Society for Co-operative Studies in Ireland/ Co-operative Housing Ireland
COMMUNITY-LED HOUSING Making it Happen
Wood Quay Venue, Dublin City Council | 4 April 2017
SEMINAR PROCEEDINGS
Edited by Bridget Carroll
Society for Co-operative Studies in Ireland/ Co-operative Housing Ireland
This seminar report was produced by the Society for Co-operative Studies in Ireland.
The SCSI is a voluntary, member-based organisation which aims to co-ordinate and promote the development of co-operative research and education in Ireland.
Registered Office The Plunkett House, 84 Merrion Square, Dublin 2, Ireland.
The SCSI and Co-operative Housing Ireland acknowledge the support of the following organisations: the Irish League of Credit Unions (ILCU), the Irish Co-operative Organisation Society (ICOS), the Centre for Co-operative Studies, University College Cork and TSA Consultancy.
© Society for Co-operative Studies in Ireland. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the publishers.
Disclaimer This document does not represent legal advice or purport to be a legal interpretation of legislation. Whilst every effort is made to ensure the information is accurate, responsibility cannot be accepted for any liability incurred or loss suffered as a consequence of relying on any material published herein. Appropriate professional advice should be taken before acting or refraining to act on the basis of this document.
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Table of Contents
1. Introduction...... 3
Context...... 3
Outline of the report...... 3
Seminar schedule...... 4
2. Opening Session...... 5
Welcome Address ...... 5
3. Community Leadership...... 6
Community Land Scotland...... 6
Community Delivery in Tramore, Co. Waterford...... 9
Discussion Points...... 12
4. Making It Happen...... 13
The Rich Mix of Co-operation in Housing in the U.K...... 13
Financing Community Development...... 18
Discussion Points ...... 23
5. Break-Out Discussion...... 25
APPENDIX 1 Biographies of speakers...... 28
2 Community-led Housing: Making it happen Society for Co-operative Studies in Ireland/ Co-operative Housing Ireland
Introduction 1 This report outlines the proceedings of the ‘Community-led Housing – Making It Happen’ seminar which was held on Friday, 7 April 2017 in Dublin City Council offices at the Wood Quay venue. The seminar was organised by the Society for Co-operative Studies in Ireland (SCSI) and Co-operative Housing Ireland (CHI) with the support of the following organisations:
• Irish League of Credit Unions
• Irish Co-operative Organisation Society
• Centre for Co-operative Studies, University College Cork
• TSA Consultancy
Context
In the context of the on-going housing crisis in Ireland the "Community-led housing - Making it happen" seminar included groups from across Ireland who are meeting their own housing needs through direct development to explore common challenges and opportunities. The full-day seminar explored the range of community-led housing options including co-operative housing, co-housing, and community land trusts with a strong focus on the practical aspects of moving from ambitions to delivery. The seminar brought together current community- led housing groups working in Ireland with key local stakeholders and finance providers alongside international speakers with practical delivery experience.
It became apparent that while many households are turning to community-led housing to meet affordability challenges, groups are also exploring innovative ways of living including environmentally sustainable development and more socially integrated communities.
Over 80 people attended the seminar.
Outline of the report
This report outlines the proceedings of the seminar as well as the key points arising in the questions and discussions. Conference presentations are available in electronic format at: http://www.cooperativehousing. ie/co-operative-housing-news/community-led-housing-making-it-happen.1176.html
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Seminar schedule
10.00am Registration and tea/coffee
10.45am Opening of Seminar – Bridget Carroll, SCSI/UCC
10.55am Welcome Address – Kieron Brennan, CHI
11.15am Community Leadership
• Dr. Calum McLeod, Community Land Scotland: “Scotland’s Community Land Rights Story”. • Ann Harpur, Tramore Development Trust & Sandra Thompson, Tramore Voluntary Housing Association: “Community Delivery in Tramore”.
11.45am Breakout Discussion
12.30pm Feedback
1.00pm Lunch
1.30pm Making It Happen
• Blase Lambert, Confederation of Co-operative Housing (UK): “The Rich Mix of Co-operation in Housing”. • Donal Traynor, Community Finance Ireland: “Financing Community Development”.
2.15pm Breakout Discussion
3.00pm Feedback
3.50 pm Concluding remarks and evaluation
Tom Daly, Chair, SCSI.
4 Community-led Housing: Making it happen Society for Co-operative Studies in Ireland/ Co-operative Housing Ireland Opening Session 2
Welcoming Address
Kieron Brennan, CEO, Co-operative Housing Ireland Co-operative Housing Ireland has had the privilege of assisting and being part of a number of seminars run by the SCSI over the last few years including on renewable energy and co-operatives, all held in this venue. When the Society suggested today’s seminar, we were obviously delighted to be able to partner in delivering an event that is very close to our hearts.
Over the last year or so, the housing crisis has rarely been out of the news. We in Co-operative Housing Ireland are trying to do our bit to respond, in our own housing model. Last year we provided 200 new homes and moved into areas of the country where we hadn’t been previously, including Donegal, Galway and the south-east. We have ambitious plans for the years ahead and hope to deliver at least 300 new homes this year, as well as developing more specialist offerings in areas such as housing for older people.
As well as being a housing provider, in other words an AHB, an Approved Housing Body, in our own right, we are also proud to be the national representative voice for co-operative housing in Ireland. In that capacity, we’ve been proud to welcome three new members, three new organisations into membership, in the last two years. They are Loughlinstown Housing Co-operative, Cloughjordan Co-Housing and Glounthaune Homes Trust, and I think all of them have representatives here today. These new community-led organisations are all offering innovative, self- help solutions to local housing need in their areas, and we continue to be approached by new groups who have exciting ideas about how to deliver new housing in new communities.
Groups are exploring the co-operative model, co-housing, community land trusts and other approaches, but all are united in their collaborative, grassroots approach. That’s why we have chosen the umbrella term of ‘community led housing’ for today’s event. All of these groups demonstrate what’s best about the co-operative ideal – a commitment to solidarity, equity, equality, self-help and mutual effort – and they all display tremendous ambition and resilience in the face of a system that is not well-suited to support different ways of doing things, and I’m sure that will inform a lot of our discussions here today. It’s a one-size-fits-all system.
So, our ambition for today is to try a first attempt at bringing some of these groups together, to learn about the opportunities we’re all seeking to create and the challenges that we’re facing. We have an excellent and, I think, an exciting group of speakers here today, who we hope will inspire and provoke, and we’re very grateful for them taking the time to travel to be with us. We’ve also set aside plenty of time for participants to meet and to share ideas and experiences, and I hope you’ll find inspiration and support from the conversations you have here today. Our hope is that by meeting with other practitioners, groups that are represented here today will find support and encouragement to take the next steps into making their projects a reality. For our part in Co-operative Housing Ireland, we’re here to listen, to understand what supports you need in making a case for community led housing, and I’m very much looking forward to hearing from you. Thank you very much.
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Community Leadership 3 The morning session was chaired by Dermot Sellars, Policy & Communications Manager, Co-operative Housing Ireland.
Community Land Scotland: “Scotland’s Community Land Rights Story”
Dr. Calum McLeod, Community Land Scotland Calum represented Community Land Scotland, the umbrella body for the community land sector in Scotland, at the seminar. Calum is also an academic at the University of Edinburgh working on issues of land reform and community land ownership. Calum aimed to give an insight into the development of the community land movement in Scotland, where Community Land Scotland fits into that and how the policy context has changed quite dramatically in Scotland over the last five years, in particular with regard to policy initiatives and legislative initiatives that have helped to facilitate greater interest politically and within communities, in relation to the idea of community land ownership, which traditionally in Scotland was seen very much as a rural highland affair. Increasingly community land ownership is now seen as an issue of relevance throughout Scotland; lowland and urban too. Colum also addressed the approach that has been taken by the members of Community Land Scotland in terms of addressing challenging housing issues in communities in Scotland and he gave a couple of cases that are involved in that process. Calum began by giving some context as to why the land issue is such an important issue within the Scottish policy context. In Scotland, there is a highly concentrated pattern of land ownership – 83% of Scotland’s land is in private ownership, 12% is in the public sector, 2.5% in what is called the ‘heritage sector’ and only 2.2% is in the community sector. The statistic that everybody, if they’re the owner of a private landed estate in Scotland, doesn’t like mentioning is that half of Scotland’s privately owned land is in the hands of 432 entities. So it’s an incredibly concentrated pattern of land ownership. And because land ownership and land use are inexplicably linked, it’s basically an issue of power and democracy and accountability and so, the idea that the community land movement is driving forward is trying to democratise land relations, trying to empower communities and people to be able to take decisions on an accountable basis for themselves and address a whole bunch of issues to help their sustainable development within that context. The concentration of pattern of land ownership has a long historical lineage; the land question in Scotland goes back to the Highland Clearances of the 18th and 19th centuries when people were forced off the land by landowners.
