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Linking houses prices to income, forever!

Community Land Trusts, a collaboration to help deal with the housing crisis?

  • 25 January 2017
  • Author: Duncan Ecob
  • Number of views: 568
  • 0 Comments
The approach to the Auckland housing crisis will need a variety of methods to be resolved.  Whilst most will look to the private and government sectors to supply new homes to meet the demand there is a ‘Third Sector’ approach that has its roots in the 1960’s American civil right movement, Community Land Trusts, (CLT).  In the  USA the largest CLT has over 2000 homes and over the last decade CLTs has found increasing and popular support in the UK. 

CLT’s are set up and run by the community with the (UK) legal definition1

…. to further the social, economic and environmental interests of their communities, and be democratically accountable to their communities’  

These objectives are very similar to those of many levels local authorities and are often seen as a community vehicle to deliver affordable homes.  One of the strengths of the CLTs is that they are able to deliver affordable homes in perpetuity by linking the sale price to the local wage level and selling them at a much lower level than the local market price.  A condition of the sale is that any future sale price remains pegged to local earnings, forgoing the potential windfalls of the property lottery.  This is very different to the ‘right to buy’ of local authority housing which removes the bought property from the affordable and social housing markets.

How they can sell homes at a “wage related affordable cost” is related to the acquisition of the land at low to zero cost.   The land that CLTs use for development is surplus Local Authority or  government land  which is often sold to help ‘ balance the books’.  But the authorities are not obliged to sell to the highest bidder rather   to dispose of their land on the basis of the “best consideration” reasonably obtainable, which should take into account long-term value. Social and economic benefits can justify the sale of land below market price –  by working with CLT’s the benefits for the area in the long-term often outweigh cash raised upfront.

Catherine Harrington is the director of the UK’s  National Community Land Trust Network and says

“People are demanding more of a say about what regeneration looks like, instead of sitting back and being told what the future of their area is going to be,” she adds.

“It’s about changing the narrative of housing: building homes rather than investment units; having security and stability in a particular place, rather than being forced to move every six months; and mobilising popular support for development.”

The nature and purpose of CLTs can be hard to generalise because they are each responding to the specific local housing need in their respective areas, they are community led and operated so address particular community needs and aspirations.   A few examples include some set up with the following objectives

·       revival of a bakery now looking at ways of tackling other empty units in the area to provide workspace for social enterprise, affordable housing and “spaces to meet, chat and celebrate”.

·       Bringing back life to rundown areas where the community has become fragmented it, to stablise it and attract people back to the

Critics argue that CLT’s  don’t represent  a real solution to affordable housing and see it as a symptom of councils shirking their responsibilities, or a result of having their own housebuilding capacities removed. But one of the biggest obstacles building new homes is often ‘nimbyism’ – a phenomenon that community land trusts are perfectly placed to counter as CLTs have a unique ability to gather popular support for new development.  CLT’s  are driven by local residents themselves, put  them in control and give them the ability to define how proposals are developed, placing the long-term interests of the neighbourhood at the very heart of the plans.

 

For further info check out this article by Oliver Wainwright in the Guardian

The radical model fighting the housing crisis: property prices based on income
https://www.theguardian.com/cities/2017/jan/16/radical-model-housing-crisis-property-prices-income-community-land-trusts?CMP=Share_iOSApp_Other

And the Uk’s CLT website

http://www.communitylandtrusts.org.uk/

and an alternative view from

http://www.cds.coop/about-us/mutual-home-ownership/community-land-trusts

 

1 UK the 2008, Housing and Regeneration Act 
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