Then we will do it ourselves - Community Land Trusts

... foundation stone for othercommunity activitiesCommunity-led involvementAt a political level, all three major parties at Westminster haveadvocated the need for communities to take action to solve localproblems. By definition CLT schemes can achieve rural homes torent/disposal by shared equity that are supplementary to those providedby housing associations; they can also be the foundation stone for othercommunity activities. The challenges to achieving replication of thepioneering schemes listed in the previous paragraph and start to achievescale fall under five main headings:-(a) Community entrepreneursCLTs are currently being established on an ad-hoc basis but a commoningredient is lay-led leadership by local people who are committed tomaking a difference in their community. To succeed, they need to begiven practical support and encouraged to overcome the obstacles that,inevitably, will need to be negotiated along the way.(b) Land availabilityThe pioneering CLT projects have acquired land/property assets in anumber of ways. These include exception sites for rural affordablehousing, commuted sums from developers’ planning agreements andthe transfer of public assets. It is important to publicise these successfulinitiatives as this will persuade other rural landowners to similarlyprovide land and property.(c) Robust legal models to protect a trust’s assets in perpetuityThe existing CLT projects have been using legal and financialarrangements that are not designed for them. There is a need tointroduce specific legal and financial frameworks for CLTs if they areto flourish. The most important requirements are to establish:-i) a legal definition of CLTsii) a mechanism to safeguard the CLTs ownership and use of buildingin perpetuity against leasehold enfranchisement by individualoccupiers. These are currently both subject to consultation withgovernment and it is hoped that both can be resolved in forthcominglegislation. If not a second best solution will need to be designedutilising the experiences of the pioneering CLT projects.(d) Technical capacityLay people involved in the leadership of CLTs may be too busy and/ornot have the skills to be confident in managing the physicaldevelopment process. The combination of leadership and technicalcapacity gives the context and motivation to provide rural housing.Appropriate human capacity can be achieved in a number of waysincluding the direct recruitment of dedicated staff for individual CLTSor for a cluster of CLTs such as the examples in Cornwall andNorthumberland. A practical alternative is not to employ staff directlybut to engage a housing association Housing associations alreadyhave staff with the necessary physical development expertise.(e) FundingResources will be required from the private, public and voluntarysectors to:• Help finance the rental housing that CLTs produce.• Build the capacity of the CLTs themselves and in particular, providepre-development finance to work-up the feasibility of developingprojects.• Meet the development finance costs of projects on site which, formany CLTs, will be their first scheme being promoted by people withlittle or no track record.To kick start this process the demonstration project is, therefore,seeking to establish a Facilitation Fund for CLTs.Recommendations – Action in the futureRecommendation to:-Government:-• Recognise the capacity of rural communities to develop affordable‘intermediate market’ housing projects that are supplementary andcomplementary to mainstream provision.• Include a legal definition of CLTs in legislation at the earliestopportunity.• Include a mechanism to amend the Leasehold Reform Act 1967 tosafeguard a CLT’s ownership and use of buildings in perpetuity againstleasehold enfranchisement by individual occupiers.• Provide a threshold below which small organisations receivinglimited social housing grant for community led rented and part-equityschemes are not subject to ongoing regulation and control.Housing Corporation:-• Promote community-led affordable housing projects in rural Englandas a separate complementary affordable housing initiative.• Utilise existing powers to make grants and or loan finance availableto community-led housing providers.Local authorities:-• Promote community-led affordable rural housing projects utilisingthe CLT mechanism as an alternative to housing association provision.• Encourage local planning authorities to grant exception planningpermissions on schemes utilising the CLT mechanism.• Encourage the drafting of housing allocation statements that setlocal housing need priorities acceptable to both the CLT and thelocal authority.• Through Local Strategic Partnerships encourage the formation of, andprovide funding for, county-wide CLT support services to contribute tolocal delivery of the community strategy in relation to both affordablerural housing and community engagement. This approach could alsohelp encourage consistent planning and asset transfer policies acrossthe county.• In any new bidding round for rural housing enablement, considercombining the housing needs survey work of rural housing enablerswith a more proactive role to create solutions through either ahousing association or a CLT.• Come together to adopt a common approach to section 106agreements, ideally based on the Communities and Local Governmentmodel and including a mortgagee in possession clause (or by usingtwo otherwise identical options, one with and without), to simplifyissues for lenders and hence provide better choice for those seekingpart-equity mortgages.Housing Associations:-• Utilise their expertise to support CLTs and put this to practical usein providing technical support to lay-led CLTs.• Provide financial support from their own resources to facilitate theCLTs perhaps by including a project in the HA core business andtransferring upon completion as a ‘turnkey’ contract.• Consider developing a CLT support service, possibly on a county levelCharitable trusts and foundation and privatefinance providers:-• Support the formation of the CLT Facilitation Fund and in additionprovide bespoke support to individual CLTs.• Encourage private finance providers to make available to CLTsmainstream development finance and long term finance repaidfrom rents.• Support the continuation of FONDT’s Northumberland project and thedissemination of the model through Development Trusts Associationto development trusts elsewhere.Charity Commission:-• Provide guidance for CLTs seeking charitable status about affordablehousing provision to be attached to the application to avoid delay inreplying to queries.Mortgage lenders:-• Accept the Declaration of Trust lease as providing enough securityfor a mortgage.• Assist the CLT movement by providing mortgages on leases wherefuture value is linked to average wages as opposed to property values.44Community Finance SolutionsCommunity Finance Solutions 45