Using Community Land Trusts To Boost Local Economy

Supporting local businesses is imperative for a sustainable community as they circulate money around the area. This can be compared to larger multinational companies which typically move money away in the form of profits, for example a typical McDonald`s fast-food restaurant pulled as much as 19% of their annual sales out of that community (Dayton Gunn, 1991). Surely keeping more money circulating around a local community can only be a good thing. One possible method of plugging these leaks and encouraging more economic circulation is through the use of Community Land Trusts. This essay explores this specific method of capturing wealth, how they benefit people within communities and the wider place itself. To better understand how community trusts can benefit local people effectively this research also determines what typically triggers the formation of trusts. Finally this essay examines the Coin Street Community Builders story as a case study of a community uprising and the formation of a community trust.

Community Land Trusts

The Garden City Model proposed by Ebenezer Howard in his early 20th century work is what planning can achieve, but the real innovation is not in the urban design but its economic and financial model. The model in essence is the retention of all land by the community, allowing a stream of income to be generated (Rydin, 2013:126). The main advantage of this economic model is that more money gets circulated and invested within the community creating a multiplier effect (Dayton Gunn, 1991). The problem in current neighbourhoods is not a lack of money entering the local economy, but what businesses are doing with that money afterwards; typically this money gets siphoned away (Lewis and Ward, 2002:2). Pouring a large amount of funding into an area in the hope it will attract large businesses is not as effective as local authorities believe (Lewis and Ward, 2002:2). A more tactful way to make funding work more effective is proposed by capturing land values and retaining more economy in the local area through the use of Community Land Trusts. The essence of Community Land Trusts (CLTs) is the simple idea that land within a community or neighbourhood is protected and usable for reinvestment by and for the long-term benefit on that community (WAG, 2010:5; also see, Bendle, 2006). It is not for profit, it is community controlled, it is managed and developed by the community, and typically used to build affordable housing (but can be used to promote culture, local enterprise, job and social opportunities, community facilities) (BSHF, 2005:1; WAG, 2010:5). While the 2011 Localism Act encourages the wider use of CLTs (Rydin, 2013:134), typically they are formed through a clear uniting of a community against a development/developer they strongly disagree with as with the Coin Street Community Builders case study that will be examined further in this essay (Bindley et al, 1996:74-77; BSHF, 2005:1). How Community Land Trusts Work Imagine a community with a large supermarket chain on the outskirts of a town. While this supermarket will not take all custom from local businesses, it is enough to start closing some of them down with their undercut prices. The big chains typically buy bulk from other big companies; they employ large accountancy firms and not the smaller local businesses; instead of a local cleaner they hire internal contractors. On the other hand, local farmers would sell their produce to local grocers, that local grocers after some success would perhaps expand their shop, employing extra locals. The local accountants can pay the grocer a little extra profit from their successful business, and on a Friday, the grocer decides to order a take-away from their local fish & chips shop and a few drinks in the pub. In one scenario, money is moved away from communities while the other shows it being spent on multiple occasions within the local town, creating a multiplier effect (Lewis and Ward, 2002:4). The problem is that the local people can only control the money they have, and if a chain business wants to move profits to somewhere else, they can. CLTs can be used by communities to have much more control over where money gets circulated, such as promoting local economic development. As they are a non-profit organisation, they can develop housing or rent shop spaces at a lower-than-normal rate and subsidise businesses and services that the community want (such as preserving open land) (Dayton Gunn, 1991). In terms of housing, in May 2009, the differential between the average current house price and the average age was a factor of 7.1. This means that the average home costs over 7 times the annual house income compared with the 3 times annual house income allowed by mortgage lenders (WAG, 2010:3). CLTs have the opportunity to separate the value of land from the house standing on it allowing that house to be rented to low-modest income families who need it (BSHF, 2005:3; WAG, 2010:5). Communities that become concerned about the lack of affordable housing, feel that they have little say in future developments or want more community owned benefits may look towards setting up a CLT (WAG, 2010:6). This is the case for the Coin Street Community Builders. The Coin Street Community Builders Coin Street was the field for a fierce battle between the local community and a major developer. In 1984 this struggle culminated into a victory for the community group where they gained control of the site in question and started to implement their own development scheme (Bindley et al, 1996:74). Waterloo Station dominates this area by bringing in the commuters from the outside to work here. This creates tension between the local residents and the outsiders with economic interests; not the employees, but those wanting to build the large scale office blocks which were the norm during the seventies and eighties. Most of the local workers are low or semi-skilled; mainly printers and distributors (Bindley et al, 1996:76). What really rattled the local's cage was a proposal to extend the Imperial War Museum into open space despite there already being a shortage. The successful opposing of this became the focus for the community to develop their own planning strategy. The Waterloo Community Development Group (WCDG) invited public meetings with local councillors and planners to hear their issues (Bindley et al, 1996:77-78). Their issues are reflected in many communities across the country and links to a deeply rooted problem of economic as well as social poverty (Middleton et al, 2005:1711-1712). Their argument was that the changing types of shops, increased office spaces and loss of public spaces were driving people away. The loss of people meant that local businesses and schools were closing, driving more people away, and the effect snow balls. Eventually the varying developers lost momentum and spirit and sold their land allowing the community group to buy it very cheap and setting it up as a trust. After achieving planning permission, the substantially increased land value allowed for several mortgages to be taken out, mainly from Lambeth and Southwark Boroughs. The housing cooperatives formed to build housing carried several advantages: one was the ability to rent property to low income families as mentioned earlier in this essay; the other was that this type of arrangement meant that the houses were exempt from the 'right-to-buy' policies of the time (and still are in the current economic climate). The right-to-buy policy would have been disastrous for the housing cooperative as it allowed tenants to purchase their homes at a discount rate. Although this would give an initial cash injection, the purpose of a CLT is to retain land and lock the value for the benefit of the community. As well as achieving permission to build affordable housing, the community was able to acquire funding for: 126,000 sq.ft of light industrial workshops; 67,000 sq.ft of shopping and leisure facilities, including a restaurant; several museums; and crafts market and workshops (modelled on Camden Lock) (Bindley et al, 1996:86-88). All of these may not be the most profitable of developments, but it creates new jobs for the community, new places for money to be spent at other local stores and businesses, maximising the multiplier effect. Others saw potential in the area and wanted to inject their own community spirit; David Sainsbury and the Gatsby Charitable Foundation funded 20 scholarships attracting new talented designer-makers to fill their workshops and retail studios (a win-win situation) (Coin Street Community Builders, 2008;23-25). It also creates new points for locals to meet, interact and network, developing trust and community spirit, resulting in a richer social economy; this too contributes to the local economy (Coin Street Community Builders, 2008:25; Middleton et al, 2005:1711-1715). Problems Community Land Trusts have great potential for London as well as other cities or countries around the world but are not the solution to all local economic problems. Similar tactics have been used not as successfully in Sub-Saharan Africa highlighting some problems relevant to the UK (BSHF, 2005:15): . The rules of the CLT were too complex for the average person to understand and use. . People could not afford to continue to pay the lease charges when their economic circumstances changed. . There was a need for clarity, consistency, and fairness in the process of allocation of assets and subsequent transactions. . There was a need for clear records to be kept of all transactions. . It proved crucial to have a cohesive and functional community group and this was found to be of greater importance than the quality of the legal instrument being used. . Is a strong sense of community against a common cause required to polarise efforts and 'get the ball rolling'? The CSCB had a slight advantage with the complexities of CLTs in that as a group they could muster sources of professional help amongst themselves, these services includes: architectural; building; lawyers; and public relations (Bindley et al, 1996:81). These roles can cover a lot of the bases mentioned above but not all communities have access to this. The community in Coin Street were also polarised against the common foe which gave them focus. While this is essential, it is not a guarantee of success, similar to the London Docklands Development (Rydin, 1999:192). Although it seems that CLTs form an unbreakable community bond, in truth they too generate a lot of tensions. Generally they were in agreement with what to do with Coin Street, but not so much about the implementation and who should benefit (Bindley et al, 1996:93-94).