Community Land Scotland is quite a new organisation; it was created as an umbrella organisation for community land owners in 2011 and the reason for its creation was that despite the fact that land has been a political issue episodically over 200 years in Scotland, the political impetus for that agenda had been drained away by 2010. Some legislation had been put in place and the Government had thought it had done the job effectively in that sense. Community Land Scotland to a large extent, was set up in order to try and inject some sort of impetus back into that agenda and also to provide some representation for its quite small number of members initially. It started off with 17 members in 2010. That had grown to 73 members by 2017.
The role of Community Land Scotland (CLS) is to represent the community land sector on policy issues, to provide knowledge exchange, to provide support to its members and to promote the sector within different spheres of interest, including government. At the time of writing there are 500,000 acres in community land ownership in Scotland. Alex Salmond, the former First Minister of Scotland, came up with a new policy target of a million acres to be put into community land ownership, a very welcome target from a community land perspective. CLS is driving towards that in different ways. 160 or so cases are in the pipeline, cases of prospective owners, of assets (whether that’s land or buildings), and other assets, to be taken into community ownership, so there’s a sense of excitement about that.
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What do the members of CLS do? Essentially community land ownership in Scotland is around community trusts and community organisations actually taking ownership and control of the land itself. In so doing, it’s very much about being seen as multi-functional businesses doing a whole array of different types of activity. It has new agricultural holdings in place, a lot of renewable energy initiatives on the go as well, there’s a lot of forestry work in terms of planting and managing community forests, workspace for rent, tourism activities, but crucially as well, housing and affordable housing is very much an important part of the agenda for community organisations in Scotland within the sector itself, whether that’s building homes for rent or providing the land for local housing that can be affordable, can attract people into communities and make the communities more sustainable in practice.
Again, historically community ownership has been seen as a highland rural affair. That’s changing to a large extent. The Western Isles are virtually all in community ownership now. There are reasons for that, which are tied into historical aspects and there are market failure issues as well, but it’s quite interesting in terms of how that dynamic is working in practice.
There has been a sea change in terms of the policy environment in Scotland with regard to thinking about community ownership and having a more diverse pattern of land ownership in Scotland. In terms of the Scottish government, there has been a push towards increasing the diversity of land ownership and the very concentrated pattern in Scotland. The baseline for that, in terms of an argument, is to try to remove barriers to sustainable development where the concentration of ownership acts as a barrier. So ideas of democratising and accountability are important in regard to that and that’s captured in a statement from a consultation of the Scottish government on land reform in 2014 and a resulting report, “The Land of Scotland and the Common Good”, produced by the Land Reform Review Group (an independent group commissioned by the Scottish government to review land reform issues in Scotland), which came out with a number of key issues, or key findings. The report states that “land is a finite and crucial resource that requires to be owned and used in the public interest and for the common good”.
This is vital in resetting the terms of the debate with regard to land issues in Scotland and land reform issues in particular in Scotland because it recognises and connects so much with other issues of economic development, social cohesion, social inclusion and so on. And so, land reform policy now in Scotland is very much seen in a way that it wasn’t before, as an engine driver for more social and economic reform and policy initiatives, and ideas of social justice are hardwired into that, ideas of social equalities and human rights as well, are fundamental to that too.
Traditionally in Scotland, the idea of community ownership was seen by private, or certain private landowners, as an attack on their individual property rights, and their human rights within that context. The debate has widened now in terms of what human rights might consist of, in terms of individual but also wider community human rights too; that’s been important in terms of helping shape the terms of that debate and agenda.
In terms of how this process is evolving, there’s a long history of legislation in land reform in Scotland dating back to the Crofting Acts of 1886 and after that. The important elements are that the process itself is both top- down in that it is sanctioned by the State and promoted by the State, but it is also bottom-up in terms of who it’s privileging, in terms of rural and urban communities. The key pieces of legislation which are important regarding purchasing land and ultimately the kind of housing initiatives that might take place within that context, are the Land Reform Act of 2003, passed three/four years after the Scottish Parliament had reconvened. That was seen as a flagship piece of legislation for the Scottish Parliament. It introduced or formalised access rights to land in Scotland. It also produced a community right to buy and a crofting community right to buy, which at the time were seen as rather revolutionary, radical pieces of legislation. In fact, they’ve been nothing of the sort, because they’re incredibly complex to use and they’ve not been activated by many organisations at all.
But in 2015, the Community Empowerment Act was passed and that has been important because it has changed the terms of community right to buy. The community right to buy in the 2003 Act needed a willing seller, so in other words, if you wanted to buy community land that somebody else owned you had to wait until that owner wanted to put the land on the market and if you could get yourselves together as a Trust and pass all the various
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bureaucratic elements of the process and the legislation, that would enable you to have ‘first dibs’ on the land. But you still have to wait for that to happen. The Community Empowerment Act changes part of that process because it allows for the sale of land where there isn’t necessarily a willing seller, if it’s in the public interest and if it can be seen as sustainable. There are all sorts of challenges around how you interpret that.
Equally important or arguably more important in some respects, has been the support provided by the Government through things like Highlands and Islands Enterprise (the Scottish government’s economic and community development agency) in terms of capacity building and other elements of support and also crucially, the Scottish Land Fund, which provides £10 million sterling per year to help facilitate and support community purchases of land. £10 million might not seem like a huge amount, but it’s very significant in terms of potential assistance for organisations throughout Scotland to actually make those purchases. It’s really, really important. So, it is top-down but it’s also bottom-up and it is privileging rural and urban communities.
Examples (of community land projects) include the community of North Harris; a community owned estate on the Isle of Harris. Housing is obviously an important issue for the community land sector in Scotland, as it is in Ireland of course. Virtually all of CLS members think that facilitating affordable housing is a priority. Various things have been done by CLS in terms of releasing properties into community ownership, releasing plots for affordable housing and also releasing plots for sale as well but often with particular conditions in terms of how that process is done, there’s plenty other elements in the pipeline for that too.
That has been achieved through a variety of means – refurbishment; bringing derelict or empty properties back into use; the selling of housing plots to individuals or to housing associations; CLS building houses itself; or building houses in partnership with different organisations, such as housing trusts or housing associations. So that element of partnership work is really important for communities within that context.
An example of the kind of work that CLS members have been doing is the West Harris Trust in the Isle of Harris, which has been involved in really quite dramatically changing the profile of that community on the island. It’s increased population when that’s been in decline, that’s been really important. It’s got some wind turbine initiatives in terms of renewable energy and a whole bunch of stuff around tourism, around the shoreline, amongst other things. Importantly, as well, it's been pushing for affordable housing and putting that in place. Built for rent, in partnership with a local Hebridean housing partnership, buildings have gone up in the last year. It has also been involved in providing plots for housing to get families and other members of the community back into the community, to increase the population, and there are various conditions associated with that in terms of criteria and what might be done with the land if it’s sold and so on, so it’s quite an important set of dynamics going on there. This is a good success story in terms of addressing a market failure in what is a very fragile area of Scotland, in the Highlands in particular.
On the east coast of Scotland, in the East Highlands, Helmsdale has got a long history in terms of the Highland Clearances process but nevertheless Helmsdale has taken an innovative approach with regard to housing. They had had no affordable housing built in this fragile community for over 35 years. Land gifted by the local authority, Highland Council, has now produced four rented homes and Helmsdale has worked closely with other partnerships, including the local housing association and has raised, importantly, a lot of funding to help support these initiatives as well. It has a close relationship as well with the Albyn Housing Association in terms of the management and maintenance of the housing stock itself, so again another example in a fragile community of ways in which community ownership, working in partnership, can help deliver in relation to housing and affordable housing in particular, which helps the community.
Following the enactment of the legislation with regard to how land is bought for the communities, there was concern among some that the Land Reform Act was going to absolutely revolutionise, and not in a good way, land relations in Scotland and land ownership in Scotland in terms of ‘land grabs’. That hasn’t happened at all. The legislation has been helpful but it hasn’t been pivotal in that respect. The community right to buy and not having the willing seller is an important development in the Community Empowerment Act so that’s going to be important
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with regard to simplifying the original legislation but also bringing it into play if you think about abandoning neglected land.
There’s also an element of the Land Reform Acts, 2016 which means that communities can work with third parties to exercise the right to buy. Again, that has to be tied into the public interest to a large extent, which can be quite challenging. In conclusion, this has been a very quick, whistle-stop tour around the land reform and community land ownership agenda and policy framework in Scotland.
Community Delivery in Tramore, Co. Waterford
Ann Harpur, Tramore Development Trust Ann, chair of Tramore Development Trust and a registered architect presented a case study of a number of projects initiated by the Tramore Development Trust.
Tramore is a seaside resort in the south-east of Ireland, in County Waterford. It has a population of about 10,300; tending to peak in summer at about 13,000. Tramore’s main industry is tourism, relating to seaside resort activities such as amusement arcades. Having been a Victorian tourist resort and spa town, a lot of its tourism industry today is linked to water sports. Tramore is 10 kilometres from Waterford city which Ann cited as one of its problems; because it is so closely situated, a lot of residents of Tramore tend to shop and spend in Waterford city because of ease of access via a very good road network between Waterford and Tramore. Tramore, therefore, tends to be a dormitory town and it has an ageing population.
