What is Community Led Housing
Housing that’s inspired and controlled by a community. It can take many different forms but basically, it’s housing built by a community to meet the needs of that community and is not for profit. This website describes some different forms of community led housing here. In more formal terms, to be considered community led, housing must meet the following criteria:
Open and meaningful community participation and consent takes place throughout the development process.
The community group or organisation owns, manages or stewards the homes in whichever way they decide to.
The housing development is of true benefit to the local community, a specific group of people (an intentional community), or both. These benefits should also be legally protected in perpetuity.
Find out more at www.communityledhomes.org.uk
What does community mean?
The community could be
All the people who live and work in a geographic area. For example, Haslemere CLT works for the benefit of people who live and work in and around Haslemere.
A group of people such as families or individuals who want to develop homes together for any reason. For example, OWCH is a co-housing development for older women.
How do community housing groups make homes affordable?
This is usually achieved by a combination of obtaining land at less than its full open market value and receiving grants to subsidise the development. There are several ways to obtain land at less than its full open market value when the purpose is to create affordable homes. Some community housing groups raise money through other means such as by selling community shares. There are a number of legal mechanisms that enable community housing groups to ensure homes remain affordable in the future however many people move in and out of them.
How affordable is “affordable housing”?
The intention of affordable housing is that it should be accessible to households on the median income for an area. In reality, some homes described as “affordable housing” are too expensive for people on an average income to afford. Groups developing community led homes work to ensure the homes they develop are affordable for the people who need them.
In strict terms “affordable housing” means:
For rented homes: Homes rented at a discount of at least 20% below local market rents (i.e. no more than 80% of open market rent).
For homes that are sold: Homes sold in a way that enables people who can’t afford a home on the open market to become home owners. These homes may be shared ownership or sold at a discount (of at least 20%) or sold in some other way that makes home ownership more accessible.
In practice, homes that comply with these terms may still be too expensive for many people. With community led housing, the group leading the development will work to create a business plan that allows homes to be sold or rented for a price people can afford.
How does a community housing group get land to build on?
Many groups form and start to engage their community before they have obtained land. It’s not necessary to have land before you start planning a project and some opportunities to obtain land only emerge after a community housing group has formed and started to engage with local people.
In order to provide homes that cost less than the usual open market value, it’s usually necessary for community housing groups to obtain land at a reduced cost. Examples of how this can be achieved include:
Acquire public or privately-owned land at below development market value where the landowner is sympathetic to local housing needs.
Purchase a rural exception site at a little more than agricultural value.
Take on the affordable housing element of a larger housing scheme through a “section 106 agreement”.
Work with a local charity or trust that already owns land.
How is a community led housing development financed?
Projects are usually financed from a variety of sources since different sources of finance are suitable for different stages and types of project. There are grant programmes to help groups get started and to subsidise the work required to prepare a planning application. Most of the cost of building homes is usually covered by taking a loan from a bank or building society and combining it with grant funding. The loan is paid off as homes are sold or rent collected. There are a number of banks and building societies who regularly finance community led housing projects. In order to ensure the homes built are affordable it’s usually also necessary to obtain land for less than its full open market value. Some groups also raise money by selling community shares. Many community land trusts partner with housing associations and let the housing association raise the finance required. Some projects include a small number of homes to be sold at their full open market value in order to subsidise the cost of other homes.
There are a number of grant programmes that can support community led housing. The Community Led Homes website lists and explains many of these programmes.
Can community led homes be innovative?
Because the developments are led by the community or people who benefit from them a lot of thought can be put into the design and selection of materials for the homes. However, in order to ensure the homes will be affordable there will be limits to how much money can be spent on innovative design and anyone investing in the project will need to be persuaded that any innovative features will not put the build process or future value of the homes at too much risk.