David RodgersExecutive DirectorCDS Co-operativesICA Housing - President

All Party Group on Co-operatives and Mutuals

9 May 2012

Northern Ireland Assembly, Stormont

Housing Co-operatives: some comparative statistics:Housing co-operatives represent: • In Turkey: 25% of the total housing stock with 1,408,603 units

• In Sweden: 18% of the total housing stock with 750,000 units

• In Norway: 15% of the total housing stock with 320,000 units

• In Germany: 10% of the total rental housing stock with 2,200,000 units

• In Austria: 8% of the total housing stock with 334,000 units

• In Portugal: 1/3 of the social housing portfolio with 180,000 units

• In Egypt: 2,320 housing co-ops with 500,000 co-op homes housing almost 33% of population

Brussels Poland

Norway

Norway

The impact of global financial crisis on the housing markets in UK and Europe• Mortgages in short supply – and will remain so• House prices falling in real terms• Low rate of transactions in housing market• Higher deposits required for first time buyers• Housing construction down from 209k units completed in 2007

to projected 126k in 2011(last Government target 246k)• Age of first time buyers increasing• Fewer new households aspiring to home ownership – many

now consider it unattainable

The challenges:• Our ability to use grant finance to develop affordable housing has virtually

ended – that is the reality.• Can we rise to the challenge and find new and innovative ways of providing

affordable housing in local communities, by adapting co-op housing systems in other countries?

• Can we succeed in securing real political support for Community Land Trusts to genuinely empower local communities to contribute to affordable housing supply?

• Can we develop new tenures, like Mutual Home Ownership and Mutual Retirement Housing?

• Can we develop new sources of finance for co-op and other community-led housing initiatives?

Can Co-operative and community-led housing create a

a new way to build affordable homes?

What is a Community Land Trust?Community Land Trust?

• A Community Land Trust is a community based not-for-profit organisation established to hold land and other assets for the benefit of a defined geographical community.

• It can take any legal corporate form:– Charity (incorporated or unincorporated)

– Industrial and Provident ‘benefit of community’ society

– Company limited by guarantee

– Community Interest Company

• In England, definition of a Community Land Trust in section 79 of the Housing and Regeneration Act 2008.

Definition of a Community Land TrustSection 79 of the Housing and Regeneration Act 2008

(3) In those conditions “local community” means the individuals who live or work, or want to live or work, in a specified area.

(4) Condition 1 is that the body is established for the express purpose of furthering the social, economic and environmental interests of a local community by acquiring and managing land and other assets in order— (a) to provide a benefit to the local community, and (b) to ensure that the assets are not sold or developed except in a manner which the

trust’s members think benefits the local community. (5) Condition 2 is that the body is established under arrangements which are

expressly designed to ensure that— (a) any profits from its activities will be used to benefit the local community

(otherwise than by being paid directly to members), (b) individuals who live or work in the specified area have the opportunity to become

members of the trust (whether or not others can also become members), and (c) the members of the trust control it.

www.communitylandtrusts.org.uk

New foundations: unlocking the potential for affordable homes

• Published in January 2009 •Proposes a new form of •co-operative/mutual housing tenure•CLT owns the land•The Mutual owns the housing built on it financed by corporate mortgage loan•Members own equity shares in the Mutual’s property portfolio

Mutual Home Ownership: how does it work?

It is a co-operative and mutual housing society which:• mutually owns the built housing assets in which its members live, but not the

land• enables residents to own equity shares in the value of the portfolio of

property owned by the mutual• ensures affordability by gearing monthly rental charges to 35% of net

household income – the more members pay, the more equity shares they own

• members can buy more shares as their incomes rise• links the value of equity shares to average earnings index to ensure long

term affordability• is affordable, in perpetuity, because the Community Land Trust retains

ownership of the land asset

Mutual Home Ownership: how does it work?

It is a co-operative and mutual housing society which:• enables residents to own equity shares in the value of the portfolio of property

owned by the mutual• ensures affordability by gearing monthly rental charges to 35% of net household

income – the more members pay, the more equity shares they own• members can buy more shares as their incomes rise (enabling new members to

move in with lower incomes than departing members)• links the value of equity shares to average earnings to ensure long term

affordability• is affordable, in perpetuity, because the Community Land Trust retains ownership

of the land asset and• the benefit of the land asset held by the CLT can be recycled from one generation

of occupants to the next.

How Mutual Home Ownership works:

LILAC (Low Impact Living Affordable Community) – MHO in action

www.lilac.coop

David RodgersExecutive DirectorCDS Co-operativesICA Housing - President

All Party Group on Co-operatives and Mutuals

9 May 2012

Northern Ireland Assembly, Stormont