To set the context, Ann went back to 1999 and why Tramore Development Trust came into being. At this time the population was about 7,600. The main street consisted of many abandoned shops, was neglected and in need of revitalisation. There was a Coast Guard building, one of the most iconic buildings in the town, overlooking the bay. Housing the Gardaí for some time, the building later became derelict and eventually was burnt out.
At that stage, Ann was attached to Waterford Institute of Technology. Along with two other architects and an artist she set about developing a research project to explore how you might regenerate and revitalise a small Irish town. Using their own hometown of Tramore as a case study, they came up with a series of ideas and initiatives to revitalise the town. The project attracted the interest of the Irish Times newspaper which charted the progress of the project. A public meeting was arranged to exhibit the ideas of the project. This generated a groundswell of support and subsequently a development trust was established.
Ann felt that at this stage the group “knew nothing”, they were simply a group of interested people. They turned to Scotland for inspiration and accessed a template of how to set up a community development trust which they incorporated as a company limited by guarantee with charitable status. A series of public meetings and community engagement events were held which the group felt gave them a mandate. Harnessing the ideas from these events, the group developed a Community Plan in 2001 which has been the road map for everything they have done since then. They chose sectors of the community they wanted to focus on: community facilities, youth and children, business and enterprise, arts and culture, older people and the environment. Objectives and actions were identified and agreed for each of those categories.
Having outlined the emergence of the group, Ann focussed on the buildings which have been accessed for the community and for older people in particular. Having established the community needs, the group conducted a building stock analysis. On identifying derelict buildings, the group tried to assign community uses to each building. They concentrated mainly on the centre of the town with a view to getting its heart beating again with a plan to work outwards from the centre. They then identified “nodal points” which, if revitalised and regenerated, would have a dynamic effect on the whole of the town.
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Ann went on to inform the audience about two community buildings that the group acquired. One was the coast guard building which was originally owned by the Office of Public Works (OPW). Following an approach to the OPW, the relevant Minister at the time agreed that funding would be granted on condition that the building would be for community use. The building was split in two – one half was used by the Irish Coast Guard as their national base, and the community trust has use of the other half. €3 million has been invested. The building had been leased to the local authority at the time; the group then got a licence with certain conditions for use of the building. At the moment of writing the building serves as an exhibition space and community café and restaurant. All of the proceeds from the community café and restaurant are ploughed back into the trust for other projects. The trust office is based there and the space acts as a flagship for the trust. By night, the building acts as a venue for music concerts and during the day it is used for classes such as flower arranging and showcasing local produce. The trust now has seven community employment posts and five part-time posts as a result of the enterprise that is happening there.
The second building that Ann highlighted had been a meeting place for the Quakers. Vacant for many years, it was falling into disrepair. A member of the Quaker community approached the trust saying that they were very interested in the mission and objectives of the trust. They wished the building to go back to the community in general. On sourcing some funding, the trust secured a long lease from the owners, restored it and it is now a centre for rehabilitation for adults with special needs.
The key case that Ann focussed on was the sheltered housing project. Again, this site is within the perimeter of focus around the centre of the town. When the group started examining the needs of older people, the only existing sheltered housing that was provided for elderly people was a development built in 1825 as an alms house. From that time there had been no other funding for elderly housing. There was therefore a huge need for accommodating the elderly in the area which became very apparent from the community engagement workshops. Funding was sourced to carry out professional research into the concept of housing for the elderly and whether sheltered housing was the best solution.
From that, a statistician prepared a report in 2004 entitled ‘Understanding the Needs and Lifestyles of Our Elderly’ based on research that was carried out on the ground, for the community that it was proposed to house. 160 questionnaires were completed for this report. 93% of those who completed the questionnaire felt that a sheltered housing facility was the answer; they wanted a contained, protected, safe place for housing. Based on other research that had been done, a lot of people liked the idea of the concept of their own front door, they wanted a defensible space outside their front door, to be able to look out on nature and green landscaping, and to be able to accommodate pets. Some people expressed a preference for doing some woodwork, or to be able to hammer a nail into a piece of timber or to be able to potter around with plants; space for this or that. There was also a desire for space for communal gentle exercise and for grandchildren staying overnight.
At the time, the community development trust wasn’t set up as a housing body, so the thinking was to establish a sub-group that would become an approved housing body, then become a member of the Irish Council for Social Housing and sign up to the voluntary code of conduct, separate to the trust. The main issue was looking for a site. It was very difficult to find a suitable site because of the steep gradient of Tramore; you had to have a site that was close to amenities that didn’t involve climbing a steep hill. Having conducted a full visibility study on five sites, a 2.5-acre site was eventually found. This used to be a farm which was north of the centre of the town and is now forming a new town centre. It’s like the commercial town centre to the existing old town of Tramore. The new school is located there. There was a green piece of land which, the group argued, was surplus to requirements. Eventually the Department of Education transferred the site to Waterford County Council and then to the group. This took a long time. In 2015 €2.5 million was granted for this project.
The aim was to form a tranquil, serene environment for the elderly so a bank of housing that would orientate inwards to a heavily landscaped courtyard in the centre was planned. There is a very busy road adjacent to the site so it was important to insulate the housing from noise and interference and people wandering into the site. It was proposed to locate a community centre that would address the needs of the public but also address the needs of the elderly within the sheltered housing community and which would allow for a natural, organic interconnection between the various generations. This was an issue because the school has a facility where Transition Year
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students work with Meals on Wheels and it was proposed to put in a Meals on Wheels facility within the community centre that would provide meals for people within their houses or collectively in the community centre.
The houses are designed on a passive house principle. Each of the houses is to be detached and looks out into the courtyard where residents can sit. The courtyard is set out with bowls courts. There is an organic garden that can either be tended by people who live there or by the school students/staff and then the organic produce can be used in the community centre for the Meals on Wheels. The glazed conservatory of the houses serves as a porch area but also a sitting area where people can look onto the courtyard or can sit outside the house under a protected area and have a conversation without going into the houses as was requested. There are no cars within this space apart from access for a fire attender or ambulance and one or two cars for specific use. Each of the houses are wheelchair accessible for disabled access and the design of the houses allows for solar gain - each of the houses has solar panels and there is a collective rainwater harvesting system so all of the services are renewable.
In conclusion, the site will be owned by Tramore Voluntary Housing Association and available for senior citizens on the Waterford County Council housing list that are eligible for rental subsidy. The age limit is sixty-plus and there’s a sinking fund which will end up being a percentage of the rental income for maintenance. The project was at tender stage at the time of writing, scheduled to start construction in the summer of 2017.
Sandra Thompson, Tramore Development Trust Sandra added to Anne’s presentation, specifically addressing the audience on how to avoid pitfalls in developing projects similar to Tramore. She outlined what a long process the project has been; how the group has dealt with Pobal, from which grants were initially relatively easy to access and draw down. These grants were to pay staff, do building work and so on but when the group was given its first allocation of grant, it was cut in half, which would have seen them only build half the planned houses for the elderly. Eventually through regular contact they were able to complete the full complement of housing.
She emphasised the importance of being aware of things such as the fact that a group has to raise money first, pay for things, and then claim the money back. It was only when they put in for an extra allocation to buy the site that an email came through in which they picked up the footnote stating that ‘Payment will be made on receipts’. Luckily they had considerable fundraising conducted and money in the kitty with which to pay for the original architectural work, their survey, for procurement to the housing agency, for engineers and architects and for a site survey. They sent the bills in at the end of October not realising that county councils close their books in November and do not pay any money out while they are finalising their annual budgets.
Sandra concluded that you have to have outside finance, i.e. a bridging loan, and you may have to do the project on a rolling basis; to pay off architects and engineers and when you get the money back, pay out the next tranche of money. You could reach a stage where very considerable moneys have to be paid out so financial planning for that is essential. She advised talking to the council and, through the council, to the finance officers, to the Department of Environment, which looks for guarantees, and ascertaining how quickly the money can be paid back. It could be four to six weeks or it could be two months. Sandra concluded that if anybody is starting a project, they have to have money in the kitty, they have to have their bridging loans in place, and they can’t get bridging loans in place unless there is an asset such as the land.
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Discussion Points
• Calum was asked about the fund in Scotland and what it can be used for because £10 million seems like a very modest amount and something that we in Ireland could reasonably ask for and which could be transformative for some of the projects that we’re talking about at this seminar. Calum replied that the fund is an important part of the framework for assisting communities. It is primarily focused on purchasing the asset, the land itself, but in some cases it is used as well for purchasing buildings that might be used potentially for community type facilities.
• In terms of financing, a participant asked if Co-operative Housing Ireland could do something with credit unions in relation to housing. The restrictions by the Central Bank of Ireland on credit unions were mentioned. Dermot Sellars, Policy and Communications Manager, CHI, replied that this was an area that they’ve been working on with the credit unions for several years or more but that they are restricted by the Regulator. It had been recently signalled at an Oireachtas committee that they’re willing to look at it again but the pace of change is very slow.
