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Sustainable Communiites: Equity and Tenure
By Andy | January 27, 2009
The recession and the credit crunch are wreaking havoc with the government’s long term policy to build more sustainable communities. Home ownership — and shared ownership — are at the centre of the policy. But as it becomes more difficult for the low paid to secure mortgages can we cast aside the nightmare of equity and learn from long-established housing models from elsewhere?This must be a dreadful time to be the Chancellor of the Exchequer. Almost everywhere he looks there are companies, sectors, regions and trade associations calling out for more government support. I’m glad it’s not me who decides who gets supported and who doesn’t. It looks as if the recession will be deeper than many predicted. And it may be that some of our credit lines, and financial products, may never be the same again. But more every problem involves a purely financial solution that builds equity through debt.
Sustainable Communities
The headlines are being grabbed by big business and large concerns. But many of the better programmes of this government are being hit hard by the contraction of the money markets. Many of these are programmes run by the Department for Communities and Local Government who are finding that the current crisis is completely changing the world in which they inhabit.
In essence funding for ‘mixed housing’ development is in crisis. Why does this matter?
Transient Populations
At the heart of Sustainable Communities is the thorny problem of transient communities. Many of our biggest and largest estates (most particularly outside of London) have suffered for years from an increasingly transient population. Bluntly, people don’t stay in one place that long. They move on, seek opportunities elsewhere or simply see moving on as something that you just do.
A community that moves (as opposed to one that is mobile) creates real problems. Roots are not put down. People do not develop long term commitments to the place in which they are living and as a consequence places aren’t cared for and loved.
The problems can be seen most sharply in the school systems where Head Teacher talk about ‘churn’, in other words the number of pupils or students who leave a school during the middle of the school year. In some of the most challenging areas of our city school churn can be as high as 80 to 90%. In other words, only a handful of students who start the year in a class are still there at the end. Imagine the despair of teachers working in such an environment. How do they build up the standards and relationship of the school? And how does an education system provide continuity of provision to those who need it the most if they simply move around so much? This particular problem is most severe in Primary. Some schools I have come across have had — at various times — a churn rate of 100%.
Re-Shaping Estates
It has certainly been the case that people move around because their estates, and the housing available, is so poor. But it is the case the estate regeneration programmes have made a real difference. We now know how to operate good and effective models of housing management. Repair and maixtenance contracts are now often more efficient. Quality design and architecture can play a big role in designing-out danger and crime. While there is still much to be done — and while there is never quite enough money to go round — there can be no doubt that sustainable community policy has made a real difference.
Home Ownership — Giving People a Stake
Home ownership has been a key ingredient in the sustainable communities programme. If we enable people to buy their own homes they are, firstly, more likely to care for them as a long term investment and secondly likely to stay around longer. A stable and settled community will build up more community spirit and will be more likely to look after facilities and infrastructure. It may seem trite, but established communities are more likely to develop effective and positive partnerships with local authorities , housing associations and other agencies.
Local people like the opportunity to buy their own properties, in the areas in which they have been bought up or have traditionally lived. It seem a bit odd for the middle classes to appreciate but more often than not you find that local people have real pride in their areas — often areas that seem to have little going for them. In cities like Birmingham small developments such as Bordesley Village and larger ones such as Castle Vale have been real success. Communities have voted with their feet, have chosen to buy and chosen to stay.
Low income is a real problem though, not least because mortgages are so tough to come by. And the real need in many of these areas is for larger, family houses. Developers don’t like building large family homes in areas such as these. Local authorities, through housing and planning strategies, have had to lead on providing this provision. And where a full mortgage is unattainable the concept of shared ownership has become popular. As with full purchase, the resident is building up an equity stake in their property and that does equate to a better commitment to place.
This is a simplistic argument but you get the message. The trouble is that the mortgage crisis is making it almost impossible for home ownership to be part of the sustainable community solution. Good mortgages — whether for full or shared ownership — are likely to be scarce for a long time. Indeed, many in the housing sector never expect mortgage finance to embrace this end of the market in quite the same way ever again.
I’ve now come across a number of developments where the ‘mixed use’ policy has clearly failed. Often, small, key developments are left empty because there are no buyers. There are people who want them and there are people who feel they may be able to afford them. But the lack of mortgages has effectively ended their dreams.
As a result Housing Associations — and their local government partners — are having to fill properties with tenants off their general lists.
Now I for one have no problems with renting, indeed, I feel that if we had the same housing mix as they do on much of the continent both our macro and micro economies would be in a better state. But continental traditions in both renting and letting are very different. For many of the schemes that I have been talking about it will become more difficult to use these properties to anchor long-term residents.
This is not just an academic argument. Go and talk to local housing managers, estate officers and community development workers. Many are devastated by the changes. They’ve seen a model that they know works being snatched away from them.
Let’s not be obsessed with equity
It is time to move away from seeing an equity stake as being crucial to building up a long term interest in your property, and therefore in your community. We may need to be imaginative, but there are international examples of programmes that have been very successful and that do not depend on equity stakes.
Watts Labour Community Action Committee
WALCAC was established by Trade Unionist Ted Watkins following the Los Angeles disturbances of the sixties. Watkins was a long term resident of Watts and for him and his colleagues the challenge was to use their organisational, campaigning and political skills — developed in the trade union movement — to good effect in organising, and building, a better community in Watts.
