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Can alternative models of ownership alleviate the housing crisis?

 

 

The housing crisis is a prime example of the economic term market failure. Politicians of different stripes have followed policies, introduced by Margaret Thatcher, of increasing market forces in the housing market, by promoting private ownership of homes, and degrading social housing by selling it off with heavy subsidies – while promising but failing to build more. These policies continue in spite of the increasing homelessness and housing crisis, and have seen the number of home owners drop across the UK and Greater Manchester, making a mockery of the Conservative claim to be ‘the party of home ownership’.

“There is no alternative” was Thatcher’s motto to ensure her political and economic neoliberal dogma was adhered to. But Thatcher was wrong. There are many alternatives to private ownership of not justin regard to homes but also to business and industry, from the local level to the national.

These alternatives are presented in the report ‘Alternative Models of Ownership’, (AMO). Produced by the Labour Party alongside external experts, the document aims to influence party policy in favour of these models. To discuss the issues a public meeting is being held at the Friends Meeting House on the 20 September at 6pm.

Rebecca Long-Bailey, MP for Salford and Eccles and Shadow Business Secretary, will speak at the meeting alongside Neil McInroy, one of the authors of the report and a director of the Manchester based Centre for Local and Economic Strategies (CLES). They are joined by Stephen Hill who is a board member of the National Community Land Trust Network and chair of the UK Cohousing Network.

Hosting the event are Greater Manchester Housing Action, a campaign group dedicated to battling the myriad issues that make up the housing crisis and Housing Futures Greater Manchester. They form a research partnership investigating ways of increasing tenants’ power and promoting community-led housing – which aims to produce a more inclusive, equitable and democratic housing situation for tenants and homeowners across the region.

Housing Futures

Richard Goulding, an academic housing expert with the Urban Institute of the University of Sheffield and a researcher with Housing Futures GM. He sees the AMO report  being published by a mainstream political party as a promising development in the promotion of more democratic ownership across society. He believes this is an essential part of combating the housing crisis in the UK, where:

“We just have a legal regulatory set up that makes Britain a perfect place to be a private landlord and not so good if you are a tenant, you don’t have much recourse to repairs, to accountability for your landlord or for security of tenure either.”

Three of the major forms that come under the broad policy term of community-led housing are: housing co-operatives, community land trusts (CLT) and co-housing. The CLT model developed during the civil rights movement in the US, the first being formed in Albany Georgia, by civil rights leaders making sure that African American farmers had access to land. They spread from there to Canada and the UK. A CLT is a non-profit company that develops and stewards land for the benefit of the community. Goulding says that CLTs are based around trying to separate ownership of the land from the assets on top of it, and are a very versatile platform for serving a community’s needs:

“They have got a pretty wide remit to what you can build on top of it – essentially, it’s got to be done with respect to the benefit of the local community, that is a legal requirement in the Housing Act 2008.”

Housing developments of any type can be used with CLTs, including: co-op, co-housing, social housing, affordable housing and even private housing if that is deemed in the interest of the community by the members of the CLT.  Goulding believes CLTs can enable residents living in areas facing gentrification and demolitions of “so called obsolete working class housing” to take back a sense of ownership and oppose these forces, and provides two examples.

Start Haringey was formed when the St Anne’s Hospital site was put up for sale and initial private housing development plans only proposed 14% of the 470 new houses would be affordable, at a time of severe housing need in Haringey. With the help of the Greater London Authority who bought the land the local community have set up a Community Land Trust to manage the land. They now have plans to build 800 homes on the site, of which 50% will be “genuinely affordable” homes which will be less than the 80% of market rate that the government classes as ‘affordable’.

Granby Four Streets is another CLT in Liverpool that has enabled the community to renovate Victorian terraces and provide them to tenants at a low cost homeownership rate or at affordable rent. They also hold a regular market and are renovating empty shops into a community retail, social and creative hub, and all their projects provide local jobs.

Some housing associations and other registered social landlords (RSL)are criticised in the AMO report which states that “many now behave like mainstream property developers” and that financial pressures due to heavy borrowing leads to RSLs:

“Selling properties in central London areas ‘too expensive’ to provide for social housing tenants. Their explanation is that they sell valuable properties and use proceeds for cheaper-to-build housing in less affluent areas.”