• A member of the Community Land Trust Initiative (an Irish based group) raised the point that, recently a consultation had been closed for local public banks in Ireland. The Sparkasse bank in Germany, which are local public banks, are working with Irish Rural Link and made a proposal for providing local public banking in Ireland. In Germany, the Sparkasse banks are involved in lending for property, so it was proposed that in Ireland the credit unions could place some of their saving in the local public banks which are technically proficient in the area of housing lending. The difference between the Sparkasse bank and general banks, it was posited, was that they get to know who they are lending to, don’t indulge in complex derivatives and lend within local areas.
• A member of a Housing Action Group in Dublin which has been campaigning for council, social, affordable, co-operative and voluntary housing on what is now a NAMA-controlled site for the past year spoke of the experience of lobbying politicians and meeting architects and town planners. He felt that there was an ideological barrier within Government against council and social, affordable and co-operative housing.
• In Dublin some communities are losing a huge amount of young people. Families are moving from inner-city communities to areas such as Portarlington, Portlaoise and Wexford. Existing sports clubs and other groups are losing out as they haven’t got enough volunteers to maintain what was a community. It was suggested that areas such as Ringsend and Pearse Street are really struggling to survive. It was felt that the Government just wanted to build 3,000 high-price, high-rise apartments (in city centre communities) that no one can afford, that a bunch of landlords will take over and the Government doesn’t seem to agree with co-operative credit unions and social housing.
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Making it Happen 4 The afternoon session was chaired by Geoff Corcoran, Committee Member of the Society for Co-operative Studies in Ireland, and Head of New Business with Co-operative Housing Ireland. Geoff began by showing the audience a video on recent developments completed by CHI.
The Rich Mix of Co-operation in Housing
Blase Lambert, Confederation of Co-operative Housing (UK) The Confederation of Co-operative Housing (UK) has been the representative body for co-operative and mutual housing in England and Wales since 1992. It started off with five housing co-operatives coming together, then established a network in the form of a trade body. Its core aims and objectives are, first, to work at a national, regional and local level to promote viable forms of co-operative, mutual and community led housing. Therefore quite a bit of time is spent lobbying government and local government. The second aim and objective is to help existing co-operative housing organisations to enhance the way they run themselves, to enhance their governance and to help them deliver excellent services. Unlike the trade body in Ireland (CHI), the UK confederation doesn’t build homes or manage homes. It sees its role as assisting its members in terms of doing that development and management. The third aim is to provide networking opportunities for its member organisations through its annual conference, through training events and also through events like today.
The Confederation has just over 180 member organisations which are wide and varying in their type. The smallest member has one house in Nottingham with four people living in it, and how they govern that co-operative, how they co-operate is around the breakfast table once a week. They sit around for about an hour and just get things sorted out. The largest member’s got 13,500 homes and so how they do co-operation is slightly different to the one house in Nottingham. Some of the members have been running for 40 years, since 1976/1977, the start of the housing co-operative sector in the UK, whilst others are just starting up now and indeed have not built any homes yet, they’ve just got ideas and plans.
There is a rich mix of models of co-operation. One lovely scheme is in Kilburn in north London, developed in partnership with a neighbouring housing association. Another scheme in Manchester is the co-operative housing element of the gentrification project of the Hulme area of Manchester. The types of models that there are; some of them are long established, fully mutual co-ops, for example, where each member owns an equal share or one-pound share. The co-op owns the properties and each member rents their property off of the co-op. In management co-ops, the properties are owned by somebody else, whether that’s the local authority or a housing association or a private owner, but the co-op is set up to manage the scheme and deliver the services. There was a wide explosion of that type of co-operative following the 1994 Right to Manage Act that was introduced in the UK and that gave a legal right to tenants on local authority estates to establish management co-ops and take over the management of their estates from the existing local authority manager.
The community gateway model is a model the Confederation devised in the early 2000s as a response to the UK Government’s policy of selling council housing. At the time, there was a great move towards what was called stock transfer in the UK, which essentially meant taking council housing and transferring the ownership of it over to housing associations, and the Confederation looked at that as a reversal of democratic control of local authority housing, because at least if you weren’t happy with the job that the council was doing, in terms of managing your home, every five years you could go to the ballot box and vote for a change. Once the homes were transferred to large and distant landlords that represented less of a democratic control that residents had. So, the community gateways model was set up as a large-scale, co-operative home transfer model. The first of those co-operative transfers took place in Preston, Preston Community Gateway Association, and the most recent was the transfer of the entire housing stock of Rochdale Council, which is the birthplace of co-operation globally, over
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to a new co-operative that is jointly owned by the employees and the tenants of those homes. That’s Rochdale Boroughwide Homes, the Confederation’s biggest member with 13,500 homes. There are other, newer models that have emerged in recent years. Community custom build, used to be called, in the UK, self-build, but this is essentially groups of people, small groups of people, coming together and building their own homes, collectively owning the land that the homes are built on but having their own leasehold ownership, for example, of the home that they built for themselves on their own parcel of land.
Co-housing scheme models typically, again will be a group of people coming together, they have their own individual home, again on a site that’s owned co-operatively but they’ll also develop certain shared facilities and resources, typically within a common house or a common building, so, for example, you might have communal laundry facilities or communal eating facilities, where people all eat together and it's, usually a close bond in a close form of community formed in that type of situation.
Community land trusts are vehicles for holding land and assets in perpetuity for use by the community. Mutual home ownership, which is an alternative to individual home ownership, is a model in which, rather than people owning the property that they live in, what they own is an equity stake in the organisation. The increase in asset value doesn’t go back to the individual entirely, the return to them would be index-linked to local wages, linked to national income and, therefore, much of the increase in property price is locked within the community organisation to ensure ongoing affordability generation after generation.
Shared ownership models including a number of student housing co-ops are now being setting up. The first was in Birmingham, now they exist in Bristol, in Nottingham, in Edinburgh, in response to changes within the provision of student housing. Nowadays, students, even going to universities in areas of the country that are not overinflated in terms of the price of central London, will be paying double or treble to live in a newly built student hall of residence. Student housing has become a commodity, something to make money out of, and therefore we’re seeing a new generation of student housing co-ops coming forward and setting up.
And across all this range of models there are so many different ways that people put together the financing; these models will either include an element of people bringing their own money to the table, some of their own equity, self-financing, debt financing, borrowing from financial institutions or getting a grant, or working in partnership with other organisations that can bring money to the table as well.
Blase highlighted a recent publication that the Confederation had produced, called ‘1,001 Community and Co- operative-led Homes’. This includes a number of case studies and examples of organisations that are building 1,001 new homes in England and Wales. Some of the examples contained within the study include Accord Group which is a housing association in the West Midlands that for a number of years has been a partner to Confederation. They’ve enabled the development of 12 housing co-operatives in the Redditch area of the West Midlands, where the housing association has acted essentially as the lever of cheap money into the development mix and the provider of development expertise, enabling a secondary co-op to be set up and 12 individual neighbourhood co-operatives to be set up as well.
With reference to how difficult it is to find the money to pay for some of the professionals’ fees and support needed, feasibility and pre-feasibility stage, well, in this type of example, Accord just bring that to the table as part of their offer. It’s not something that members of the community have to go and find the money for and convince a lender that they should give them the money for.
Ashley Vale self-build is an example of a community self-build project. They’ve developed 26 self-built homes on a single site where there’s a collective ownership of the site within a co-operative structure and then individuals build their own homes. Belgrave Neighbourhood Community Housing Association, based in Leicester has got about 450 homes and recently they’ve been buying empty private sector homes on the market themselves and refurbishing them and letting them to members and growing their organisation. Bushbury Estate Management Board is an example of a management co-operative that’s now moved into building and developing its own homes from surpluses that it’s made over the years. They’ve just taken a pub into ownership and converted that into 38 new homes.
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Mace Housing Co-op is what’s referred to as a short-life housing co-op. Short-life housing co-ops have been in operation, predominantly in London for about the last 40 years and they started off as a short-life co-op by six people squatting in two empty properties just off the Kilburn High Road and negotiating licenses with Brent Council to manage them, and eventually grew to about 450 homes and started doing their own development, etc. Mace Housing Co-op is similar to that and they’ve recently been doing a number of refurbishments of empty flats over the top of shops in the Kilburn area. Northwest Housing Services has been supporting a number of member co-ops in Liverpool to do new developments. They also supported the Granby 4 Street’s Community Land Trust, which was, amongst other things, where Ringo Starr was born and brought up in one of the four streets, which certainly helped in terms of leverage not to have the homes demolished. They’ve recently won a prestigious national design award for the eco refits that they’ve done on those properties that everybody had given up as beyond saving.
The Somerleyton Trust is a new trust that’s been set up in the Brixton area of south London, working in partnership with Lambeth Council, seeking to develop 300 new homes on a single site development for a mix of rental products, from traditional social housing rents, through intermediate market rents, up to full-market rents. For the Confederation it’s a very interesting scheme because it’s a scale scheme right in the centre of London, such a high-demand, go-to location for international investment finance and if the Confederation is able to work in assisting the Somerleyton Trust develop a scheme that doesn’t require any homes for sale to cross-subsidise affordable rent, that has the potential to act as a good example moving forward.