Established in 1965 WALCAC is still active today. Watkins and his colleagues were extraordinarily successful. WALCAC built schools and child care facilities. supported new businesses and new industry and built the first hospital in the locality. And WALCAC built homes — they still operate as landlords for over 500 homes in the locality.
Watkins faced all of the same problems they we do in building sustainable communities. Nobody can ignore the power of a community body that opens a school and builds the first hospital. But WALCAC but was about more than these things, it was about what we now call sustainability.
“Don’t Move, Improve”.
.. was the motto of Ted Watkins. He understood the importance of building a stable community, and this is still recognised by the organisation today. According to the WALCAC website this group of early Union pioneers …
“… sought to improve and revitalize the community by
promoting and providing much needed services to its neglected citizens and by building in permanency through the development of an economic base that was necessary to create a healthy, self-sustaining segment of the Greater Los Angeles area”
Note the use of the term permanency. Watkins was trying to achieve exactly the same thing as out own sustainable communities policy. Watkins and his colleagues knew that it was important for people to stay within the community long term.
And guess what? Housing — and home ownership —was part of the WALCAC solution. But their model was not based on building up equity.
Under the Watkins plan home ownership was a reward for long term tenancy and contribution to the community. People built up their stake by community work, voluntary contribution and by being a good tenant. At the end of 15 years the long-standing tenant was simply handed the key and the building was theirs.
Ownership was still a massive incentive. After 15 years you had ownership of an asset that you make work for yourself. It could be sold as the family shrank or it could be passed on through the family like any other asset.
Thinking Laterally
I’m not suggesting that the Watts model is necessarily something that should be adopted here. But here is a model that is tried, tested and long lived which makes a real contribution to the ‘permanency’ of community.
Today’s problem falls on the shoulders of the newly established ‘Homes and Communiites Agency’ and it seems sensible to me that they begin to look at other ownership models rather than those built on mortgages.
Of course, the financial world would go barmy with this idea. They would tell you that it is impossible, that there is no real financial accountability in such models. But these are same financiers that have failed us and who are unlikely to be able to make a significant contribution to these programmes over the coming years. But while the days of sub prime maybe behind us the financial sector will still benefit, ultimately, from people wanting to use and exploit their own assets.
Could we do this here?
Could we do this in the UK?
Well, the idea of granting assets to communities is something that this government has championed, albeit at a level of rhetoric. They have been thinking about the making over assets from local authorities (and others) to community led organisations rather than individuals. But the principles are the same.
Even here while Ministers may have been willing the system has proved much more difficult to shift. The government even commissioned local authority Chief Executive Barry Quirk to lead a review to look at the transfer of assets and to consider what might have to be done to facilitate this. Quirk’s conclusion was that local government (and other agencies) needed no new, formal, powers to do this. However, financial considerations, audit policy and so on acted as breaks on such innovation.
You still hear people talking about the Quirk review. The voluntary sector as very keen on it, not surprisingly as they would stand to be beneficiaries under such transfer. But there has been little movement. The system just does not want to know.
The same would be true when looking at the transfer of individual assets.
But the world has changed. We do need to find new models of doing not only what we think is right but in facilitating what we know works.
Is our government brave enough and determined enough to look the world in the eye and say, “and now we’re going to do things differently’?
Change is Coming
But maybe such ideas are not quite as mad as they seem? Watts wasn’t the only community in the US that benefited from this kind of imaginative work. Chicago’s South Shore has also been the centre of some wonderfully innovative community development work. Chicago, of course, is where a young community developer called Barack Obama first practiced and then made his name.
It’s worth reading Obama’s writing on Community Development. It makes you realise that not only has he broken ethnic barriers but has broken others as well. This is a politician that has come up by a different route.
Obama is of course a politician as well as a community organiser. We have people like that here in the UK. For example, the London Communities programme has brought together unionists, communities and faith groups to work for better neighborhoods; the trade union UNISON has been one of the most important supporters of the programme.
Historically, of course, the Co-op movement was very similar although perhaps without the same degree of community development focus.
We can learn from elsewhere and there may be much to be gained by experimenting with new models and ideas. We cannot let our sustainable community policy die. The Labour movement should be vocal in ensuring that funds are found to continue the development of this work. But we need to look beyond simplistic and failed notions of equity and ownership.
Our politicians need to be bold. They need to kick the financiers into touch. It is time to find a new way.
Watts Labour Community Action Committee
Topics: Housing, Infrastructure |
January 27th, 2009 at 8:59 pm
I can never understand why we do not become more like other parts of Europe and encourage people to rent: homeowning is not the be all and end all of everything. It’s all part of the Daily Mail Way Of Life - you must own your own home - at any cost. And look where that has got us.
January 28th, 2009 at 10:13 am
I agree and disagree with that. It is important for more people to rent. But the European model would mean more rental in city centres rather than family homes in outlying estates. Estates the size of ours in Western Europe tend to have much the same problem.
Personally I am not hung up on ownership at all. But it does lead to permanence and does give people a stake, If you ask people what they want many (not all) want to own.
What the Watts programme does is provide genuine incentives and real rewards. Not a bad thing in my book.
January 28th, 2009 at 8:01 pm
“But it does lead to permanence ” True, Andy, but so did secure tenancy in council housing. My grandparents lived in such a house for over 30 years, and one would have hoped a Labour government would have built more social housing. In fact, I think i am correct in saying there has been less social housing built since 1997 then there were even in the Conservative era. That is a disgraceful record, as is the governments intransigence on not allowing the fourth option, insisting on ALMOs or Housing Associations, some of which are dreadful