Community land trusts held back by complex GLA red tape

[Tony Gosling]

Community land trusts held back by complex GLA red tape

Requiring community groups to bid against the 
private sector for land is slowing the progress of London's first CLT
Liam Kelly - Guardian Professional, Monday 18 June 2012 14.39 BST
http://www.guardian.co.uk/housing-network/2012/jun/18/community-land-trusts-red-tape

Boris Johnson promised a network of community 
land trusts in his London mayoral election 
campaign in 2008. Four years and two elections 
later London still does not have a single CLT, 
let alone the promised network of them. But when 
the Homes and Communities Agency (HCA) put a 
2.4-hectare (six-acre) plot of land previously 
home to a psychiatric unit up for sale, hopes 
were high that London's first community trust was imminent.

CLTs are not-for-profit community organisations 
which develop permanently affordable housing on 
land owned and controlled by the community. They 
work with residents to ensure local housing needs 
are met, both in cost and design. The land is 
owned by the trust and the homes are let or sold at affordable rates.

In London, the East London Community Land Trust – 
a group committed to providing permanently 
affordable housing in the East End – has its 
sights set on the St Clement's hospital site in 
Tower Hamlets. It plans to develop 300 private 
properties to subsidise 28 affordable family 
homes which would be let at reduced rates or sold 
for 25% of market value. The CLT has already held 
over 300 one-to-one meetings and 11 public 
meetings to canvass local opinion and more than 
1,000 local people have purchased shares in the trust.

Tower Hamlets is the third most deprived area in 
the UK. Half of the children in the borough live 
in households receiving benefits or tax credits 
insufficient to lift them out of poverty, and 
figures compiled by Save the Children show the 
borough to have the joint highest rate of 
children living in severe poverty in the UK. Yet 
market pressures mean the average home in the borough costs £370,000.

The HCA's competitive tender process forced the 
East London CLT to align with a developer and bid 
for the site against private sector rivals. Its 
bid was rejected in February. The preferred 
bidder has not yet been announced, although the 
Greater London Authority that now controls the 
site claims a CLT will be involved and a 
community group will eventually own the freehold.

The decision to make the East London CLT bid for 
the land against competition perplexed project 
director Dave Smith. "If you've got a community 
group who are interested in a particular site, it 
doesn't really make sense to make them compete 
against other developers," he said. "Why can't 
you acknowledge the role they hold within that 
place? Why can't you say 'OK, let's recognise 
these guys and have them on the procurement side 
of the contract and then they can help choose who 
is going to redevelop the site and work with whoever wins'."

Fiona Duncan, head of area at the GLA, said it 
the decision was the "best route" to identify a 
development partner for the site. "It would be 
potentially too onerous a process for the CLT to 
engage with all the bidders," she argued.

A missed opportunity, according to Smith. "We had 
to align ourselves [with particular partners to 
make a bid] and this meant that nobody else could 
have early access to the huge pool of local 
talent and resources we brought with us," he 
said. "Our concern was always the future of this 
site and our particular neighbourhood, not one 
specific deal. We wanted local people to have a 
say, whoever was chosen. We could have been a 
resource for every bidder – and the tender process as a whole."

Smith also raises fears about the impact the 
costs associated with GLA procurement processes 
could have on small community groups. "There's a 
huge cost for a group going through the tender 
process and potentially there's a real problem 
with these small independent community groups with no real funding."

The GLA said it would be inappropriate to reveal 
the winning bidder, as discussions about how that 
developer would deliver a CLT are ongoing. The 
National CLT Network is excited about the 
prospect of London's first CLT: "As far as I know 
negotiations are going well and it's great that 
we're going to see the UK's first urban CLT in St 
Clement's," said Catherine Harrington, the network's national co-ordinator.

But some are afraid the process may lead to a 
"watered down" final scheme. "It remains a 
concern," said John Biggs, Labour London assembly 
member for the city and east. "It's difficult to 
see how it quite works without additional 
funding. Most of these schemes use the land value 
to help make the sums work but a CLT requires the 
land value to be sacrificed and donated to the 
trust, so I remain to be persuaded that this will actually work."

So is the vision of the local people lost? East 
London CLT remains "absolutely confident" the 
site will deliver permanently affordable homes at 
25% of market rent. "There's always compromise in 
these things, in looking at the design and costs 
involved, because it's a different scheme to the 
one we proposed," Smith said. "But I'm confident 
there'll be no compromise on the core principles 
of what a CLT is in terms of its own freehold and 
providing permanently affordable homes."

A GLA spokesperson confirmed the authority is 
considering a presumption in favour of CLTs on 
certain London sites in future: "That may be one 
of the things that is considered in terms of how 
we promote them and how we can best use them for London."

On a national scale, the HCA is more steadfast. 
Strategy manager Anthony Brand said: "At this 
stage we are unlikely to develop a specific set 
of guidance for sites where there is a local 
desire for a CLT, though of course we are able to 
tailor our approach to that if appropriate."

With more CLT homes promised as part of the 
Olympic legacy, and at the Chobham Manor site 
earmarked in the mayor's Olympic manifesto, those 
involved feel the procurement process has to be 
improved if the promise of a network of CLTs can be realised.

"This is good news for London and good news for 
CLTs. But we need to make sure that lessons are 
learned from St Clement's," said Harrington. 
"We're confident of a good result there, but a 
greater result still would be if St Clement's 
paved the way for a simpler and more encouraging 
approach to procurement that sees CLTs really flourish in our cities."

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