We traveled to Leeds this Saturday with our home-made
vegetarian muffins for the 'bring-a-dish' meal to attend one the 'Learning from LILAC' days organised by the housing cooperative group based in Leeds. The
day was an opportunity to meet the residents / members, tour the site and share
experiences and lessons gained from the unique pioneering housing development.
The particular focus of the event was looking at the finance model
behind the development and the approach they took for affordability.
At the
surface level, the underlying financial model used to support LILAC is fairly
simple. Yet, in practice it becomes a lot more complicated … although the
cooperative members “… prefer to call it sophisticated rather than complicated” due to the number of people /
household involved and the levels of checks and controls on the collective
finance that this requires.
At the
core, it is a Mutual Home Ownership Society (MHOS)
where LILAC owns the property / assets and it operates an equity based
leasehold scheme. At present, LILAC as a society is responsible for the
outstanding mortgage repayments together with the maintenance and management of
the Project. This form of incorporation and legal structure was decided by the
initial members of the group after looking at a range of alternative ownership
models; including the options of a Community Land Trust (CLT) and other forms
of cooperative societies.
There are
many examples of similar MHOS models, albeit at a small scale throughout the
UK, where collective ownership works well for single households interested in
and willing to share spaces (rooms and facilities) and costs while still
gaining “… a stake in the housing market that is increasingly becoming out of
reach of too many households”. What is pioneering with this project is the
scale of the intentional community, the collective ownership and the
implications that this has for many details aspects of the managerial, legal
and operational aspects of the development.
The
formal group emerged from a history of radical and challenging action-research
within the city of Leeds and a shared view that dominant capitalist models of
urban development and regeneration should be challenged with alternatives that
value community and sustainability.
And the pioneering development began with these inherited shared values set out
“… on the back of a beer mat … (p)assion drove the project
but it is the complex financial model that made it happen.”
It is a
very deliberate response to several threats and trends, including social
cohesion, affordability and environmental sustainability and in initiating the
project it was intended to become a social statement … one that inspires others
to re-evaluate their conventional lifestyles.
These
founding principles have in effect become the success criteria for the project
as a whole. It is intended to help cooperative members gain access to
affordable and “high quality” sustainable housing “with a relatively small
financial commitment”. It gives members, and only members, rights to own shares
in the society. So it is wholly owned and managed by those who live there.
The legal
structures emerged from a series of community agreements between the
co-founders. It has followed this course, and in effect “designed the
financial, ownership and on-going management model to suit the original
members” … and … “reflect their social and political values”.
Like any
cooperative society, LILAC adheres to the underlying cooperative principles and
remains in the control of its members and operates for the benefits of its
members. This aspect of membership is different from many other mutual and
provident societies and / or community benefit societies, as in practice you
can only be a member of the society if you actually live within the project.
It has
benefits for those members who may find it difficult to access traditional
forms of housing and mortgages as it explicitly allows people “… with
unpredictable employment or incomes who could not get a mortgage” to become
members”. It deliberately views “housing as a service rather than a commodity”
and prevents any individual members from actually owning the dwelling they
occupy. Rather, they maintain a share in the mutual equity / ownership of the
project as a whole. Any limitations on the equity owned by individual members /
households has been deliberately designed to “… foster economic equality
between members” and “through mutually linked finances, it promotes sustainable
social and economic development”. In doing this “… it challenges the existing
unsustainable housing model which has seen house : earning ratios rise from
2.7:1 to 5:1 in the last 20 years” within the UK. One of the members decried
their own experiences of working in the public service in London and realising
that after “… slogging away for a long day, week, year … only to return home
and realise that their house had made more money in rising values over the same
time period”.
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Lilac’s Mutual Home Ownership Society adapted from; Chatterton, P (2013) “Towards an Agenda for
Post-carbon Cities: Lessons from Lilac, the UK’s first ecological, affordable
cohousing community”. International Journal of Urban and Regional Research 37(5) 1654-1674.
|
The
details of the mutual ownership, with all of the peculiarities needed to
provide the flexibility for a mix of low and high earners, those with variable
income or changing employment status. Options allow for people to more within
the development as their circumstances change, through agreement vary the
number of shares they own and make contributions to a common Equity Fund that
is used to support gaps in funding whenever there is a need for refinancing,
unexpected repairs and / or maintenance.
A basic summary of the costs relating to the project
... a total project cost of £3.1 Million with a cost to the cooperative members
of £2.6 Million after consideration is made for a business development grant
attached to the prototyping of the innovative Modcell construction method as it is first applied
commercially to a residential development in the UK.
The pie chart shows the approach
to finance for the 12 apartments and 8 houses in the development. The relative
build cost has been split between the different units according to size. The actual construction cost of the homes was £1081 per square metre.
Land cost was £204,000. After initial cooperative members raised a minimum of
10% deposit for each of the individually allocated equity shares, the resulting
mortgage to Lilac was £1.5 Million.
The
environmental credentials of the scheme are evident in many different aspects,
ranging from the innovative construction method and the use of ‘Modcell’
pre-fabricated straw bale insulated panels, an integrated sustainable urban
drainage system, shared allotments and pocket park, to the incorporation of
renewal energy technologies. Indeed, the environmental performance of the
building fabric ensures low energy and low running costs, with the availability
of the Feed in Tariff (FiT) for the photovoltaic panels
covering the energy running cots of the common house. It is also demonstrable
that the approach to collaborative design and collective learning in LILAC,
including the performance specification and the relationship with actual rather
than speculative lifestyles; has benefits in actual performance and low carbon
low energy usage.
It is a
redevelopment of a former school ‘brownfield’ site, well connected with public
transport, excessive cycle ownership / usage, and informal car sharing that
allows the project to have significantly reduced levels of car parking compared
to a typical speculative development of its size.
In
practice, it is more likely that the transferable aspects of the project will
be the social, community governance and environmental values behind the
development rather than the bespoke details.
It is a lesson about following a different development process,
starting with common values, ground in appropriate management arrangements,
legal structures and then continuing to learn. In their own words “… (w)e built a new financial model, a new legal model, a new design model …
(t)here was so much work to be done and it required a huge amount of
perseverance for this group of ordinary people."
Unsworth, R., Ball, S., Bauman,
I., Chatterton, P., Goldring, A., Hill, K., Julier, G (2011) “Building
resilience and well-being in the margins within the city: Changing perceptions,
making connections, realising potential, plugging resources leaks”. City 15(2) 183-203.
Chatterton, P (2013) “Towards an
Agenda for Post-carbon Cities: Lessons from Lilac, the UK’s first ecological,
affordable cohousing community”. International Journal of Urban and Regional
Research 37(5)
1654-1674.
Baborska-Narozny, M., Stevenson,
F., Chatterton, P (2014) “A Social Learning Tool – Barriers and Opportunities
for Collective Occupant Learning in Low Carbon Housing”. Energy Procedia: 6th
International Conference on Sustainability in Energy and Buildings
62 492-501.
Chatterton, P (2015) Low
Impact Living: A Field Guide to Ecological, Affordable Community Building (Earthscan, Abingdon).