Having sympathy for these criticisms Goulding says that some housing associations since 2010 have become “quite large and commercialised” leading to less power for tenants in the organisations. He believes community-led housing can counter by encouraging “grassroots participation”. On the other hand, Goulding also believes that housing associations have been “really important partners for a lot of community led groups in helping them establish, because they can  provide support and  a lot of expertise and guidance… navigating the development markets and the planning system”. OWCH in Barnet is an example provided of a community of senior citizens collaborating with a local housing association to create a successful co-housing development. A model that may become increasingly important with our ageing population.

The Preston model of promoting local supply chains and co-operatives included in the AMO report also appealed to Goulding because it “contributes to democratisation of community ownership and trying to keep profits within an area,” and had similarities to the ‘new municipalism’ approach where citizens take collective control of local services.

The Preston model and co-operatives

Neil McInroy and CLES have been working with Preston City Council for the last three and a half years on a “Community Wealth Building” (CWB) initiative, that harnesses the spending power of six large “anchor institutions”, which include the city and county council. The project research discovered that, of the £750 million combined annual spend, only 39% was with organisations based in Lancashire, leaving £450 million that leaked out of the Lancashire economy.

To stem this leak local procurement was prioritised where possible, and the city council identified £3 million of spending that had the possibility of being spent locally instead, and Lancashire County Council altered its commissioning strategy to enable smaller organisations to be supported to bid. As a consequence of these and other developments within the initiative it is claimed millions of pounds have been repatriated to the local economy, with visible improvements in the form of jobs and business development.

A major aim for CWB in Preston was to encourage the formation and support of co-operatives within the region, and providing a co-operative infrastructure to support existing co-ops and to help new ones set up.

Co-operatives are fittingly a key theme of the AMO report, which resonates with the region due to it being the birthplace of the co-operative movement which was initiated by a group of pioneering weavers establishing a co-operative shop in Rochdale in 1844. Whatever the form of co-op, be it housing, retail, industrial or other they are all essentially, as the AMO report states:

“An autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise. Cooperatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity.”

Along with these values there are other benefits to co-operatives. In housing co-ops tenants are less likely to lose their home in a recession and those in workers’ co-ops are less likely to lose their jobs. A number of studies have also shown productivity in co-ops is greater than in comparable privately run firms, so promoting them could go some way to dealing with the UKs productivity problem.

In 2012 it was estimated that there where 500 worker co-ops in the UK employing just under 80,000 workers, comprising about 0.27% of total employment in the UK. This is much lower than Spain which has 20,000 worker co-ops, Italy and France also have much larger co-operative sectors than the UK.

To promote co-operatives in the UK the AMO report suggests emulating successful institutions and policies in other countries; the Mondragon cooperative group in Spain and the Legacoop worker co-operatives in Italy are used as good examples. The report makes four suggestions to improve co-operatives in the UK:

  • Improving co-operatives’ access to finance
  • Providing funds for worker co-operative buyouts
  • Re-establishing previous Government support of co-operatives’ development
  • Reform of government procurement policy

The report also stresses the need for new banking support networks or shelter institutions that can provide financial and other support needed to counteract the money markets’ hesitance in lending to co-operatives, thus putting them at a disadvantage and prone to buyout during times of economic stress.

Support networks and changing culturally entrenched views

A firm believer in support networks being needed to enable growth of AMOs, Stephen Hill is currently creating support hubs around the country for community-led housing (CLH) projects, as part of his work for the NCLT network, that will help groups access the £300 million, over five years, provided in the March 2016 Budget to fund community housing projects.

Hill thinks that there is a lack of political understanding of what community-led housing projects can offer and part of the battle in getting these projects off the ground is to educate politicians in their advantages and flexibility:

“We are trying to get the government to do something that it has never done before, which is to say ‘this is what a community home looks like, it has this much grant and these are the bodies that can have it, and away you go’. It is very much about trying to grow a housing sector and those sectors will be different in every housing market area that they operate in… usually people in Whitehall say ‘we know what to do’ and then they think they can apply it all over the country. So you get billions of pounds being wasted on help to buy and all the rest of it, which is entirely inappropriate in some housing markets.”

A project in Bow shows it is the CLH sector leading the way in showing the politicians what is achievable and changing political perspectives and policy. After campaigning for eight years the East London Community Land Trust were granted ownership of the land of the former St Clement’s hospital site in 2012, to become the UK’s first urban CLT. To combat the severe rises in property value in the area, which would make any properties built on the site unaffordable within a couple of years, the East London CLT decided to determine the prices for the 21 homes to be built there on local median income levels, rather than market rates.

