certain agreed conditions. Dwellings may be rented out at a moderate rent (slightly higher than the social rent) allowing for the repayment of the capital invested in the renovation. After the agreement has expired, the property turns back in full availability to the public housing provider. The valorization alternative to the sale of public housing is formally a priority of the Lombardy Regional Government, but there has been very small research regarding the actual effects of this policy. Despite this, privatization continues. In 2022 ALER Milano planned to receive a revenue of around 54,4 million€ from the sale of part of its owned asset (ibidem: 57).

Stadera, from a desirable neighborhood to the “Bronx” of Milan

Stadera was built during the fascist regime by the Istituto Autonomo Case Popolari (IACP) – the name of the local public housing providers until the 1980s – of Milan to accommodate slum dwellers from the old town, evicted households (due to urban gutting in central neighborhoods) and workers of the main factories of Milan at the end of the Twenties. In the post-war period, bound by a common way of living and by a similar political background, inhabitants activated forms of mutual aid and created social and safety networks in the neighbourhood. Together with the fact that the dwellings were decent and affordable (featuring a private toilet in each dwelling), this was a reason why a lot of people were seeking to be assigned there.

Formerly located at the outskirts of the city, with the passing of time the neighborhood has been absorbed by the urban expansion, becoming quite central and easily accessible through public transport. With the deindustrialisation process, which undermined the workers’ identity and caused a significant rise in local unemployment, the social fabric became more fragile, giving the opportunity to organized crime to infiltrate in the neighbourhood (notes by MG). The buildings, reaching sixty years old, were increasingly in need of maintenance and adaptation (notes by MG). However, the process of passive subsidiarization described in the previous chapter – together with the division of competence of allocation (by the Municipalities) and management (IACP) – caused delays in the refurbishment and allocation of empty dwellings, leaving them vacant for long time (Table 1) and available for squatting and for the infiltration and occupation by local organizations that were particularly active in drug dealing activities (notes by MG).

Table 1 Empty dwellings and not surveyed or abusive dwellers in the public housing estate of Stadera, in 1991

In the Eighties and Nineties, Stadera was partially controlled by the organized crime and labelled “the Bronx of Milan” by local newspapers due to social decline and the bad conditions of the buildings (Alietti et al. 1998). Some of the dwellings were turned into drug dealing headquarters, many were sublet to foreign tenants, that in some cases were fooled by believing that they were properly buying the flat for a relatively low price, while they were just paying to receive a set of keys and squat it (notes by MG). In this situation, the four buildings of the Quattro Corti remained completely vacant due to a change in the standard for the allocation of Public Housing dwellings that estabished that dwellings smaller than 28m² could not be allocated. Unable to timely refurbish and to adapt the buildings to the new standard, the agency relocated the tenants and removed the internal partitions to discourage squatting (notes by MG). Meanwhile, in 1994, the Municipality activated a form of place-based intervention by opening a front office of the local police – the so-called “presidio dei vigili” (policemen base) – in the ground floor of one building of the estate. Five officers were selected to deal with the mentioned complex situations in a communicative rather than authoritarian manner, and were supported by a young social worker (notes by LL). The policemen achieved a good level of confidence among the neighbours and became a reference for redeveloping the street-level contact among inhabitants and institutions that had been lost with the fragmentation of housing management (notes by LL).

The urban regeneration plan and the Quattro Corti project

In the early Nineties, the IACP promoted a survey on the issues affecting its public housing neighbourhoods in Milan and envisions a «big refurbishment plan»⁸. However, at that time these analyses were unable to rise the attended public debate and mostly remain a statement of intent with no consequences (notes by MG).

In 1999, driven by a situation of «social emergency characterized by high levels of decay, both from a physical and a socio-economic point of view, which in the last decades has worried the local administrators» (ALER, 1999: 1, translation by the authors), ALER Milano, the new name of the public housing provider since 1996⁹, and the Municipality of Milan promoted an Urban Regeneration Program targeting the Stadera neighbourhood.

