How to… set up an urban Community Land Trust

Community Land Trusts have helped local people take control of land and develop housing solutions in rural areas across the UK. Now for the first time this model is being used to help tackle London’s dysfunctional housing market, as Kate MacTiernan explains

A revolution is taking place in Mile End in the east end of London that offers a way out of the housing crisis. It is the UK’s first urban Community Land Trust. It’s a revolutionary idea and a practical realisation of the new attitude to housing, community and ownership of land for those that live in London and yet can barely afford to do so.

In the UK the symbol of a house – the domestic environment, engulfed in a community, endowed with practical economy, family and furnishings – has utmost importance. And yet the system of home ownership has favoured those that are absent from London itself – giving priority and power over to speculative overseas investments.

Luxury homes currently in development, will, once completed, cover a surface area equivalent to the 2.5sq km of the Olympic Park in Stratford and will have a market value of £38bn, according to EC Harris, the building consultancy. Many of these luxury flats are treated as stable and lucrative investments by overseas buyers, and remain empty.

When the functioning of the housing market in London is looked at in light of this it reveals some deep paradoxes. A report published in 2010 from the Smith Institute entitled ‘London for Sale?’ reveals that around 60% of new-build property in central London in the first half of 2011 was bought by overseas investors, mainly from the Far East.

The report summarises the situation thus: ‘There is an urgent need to make London one city that can actually house its citizens decently at a cost that they can afford. This will involve taking radical measures to correct profound market failure. In the end markets exist to serve the needs of people. It is very difficult to argue that the London market serves the needs of Londoners and in that sense it is dysfunctional.’

St Clement’s Hospital in Mile End is the first sign of the emergence of a new system, one that is functional and both socially and economically sustainable as it accounts for future generations. The land will be held in perpetuity by a community foundation and 10% of the houses that exist on this land will be available for a quarter of market value (approximately £100,000 – £120,000 rather than the inflated £400,000 for a standard family two bedroom), the increase in the value of the bricks and mortar rising with wage inflation rather than the speculative market, and sold on only at this capped rate. This 10% equates to roughly twenty-five houses and is a small step in the right direction.

St Clement’s hospital is an old mental asylum and is situated close to the Olympics site and is the real legacy for the area.  With plans in 2013 to open up the front building for community use, the old days of volume house builders coming in, making a quick buck out of some two bed flats and disappearing into the distance with a section 106 agreement posing as compensation in their wake, are gone. The section 106 agreement in the Community Land Trust model can be incorporated into the mixed-use strategy on site, helping to consolidate the value of the development for local people by directing the investment to their particular needs.

Through the community land trust model life will be breathed back into the site, with community activities set up to encourage enterprise and training while they wait for the homes to materialize. The East London Community Land Trust will run affordable workspace, artist’s studios, markets, cafes and educational, enterprise and social opportunities for local people throughout 2013. The gardeners from the cemetery behind are waiting to get their hoes to work on the common courtyards and the people from the neighbouring estates made Christmas decorations to adorn the front of the building. St Clement’s hospital will go from being an abandoned mental asylum to the only sane development in London – one that recognises and encourages the community to do – rather than be done to. Watch this space.

Kate MacTiernan

Kate MacTiernan is the chair of Meanwhile + Mixed Uses at East London CLT, as well as a member of the board of trustees.

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