Finally, the Confederation works with the Welsh Government, which about five years ago agreed a policy to directly support co-operative and community led housing. They created a revenue grant programme and that’s what pays the Confederation to go in and work with the 19 new co-operatives that are being set up across Wales. Again with reference to finding and raising of bridging loans; with a revenue grant programme, firstly, you don’t have to go and persuade a bank to lend you money and, secondly, you don’t have to pay them the interest that they will be asking for payment on that. Indeed, the Confederation has other revenue grant programmes, such as the Community Rights and Neighbourhood Planning programmes in the UK that give initial grants starting at around about £10,000 for pre-feasibility work and then a second phase of up to £40,000 for feasibility work to work up proposals and get schemes through the planning system. The Confederation didn’t have these sorts of grants programmes in place five, six years ago. They really make a difference. And the UK Government has very recently announced a new fund called the Community Housing Fund that they’re putting £300 million in to directly support the growth of our sector. So it’s about creating momentum and it’s about getting the political agenda to the position where there are strong reasons that have developed over time for that sort of support to be put in place, and it’s certainly a place to aim to get to.
Getting back to Community Land Trusts; Cornwall Community Land Trust is essentially an umbrella community land trust that operates over the entirety of the county of Cornwall in south-west England. They’ve been working closely in partnership with Cornwall County Council for a number of years now. They have developed 200 new homes for sale and affordable rent over the last couple of years and what they do is, as an umbrella body they do the development work and then they seed local community land trusts on a scheme-by-scheme basis, rather than them seeking to build their own property empire, so what they’re doing is acting as the enabler of small, locally based trusts.
Toller Porcorum is a small village in England. Back in 1998, they saw their post office and village shop close down, which is a fairly common phenomenon in many rural parts of the UK. But, determined that that wouldn’t be the end of local services, a group of residents came together, set up a community land trust, adapted and adopted a model developed by the Wessex Community Land Trust to their own local circumstances and very recently built six new affordable homes and a new post office.
Cohousing schemes such as Cambridge Cohousing are currently developing 42 new leasehold homes, which are due for completion later on this year. The model there, again, has land owned by the cohousing organisation, the freehold is held there, and then leases are sold to the individual residents that are members of the cohousing organisation that owns the land. So, in that way, not only do people have a stake in the freehold ownership of the overall site, but they also have ownership rights, through leaseholds, over their individual homes.
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Lancaster Cohousing has developed, indeed they were the first cohousing scheme in England to complete, 35 high-specification eco leasehold homes, shared buildings, low-carbon workspace and a very pretty riverside woodland habitat in 2013. LILAC stands for Low Impact Living Affordable Community and that’s what they’ve sought to develop. They’re based in Leeds. It’s a development of 20 permanently affordable homes that are owned and maintained by a mutual home ownership society. Each member makes a monthly payment that is fixed at 35% of their income. Average cost of housing to income rates in the UK rarely get anywhere near 35% in many inner-city areas, it’s a much, much higher proportion of your disposable income that’s going on housing costs, and that makes housing very unaffordable. So, here, if somebody is earning £15,000 a year, they would be paying something in the area of £100 a week but somebody living next door to them earning £60,000 a year would be paying something nearer to £350 a week, and they’ve found a group of people that want to do that, and want to share in that sort of way and support each other. The monthly payments are set at 35% of income and their equity growth is linked to national income levels, so as the value of this scheme goes up over time, whilst everybody will be able to take out a small increase in the value of what they’ve put in, that will be linked to general growth in the economy, they won’t be stripping all of the value out and taking it away with them.
One of the major problems with two of the public policies in the UK over recent decades, both the Thatcher government’s Right to Buy Scheme in local authority housing and the shared ownership product that has become so popular, is they’re affordable for the first people in. Blase was the manager of a management co-operative in south-west London for a number of years and when those council homes were first sold to the families that had lived in them for many years, they bought them for £15-18,000 for a three-bedroom flat for example, which in South-West 19, half a mile from Wimbledon Tennis Club, is a great deal. When they came to sell them ten years later, at £250,000, because that was the market price for them then, they ceased to be affordable for anybody. Today, those flats, the same flats, cost more than half a million pounds.
The second example is shared ownership, which, again, is affordable the first time around, the first person that gets in there it’s affordable for. Once it goes into the private market, it just becomes another property in the private market. So, what LILAC is doing here, in terms of pegging monthly payments to your own income, but also pegging equity growth to national income levels, should ensure ongoing permanent affordability of this scheme.
Finally, Blase briefly identified the key stages in terms of the journey for a community led, co-operative housing scheme:
• Firstly, a group has to come together, people that are going to start the scheme off, whether that is the people who are going to end up living in the properties or people that just want to do something in their community, a group has to come together. What is then important is that they get access to the right sort of advice and support.
• There are a lot of people that purport to be experts in community led housing and supporting community groups and a lot of them aren’t. A lot of them are consultants seeing this as the latest earner, so they tell everybody what experts they are. So, think about some way, at a national level, of being able to properly signpost groups to where real expertise lies. In the UK, they look at accreditation schemes, for example, and networks of professionals and support organisations that help people get at the right advice when they need it.
• Visit existing schemes, actually going and seeing people today who are doing it or have just done it is really inspiring and you can get so much advice and guidance and enthusiasm from visiting existing schemes.
• Then, work out who you’re going to work with to build the scheme, to build the homes. Is it going to be a self-build scheme? Are you going to get a builder in to build the homes for you? Are you going to partner up with a housing association?
• Scope the proposal.
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• Find the right legal structure for yourselves. Blase was concerned that if one of the first things you’re having to do is go and find a bank to lend you some money so you can even start doing some pre-feasibility work, you’re having to get a legal structure right at the outset, and that’s not often or not always the right thing. People reach for the model constitution off the shelf and then find two years later that, actually, it doesn’t do what they wanted a constitution to do.
• Get the finance in place.
• Get your plans drawn up and get planning permission.
• Get building and then work out how you’re going to deal with lettings and sales and how you’re going to deal with future allocations down the line. In a scheme that involves sales, are you going to allow people to just sell the properties or the leases into the open market to whoever they feel like? It’s an interesting question because, over time, does that dilute the co-operative nature of your scheme, as people move in, both from a sales but from a rental perspective, that just want somewhere to live, rather than live in a co-operative? And many of the Confederation’s members, in central London particularly, have found that over a number of decades, because of the general housing pressures that there are in London that the active members of their co-operative have reduced in numbers because they didn’t think that future allocations thing through at an early stage.
• And then, draw up your plans for long-term sustainability. It’s all well and good building something, but it still has to be standing in 10, 20, 30, 40 years when you or the next generation will still be requiring it as a home.
• So, again, things that were mentioned this morning about making long-term provisions through sinking funds for ongoing maintenance are good things to be thinking about at that early stage.
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Financing Community Development
Donal Traynor, Community Finance Ireland Donal gave an overview of Community Finance Ireland (CFI). He began by commenting that while CFI is probably in the ha’penny place compared to the mainstream banks and the Housing Finance Agency in terms of what it can offer to groups, its staff are always at the end of a phone and it is very, very accessible in terms of being used as a sounding board for investment should groups wish to go to any other finance companies on the island.
Donal set the context by explaining where CFI comes from and what it is all about. The organisation in the Republic is called Community Finance Ireland. It is part of a wider all-island group called Ulster Community Investment Trust (UCIT), which was established in Northern Ireland in the mid-1990s. Why was it established? In the mid-1990s in Northern Ireland, in the border region in particular, the banks stopped lending. Indeed, at this stage they stopped lending more so to community based organisations because of the volunteer ethos and the risk involved, or as they perceived it to be, with the potential of volunteers upping and leaving an organisation after a rift at a board meeting. They decided that they were going to cut off lending, or if they were going to make lending available at all they were going to do it at a very high interest rate, plus they were going to seek personal guarantees from voluntary directors or trustees. As a result, there was a mandate given to a group of people to go out and set up a lending agent exclusive to the community sector.
Donal stressed that UCIT/CFI is a membership-based structure. Individuals and organisations are offered the opportunity to buy a share in the UCIT group. That share does not pay a dividend, it is fully redeemable at any time and there are shareholders from all over the island. However, one is not obliged to become a shareholder to get a loan from CFI, something Donal stressed. In terms of structure, CFI is led by its voluntary membership first and foremost; its directors are drawn from its membership base. There are a number of companies as part of the group. Community Finance Ireland, based in the Republic, lends exclusively to member-based or community- based entities in the Republic. A sister company, UCITNI, does the same thing in Northern Ireland, based in head offices in Belfast, and there is another investment company that has the mandate to look after the Northern Ireland Small Business Loan Fund (akin to Microfinance Ireland in the Republic).
Community Finance Ireland lends between €30,000 and €0.5 million to groups across the island, not just to housing associations but to sports bodies, childcare providers, with a community hospital and a community off-licence facility exemplifying the diversity of its portfolio. Most lending is for 15 years but there is a special exemption for social housing where lending can stretch to 20 years.
The products on offer are very straight forward; first, bridging finance. The Government will not pay money directly to a contractor, they will pay you when you get a receipt from the contractor, as you heard earlier in the seminar. The CFI bridging facility is made available for up to 12, 18, even 24 months.
