Community Land Trusts Across the Pond
The CLT sector in the United Kingdom is young but booming
By Tom Moore Posted on August 12, 2013
Community land trusts (CLTs) in England were described as a “largely theoretical model” by a government report in 2006. And yet, the CLT sector has already moved through a period of experimentation into replication: There are over 100 English CLTs now in existence, and they are supported by a network of support agencies that have formed in recent years at regional and national levels.
The growth of English CLTs in recent years has been boosted by a political climate at the national government level that has sought to shift more power and responsibility for the development and management of neighborhoods to the local level, though the CLT sector pre-dates this shift.
New Solutions to Old Problems
The idea that CLTs might offer a solution to the complex problems of the English housing market first came up in the early 2000s through action research into rural social and financial exclusion conducted by Community Finance Solutions, an independent research unit at the University of Salford. This was supported by the achievements of American CLTs in preserving housing affordability for those on lower incomes, with direct communication with the U.S. CLT sector presenting CLTs as a potential solution.
England was facing not only the fallout of the global economic crisis, but also insufficient housing supply to meet rising demand, deteriorating levels of affordability relative to incomes, and difficulties for households not only in accessing mortgage finance but in raising a deposit to purchase a home. These issues are particularly prevalent in rural parts of England, where house prices have escalated beyond the feasible reach of local incomes due to the popularity of idyllic rural locations with commuters, retirees, and holiday home owners, coupled with restrictive planning policies that have historically impeded rural housing development.
On the rental side, social housing stock is in short supply, and in the unregulated private sector there is variable levels of standards and levels of affordability.
CLTs have formed in rural areas to tackle these issues by collectively owning land and assets in perpetuity for the purpose of meeting specific needs of their community, and by developing affordable housing that is only sold subject to covenants that preserve affordability and prioritize local people in its allocation. Urban examples are also emerging, but it is in rural locations where the majority of CLTs are currently found.
Growing the CLT Sector From the Grassroots
Setting up a CLT sector from scratch has, however, not been easy. They faced a series of definitional, financial and practical problems. Because it was a new form of organization, in the early years potential partners and stakeholders (including local and national government, funders, and regulators) didn’t understand the nature of the CLT model, its purpose, and its governance. For example, when CLTs first attempted to access development finance from the Homes and Communities Agency (the national grant funder and regulator of housing in England), they struggled with complex registration, application and regulatory requirements designed for professionalized large-scale developments and out of tune with the scale and capacity of local community development led on a voluntary basis.
Two national programs, the National Demonstration Programme (2006-08) and the National Empowerment Programme (2008-10), led by Community Finance Solutions and supported by charitable funders such as the Carnegie UK Trust (a charitable grant making trust that supports community development) and strategic funding from the national government helped pave the way. These programs provided technical assistance and advice on urban and rural CLT formation, incorporation, business planning, and identification and acquisition of key resources. The programs led to the inclusion of a statutory legal definition of a CLT in the government’s Housing and Regeneration Act of 2008. This helped to build wider understanding of CLTs and legitimize the growing sector in the eyes of partners and stakeholders.
However, the streets did not automatically become paved with gold for CLTs seeking capital for their projects, and much of the early support for CLTs came from a cocktail of funding sources with local political relationships often proving important. One such example was found in the rural parish of St Minver in Cornwall, a predominantly rural county in the Southwest. Here, in the small village of Rock in the shadow of expensive housing stock known locally as “Millionaire’s Row,” a group of local people formed a CLT that has developed 20 permanently affordable homes in two phases for local residents. The first phase of this development was undertaken with the assistance of local government in Cornwall, which provided a £5,000 grant to meet the costs of incorporating the CLT and offered an interest-free loan of £544,000 to help fund infrastructure. A local landowner sold the land to the CLT at significantly below market value while the homes themselves were self-built by the occupying households. This helped to reduce costs as well as embodying the philosophy of community-based self-help. The homes developed by the CLT would ordinarily have been sold for over £300,000 on the open market, but were sold to income-eligible households for approximately a third of that value, with future resales fixed to the same percentage of market value that they were originally bought at.
The St Minver CLT’s success helped encourage the local government in Cornwall to create a revolving loan fund to support CLT development in the county. Initially set at £1 million, this has recently been increased to £4 million, with loans available for CLTs who replenish the fund when their developments are completed.
Building a Network of Support
The St Minver CLT was one of the first organizations to complete its developments under the auspices of the Cornwall CLT, an umbrella body operating across the county to support and catalyze local, volunteer-driven CLT development. It was initially funded by a grant from the Tudor Trust (a charitable grant funder) and hosted by (but independent of) a local housing association.
