Cumbria Rural Housing Trust

Redhills House, Redhills, Penrith, Cumbria, CA11 0DT, Tel. 01768 210265,

Community Land Trusts : A Consultation

Cumbria Community Land Trust (CLT)

Steering Group Response

17th December 2008

Drafted by Andy Lloyd, Cumbria Rural Housing TrustCLT Officeron behalf of the Cumbria CLT Steering Group comprising representatives of: The Lake District National Park Authority; South Lakeland District Council; The Friends of the Lake District; The Country Land & Business Association; Cumbria Asset Reinvestment Trust; Cumbria Rural Housing Trust; Hands on Help for Communities.

Part of the Investing In Communities Initiative & ‘Under One Roof’ Project

Current funders: The Lake District National Park Authority; South Lakeland District Council and Eden Housing Association.

With reference to the 2008 CLT Practitioners Meetings, the Birmingham Round Table Discussions, and the CLT Practioners & Development Trust Association responses.

Introduction to Cumbria Rural Housing Trust (CRHT)

Cumbria Rural Housing Trust has a long history of working with rural communities, Local Authorities and Housing Associations to provide affordable housing schemes for the County. Registered under its current name in 1994, the trust specialises in:

  • Providing parish level housing need surveys required by planners and Housing Associations for new schemes, describing the number of homes required, as well as size and tenure.
  • Working with communities to identify problems and appropriate solutions.
  • Working with landowners, local authorities and housing providers to increase the supply of schemes for rural communities.
  • Promoting new efficient ways of providing affordable homes
  • Contributing to housing and planning strategies at local, regional and national levels.

January 2008 Community Land Trust Officer Post

Since January 2008 the Trust has employed a Community Land Trust Officer to assist communities interested in setting up CLTs identified in the Under One Roof report. The Officer was funded to help all Cumbrian communities to examine the CLT model for affordable housing with the targets of making at least 20 communities aware of the CLT option; supporting two existing CLT communities; and enabling two new CLTs to form. The officer has met or exceeded these targets in the first 10 months work, increased understanding and support for the model amongst Local Authorities, run a successful conference for the county and produced a range of technical resources available on the new CLT section of the CRHT web site as well as producing a response to the current government CLT consultation on behalf of the CLT Steering Group and feeding back to Cumbria LAs and the North West Rural Affairs Forum.

5 key points

  1. Trust based community development has a track record of very durable and diverse regeneration in the UK and the USA: Alms House Trusts – Brabins Trust facilitating the creation of Chipping CLT, Lancs; Coin Street Community Builders, London. Gateway Trust described below.
  2. (Development Trust Association response) The overriding strength of CLT’s is their ability to empower communities to create solutions that are fit for purpose. Whilst a balance has to be struck between empowerment and control of public funds, if the movement is to deliver on it’s potential, the Government needs to be careful that innovation and good will is not constrained by overregulation. The regulatory focus of the paper and the narrow interpretation of the function of a CLT is disappointing. The failure to identify and consider the broader role of CLT’s and their structure as independent, not for private profit organisations, holding assets for community benefit diminishes the scope to understand the potential of the CLT movement and the required support and regulation. With this in mind, it is not considered that appropriate questions have been asked, but in the spirit of consultation a full response follows.
  3. (National Practitioners response) National and local government should enable, not control (in the spirit of the Community Empowerment White Paper). Local people are motivated to form CLTs because they have identified specific local needs and the means to tackle them. Local people will not readily give up their time to be just a minor component of existing public provision. They want to be valued equally with other agencies as investors in their communities.
  4. CLTs will usually, but not always, want to work in partnership with Housing Associations regards development expertise etc. CLTs are being delivered in many ways ranging from independently developed, to combined CLT / HA schemes, to HA delivering whole schemes on behalf of CLTs (Cornwall Rural HA).
  5. The 3 essential practical steps required are: a) Complete exemption from the Leasehold Enfranchisement Act 1964 to provide simple protection against the ability of CLT part owners to increase to full ownership; b) access to lightly regulated housing subsidy from the new Homes & Communities Agency (described below), in line with the ethos of ‘New Ways of Working’ & ‘whatever it takes to get the job done’; c) funding of local enabling expertise. This currently resides in locations including – Communities themselves, The Development Trust Association, Housing Associations, the Co-operative Movement, Community Finance Solutions, Cumbria Rural Housing Trust, Land For People.

The Lake District National Park Authority comments that CLTs:

  • Enable communities to take control over their own environment.
  • Give local communities a genuine opportunity to participate in decision making regarding their homes and areas.
  • Facilitate engagement and ownership.
  • Remove doubts about prioritising local housing allocations.
  • Ensure development is appropriate to location and scale & is locally distinctive.
  • Need full time ‘hands on’ county based CLT officers to maintain consistency and continuity, rather than a short term advice. Funding for this needs to be secured through a combination of local and regional (HCA / RDA?) funding.

