Date post: | 14-Jul-2015 |
Category: |
Presentations & Public Speaking |
Upload: | eunho-chun |
View: | 445 times |
Download: | 0 times |
Community Land Trusts and Co-operative Place Making
Pat Conaty - Co-operatives UK
Seoul Metropolitan Government
South Korea
17 March 2015
2
Co-operative Place Making: A Creative Idea
Co-operatives: circa 1 billion members internationally and providing services weekly to 3 billion people
Co-operatives: have transformative potential through public-social partnerships between citizens and the state
Democracy: co-operative membership is growing while political party and trade union membership is declining
Social Economy sector including both social enterprises and co-operatives are growing fast in South Korea
Energy
Reframing Finance
Democratizing & Localizing Ownership
Co-operative Place Making Priorities Towards more Self-Reliant and Resilient Cities
3
KE
Y F
UN
CT
ION
S
BASIC NEEDS:
Food Shelter
Community Land Trusts
Unaffordable Cities – ‘Generation Rent’
Public sector employees (UK) – 60% earn under £16,000 yearly and average 2014 house prices were over 15 times this level
1996 – 2007: UK house prices rose by 204% and wages by 94%
Mortgage deposits: typically today £7,500 to £15,000
Market madness: Average national rent (2014) £720 per month and average national mortgage £658 per month
Community Land Trusts in UK, USA and Canada offer solutions
Affordable Housing in Britain
Main providers:
(i) Municipal and district government: major provider but housing stock has been sold since 1980s and stock increasingly transferred to social landlords (including ALMOs)
(ii)Housing associations: the favoured non-profit provider – build mainly for rental or shared ownership. This sector includes a small housing co-op movement
(iii)Community Land Trusts – new entrant with potential and new vehicle for intermediate market
Community Land Trusts: Mutualising Land
1. CLTs own land under a non-profit multi-stakeholder democratic governance model for improving and preserving the affordability of housing for renters and owners
2. Home ownership option – CLT owns land, individuals own homes. Lease agreements include resale formula, equity share or deed covenants to preserve affordability.
3. Rental option – CLT owns land. CLT can own housing or lease land to a housing non-profit or a co-operative.
4. Other applications: managed workspace, community buildings, urban farms, community supported agriculture and for co-operative energy.
9
Community Land Trusts Today
• USA: first CLTs in 1970s - but most projects since
1995 (250 CLTs nationally)
• Scotland: community land buy-outs in rural areas
in 1990s with support from Scottish Parliament
since 2003 (25 CLTs)
• England: national demonstration project since
2006, mostly rural (40 CLTs set up) – CLTs
recognised in law (2008)
• Belgium and Canada: CLTs rather new
CLT Pioneer - Scotland
Isle of Eigg Heritage Trust – Land for People
(i) Community buy-out of the island for £1.5 million: struggle for decades with absentee landlords
(ii) CLT established in 1997 – has developed community owned businesses: including shop, tourist facilities, workspace, hydro power plants and wind farm (energy now 98% renewable)
(iii) Successful struggle led to Community Land Unit and Land Reform (Scotland) Act 2003 giving communities a pre-emptive ‘right to buy’
Cornwall CLT – Public Social Partnership
CLT Umbrella for Cornwall county: 105 homes on 12 sites:
1. Technical expertise partnership with Cornwall Rural Housing
2. Pre-development finance: Revolving Loan Fund partnership with the local government and loans at zero interest
3. Construction finance: Revolving Loan Fund capital from the Public Works Loan Board at 3.5%
4. Division of labour: Cornwall Rural Housing develops the rental housing and Cornwall CLT and six local CLTs co-develop the housing for sale
5. Cornwall CLT and 9 local CLTs (one federation): 100 more homes under development
Burlington, Vermont A made in the U.S.A Land Reform Story
• CLT started in 1984 with a $200,000 grant from the city
• Now over 2300 units under Champlain Housing Trust
• Affordability of portfolio has increased by 20% over 25 years.
9
11
THE CLT Putting More of the Gains in the Market Price
onto the Community Balance Sheet
Community Control of Land Preserves Affordability
Source: Champlain Housing Trust
CLTs: Greater Affordability Over Time- Rental and Ownership Units
12
50% AMI 60% AMI 70% AMI 80% AMI
1984
2002
2009
Over 25 years, homes in the Burlington CLT rental units and owned-occupied units became
MORE affordable.
CLT’s Perform Better than Private Property in a Crisis
10
National Community Land Trust Network (NCLTN) and Mortgage Bankers Association (MBA) data for mortgage delinquency and foreclosure, 4th quarter 2009
National Community Land Trust Network (NCLTN) and Mortgage Bankers Association (MBA) data for mortgage delinquency and foreclosure, 4th quarter 2009
Source: Champlain Housing Trust
Reclaiming Finance
Democratizing & Localizing Ownership
Vancouver: The Second most Expensive Urban Housing Market in the World
What role for resilience?