In this program, articulated in 15 actions, the one promoting the refurbishment of the residential buildings known as the “Quattro Corti” stands out for various specificities. While most of the interventions are publicly funded, for two of the four buildings of the Quattro Corti an innovative form of public-private partnership is foreseen.

«The engagement of qualified privates is envisaged, with special regard to production or housing cooperatives. They would acquire the buildings through loan-for-use for 25 years, while they would provide the refurbishment and management of the buildings with their own financial resources» (ALER, 1999: 4, translation by the authors).

In this unprecedent synergy between local social enterprises and the public housing provider, the renovation is in charge of the social enterprises which sign a contract to rent and manage the dwellings for 25 years, while the ownership of the buildings remains to ALER. This unburdens ALER from the refurbishment costs while keeps the ownership public.

This form of public-private partnership is the result of a negotiation process set up before the publication of the Regeneration Program, a negotiation guided by Lombardy Region and involving different actors of the housing sector – Tenants’ Unions, entrepreneurs, developers, housing cooperatives, ALER − to test any possible way to set a collaboration among them (AG 1; HC 1; authors’ notes). The intention is to find new ways to face the deficits of the public housing stock and promote a supply of rental housing in Milan for those who cannot access to public housing but face hardship in the increasingly unaffordable private rental market (AG 1; HC 1; authors’ notes). In 1999 the Lombard Agency for the Renting Relaunch (Agenzia Lombarda per il Rilancio dell’Affitto) was established to coordinate these actors, following the abolition of the Fair Rent law on rent control (AG 1; HC 1; authors’ notes). The project addressed a segment of the housing demand which partially overlaps with the upper parts of the waiting list for public housing – while later public-private partnerships tended to address more solvent middle-income households (Bricocoli and Salento 2014). While the profit-oriented actors did not recognize an interesting opportunity in the proposed partnership, two local housing cooperatives – Dar = casa and La Famiglia, the latter later renamed Solidarnosc – saw in the Quattro Corti project a feasible way to increase their stock of affordable dwellings for a long period,  only at the refurbishment costs, and to possibly open up new branches of collaboration with the public housing provider (HC 1; HC 2; authors’ notes). For Dar = casa, it was a chance to manage one entire building after having experienced the renovation of housing units scattered in different public housing estates. For La Famiglia (then Solidarnosc) it was the first occasion to embark on the management of rental assets – until then, it was an home-ownership oriented cooperative.

With the Agency for the Renting Relaunch, the housing cooperatives had a formal representative in the negotiation with ALER, Lombardy Region and tenants’ unions, which led to the signing of the agreement in July 2001. The document states that ALER would keep the ownership of the buildings, define the refurbishment project and provide some works to the outer shell and the common parts; on the other side, the housing cooperatives would refurbish the rest of the buildings with their own financial resources, and then manage them for 25 years (until 2029), diverting the 5% of the rents to ALER since the 6th year on.

In August 2002, ALER completed the refurbishment of the outer shell of the buildings and the installation of an external elevator. For the cooperatives, funding came for one third from the bank foundation Fondazione Cariplo, while the rest was covered with a social loan from the members of the cooperatives and a bank loan. The cooperatives started their work, which mainly concerned the internal refurbishment of the dwellings and the vertical connections, resulting in the insertion of three elevators per building and the creation of 97 dwellings with one or two bedrooms each (Fig. 4). The dwellings were allocated to the new tenants in 2004, after two years of works.

Fig. 4

Source: made by the authors

The refurbishment of the buildings. In dark red, the new vertical connections. In light red, the redesign of the dwellings plan (incorporating two units into one as highlighted in yellow).

The Quattro Corti project inhabited and the Stadera neighborhood after twenty years

In 2004 the refurbishment of the Quattro Corti was completed, whilethe rest of the public housing estates in Stadera was still waiting for the beginning of the rest of the Urban Regeneration Program, which would eventually be officially kickstarted only in 2005 (Fig. 5).

Fig. 5

Source: elaboration by the authors

Gantt chart of the Urban Regeneration Programme of Stadera: in grey, the theoretical timeline of the various initiatives; the yellow horizontal line is the refurbishment of the Quattro Corti buildings; the yellow vertical line is the real kickstart of the Urban Regeneration Programme, with six years of delay.