Consultation Section 1 - Introduction

Response: The terms of the consultation: The consultationis couchedin terms of existing approaches to part ownership, but offers an opportunity to re-state the advantages of the CLTmodelapplied successfully in the USA centred on:

  • local empowerment
  • permanence
  • insistence on very safe loan to income ratios (say 2.5x)
  • basing share of ownership on build costs & linking resale values to wage inflation - the key to long term stability where the market may be subject to extreme falls or rises
  • lender support
  • Induction, training, support, intervention

Section 2 Recognition & legal models

(2 questions)

Response: Stating the Potential of the CLT Model:The consultation recognises that trust based affordable housing has an established track record, but the differences and strengths and extent of this approach should be further catalogued. For instance:

  • Non depletion of stock
  • Eventual re-investment income as with Letchworth Garden Cityrented housing.
  • America - Permanent locally affordable housing in more than 220 American towns and cities.
  • Resilient part ownership - Michael Brown, Burlington CLT, Vermont, USA, August 2008‘With our safe loan to income ratios, ongoing support and resale values linked to wage inflation (not yet applied in the UK) the foreclosure rate for US CLT homeowners is an incredible 0.6%. As a result, U.S. banks love CLT mortgage loans and the fall-out from the sub-prime crisis is notaffecting CLT home owners’
  • Empowerment & better communication – communities directly involved in addressing local problems.
  • An ideal vehicle for transfer of public assets as govt accepts from the Quirk review.
  • Long term social and economic benefit through ownership of assets.

Examplesof long term social and economic benefit through ownership of assets

1678UK Brabins Trust, Lancs, alms houses, expanding now as a CLT. Close support from Great Places HA.

1903 UK Letchworth Garden City, trust based rented housing, none sold off, permanent re-investment income.

1923UK Lord Leverhulme, Isle of Lewis into ownership of democratic Stornoway Trust. Still going strong.

1950’s India ‘village trusteeship’

1967 USA CLT farms established

1983UK Stonesfield Trust, Oxfordshire, 11 rented homes, re-investment income

1994UK - Threlkeld HA (a local trust), 14 homes, part ownership. Eden HA support.

2008USA Over 220 CLTs, large urban to small rural. Federal financial assistance.

New pilots in England & Wales.

Community Land Fund established in Scotland

GlendaleGateway Trust, Northumberland

GGT is a great example of a community organisation taking a central role in local regeneration. The trust is managed by local people with some support from the Development Trust Association and has been successful in revitalising the high street in Wooler. By developing empty properties and derelict land owned by an absentee landlord it now owns a mix of complementary assets including 4 affordable rented homes, three retail units, the local youth hostel and a community hub and managed workspace. The impact of this holistic approach is that shops are occupied, the retail quality has improved (including those premises not managed by the Trust), and one family and a number of young people have a secure tenancy in a town of escalating prices. Plus the local YHA has been renovated and the town has a focal point for community activities and employment and social advice. The Trust also facilitated a significant housing development in the centre of the town, through the acquisition and sale of land to a housing association.

Tom Johnston at the Trust also reports that when applying the M3 local economic multiplier, by using local suppliers and builders the housing budget of £280,000 produced a value to the local economy of over £800,000. And whilst the District Council provided a grant of some £40,000 towards housing renovation, they now receive over £20,000pa in new council tax receipts from the scheme.

This demonstrates how community organisations can enable the design and provision of housing and subsequent allocation, and has stirred the Trust to take a greater role in housing in the future. Essential subsidy for the affordable housing was not available at the time from the Housing Corporation (a situation which GGT would like to see change through the current CLT consultation process)and instead was provided as a ‘one off’ by the Regional Development Agency.

Threlkeld unregistered housing association, Cumbria

14 homes built in 1994, also workshops. Land donated by ARC Ltd plus manager for one year to set the scheme up. All shared ownership jointly owned by the occupants and the trust. THA has been supported throughout by Eden Housing Association.

Witherslack CLT, Cumbria

Rural self build scheme. Dispersed but vibrant settlement. Community already saved village pub. High housing need. Land gifted by local landowner. Planning support for location. Scheme acting as a catalyst to refine National Park 106 planning

agreements

Developing the CLT definition: The 2008 Housing & Regeneration Act definition does not mention affordable housing or permanence. CLT practitioners may therefore want to clarify and re-inforce the definition through use of recommended model rules, as suggested by Cornwall Rural HA, in line with the ethos of local, affordable, permanent and inclusive development.

Legislation also needs to be extended to enshrine the CLT definition in law in Scotland, Wales and Northern Ireland as well as is currently applied in England.

Consultation Question 1

Do you agree that the CLT model has a role to play in a ‘mixed

economy’ of different social and affordable housing providers?

Response:CLTs have a highly constructive role to play in through:

  • Their ability to develop diverse assets adding to overall sustainability.
  • Bringing a variety of funding options to add to affordable housing supply such as share issues, loan stock, charitable giving, housing grant, cross subsidy etc.
  • Bringing communities into constructive partnerships with delivery agencies.
  • Providing social and economic benefit over the long term.
  • Anchoring households during difficult economic times by tuning affordability to local communities.