14
KEY FU
NC
TION
S
BASIC NEED
Reclaiming the Commons
Vancouver: Co-operative Place Making Introducing the CLT as a Proven Innovation
8
Evolution of a Public-Social Partnership
City of Vancouver
Head lease (99 years)
Housing agreements (Affordability obligations)
Vancity
Owner/Operator Agreements Sub-leases
Fraserview Co-
op
(79 units)
Fraserview Co-
op
(82 units)
Total of 161 units
over two sites
HFBC Housing
Society (114)
Katherine
Sanford Housing
Society (48)
Social Purpose Developments
Vancity CHF BC Terra Housing
Project consultants
Architects
Contractors
Legal advisors
Community Housing Land Trust Foundation
Tikva Housing
Society (16)
Tikva Housing
Society (16)
Site #1 Site #3 Site #2 Site #4
Vancouver CLT 355 Homes
Vancouver CLT 355 Homes
Resilient Cities through Co-operative Place Making
Housing that is 25%-60% below the market price Use of Public and Community Assets for Community Benefit Surplus generated equally shared by city and CLT Must be reinvested by both partners in affordable housing A Public-Social Partnership that demonstrating that Reclaiming the Commons is positively practical
14
CLT Development Steps
The Commonwealth Wheel: SELF-OP
1. Social (community and stakeholder engagement) 2. Environmental (site selection, planning, design) 3. Legal (company type, leases, tenure, etc) 4. Financial (pre-development, development, etc) 5. Operational (Directors, staff, agents, etc) 6. Physical (procurement, development partners, etc)
Delivering Affordable Housing
Intermediate market housing
Social Housing Rent to
purchase models Equity purchase models
Outright Sale
£10,000 £14,000 £18,000 £22,000 £26,000 £30,000
Levels of household income
A typical CLT is currently about delivering intermediate market homes but sustainable communities are about more than affordable housing!
Securing land and Local Planning
Permission
• Local Government Act - Section 106 agreements: to secure planning this encourages developers to provide land or a ‘commuted sum’
• Rural exception sites: allows land to be accessed at near agricultural prices for meeting local needs for housing development
• Urban areas in England and Wales – difficulties to get national policy support but this is being achieved across Wales and in some English cities: Bristol, Liverpool and Middlesborough
Local Housing Needs Survey
Methods to appraise the local rural market:
(i) Local housing market price appraisal
(ii)Waiting lists and municipality data assessment
(iii)Local door to door surveys in target local areas
including public meetings on affordable housing
development and local needs
(iv) Analysis of demand and affordability by age groups,
income levels, for particular property sizes and for
tenure (to rent or to buy)
CLT Appraisal Process
Pre-development Feasibility Work
• Market appraisal and affordability design & selection criteria: through housing needs survey
• Site selection: through options appraisal
• Costs appraisal including Sustainable construction methods and viable options
• CLT model: options appraisal
• Outline financial model for preferred site
• Report for the planning authority and target funders (national government and lenders)
CLT Type: Issues and Options
1. Objective: to preserve affordability in the long term locking in the land assets and a resale formula
•Equity purchase (common form)
•Rent to equity
2. Obstacles: Right to Buy legislation - leasehold enfranchisement and ‘Rule against Perpetuities’
•Mutual Homeownership Society (Co-op model)
•Declaration of trust (to be tested)
Mutual Homeownership (MHOS)
• Housing Co-operatives owns the dwellings
• Separate CLT company owns the land and provides
a lease to the Housing Co-operative
• New members make a 5% deposit
• Mortgage is corporate
• Full repairing lease based on 30% to 37% of
household income
• Lease payments convert to equity stakes
• Co-op pays members leaving their equity less 10%
Stages of the CLT Journey
Detailed Plannin
g Intro
Cost of scheme
Building the
model T
im
e
Completed Scheme (Occupancy) Construction
Feasibility day one day of advice to help you identify the steps to take
Technical assistance grant a small grant to fund initial costs
Pre-development finance funding your project prior to planning permission
Development finance funding the costs of construction
You can apply directly to any part of the fund
Support from The CLT Fund
Construction Detailed planning Occupancy Building the
model
High Risk
Low Risk
Grants, donations, equity
Gifts in kind
Unsecured loans
Senior debt
Work at risk declining risk, increased amount of money required
Matched finance – a summary
SELF–OP: Resources and Funding
Key elements:
1.Land at very low-cost is essential
2.Sweat-equity: expertise from professional stakeholders
3.CLT Fund: Technical help and feasibility grant
4.CLT Fund: Pre-development risk finance
5.CLT Fund: portion of construction finance (30%)
6.CLT equity: for bridging funding and risk capital (grants, share issue, retained funds, etc)
7.Construction finance: social banks
8.Long-term finance (part sale): banks and building societies
9.Long-term finance (rental): Community Land and Finance
Lessons Learned
1.The Commonweath Wheel works across the full range of co-operative place making situations
2.Has demonstrated that the process can be codifed from small to larger projects for knowledge transfer and dissemination
3.Greatly simplifies the process for participants – both community groups, service providers and local government
4.Community Land Partnerships can provide a co-operative place making framework
5.Tool is extendable to other applications: energy, workspace, urban farms/gardens
6.Honest Broker – for all the talents and a transparent, empowerment tool, seeking mutual stakeholders to utilise.
