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.

HOW WE DID IT
When the mayor of London Boris Johnson and the Greater London Authority (GLA) agreed to hand over the freehold of the entire St Clement’s hospital site in Mile End to the East London CLT (ELCLT), they made history. This ‘gift’ was not one that was coaxed out of them easily, nor was it a ‘gift’ in the true sense of the word as it was paid for at commercial rates and must be used to generate profits for the developer through the usual mechanism of majority private sales. Nonetheless, the land would now remain in ownership of the community in perpetuity.

This was the result of a five year campaign by local people to have a stock of well-built, permanently affordable houses established within an environment generated, owned and run by the local people. This epic feat was achieved by the organisation of over 1000 local people, gathered and directed by David Smith, a community organiser from London Citizens. He swiftly organised a board of trustees, partnered with a development partner, Igloo, to prepare a bid for the selected site. Igloo has been described by the United Nations as the world’s first sustainable property investor and the only substantial socially responsible real estate vehicle in the UK and so was a natural partner for ELCLT.

David and other board members visited America where the CLT movement was established as part of the civil rights movement and is thriving in urban locations. A funding and support stream from the Oak Foundation and the United States Community Land Trust Network was established to assist in the St Clement’s mission.  The bid for the site then started and due to the uniqueness of the site and the conditions of the CLT model the requirements were altered 11 times by the GLA, each time requiring a new submission from Igloo and ELCLT. All the work involved in this lengthy and time-consuming process from legal documents and financial models to design and documentation was done pro bono through a panel of experienced experts who gave their services in kind.

After a much delayed decision date, it was finally announced that the site would eventually be owned by the Community Trust, but that the development stage would be undertaken in partnership with Linden Homes as dictated by the mayor of London’s office. This prompted a return to the drawing board and a re-negotiation of terms between ELCLT and their new development partners. This included an agreement to 10% of the overall number of houses being built on site to be ‘affordable for sale’ houses through the CLT (conforming with the level of affordability set by them, approximately 25% of market value).

Community consultation workshops with numerous groups had until this point governed the way the ELCLT had drawn up the designs for the large site. A new round of these were held with the new developer (Linden Homes + Galliford Try) and their architects (John Thompson + Partners) in December 2012 so that they could hear first hand what people wanted out of this groundbreaking initiative started by local people. The East London Community Land Trust continues to work with Linden Homes and JTP on the masterplanning and design of the site and homes, which will go into planning once all parties and local people are satisfied with the design quality of the scheme.

In 2013 during the pre-development stage of the site, the empty buildings will be used by the community to offer a range of services and hold cultural events that allow local people to use this space in the way they choose, rather than the usual method of boarding it off for private development. This will seed in a functioning community and try out the best possible uses for the non-residential areas, in a temporary way that will evolve into a more long-term system of mixed use and public space.

The story is not over yet – the real test will be to what extent the conditions set by the mayor for St Clement’s to truly allow for there to be community control and choices. If this is realised the next urban land trust will likely include more permanently affordable homes and the model will be on its way to establishing a new way for the city to house its citizens and promote successful and sustainable ways of living for all socio-economic groups.

• To find out more about the East London CLT click  here