Formed in 2006, the Cornwall CLT was one of the first CLT support agencies in the country. As of 2012, there were seven such support agencies in existence operating over single or multiple counties; others have also formed and disbanded in recent years due to funding issues. CLT support agencies are typically staffed by an individual and fulfill several key functions, including the provision of technical advice and guidance, assistance in identifying and facilitating opportunities to access land and capital, advocacy and promotion of the CLT concept, and brokerage of potential partnerships with relevant stakeholders and partners that may hold resources or decision-making powers vital to the success or otherwise of local development. They are usually funded initially by grants, either from charitable funders or from local governments and over time seek to become self-sustaining by generating income from fees charged to local CLT groups for technical assistance on the completion of successful schemes. However, this is not a profit-making exercise, as CLT support agencies provide significant amounts of pro bono work to community groups and are usually constituted in a manner that encourages the reinvestment of surpluses. Additionally, their fees are usually derived from grants given by the CLT Fund, a fund established by a coalition of charitable investors in 2008 to give small grants to CLT groups to use for technical assistance.
CLT support agencies have proven to be a valuable resource for volunteers at local CLTs to draw upon, as the process of forming, developing and managing a CLT can be complex and time-consuming. They also facilitate peer-to-peer support networks between successful CLTs across the country.
The value of these support agencies is clear to see. Cornwall, which had the first umbrella CLT, has developed 105 CLT homes—nearly half the total number nationwide.
A trend in some areas is for the more professionalized CLT support agencies to develop their own assets in their area of operation where community groups have not yet emerged to assume responsibility for housing delivery. This allows CLT support agencies to meet housing need themselves in addition to their primary objective of supporting local volunteers in the formation of CLTs, similar to the central server model that exists in the U.S. However, this is also a divergence from the traditional understanding of rural CLTs as premised on voluntary action and self-help.
Another product of the national demonstration and empowerment programs, and integral to the network of support that now exists for CLTs, was the creation in September 2010 of a National CLT Network. Hosted by, but independent of, the National Housing Federation (a body that represents housing associations, the main providers of affordable rental housing in England), the National CLT Network is a membership body that exists to create the conditions for CLTs to thrive. It promotes and supports the work of CLTs nationwide, taking its lead from the work previously undertaken by Community Finance Solutions. It works to address national barriers that are shared by many different local CLTs, complementing the more locally-focused work of CLT support agencies, as well as providing direct expert advice, support and training in a similar fashion to the U.S. group of the same name.
The network has lobbied at a national level to develop appropriate and proportionate investment models and regulatory processes for CLTs. A notable success is a new £25 million capital grant program for community-led housing as part of the Homes and Communities Agency’s nationwide housing investment. This included the development of a more accessible registration process that made more sense for the size of organization applying, thus helping to overcome one of the barriers faced in the early years.
This grant program also encourages the CLTs and housing associations to partner together when bidding for funding, aiming to combine the experience and technical expertise of the latter with the voluntary endeavor, knowledge of local needs, and community focus of CLTs. In some areas, such as in the Somerset, Dorset, and Devon counties, which share a single CLT support agency, this has led to new CLT models of rental housing, where the CLT owns the land but leases it to a housing association who then manages the homes for rent on a long lease. This model allows the CLT to fulfill its stewardship role while easing the long-term management burden on local volunteers.
The National CLT Network has recently launched a program of grant support to enable emerging CLT projects to visit successful projects elsewhere, learning from experience and sharing ideas. This viral approach to CLT promotion and support may help continue to replicate the CLT model across the country, complementing the work of CLT support agencies and preserving the ethos of community action, self-help and mutual support that has been integral to the development of CLTs in England to date.
The Future for CLTs
The national and sub-regional networks of CLT support have helped move the CLT sector from being considered as an experimental, theoretical proposition to a model of community-based housing delivery replicated across rural England. While still composing a miniscule proportion of the English housing system, the work of CLTs has had a significant impact in the communities they serve.
By holding land in trust and developing affordable housing to be preserved in perpetuity, CLTs exist to benefit both current and future generations of their local communities, though some challenges may remain. Firstly, those that form CLTs tend to be drawn from middle class professional backgrounds, suggesting that more deprived communities may face particular challenges. Secondly, the growing involvement of technical experts has so far been beneficial for CLTs, but experience in other community sectors tells us that community leadership and empowerment can sometimes be challenged or undermined by the evolution of professionalized and paternalistic relationships. Third, the bleak economic climate may threaten the ability of the CLT sector to continue its recent ascent. It has already proven to be unfavorable to many of the natural allies of community self-help in England, with several community organizations threatened by funding cuts, while a general tightening on mortgage finance coupled with wariness on behalf of lenders regarding the restrictions CLTs place on resales may also be a hindrance. In addition, mechanisms to preserve affordability remain underdeveloped relative to the achievements of the U.S. CLT sector. Finally, the idea of what it means to be a CLT in England is already being taken in new directions, as the more professionalized CLT support agencies that develop their own assets emerge.
However, these issues may well be surmountable if the outcome is affordable housing that is developed on the terms of communities and to benefit locals. Given the growing network of support for CLTs, the prospects appear favorable.
Tom Moore is a Research Fellow at the Centre for Housing Research, University of St Andrews. He has worked with and conducted research on CLTs in England since 2008.
- National CLT Network