Revolution in affordable housing
London scheme aims to replicate US housing concept
LONDON: A few years ago, Colin Glen noticed something funny about his church. Nine in 10 congregants, Glen reckoned, didn’t live anywhere near Epainos Ministries, a black-majority church in Tower Hamlets, east London.
Many used to – but then they got married, had kids, and found they couldn’t afford to buy a family home in the area where they grew up. So most moved out. “It was completely unaffordable to working-class families like us.”
Tower Hamlets is one of the most deprived boroughs in London, but the housing crisis has hit here too. The average home costs about £370,000, far beyond the reach of many locals, 40% of whom have a household income of less than £29,000.
“It was a desperate time for us,” says civil engineer Glen, remembering 2007, when he, his wife and their two children got too big for their one-bedroom flat.
“It’s really traumatic living in a space you know you’re going to outgrow, but which you can’t afford to move out of.”
Five hundred metres from the church, there is a glimmer of hope for families still living in overcrowded homes. On the other side of Mile End Road stands St Clements, a derelict former mental hospital.
Crumbling, sprawling and gothic, it may this week be chosen as the site of the UK’S first urban community land trust (CLT) – a revolutionary housing concept that, if replicated across the country, could help to curb spiralling house prices.
“Millions of people have been pushed into unaffordable and unstable private rented accommodation,” writes Ed Howker, co-author of Jilted Generation, a book that deals with the housing crisis.
“CLTS could be a silver bullet for these problems.”
The premise is fairly simple. A collective of 1,000 east Londoners (including Glen) hope to buy the site, develop it, and sell some of the homes they build to outpriced locals for about a quarter of their market value.
Around 200 of the 300 properties on the site will be sold at their full value, and it is from this windfall – along with support from an urban regeneration fund – that the project will be subsidised.
Because it allows people to buy property at a knockdown price, the project might seem superficially similar to the right-to-buy. But there are two crucial differences. First, the site will be built with ideas conceived by locals.
Second, and most significant: the subsidy will be transferred from generation to generation. When CLT owners decide to move, the sale price will be restricted rather than the full market value.
There is just one catch. It is not yet a done deal.
The Homes and Communities Agency (HCA) would decide whether to offer the site to the East London Community Land Trust (ELCLT), or to one of three rival bidders.
Hopes are not high. The meeting will be chaired by London mayor Boris Johnson, and while CLTS were a huge plank of his election manifesto in 2008, Johnson has failed to create one in nearly four years of power. As a result, the meeting is seen as a make-or-break for urban CLTS in Britain.
“This is a litmus test,” says Dave Smith, an organiser for London Citizens, an alliance of community organisations that over the past six years has played a key role in facilitating the proposals. “Who else is going to have the capacity to create something like this, if not us?”
Smith fears the authorities aren’t willing to take a punt on CLTS because they are a relatively unproven concept in Britain.
In the US, it is a different story. There are more than 240 CLTS – one in nearly every state – and many are part-funded by either state or federal government. And they work.
“In the US, data shows that community land trusts are very effective at both keeping housing affordable when the real estate markets are hot and at preventing foreclosures when the market is cold,” says John Emmeus Davis, the man Smith calls the “godfather” of American CLTS.
According to one academic study, CLT residents were 10 times less likely to default on their mortgage than people who bought homes on the open market.