9
Mutual Home Ownership CLT – CDS Co-ops
10
CDS Co-ops: MHOS lease to equity shares
Total net household income 14,406 16,688 18,845 23,108 26,318 32,738
35% of net household income for housing costs 5,077 5,841 6,596 8,088 9,211 11,548
Less revenue costs payable for all members
(i) Management 33 33 33 33 33 33
(ii) Maintenance 53 53 53 53 53 53
(iii) Service costs 18 18 18 18 18 18
Net monthly payment for corporate mortgage loan repayment
319 382 445 570 663 850
Capital value of corporate loan serviced 64,336 77,190 89,892 114,997 133,900 171,707
Number of equity shares funded by monthly payment 64 77 90 115 134 172
Add equity shares paid as 5% deposit 7 9 10 13 15 19
Total equity shares owned 71 86 100 128 149 191
Monthly cost of each additional equity share 4.95 4.95 4.95 4.95 4.95 4.95
CDS Co-operatives - MHOS
Limited equity return
•71 shares = £13,314
•86 shares = £16,271
•100 shares = £18,919
•128 shares = £24,217
•149 shares = £28,190
•191 shares = £36,136
11
LEEDS Project - Lilac
Community Land Trust Benefits
Subsidiarity: a vehicle for resilient, democratic and decentralised societies
Climate change: can unite a wide diversity of joint action on low-carbon solutions (housing, food, energy, recycling, green jobs, etc)
Economic security: can collectivise risk and provide affordable housing, green energy and food
Social capital and partnership: requires creative community, business, municipal and social finance collaboration
Community Land Trusts and Local Food
1. Intervale in Burlington, Vermont: has developed a CLT for local food on 200 acres of dumping ground (6 ft of rubbish) – now a ‘city garden’ of a dozen community farms supplying 7% fresh food for town of 35,000.
2. Evergreen Co-ops in Cleveland, Ohio: Green City Growers – largest city farm in the USA with 3 acre greenhouse and 10 acre site growing 6 million heads of lettuce and 300,000 pounds of herbs yearly through a worker co-op in the city’s poorest inner city area
3. Community Land Advisory Service: new project of the National Federation of City Farms and Gardens and now underway in England, Wales and Scotland to create Community Land Banks for community gardens and food growing in cities, towns and villages
Housing Opportunity: Ageing energy inefficient housing disrepair
Public-Social Partnership models in Action 1.KfW bank: ‘green lending’ through Co-op and municipal banks at 2.65% - 250,000
jobs created and €1 billion invested annually
2.Evergreen Co-ops, Cleveland: Ohio Co-operative Solar: combined green housing retrofit and solar energy fitting for homes and public sector buildings: Social investment capital at 1% for worker co-op start ups
3. NeighborWorks (USA) assisted 1.2 million low-income households since 1991
– more than 230 urban and rural delivery networks in 4,400 local communities
– have mobilised investment of $18.1 billion since 2001
– Model being replicated in the UK with local government partners
Duplex Title
33 International Institute for Self-governance
Roads, water,
Sewerage,
electricity,
phone, shops
bus services
schools,
factories,
hospitals,
offices &
entertainment
Roads,
water,Sewers
electricity,
phone, shops
bus services
schools,
factories,
hospitals.
Roads,
water,Sewers
electricity,
phone, shops,
bus services
schools.
Roads,
water,Sewers
electricity.
Roads, water.
Village
Township
Suburban
Centre.
Regional
Centre.
Central
Business
District
Two components of property LLvaluePPu 1. Investment on the site & site specific amenities; 2. External investments servicing the site
Two different types of property rights required for efficient and equitable resource allocation: 1. “Dynamic Lease (DL)” or Strata title for space occupied, & 2. Equity in Community Land Bank (CLB) capturing external values
Public Investment Impact Public Investment Impact
Co-operative Land Bank
1.Extension of London Jubilee line (11 stations) in 1999
2. Cost of public investment by taxpayers: £3.5 billion
3. Urban land value uplift: £13.5 billion
4. Co-operative Land Bank (CLB) is an urban district CLT
5. CLB can self-finance affordable housing, renewable energy and workspace for an Eco-town (5000) or a new city
6. Precedents: Letchworth Garden City (33,000) and Irvine CLT (USA) – both similar size for the master plan
7. Commons Sense (2013): Co-operatives UK report
CLT Networks and Case Studies
For further information on Community Land Trusts see case studies at:
UK: See http://www.communitylandtrusts.org.uk/ncltn
USA: see http://www.cltnetwork.org/