The owners of the houses, on sale of the property, do not gain any capital uplift due housing market rises, but this consideration was trumped in enough people’s considerations by the benefits of security of tenure with an ethical company and the knowledge that others in the local community could also benefit from these houses in the future; enough so to make the development a successful example to follow. Hill says:

“The mayor in his housing strategy then created something called the London Living Rent which is based on exactly the same principle. So you shouldn’t be spending more than a third of your income on your housing costs. It’s a rent into purchase product so you start off renting and then at a particular time you convert to ownership, but it’s exactly the same basis. So government is following the lead of communities in some respects.”

Both local and national politicians and staff in housing associations need to get over their predisposition of not trusting tenants to determine their own housing situation, Hill goes on to say this a problem peculiar to this country: “it’s a very English thing that we think people can’t take responsibility for their own housing solutions”.

Housing action making progress in GM

Greater Manchester Housing Action is almost three years old. The grassroots campaign group got together at a time when rough sleeping was becoming increasingly visible and not long after homeless protest camps and squatting groups had become a prominent feature in the city centre, campaigning for homes and an end to homelessness in the city. Taking up that campaign GMHA widened it to cover all aspects of the housing crisis of which rough sleeping was the most visible symptom.

One of the organisers of GMHA, Isaac Rose, explained that they had eventually settled on three core aims: to network together different groups within the housing movement, to educate on the politics and economics of the housing crisis and to lobby and campaign on housing issues with a “special interest in trying to build power for citizens in the city”.

The AMO meeting on 20 September in Manchester meets all those three aims, and Rose is particularly pleased to have a Shadow Secretary of State for Business, Energy and Industrial Strategy on board:

“I am really glad that Rebecca Long-Bailey will be there, because she is one of the commissioners of the report along with John McDonnell. We are excited to be developing that agenda for how it could be used for housing. At the moment it is kind of an open question whether that agenda will help housing, but we think there is massive potential.”

There is some progress being made towards supporting alternative models of ownership in housing on a regional scale, with the Greater Manchester Combined Authority (GMCA) having recently announced separate support packages for community-led housing and cooperatives across the region. However Rose believes Manchester City Council’s pursuit of a private sector development led approach to housing, and a property driven  economic plan in the city, is holding them back from getting behind the AMO agenda:

“One of the things our research has shown is that some cities, like Leeds and Bristol, have quite a lot of good infrastructural support from local authorities and third sector bodies that support communities or groups of people who want to set up community led housing projects. But that doesn’t exist in Manchester, and it is really positive that the GMCA are moving towards that.”

The research project GMHA is taking part in alongside the University of Sheffield is the Housing Futures GM project which is one of the 14 projects that make up the ‘Realising Just Cities’ international collaborative program. Housing Futures is a year long program looking into the potential for community-led housing in GM that will culminate in November this year with the release of a full report of their findings.

The research project GMHA is taking part in alongside the University of Sheffield is called ‘Realising Just Cities’. A year long program looking into the potential for community-led housing that will culminate in November this year with the release of a full report of their findings.

Strong communities build a stronger society

Can alternative models of ownership alleviate the housing crisis? The consensus view from those interviewed in this article is that it can form an important element of combatting the crisis but it would also need to run alongside (or perhaps within) large scale public investment into housing in the UK. The need to oppose the market driven financialisation of housing, that turns homes into assets and reduces the security of those living in them, and the need to democratically empower tenants to steer their own housing destiny, were also important issues raised where AMOs could be a positive force.

Alternative models of ownership promote group interests over individual interests, helping to bind together and empower communities. They oppose the increasing atomisation of society brought about by our political and economic adherence to the neoliberal agenda established by Margaret Thatcher and her peers. “There is no such thing as society”, Thatcher said to emphasise her focus on the individual. It would be good to see AMOs given the funding and support networks they need to flourish, to prove her wrong once again.

 

Conrad Bower

GMHA event page for the public meeting on Thursday 20 September at the Friends Meeting House in Manchester – click here

GMHA website – click here

‘Alternative Models of Ownership’ pdf – click here

Feature Image: Wikipedia Commons

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