Current discussions around development tend to assume a dichotomy between state-led and market-led approaches. Community-led development offers an additional option, taking inspiration from the commons and historic movements such as the Garden Cities and Plotlands, empowering communities to create their own homes and places.
Although their legal forms and activities differ, community-led developments share these common principles:
- meaningful community participation and consent occurs throughout the development and design process, although communities do not necessarily have to initiate the conversation, or build homes themselves;
- there is a presumption that the community group or organisation will take a long-term formal role in the ownership, stewardship, or management of the homes;
- the benefits of the scheme to the local area and/or specified community group are clearly defined and legally protected in perpetuity.
We do not expect community-led development to replace the need for the state to deliver mass social housing. But we do believe it could play an important role. Community-owned housing now accounts for 15% of the total in Norway and 8% in Austria.
The governance and ownership structures that facilitate such development are extremely varied. Community-led developments need not happen on community-owned land. They can be based on land leased from local authorities, or the Common Ground Trust, for example. However, for those groups able to raise the necessary finance, the attraction of taking land into direct community ownership is clear: more direct control over managing their housing collectively; an additional driver for change to our currently dysfunctional housing system, particularly where council capacity is absorbed by providing social housing to those most in need.
Community-Led Housing (CLH) is a term that incorporates Community Land Trusts (CLTs), co-housing projects, co-operatives, self-build groups and tenant management organisations (TMOs). Projects often incorporate a combination of the above models, for example a CLT may have a cohousing cooperative and/or self-build plots on its land. Proposals have also been made for large scale Community Land Trusts, inspired by Ebenezer Howard and Letchworth Garden City.
CLH provides a means of taking land into permanent community ownership. For example, CLTs might acquire land in perpetuity, then provide for its private use through rented homes and long-term ground lease agreements. The leaseholders may own their homes or other improvements, but resale restrictions apply to protect affordability. CLTs hold land and other assets for the wellbeing of the community, controlled by a membership open to anybody who lives and works in their area.
There are already inspiring examples of community development in England. Locations vary from high-value markets in coastal villages and national parks, to deprived areas afflicted by poor quality private rented housing and empty homes.
- Granby 4 Streets CLT in Liverpool saved nearly 100 homes in a multicultural neighbourhood from controversial demolition plans, rejuvenating a once-thriving area that had fallen on hard times;
- LILAC is a mutual home ownership and co-housing scheme of 20 households in Leeds. Members pay a monthly amount set at 35% of their income into the cooperative which owns the property. This payment becomes equity in the cooperative after deductions for management of the building;
- Lyme Regis CLT built 15 affordable homes outside the town boundary, because sites inside were too expensive for affordable housing. Permission was approved against officer advice, due to overwhelming community support;
- Sanford, in Lewisham, is the oldest purpose-built housing co-op in the UK. Founded in 1973, there are around 125 tenant-members living in 14 houses and a block of flats;
- East London CLT has 23 of the 252 flats built on the former site of St Clements Hospital. Property prices are pegged in perpetuity to local earnings rather than market rates, initially selling for around one-third of the price of similar flats.
Scotland has recently taken bold steps towards wider community-led development and ownership. Isle Of Eigg residents famously completed a buyout in 1997. This was followed by post-devolution land reform bills with ambitious government targets and funding. Community Development Trusts have been the main vehicle. They are similar to Community Land Trusts, but have a slightly different statutory footing. There are now 227,526 hectares in community ownership in Scotland, including large former MOD sites and entire islands. Many increase housing provision, but there is a broad range of uses, including land for energy generation, forestry, industry, business, tourism, agriculture and education.
In the USA, CLTs originated in the civil rights movement. There are now at least 225 CLTs in the USA, owning around 25,000 rental and 12,000 home ownership units. Founded in 1984, the Champlain Housing Trust in Vermont is the largest CLT, with 2,600 permanently affordable dwellings, ranging from one-bedroom flats to family homes with a mix of rental and shared equity ownership. As mayor of Burlington, Bernie Sanders played a significant part in Champlain Housing Trust’s creation. It has won a UN award for its work, and demonstrates that CLTs can thrive at scale.
Tools for bringing more land into community ownership
A key challenge communities face is the difficulty of identifying and purchasing land. We need new mechanisms to help scale up community ownership of land.
Community Right to Buy and Compulsory Sale Orders
In Scotland, the Land Reform (Scotland) Act 2003 introduced a Community Right to Buy, which empowered rural communities with the first option to buy land offered for sale. This was accompanied by the establishment of the Scottish Land Fund, to support community organisations purchasing and developing land.