Secondly, the term loan whereby CFI offers a mortgage-based product and you pay capital and interest payments over that period of time. The rate of lending is generally 6%. Bridging loans are always 6%. Does CFI lend below 6%? It has done. Will they continue to do so? Probably, for the right type of projects. Will it go below 5%? Most likely not as it buys in the vast majority of the lending that is made available at a cost.
However, the next point is very important: the cost of funds that CFI provides to groups is insulated to the ECB base rate increases for the first three points. What that means is that if CFI lends you €500,000 at 6%, and if the European Central Bank base rate increases from where it currently sits at 0% up to a maximum of 3%, there will be absolutely no negative impact on your cost of borrowings, it will not change whatsoever. However, if you were to go into a bank today and ask your bank manager “Can you give me half a million and I want the monthly repayments fixed, at 6%? And I want to be able to clear off that loan at any time with no penalty, and if the ECB goes up to 3%, I want you to do nothing with me, I want you to leave it” - you are unlikely to get a response from a bank on those terms.
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Tracker-based products could be coming back in a disguised format and you need to be very aware of that because if you go to your bank and the bank says we’ll give you 5% of a tracker, we’ll stick it at 0%, we’ll put it on the ECB + 5% which, today, is 5%. What happens when the ECB goes up by two percentage points? What happens when it goes up three percentage points? Well, basically what it means is that your lending becomes 8% all of a sudden, 3 + 5. It also means that your monthly repayments will change to meet the increased repayments. With this particular CFI product, you’re locked in at 6%. Yes, if the ECB goes to four the interest rate becomes seven, however your monthly repayments stay the same and the money is taken back by extending the terms slightly towards the end. So, there’s peace of mind for cash-flow, a very high priority for community based organisations.
There are no arrangement fees with CFI. Bridging loans are very high risk - there’s frequently a delay in the grant coming through. And that, basically, is an arrears situation. However, as much effort goes into a bridging loan, in terms of doing the due diligence, as would to a normal long-term investment product but CFI don’t charge an arrangement fee to cover its cost because it feels it gets enough money off a voluntary organisation via the interest that it charges. CFI believes that groups should not have to pay arrangement fees on bridging loans as bridging loans are a feature of this sector. If you can, go to a local business, or a number of local businesses, and ask if they could stump up the money: “based on this grant offer, don’t charge us any interest, don’t charge us any arrangement fees and we guarantee you, as our local businesses, that when this grant comes in, we will give it back to you and in return, you will be forever associated with the success of this project”. There are other opportunities there, in other words.
There are no penalties for early lump sum redemptions with CFI products. Interest is calculated on a reducing balance. Perhaps similar to a credit union facility, the interest is only charged to your loan account quarterly, and is calculated on a reducing balance. And again, when rates increase, the terms extend slightly, so if we start lending at 6% and, for some reason, the interest rates go up by 10% during the term of the loan, your monthly repayment stays the same and CFI just continue to take the repayments back off you, so there’s cash-flow.
In terms of geographical coverage, CFI headquarters are based in Belfast and Donal is based in Ardee in County Louth. There is an executive based in Ennis in Clare with about 37 years’ experience in the Bank of Ireland section. There’s an executive in Wexford who has 19 years with Ulster Bank experience. An executive in Dublin brings 27 years Bank of Ireland expertise. Our CEO in Belfast, who’s 43 years in senior banking, was head of credit in the UK for Bank of Ireland. So, CFI really know what they’re doing. Of the €80 million committed since foundation, less than 2.5% of that fund has been lost and that’s because CFI take a close interest in the groups that it lends the money to, and they’re on the ground, meeting clients on an ongoing basis and putting as clear a perspective in front of them as they possibly can, in terms of, from CFI’s experience, the sort of things and obstacles groups are going to come up against, long term.
CFI is also learning; every single transaction, it’s always a learning experience. In 2004 to 2008 CFI did the first ever Business Support Programme for social enterprise on a cross-border basis with about 60 groups. It did the first ever trade show for community enterprises such as your selves back in 2008. There was about a thousand people at that. It started off in 2008 with just Donal in the Republic, it now has additional executives across the country doing the lending, as mentioned. In January alone of 2017, CFI approved €1 million worth of lending. So, it’s showing you the extent of how CFI is coming along.
Social Finance Foundation have afforded CFI access to about €97 million worth of lending to groups like yourselves, not to private individuals, not to private enterprise, not to State bodies, just to groups like yourselves, and it’s a little-known fact.
In CFI’s view, the community housing market in the country at the moment is a four-tier market. Tier 1 comprises the larger groups, of which there are maybe 10 or 20, who have access to Housing Finance Agency money. We’re not at that level at all, multi-million-euro investments at relatively very low margins. Tier 2 are groups that may be able to aspire towards accessing the Housing Finance Agency money, but generally all their needs are catered for by the mainstream banks. Again, you’re getting money at 3.5-4%, maybe 5%. There’s no point in us trying to compete with that. We don’t need to compete with that, that’s not why we exist. We exist because
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Tier 3 have either gotten money off the banks to an extent to where the banks are saying “You know what: we’re exposed enough now and we’re not going to lend you anymore money”. Or, the groups themselves have had bad experiences with the banks in the past, they’ve only lent on the strength of personal guarantees, they’ve been restricted with the types of security conditions they’ve put in place and, so, we’re a viable alternative, as our competition Clann Credo would be as well. And then you’ve got Tier 4, those groups have done what they said they were going to set out to do, they’ve built the product and now they’re sitting on fully occupied housing, have no intention of developing anymore, no appetite to do so. They certainly won’t be looking for investment, so we don’t need to focus too much on that.
Donal then pointed to a number of issues that CFI and any investor are looking out for every time a transaction comes across their table.
• Ideally you guys are going to be shovel-ready, because why? It starts with a dream. You want to know, if we get this to a certain stage, can you guarantee us that there’ll be money available? Well, for the foreseeable I can guarantee you that the money will be available as long as you structure it in a suitable manner. What’s a suitable manner? That’s up to you. We will work around you. As long as you’ve got a sound repayment capacity that, if the security is required it’s of material value down the line, etc., and that you guys have a track record of managing successful projects in the past. The quality of the board is also important. If you guys are coming to this table and none of you know anything about housing or know anybody that knows anything about housing, then question marks will be raised.
• Organisation structure is important.
• Also, equity support: the days of 100% mortgages are over. Communities, especially, are being encouraged to reach into their pockets and come to the table with what bankers used to call ‘skin in the game’. It’s not enough just to expect that, “Oh yeah, CFI will give us all the money that we need and ask no questions”. We want to be able to see community buy-in, it’s very important.
• The adequacy, quality and sustainability of earnings into the future, that’s extremely important. The less amount of speculation the better. The value of security is also important.
• Detailed projections: I know the Irish Council for Social Housing have a calculator model on their website, it’s available to use in terms of calculating sinking funds and just taking into consideration insurance and all the rest of your running costs.
• The level of social impact is important. Why? Because we could be asked for €300,000 or €400,000 to build two houses for two families but this amount in another part of the country could go some way to contributing towards the establishment of 18, 20 apartments in a different way, so we’re not saying that we don’t do that, but we just want you to know how much bang for the buck will the investor get? And for us, it’s social impact. For the banks, it’s how much money can we make?
• What we’re very wary of are opinion leaders with legacy issues. You know, these people with mid-life crises, they wake up some morning and say, “Oh my God, I’m at such an age now and if I pop the clogs in the next 24 hours this parish will not remember me for what I have or have not done for this lovely community, so I need to come up with an idea fairly quickly and come hell or high water we will get grant aid and if we have to borrow three times that, we’ll do that because I want to build this building that we’ll call after me and, you know, if I die then, the building will be built and they’ll not knock it down”.
• But in 15, 20 years’ time the plaster’s falling off the walls, why? Because the community never bought into it in the first place, there was never really a need or demand for it there, and all you’ve got is this big white elephant stuck in the middle of an unsightly situation and we’re very conscious of that. So, chasing funding for unviable projects is an issue. Grant aid has been made available in different formats all across the country and all of a sudden there’s a race. There’s a race to see who’s going to get it, you don’t tell anybody else this grant is available until you have the letter of offer yourself, and then you say to the world and their wives “Did you not hear about that grant? That’s been available for the last while. We knew all about that”. So, there’s
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this competitive situation where there’s grant aid. Thankfully that’s not the situation in community finance, but we’re very careful, or very wary of the fact that, is this group really about what is needed in the local community or are you like the boys in Killnaskully sitting above at the bar? And the only reason they want to get their hands on the grant is because if they don’t get the grant the Bally boys across the hill will get the grant and they’d be forever looking down their nose at them into the future, saying “Ha, ha, we got the grant”! So level of social impact versus the investment.
• Has your wheel already been invented? Blaise has told us about the various types of models that are happening in England. It’s amazing. It follows that in Germany and Spain and Belgium, all across Europe and indeed America, there are so many different models out there. However, it’s plain to be seen from the discussion group earlier on that legislation and the ideology here in this country is really restricting the development of an awful lot of those. You might think that you have a novel idea but do a little bit more research and see has your wheel already been invented, because that is where you will find that you might be pushing an elephant up a hill, you might get so far and then you find out this logjam was in the way all the time and if I had spoken to somebody else, maybe I would have saved myself an awful lot of hassle.
