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>Please provide an update on some practical models that >can be replicated! > >>The Problem: >>High cost of home ownership in much of the UK meaning >>up to 90% of emerging households cannot begin to own >>their own home. Little government subsidy and what >>there is is directed at firefighting local problems >>rather than long term permanent affordability. >> >>The Social Invention: >>Credit where it's due, I didn't exactly "invent" this. >>The fundamentals of the ideas have been around since >>the beginning of the building society movement. And >>more recently it builds on work done by New Economics >>Foundation, CDS Cooperatives and the Community Finance >>Solutions group at Salford University. >> >>So a growing movement around the country is now >>promoting a renewed interest in mutual financing >>solutions to help each other get on the housing ladder >>through a vehicle called Community Land Trusts. >> >>It's not always easy to describe succinctly, but >>basically it's a three stage process that means that >>communities gain long term control of their own >>development and householders could begin to build up >>equity stakes in their home from little more than >>social rent rates. >> >>Step one: Community Land Trust acquires land and holds >>it in charitable trust for the benefit of the local >>commmunity in perpetuity. Land could be gifted, >>donated as part of developers' affordable housing >>quotas, or even bought in the open market (in some >>cases we believe we can afford to pay up to 50% of >>market values and still produce 100% affordable >>housing). >> >>Local community gets together to design development to >>address identified community needs for affordable >>property assets. Mostly this will be housing, but it >>could be small business units or similar. This creates >>a "mutual housing partnership" which takes out one >>huge commercial rate long term mortgage to pay for the >>buildings. Residents become members of this >>partnership. Their monthly payments go towards >>covering the costs of the big communal mortgage. >> >>So long as households from all the income range >>excluded from mainstream market priced housing >>participate, overall their payments will cover the >>communal mortgage. They get shares in the development >>according to how much they are assessed as being able >>to afford which are linked to a local property values >>index. >> >>When a household wants to move they sell on the >>responsibility for their share of the communal >>mortgage to a qualifying buyer. If the incoming buyer >>cannot afford the same amount, the communal mortgage >>can refinance to make up the difference. >> >>At the end of the day you gain a proportion of the >>index growth in the original value of your share of >>the mortgage. >> >>You get the house you need at a rate your can afford. >>The local community retains a long term interest.
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