The Urban Regeneration Plan faced many delays and criticalities, to the point that some actions were still being carried out in 2022.

The tenants of the Quattro Corti are members of the cooperative with an income below the maximum limit for the leasing of a publicly owned dwellings set by Lombardy Region. The rent of the refurbished dwellings is defined at the minimum rates established in the Municipal agreement on the canone concordato [agreed rent]. It is an incentivized contract on the private rental market, in which rents depend on objective characteristics of the dwelling within a range of minimum and maximum defined for a specific area by an agreement among local stakeholders (mainly tenants’ unions, landlords’ associations, municipality, etc.) in exchange of some tax relieves. This rental segment was introduced as a partial compensation for the abolition of the Fair Rent rent control in 1998, but by the time it proved largely unsuccessful in Milan: in 2021 only 3,89% of the new contracts were signed in Agreed rent in the municipality of Milan, despite the fiscal incentives and benefits provided (Agenzia delle entrate, 2022). Nowadays the renting costs in the Quattro Corti are around 60€/m² and a two-rooms dwelling costs the tenant around 300 euro per month (Fig. 6). It is much lower than the market rate, which currently feature average rents of over 210 €/m² per year for semi-central areas and of 120 €/m² per year for peripheral areas (Centro Studi PIM, 2019). The Quattro Corti project represents a relevant (though isolated) contribution to the small Milanese moderate rent segment, which is especially lacking supply in the range between 50 €/m² and 80 €/m² (Nomisma 2021).

Fig. 6

Source: elaboration by the authors

Typical refurbished two- and three-rooms apartment in the Quattro Corti and renting costs.

With these affordable rents, the housing cooperatives can respond to the housing needs of people with low and moderate income: households with only one salary, individuals with precarious earnings, households entitled to access Public Housing but still in the waiting list. Many tenants have foreign origins – also due to peculiar nature of the cooperative Dar = casa, founded with the aim of fostering the housing inclusion of immigrants. For many, entering the Quattro Corti has meant to finally found a stable housing solution. One of the tenants, Caroline¹⁰, has a migrant background and, due to difficulties in finding an accomodation with an affordable rent , in the past has shared a flat with other compatriots, moving from one flat to another five times in eight years. «At one point we were twelve people living together!”, she said (INH 1, authors’ notes, translation by the authors). When she got the residence permit, she applied for a public dwelling, but the waiting times were long. «One day a friend of mine came to visit at my place, a tiny one-room apartment where I was living with my husband. When she saw my house, she was shocked. She said that I couldn’t live in such conditions, that we needed to find another solution. She then suggested me to address the housing cooperative La Famiglia to apply for one of their dwellings» (INH 1, authors’ notes, translation by the authors). In 2000, Caroline became member of the cooperative and in 2004 she moved to the Quattro corti.

Some of the tenants of the Quattro Corti are also people whowere previously living in a public housing dwelling with their original family. In the interviews, they stressed the difference of staying in the Quattro Corti, where the cooperatives are present and intervene efficiently and promptly.

A peculiar case is the one of Maria who, born and raised in a dwelling managed by ALER in Stadera, decided to move in the Quattro Corti. «I could pay a lower rent by staying in the ALER building, but since I was unsatisfied with the Public Housing management, and I could afford a higher rent I’ve become member of the housing cooperative willing to move in the Quattro Corti» (INH 2, authors’ notes, translation by the authors).

In general, the housing pathways of the tenants interviewed show how the housing solution offered in the Quattro Corti gave them the opportunity to find independence from the original family and leave situations of cohabitation: moving to the Quattro Corti represents the end of housing precariousness and, for some, the opportunity to start the bureaucratic procedures for the family reunification process (Basso 2013).