• Local lethargy: again, you might have a very positive opinion leader with their minds in the right way but if the rest of the group can’t row in behind them, for all the right reasons, that is going to cause an awful lot of difficulty. Worse than that is opposition to what you’re developing, thinking, “Oh, you’re going to put social housing in my backyard? Not in my backyard you won’t. No, no, no, because I plan on selling this house in five years and if I think for one minute that undesirables are going to be living across the fence in my back…” - there’ll be opposition. So, it’s about how you package the whole idea and sell, and there are people here in the audience today who should really be up here giving a talk in terms of all of this stuff that I’m talking about because they’ve really been there and done that.
Suggestions – qualify your team, tie down the level of market demand there is for your product, learn from the mistakes of others, come to the table with some equity, realise the difference between hard cash and sweat equity… sweat equity won’t put bricks on the ground unless you’re actually willing to put the bricks on the ground yourself, exhaust all avenues for grant assistance first, after that look for your non-interest-bearing debt and soft loans, I’ve mentioned, then compare price of funds and associated terms and conditions when you’re looking for alternative finance.
Common issues which have arisen among groups so far:
• Delays in completion of the governance process: people taking time to register as a housing body, taking time to register with the CRO, to get a charity number. It’s mostly a voluntary committee matter because you’ve 101 other things going on in your heads and it’s just hard to get the time to tie these things down in a voluntary capacity.
• Confusion on the matter of trustees, whether they’re liable for debt and stuff.
• Lack of clarity on the availability and the price of the land that you’re seeking.
• Lack of clarity on the planning process and associated regulatory requirements.
• Lack of clarity on the availability of finance from all sources and the likely conditions attaching. The terms of payment and availability agreements with local authority.
• The long time lag associated with various development stages – planning, site acquisition, registration… you’d wonder why you’d get involved in this at all.
• No group equity, 100% debt finance required.
• No track record in successful project management.
• Colourful financial history.
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• Significant opposition among the local population.
• And the whole security question – “what do we need to do to secure this loan”?
The application process:
• We start talking to you, you fill out an application form on the communityfinance.ie website.
• We accept the application and meet with you guys on site to discuss the thing a bit more.
• We assess your credit.
• In terms of the length of time it takes to get back, once we have all the information in, we can get approval up to 200,000 within 48 hours. We can get approval beyond that, you are talking, maybe up to half a million, it could take four weeks.
• And then we release the offer to the client and after that, guys, the ball is in your court and takes as long as you take to accept that offer and sign up to the terms and conditions that might be prevailing, that’s how long it will take us to get the money on the ground.
Three very quick examples– Castleblayney Trust for the Homeless, Needy and Unemployed. One voluntary director had signed a personal guarantee to a bank, no longer actually functioning as a bank, for €600,000. Our role was to come in and take charge of a couple of the properties and release that personal guarantee. The second one that we looked at, there, in Newtown Cunningham in Donegal, 32 independent living apartments. We came in with the Department of the Environment because there was a shortfall of about €400,000. We got involved in that, that’s fully occupied now. And then, the Brickens Housing Association, I believe, was a smaller term loan because they wanted to upgrade with a capital loan on facilities that they were doing. Laying the foundations is extremely important for us going forward as well as the groups building.
In terms of next steps I really believe that a very productive thing would be a Roundtable Meeting of all the stakeholders including, and this is not an exhaustive list: the Irish Council for Social Housing (I understand that when they’re referring finance to people sometimes they never even mention Community Finance Ireland); social finance providers, including Community Finance Ireland and, indeed, Clann Credo; the Housing Finance Agency; the credit union movement; mainstream financial institutions; the Department of Housing, Planning and Community Local Government; local authority planning department representatives; local authority housing department representatives; and any other stakeholders relevant to the process of establishing community-led housing.
Because I know what the opportunities are that I have to offer. I know my limitations. What I don’t know is the same for all the rest of the players, and I definitely believe that none of them know about all the opportunities and limitations, or the processes of the rest of them either. And that is a real stumbling block because I can’t tell you, when you come to me with an application, where the problems are going to lie, because I know what I can do, I know how far I can go, but I don’t know the problems you’re going to face. And so, if all these people sat together, a blueprint of how this thing should work on various models would be an outcome. We’re open to sitting down and discussing that, if nothing else, you’d have a process map to assist communities seeking to develop or expand services.
22 Community-led Housing: Making it happen Society for Co-operative Studies in Ireland/ Co-operative Housing Ireland
Disussion Points
• An attendee suggested the seminar audience use itself as a campaign group to say to the Government; “Listen, the UK, with a pretty conservative government, has the best structure and organisation for housing co-operatives and trust housing, far ahead of Ireland”. We should be saying that it’s not a radical proposal that we’re looking for here. It already exists in the UK, in England and Scotland and Wales. The U.K. is miles ahead of what we’re doing in this country.
• There was a discussion on whether a community land trust, generally speaking, pays anything on an annual basis for the use of the land? Geoff Corcoran from CHI responded that there isn’t an ongoing ground-rent (in an Irish case example he used) but that the value of the land will stay with the houses. The question then was asked whether there is any money going back into the community to help fund services, or to help fund more land for the community? It was queried how that’s worked out with community land trusts in Wales and elsewhere; is the land essentially free with controls over resale, or what is the story?
• Blase replied that the typical situation in the UK is that no annual fixed ground rent would be charged, but an annual service charge would be payable by any leaseholder. Service charge legislation is fairly clearly defined in the UK and there has to be a direct recharge if actual costs are incurred by the freeholder, in terms of delivering services. Ground rent will typically be a fixed annual payment that may bear no relation whatsoever to the actual cost of managing and maintaining communal paths, for example. So, charging a service charge that links directly back to actual costs would be the normal situation.
• And, then, in terms of any rental units that are on the community land trusts, because community land trusts don’t just develop homes for sale through leaseholders, they also develop shared ownership and rental ones, there’s an element within the weekly rental charge that is essentially that similar service charge element and so you have a portion. Let’s say you have a communal garden and it costs £2,000 a year to maintain that, and there are 10 properties, then notionally each property should pay a tenth of the cost of maintaining that garden, either through a service charge on their lease or through a proportionate payment of their rental charge.
• Again, Blase explained, it would be normal that the occupation of the land would be at no additional charge but that’s not to say that people wouldn’t be expected at the outset, perhaps, to either buy a share in the co- operative and in that way they are putting some money into the co-operative, or be involved in a community shares option, or loan stock option, which helps to raise finance for the overall scheme and helps to close some of the equity gap in terms of what a lender would put in. So, for example, if a lender would put in 70% or 75% loan to value, you’ve got to raise 25% or 30% of the cost of buying the land and developing it. And, quite often, people coming into community land trusts would put in through a community share option or a loan stock option that would then potentially be a tradable asset at the point that they come to move on, for example. Or, they might buy a share that might cost them, say, £500 when they move in but then is sold on when they sell the lease, or such a thing. So, again, people wouldn’t tend to actually pay a fixed annual amount just for being there.
• Donal Traynor was asked whether you have to draw down 100% of a loan offered by Community Finance Ireland or can it be on a drip-feed basis when the letter of offer arrives. Donal answered that you just draw down as you need.
• Geoff of CHI was asked if it was his experience that local authorities might find it easier to consider a 999- year lease or a lease option, rather than the complexities of ownership and also the risk of transferring a public asset to private individuals, a group or a co-op. Is it easier just to forget about the whole ownership aspects and pitch a lease at them? Geoff felt that, ultimately, local authorities don’t really distinguish when it comes to it. They’re either willing to do it or they’re not, but the leasehold option could be something worth exploring, in
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terms of local authority land. You want to make sure that if you’re going to have to borrow money for a period of time, that the leasehold you have will more than cover that. So, for a 30 or 20-year loan you’ll probably want to have a hundred-year lease to give comfort to the lender. So, they wouldn’t just want to see that the lease is for the term of the loan.
• It was felt that Irish policy is, effectively, “anyone but the council” for building homes.
• A concern was raised by an attendee that this seminar gathering was quite internal to itself. How does it relate to the larger housing crisis? There are questions of scale at that level, and the seminar had a bit of a debate earlier on the kind of rigour or practicalities of getting a single scheme together, and the difficulties of that. How does it relate to the fact that we can go on in this way for maybe 10 or 20 years and we can still have the same housing crisis in practice, not even in theory? So… effectively, what the State is saying to us is that’s a kind of niche, they’re saying that there will no longer be a public housing sector in this country. What we will have is a kind of mishmash of voluntary housing bodies, they’re calling this new scheme ‘Affordable Rental’. No one knows what affordable rental means, we know what it probably means, it’ll be close to full private rental cost, but effectively it’s the market model and it’s dominant, and on nearly all of the home-stay sites, the policy is that the market gets the highest priority. Is there any relationship between the two things for people? I think the question applies in England, and the rest of Europe actually, just as much as it does here.
