This is a guest blog from Alex Lawrie, Somerset CLT
To rent or to buy? This binary opposition defines the UK housing market, and for decades there has been only one acceptable answer: buy if you can, at any price. Buy more homes than you need and rent them out. Buy in the expectation that soon another buyer will pay even more.
The reasons are obvious. Our renters get a terrible deal: they gain no equity, no control, are moved on as often as every six months, and rents eat up as much as half of their income even in poor quality housing. This logic is the engine of division and inequality in our society, not to mention a speculative bubble in property prices.
Community Land Trusts (CLTs) have emerged as potential saviours of divided communities; but they have been forced into much the same choices. 'Affordable' homes for sale remain out of reach if all they do is shave a few percentage points off property prices ten times average incomes. CLT rentals may be more affordable, and secure, but there is still neither equity nor control; they are a ghetto option for the desperate, and that brings social problems the CLT then struggles to manage.
One CLT in Taunton, Somerset is developing a new kind of tenure - one that could, in time, bridge the divide between owners and renters and create inclusive and diverse communities. They have three ideas, all with antecedents in social housing, but combined in new ways.
First is tenant management. The CLT is called Somerset Co-operative CLT, and the 'co-operative' references their willingness to learn from the experience of the housing co-op movement. Multistakeholder co-operative rules guarantee tenants 45% of voting power in general meetings - ensuring that they can hold the board to account, and even secure representation. At first the board continued to be filled by local residents that did not themselves need housing. But in the last year, two tenants have come forward willing to serve - one is now the treasurer. And for those tenants who are not on the board there is the reassurance that their interests and experiences are being heard.
The second piece of the jigsaw comes from the co-housing movement. How do you deliver the benefits of large and well equipped homes on the budget of a social tenancy? By creating more shared facilities - shared with other tenants, and with the local community (working in an urban setting, unlike many village based CLTs, allows for a richer web of linkages and relationships with local people. Office space, broadband internet, laundry facilities, cycle parking, storage, well maintained gardens, greenhouses and allotments are already being provided; in future, the CLT plans to provide shared electric vehicles on the model of Co-cars in nearby Exeter, a meeting and events room, and more support for people starting and running their own businesses (especially co-operative businesses).
But these are matters of detail as long as the issue of equity is not addressed. Somerset Co-op CLT is trying a totally new model - a housing progression fund. This creates an 'account' for each tenant into which a share of their rent is paid - not funds that belong to them, but a source of zero-interest, flexible credit that they can employ to secure improved accommodation in the future. In addition, they can 'overpay' on rent to build up a true equity pot - shares in the CLT that earn interest and can be withdrawn when they move out. Finally, the close relationship between the CLT and the local credit union provides a further line of credit. It all adds up to the same benefits that homeowners get from paying off a mortgage, but stripped of the speculative element and accessible to the very poorest.
CLTs in the UK are in a phase of exceptional innovation, growth and discovery: the present wave of support from government and local authorities won't last for ever, but it is being invested in experiments that could give the sector solid foundations for the future. The biggest challenge is to secure the land and property with which these models can be tested - and that's why Somerset Co-op CLT's current share issue is so important.
Find out more about Sommerset CLT share offer here