Consultation Question 2

What role can CLTs play in both a rural and urban context?

Response:All of the above plus:

  • CLTs provide an excellent mechanism to hold public land for community benefit.
  • Community organisations have a track record of successfully developing high value mixed use assetsincreasing community benefit in both urban and rural locations: See Witherslack CLT, Cumbria; Glendale gateway Trust, Northumberland; Coin Street Co-op, London.
  • Bringing landowners onboard due to permanence of the CLT. See landowner involvement at Buckland Newton CPT, West Dorset.

Section 3 Regulation & access to Social Housing Grant

(no questions)

Response:CLTs need to comply with regulation where they interact with planning, charitable, or funding policy. However CLTs have an ethos of their own which seeks to add value to existing policies of affordability and inclusivity. The purpose of this consultation would hopefully be about making it easier to achieve these aims.

Regulation of CLTs already happens through existing policies, andis a 2 way process:

  • The planning context will largely determine a CLTs approach to housing allocations. Planning policy will require a housing provider to allocate homes with reference to policies of fairness and inclusivity. CLTs seek to ensure or improve on such policies and their aims will tend to overlap with LAs.
  • The Homes and Communities Agency will have policies that apply where grant may be considered. However community friendly regulation needs to be applied. Some CLTs are currently negotiating grant with regional offices of the Housing Corporation on this kind of basis.
  • Schemes based in existing buildings may not require planning permission and be free to apply their own allocations criterion.

The concern expressed regarding the protectionof public subsidy made available to CLTs could be seen as misplaced. CLTs set out to lock subsidy in more effectively for permanent community benefit. They currently struggle to do this in the face of the existing regulatory & legislative system which makes this difficult.

Access to subsidy: Social rents and locally affordable part ownership cannot be delivered without subsidy. Therefore government subsidy for CLTs must be made available. However this needs to be on terms appropriate to the scale and nature of CLTson the basis of:

  • Accessibility
  • ‘Light touch’ regulation
  • Permanent community ownership – zero exposure to any future Right to Buy scenario.
  • Opportunities to create economies through different approaches to procurement

For example, some regional offices of the Housing Corporation were negotiating to make grant available direct to CLTs on the basis of: having an RSL partner; meeting minimum space standards and the Code For Sustainable Homes level 3; and simplified housing management accreditation.

Pre-emption clauses and buying back: CLTs also require access to ‘buy back grant’ to enable them to

a). re-purchase homes in the small number of instances (0.6% for American CLTs) where occupants default and

b). to ‘buy back’ in order to reduce the share of ownership where the next eligible household may need to buy a smaller share of ownership.

This will enable CLTs to achieve affordability and permanence.

Strengthening the National Facilitation Fund: The fund wasfacilitated by Community Finance Solutions at Salford University and launched in September 08 by Venturesome, the Tudor Trust, and the Esmee Fairbairn Foundation offering CLT preliminary and development funding. The Housing Corporation& newHomes & Communities Agency and other bodies could contribute to this fund to help it to become the specialist provider of CLT finance, perhaps in a similar way to the operation of the Community Land Fund set up in Scotland.

Also to repeat from above on pre-emption clauses and buying back: The national Fund could provide access to ‘buy back grant’ to enable CLTs to re-purchase homes where occupants default, or to reduce the share of ownership where the next eligible household may need to buy a smaller share.

Section 4 Access Policies & Tenures

(no questions)

Response: Approach to housing allocations where CLTs may receive Social Housing Grant: Bearing in mind the strong Community Empowerment agenda set by government, the new Homes & Communities Agency must ensure that grant can be offered to communities in an appropriate manner. Holy Island Trust in Northumberland is negotiating via a local RSL partner from the local office of the Housing Corporation. The grant will be paid direct to the trust and conditional on achieving a reasonable housing management accreditation.

The under supply of affordable housing in all locations has the effect of excluding large numbers of households with ordinary housing need from any prospect of being affordably housed. In effect social rented housing is rationed with vacancies prioritised for those in greatest need. This is fair in one sense but does not succeed in meeting the needs of ordinary local households. Therefore government needs to build a bigger better stable part ownership market to redress this imbalance, part of which needs to be the undiluted CLT model. Where a local affordable housing scheme may be delivered through the efforts of a community trust some negotiation and leeway will be required so that the scheme can meet general local need.

Section 5 Finance

Pre-development and Development & ‘Value for Money Study’

(2 questions)

Response:This part of the consultation contains an assertion that,

‘Community led CLT schemes generally prove to be more expensive, usingexisting assessment criteria, when compared to affordable housing schemes beingdelivered by larger RSLs, both at the level of grant per home and the grant per personhoused. CLTs, however, aim to provide affordable housing in perpetuity and to achieveother benefits for the area, such as building the capabilities of local people andstrengthening the sense of ownership and bonds within the community. These additionalbenefits and the costs associated with providing them are not usually taken into accountwhen CLT schemes are being assessed for the value for money that is gained for publicinvestment.'