• Blase replied that in both his country and Ireland it seems, we have for many, many decades decided that these (co-operative and community-led) types of approaches are not the way to deliver large numbers of properties and large parts of the housing supply, whereas you go to other parts of Western Europe and Sweden is a very good example of this, from the Second World War onwards, co-operative housing was through government policy a major deliverer of affordable housing within that country. And so, where government has specifically said this is our large-scale approach to dealing with housing crises, it is possible to deliver. But, in both Ireland and the UK, certainly in the UK example, after the Second World War, it was council housing that was the go-to delivery model, aside of the market, and therefore by those very decisions, co-operative and community led housing became niche, because they were not government policy. If you look at Switzerland, for example, where the Swiss government has specifically underwritten a bond-issuing co-operative, 20,000 new homes have been built by these types of organisations financed through that type of model. So, it’s possible but it requires a fairly seismic shift in government policy, away from long-established models of market delivery, whether they are public- or private-sector driven.
24 Community-led Housing: Making it happen Society for Co-operative Studies in Ireland/ Co-operative Housing Ireland
Breakout Discussion 5 Following the presentations from Ireland, delegates formed groups to discuss a number of issues. A number of questions were circulated to the groups. Each group identified one person to take notes and to report back to the wider group. In this section, the key feedback points are presented.
What are the opportunities for community led housing in Ireland?
• Establish what legislation is in place to support the future ownership of assets. The Tramore example was really useful in this respect.
• The Credit Union Act in the North in particular was raised; credit unions have made what could be called asset-bank loans which might be of use to individuals in housing co-operatives.
• The long-term ownership of land and assets and public land in particular should be publicly debated; whether public land be developed for private ownership in either a co-operative way or, run by the State as it is at the moment where it’s just for public ownership or private ownership. Should it be a bottom-up approach of groups developing land trusts or co-operatives? Co-operative Housing Ireland could have a wider policy discussion in terms of how public land is used going forward.
• There was some agreement that credit unions and other financial institutions have potential to be involved in co-operative and community-led housing. The credit unions have protested that they have five billion in funding that they could put to social housing and community housing needs, but they’re not allowed at the moment. There are also banks like Triodos Bank and others which could play a role.
• There is a need for more sharing of information, particularly across borders/with other countries that have track records of doing things in different ways.
• As Ireland is a small country, replication should be easy: build templates that might support projects in other parts of the country.
• A report/survey of all public land could be published and put on Google Maps with pins, and then opened up to the private sector, builders, developers, community groups, to come up with projects. But the process should be streamlined so a group doesn’t have to go through a secondary process of tendering and opening it up again to further discussion; basically, anybody who’s interested could come and make the pitch and be able to get a swift reply.
• Make politicians aware of the potency of co-operatives, not just for housing but for how they bring communities together and can cement a community to do whatever the need is; for elderly groups, for disabilities, for community facilities and so on. Maybe we need to be persuading our politicians that, while our rural communities are falling apart, we’ve seen how, when a crisis happens, people build around each other and our politicians could be made more aware that co-ops do form the basis of keeping our rural areas together.
• Mobilise on the platform of information that people working in this field for, say 16, 20 years have and could share. A really positive thing that we have now is that people have been working for a really long time with county councils and building developments.
• We have a moral right to (local authority) land. Local authority land should be used for what the community wants and what the community needs most. The land is available: there are sites in Dublin city which at the moment are being sold to the highest bidder and the prices are going to be beyond the funds of local people. So, there are opportunities there to seize that land and/or fight for that land.
• We need to be on the ball and persistent and have a vision and it’s up to us to sell our vision to the Government.
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What are the challenges we face in promoting community-led housing and are there differences that we need to recognise in terms of urban versus rural?
• The main challenge is access to land, although, first of all you have to establish the desire for it and the expertise you need to access available supports, and so on. So, land and expertise were the two main things. A lot of people in the city in particular don’t actually have an asset to put forward. There is a difference between the rural and urban experience in terms of how people might meet their housing needs. It may be less of a problem in rural areas to get access to land, for instance.
• Individual ownership seems to be predominant over group ownership. So, dialogue and education seem to be very important, and an understanding of the culture behind this and how we got to where we are in our land and housing history.
• Government obstacles; it appears that there is a favouring of the private market delivery model, which some see as arising out of the Government’s interest in preserving the banks and the value of the land held by NAMA. Opposing mind-sets is something that we really need to work on and overcome.
• The playing field (for community groups) has never been equal and it’s within a lot of people’s interests to keep it unequal because private investors have a vested interest as opposed to community driven projects.
• Gentrification in certain areas, where that’s been seen as a positive thing when land prices go up. Local communities need to be protected and enhanced, to be able to remain living within their local areas, if they wish to stay there. If all the new buildings that are happening are one-bedroom studio apartments then there are no families and there are no communities, it’s just going to be fly-in, fly-out communities that don’t actually have any real say, or any real kind of involvement in the communities themselves.
• What’s frustrating is that there’s been lots of meetings, lots and lots of meetings (between voluntary housing/ community groups) with people who are supposedly in charge, we’ve had lots of meetings with these people and they’re always promising a certain amount. They give people a little bit, they give them enough, a meeting here, a meeting there….. but at the end of the day no actual laws/policies are being changed and there’s been a big call to change that.
• The new way of doing things between the department and the local authorities has actually slowed things down rather than speeded things up.
• The amalgamation of some of the local authorities has caused problems because you’ve lost the specialisation that you might have had in your town council area and people have been reassigned so they don’t know the systems when you’re coming ready to do business, they’re not aware of it. This causes delays and adds to costs.
• The general feeling is that there’s no real welcome for innovation and a general feeling, as well, that (government and local authorities) just don’t want to know, really, no matter how much we like to try and persuade them, that there’s an ideological barrier, that they think that the private sector is the best place to do most of this business and, probably, they feel they’ll get that stuff back because 10% of it will come back into social affordable housing just by default, without having to do any of the big thinking on the legislation.
• Is legislative change required? Probably.
• There’s a new category of people that needs to be on the housing list and this is the working poor.
• Having the capacity and the expertise, knowing where to start and how to get the finance.
26 Community-led Housing: Making it happen Society for Co-operative Studies in Ireland/ Co-operative Housing Ireland
How do we build support among the wider community? And what is the national and policy support that we need?
• More support for tenants, choice for people who want to rent.
• Land gives a status and a privilege in this country, and that isn’t challenged and we need to realise that in favour of the community, in other words community ownership, as opposed to private ownership. We need to develop more ideas about owning land, more collective ownership of land, or resurrect those ideas. We have co-operatives in other areas, but not generally in land areas, so we need more support for co-operative development and collaborative development.
• We need more upfront financing, there are problems with the initial requirements, with the development phase, as well as the feasibility phase.
• Credit unions and the fact that current regulation is making it difficult for them to play a useful role that they played in the past in finding housing solutions. Ultimately, again, it was mentioned that we need major political change to support a major advancement in housing in this country.
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Appendix 1: Biographies of speakers
Biographies of Contributors
Dr Calum MacLeod, Community Land Scotland Calum is based at the Institute of Geography and the Lived Environment, University of Edinburgh. He is a former member of the Scottish Land Fund Committee and works with community groups to help them with their land purchase and development proposals. Calum writes about community land ownership and land reform on his blog, 'Beyond the Horizon'.
Anne Harpur, Tramore Development Trust Anne Harpur is chair of Tramore Development Trust and a registered architect with 26 years’ professional experience as founder and director of AHA! Architects. She was elected a Fellow of the Royal Institute of the Architects of Ireland in 2013. She has specific expertise in Community Architecture and Community Development.
Sandra Thompson, Tramore Voluntary Housing Association Sandra Thompson is Project Leader of Tramore Voluntary Housing Association (TVHA).
Blase Lambert, Confederation of Co-operative Housing (UK) Blase has been a leading player in the UK co-operative housing sector for over 20 years and is currently the Chief Officer of the Confederation of Co-operative Housing (CCH). Blase led the development of the CCH / National Housing Federation Code of Governance for Housing Co-operatives, Accreditation Frameworks, Centre of Excellence training programme and leads the CCH support and advice service. He is a Board member of Co- operative Housing International and the Co-operative Housing Finance Society.
Donal Traynor, Community Finance Ireland Donal is Associate Director of Community Finance (Ireland), formerly UCIT (Ireland), a charity which provides loans exclusively to other third sector organisations such as community groups, charities, sports clubs and social enterprises in the Republic of Ireland. Since 2001, as part of the UCIT Group, CFI has committed in excess of €70 million to over 360 organisations.
Bridget Carroll, Society for Co-operative Studies in Ireland Bridget is currently Treasurer of the Society for Co-operative Studies in Ireland. She is a researcher in the Centre for Co-operative Studies, University College Cork and a lecturer at Cork University Business School.
Kieron Brennan, CEO, Co-operative Housing Ireland Kieron Brennan is CEO of Co-operatives Housing Ireland, the national federation for housing co-operatives in Ireland. Prior to that he was CEO of the Irish League of Credit Unions, Programme Manager at POBAL and Ireland Manager at Triodos Bank.
28 Community-led Housing: Making it happen www.hackettdigital.ie