Initially, this was aimed at helping rural communities buy large estates typically owned by absentee landowners. Landowners were not compelled to sell – the right to buy was only activated when the owner volunteered land for sale. However, more recently the right has been expanded to urban areas, and community groups are now able to purchase land without a willing seller under certain circumstances, such as where land has been abandoned or neglected.
Community Right to Buy does not currently exist in other parts of the UK. In England, the Localism Act 2011 introduced a tokenistic ‘Community Right to Bid’ which has proved to be of little practical value: It allows communities and parish councils to nominate buildings or land to be included on a list of ‘assets of community value’ managed by the local authority. If the assets comes up for sale, the community can ‘pause’ the sale and take up to six months to find the funding required to buy the asset. The ‘Right to Bid’ only applies when an asset’s owner decides to dispose of it; there is no compulsion on the owner to sell it. Significantly, the scheme does not give first refusal to the community group, as with Community Right to Buy in Scotland. It only provides communities with a right to bid – not to buy. This means that the local community bid may not be the successful one.
Compulsory Sale Orders and Compulsory Purchase Orders
Compulsory Sale Orders (CSOs) and Compulsory Purchase Orders (CPOs) are other potential mechanisms for bringing land into community ownership. CPOs are discussed in Chapter 5. CSOs are a proposed new statutory power, giving public authorities the power to require land that meets certain criteria – for example, left vacant or derelict for a defined period – to be sold by public auction to the highest bidder, with community groups offered the right of first refusal. This proposal is explored in detail in a recent Scottish Land Commission report.
Unlike CPOs, CSOs have the advantage of not requiring up-front public investment, as public authorities would manage the auction process but not take ownership of land. If coupled with financial support, this could offer an efficient way to transfer land into community ownership.
Benefits and current barriers
Community-led development offers a compelling alternative to current approaches. With sufficient support to scale up, it could become a powerful tool to transform the position of people who are currently excluded and marginalised. Outside Scotland, it has largely focused on increasing housing provision, but a broader scope is possible, as explored in Chapter 8.
Benefits include: securing land value increases locally, higher standards in design, improved health and wellbeing, strong local support, providing genuinely affordable homes to rent or buy and preventing new houses from becoming holiday homes or buy-to-let investments.
Principal current barriers are access to and the price of land (particularly in competitive urban land markets), the cost of finance, the need for expert support throughout the process, lack of transparency around land ownership, a lack of understanding among councils’ leadership, property and planning departments and pressures to sell council land to the highest bidder, using outdated RICS valuation guidance.
The recently-launched Community Housing Fund is designed to address financing and expert support. Systemic obstacles such as high land prices and lack of transparency are discussed elsewhere in this report. Below are specific recommendations for tackling the remaining structural, legislative and cultural obstacles.
Recommendations for supporting community development and ownership of land
In the recent Housing for the Many Green Paper, Labour has already committed to:
- remove the threat of right-to-buy from CLH;
- produce new definitions of affordable housing, not connected to market rates;
- provide long-term support through the Community Housing Fund.
In addition we recommend that Labour:
- Introduce a new Community Right to Buy, like Scotland’s, and develop UK-wide Compulsory Sale Orders;
- Give the new Development Corporations (Chapter 5) a remit to support community-led development and ownership, including using compulsory purchase powers where appropriate;
- Local authorities should be encouraged to introduce local planning policy that will allocate a portion of strategic sites for community-led development;
- Ensure CLHs are exempt from laws which might stifle the growth of this emerging sector. Potential issues include: bans on leasehold and ground rents, leasehold enfranchisement, and taxes on rental income;
- Provide consistent investment and support to the growing network of Enabling Hubs;
- Work with the industry body UK Finance to encourage their members to increase consumer choice for CLH mortgages with the goal of more lenders with more bespoke community led mortgage products to choose from;
- Explore CLH as a covenanted or planning use category that can be slotted into plans and strategic planning documents. Strategic Housing Market Assessments, for example, should include a quota of community ownership.
- Create powers to assign sites of potential community value to a Community Ownership use class, with accompanying development rights.
 National CLT Network press release, 2018. Citi Community Development and Grounded Solutions Network Announce the Creation of the National Community Land Trust Accelerator, Business Wire.
 UK Government, 2012. Community Right to Bid: non-statutory advice note for local authorities
Scottish Land Commission, 2018. Compulsory Sales Orders: A Proposal from the Scottish Land Commission.
 J. Rosenberg, 2011. Social housing, community empowerment and well‐being: part one – empowerment practice in social housing, Housing, Care and Support, Vol. 14 Issue: 4, pp.113-122, Emerald Insight.
 UK Government Press Release, 2018. New fund launched to increase community-led affordable housing