The cooperatives operate a careful management. A concierge was employed before the end of the refurbishment work to support tenants in the phase of entering the dwellings and maintaining a memory of the works (HC8) and, thanks to some public fund, a social cooperative was there to improve the social connections between the future inhabitants and the neighbours (HC6). After the first years of inhabitation, many tenants complained with too high heating costs, and the old heating system was replaced with an additional investment by the cooperatives (INH3, INH4, HC1). Additionally, some resources were spent in the refurbishment of the open courtyard and two small buildings that were devoted to a common space for inhabitants and a space for local associations (HC5, HC7, CB).

From the point of view of the cooperatives, it is important that the project is economically viable, and good management and maintenance is seen as a good way to incentivize tenants to keep up with rent payments (HC1, HC2). Additionally, they do a close and careful monitoring of the tenants’ payments to discourage rent arrears. From 2014 to 2018, the average rate of arrears fluctuated between 2% and 8%, a good result compared usual rates of rent arrears in the Italian public housing, and in line with what foreseen in the business model of the refurbishment (HC 1; HC 2; authors’ notes). Nevertheless, between 2004 and 2018, the housing cooperatives have started 17 evictions procedures, of which three haven’t reached the execution since the tenant has been able to solve his debt or access to the economic support for the morosità incolpevole [unguilty arrears], a subsidy activated by the Italian national government in 2014 to mitigate evictions caused by the temporary worsening of the economic conditions (HC1, HC2, authors’ notes).

Discussion: reframing the Quattro Corti project

In the scarce literature available, the Quattro Corti project has been analyzed and discussed for the way in which the cooperatives have been able to innovate and develop efficient management methods based on the proximity to their tenants and to encourage housing inclusion of foreigners in a strongly multicultural context (Alietti et al. 1998). This is coherent with the general attention to “collaborative” housing projects and practices, which tends to obscure other important aspects of public-cooperative partnerships (Ferreri and Vidal 2021). In fact, less attention has been paid to one central aspect of the Quattro Corti project, namely the effective collaboration between public and cooperative actor to refurbish and bring back to use a portion of public property that had been vacant for years, ensuring affordable rents and preventing the risk of privatization. Thanks to the resources gathered and skills provided by the cooperatives, ALER Milan has maintained the ownership of the dwellings by relieving itself of the costs of refurbishment and taking advantage of the management of the cooperatives and fostering the supply of affordable rental housing. The Quattro Corti project has immediately represented a unique case within the Stadera Urban Regeneration Plan, experimenting with an alternative route to the ordinary methods of intervention on public estates.

Even though the Quattro Corti project has been conceived inside the Urban Regeneration Program for Stadera, the area-based approach or the effects on the social-mix of the neighbourhood are less relevant than the potential of the partnership to prevent privatization. Beside the carefulness employed in settling new inhabitants in a consolidated neighbourhood and the quality of the intervention, both important elements of the project, the key point of the Quattro Corti is that 97 affordable rental dwellings have been made available in a period in which the buildings would most probably have remained abandoned and vacant. Since the entrance of the inhabitants, the management of the four buildings has been carried out with continuity and without problems, so much that the cooperatives have been able to think more broadly about the quality of management and services offered (e.g. activating new common spaces).

For the two cooperatives, the Quattro Corti represented an important opportunity to grow and innovate their management. In turn, managing the entire estate, the cooperatives have been able to significantly intervene on building quality, installations, and common parts, bringing their expertise in management and significant technical improvements. In general, tenants of the Quattro Corti refer to their buildings as the best and more livable ones in the neighbourhood. The effects are immediately visible on the costs and quality of living of the members in the Quattro Corti, e.g., the substitution of the heating system has significantly reduced condominium fees. This is a relevant point, as condominium expenses often represent the heaviest expense for public housing tenants – since they are not parametrized on tenants’ incomes (Polis Lombardia 2021). The physical improvements will remain as a legacy when the buildings will return to the management of ALER.

Certainly, the major controversy of the project, especially raised by local tenants’ unions, is the subtraction of the dwellings from the Public Housing regulation in favour of a less strict rent-control regulation, which allows for more flexible allocation and slightly higher rents – though still low and controlled (TU 1; authors’ notes). The point is motivated, also in the light of the limited availability of Public Housing dwellings in the face of the large waiting list in Milan. However, it is mitigated by considering the political framework of national housing policies in Italy since the 1990s and the contingent situation in Stadera when the Regeneration Plan was launched (with so many empty dwellings for a long time). Additionaly, this is just a temporal change of destination and since ALER retains the ownership of the buildings, it will get back well-maintained dwellings after 25 years without drawing on its already drained budget for their refurbishment.