Conclusion

It is clear that Community Land Trusts hold many advantages; the key ones being the ability to capture and lock land values to a trust and locking land use to the local community for their benefit. Another advantage is the independence that locals and communities gain in terms of funding their own developments and deciding what developments they want; not what the market is allowing to be most profitable. If used correctly with the correct developments and nurturing, the economic gain can be substantial for a local community. 'Correctly' has many connotations; this could mean to increase social housing, more affordable work spaces, park spaces or education facilities. The two things these all have in common is making sure that the trust provides what the community truly want and encouraging people to enjoy spending their money in their community. This creates the multiplier effect meaning that local businesses spending money at other local businesses will go on benefiting the whole community. The rent paid by these businesses to the trust then gets re-invested into the community to pay for new things. All the residential accommodation built so far in Coin Street is social housing available at a rent affordable by those on low incomes (Coin Street Community Builders, 2008:15); this is not profitable, but it is an example of community spirit. The community involvement and their added stake in the local context allows them to have a substantial say in what goes on; this is also key for the success of CLTs. In the case of the Coin Street Community Builders, the South Bank Partnership was formed in 1995, bringing together members of the Employer's Group, the leaderships of Lambeth and Southwark Councils, local ward councillors and regional bodies such as Transport for London into the same room to discuss the future of their community on equal terms. It may seem that Community Land Trusts are the 'Holy Grail' for improving local economy and providing opportunities but it is not a one-size fits all solution to the problems of local deprivation, inadequate housing supply and the lack of active citizenship (BSHF, 2005:7). The case with the Coin Street Community Builders proves that Community Land Trusts can give the power and tools for locals to form their community into something that does not strive for profit, but for enriching their local economy, local opportunities and social enterprise.

Bibliography

Brindley, T.; Rydin, Y.; and Stoker, G. (1996) Remaking Planning: The politics of urban change. Routledge, London, UK. Building and Social Housing Foundation (BSHF) (2005) Redefining the Commons: Locking in value through community land trusts. BSHF, Leicestershire, UK. Coin Street Community Builders (2008) Coin Street Community Builders: a very social enterprise. London, UK. Dayton Gunn, H. (1991) Local Government`s Role in Retaining Capital for Community Economic Development. www.sustainable-city.org/articles/capital. Accessed 21st April 2015. Lewis, J. and Ward, B. (2002) Plugging the Leaks: Making the most of every pound that enters your local economy. New Economics Foundation, London, UK. Middleton, A. et al (2005) 'Social Capital and Neighbourhoods that Work', Urban Studies. Vol 42, No. 10, 1711-1738. Rydin, Y. (2013) The Future of Planning: Beyond Growth Dependence. Policy Press, University of Bristol, UK. Welsh Assembly Government (WAG). (2010) Community land trusts: capturing land value for communities. Welsh Assembly Government, Cardiff, UK.

Further Reading Bendle, S. (2007) Community land trusts: a practitioner`s guide. (Ed.) Dayson and Paterson. Salford, UK. Buckner, L. and Escott, K. (2009) 'Jobs for communities: does local economic investment work?', People, Place & Policy Online. 3/3, pp. 157-170. Aiken, M. et al. (2011) Community organisations controlling assets: a better understanding. Joseph Rowntree Foundation, York, UK.