The Quattro Corti project represents a pioneering case of the so-called “alternative valorization”, that was introduced only fifteen years later with the national law 80/2014 and the Lombardy regional law 16/2016 and until 2021 only affected 990 dwellings in the whole region (own elaboration on data by Regione Lombardia). Finally, it represents a unique experimentation of cost-renting in Italy. In cost-renting, charged rents amount to the mere repayment of the initial investment plus maintenance and management costs and can be reduced when the initial investment is repaid. While cost-renting is a widely implemented principle of housing policies in some European countries, this is not the case in Italy. Italy is characterized by a dual system in which Public Housing is regulated by a strict rent control measured on tenants’ incomes, while in most other rental contracts rent is defined by the market (Kemeny 1995; Peverini 2023). While public housing agencies bear the social cost of providing housing at very low rents to poor households, the Quattro Corti partnership allows slightly higher rents that are necessary to guarantee the economic sustainability of the refurbishment process for the housing cooperatives, within a defined time frame.

Conclusions: the potential role of cooperatives in maintening public properties and providing affordable housing

In the face of chronic defunding and of expectations of economic sustainability (that were never met) together with the social goal of responding to poor households, any good management of public housing at social rent costs appears inefficient (Saporito and Perobelli 2021). This aura of inefficiency is the perfect background in which to preach the need to economically exploit the conspicuous public asset owned by public housing providers through privatization. With more vulnerable tenants and a lack of funding, ALER Milan, in an effort to address its chronic budget deficiency, has implemented extraordinary sale plans: a debt repayment strategy that results in a decrease in the stock of public housing, which makes it further undersized with respect to growing public housing need. Despite the legislative evolution has since provided for the privileging of forms of “alternative valorization” to the sale of public housing assets, the case of the Quattro Corti – which precedes these laws by more than ten years - remains a remarkable one with neither follow-up nor official evaluation. In this sense, the Quattro Corti project can be regarded as a pioneering case of reuse of a vacant public asset alternative to its sale. Paradoxically, the most critical issue of this experience is that it has remained an isolated case: the demand for affordable housing in Milan is much higher than supply, while there is still a lot of vacant public assets waiting to be refurbished and one main strategy is still privatization. The Quattro Corti project shows that it is possible to intervene in a synergic perspective: responding to the demand for affordable housing for the period of management by the cooperatives and guaranteeing the return to the public agency of the properties refurbished and ready to be reallocated right after. In the ALER housing stock in the province of Milan 7.896 dwellings are vacant and in need of refurbishment, but if one considers also vacant assets by other public companies (e.g., the railway company, the army, public offices) the potential for replicating the Quattro Corti scheme expands significantly. The main issue for replicating the Quattro Corti scheme is the elaboration of an effective and transparent process of decision-making. By tracing the different steps involved in the Quattro Corti, it is possible to underline some necessary preconditions for such partnership:

• the activation of an adequate policy tool to identify competent private subjects who can run properly a project of this level of complexity – in the case of the Quattro Corti project, it was the Lombard Agency for the Renting Relaunch;

• the intervention on an entire building (or contiguous entire buildings) to make management easier and more effective;

• clear regulations regarding rent determination based on the cost-renting principle and a defined temporal limit;

• the presence of external funding to cover part of the investment for the refurbishment costs – approximately one third, similarly to subsidization mechanisms in affordable rental housing construction in other countries .

More than twenty years after its conception, considering the current positive results of the experimentation, the manifest interest of cooperative actors in this type of intervention, the presence of vast vacant public assets at risk of privatization, and the urgent need for affordable rental housing – that a partly subsidized refurbishment scheme like that of Quattro Corti could enable –, scaling up the refurbishment model represented by the Quattro Corti could represent one viable way to mitigate the privatization of public housing.