As available land rapidly disappears in cities (in addition to rural areas), community land trusts may be the solution needed to ensure that affordable and accessible land remains. Rather than pricing property based on the housing market, a community land trust bases it on the median income of the area surrounding the property. In London, a hospital-turned-housing development has been partially bought by a community trust, and as a result offers one-bedroom apartments at less than half of what the market price is.
Here’s what the future holds for this community land trust developments, in London and other cities:
Community land trusts operate around the principle that housing is a necessity, not a financial asset. CLTs are member-driven nonprofits that, using a combination of public and private funds, buy up property and place it into community ownership. Then the CLTs lease properties at rates that are tied not to market forces, but to local incomes; CLTs calculate prices by taking one-third of the local median wage, multiplying it by the standard 25-year mortgage rate of 5.5%, and adding a 10% deposit rate. It’s a model that’s designed to apply in perpetuity: If tenants decide to leave the property, they must sell it at a price that remains pegged to income, foregoing the personal financial benefits of a rapidly appreciating housing market.
In 2014, with the political backing of then-Mayor Boris Johnson, the GLA encouraged the East London CLT and Galliford Try to collaborate on a plan for the site. This month, tenants will move into the 23 CLT units in St. Clement’s. While the 23 CLT units in the St. Clement’s property are just under a third of the development’s 35% affordable quota, and an even smaller fraction of the total 252 homes, they carve out a permanently affordable bastion in the rapidly gentrifying area.
The East London CLT is the capital’s first such development, and it’s likely not to be the last. After being imported from the U.S in 2006, the organizations have exploded across the U.K. in recent years, growing from 36 groups in 2010 to more than 255 now, and accounting for more than 700 homes. While CLTs initially took root in middle-class rural towns in the U.K. as a way to re-animate communities and preserve stability, interest in the model has spread to urban areas in recent years. Housing and planning expert Stephen Hill told the Guardian that CLTs “have the potential to be a hugely disruptive force. They allow people to say ‘the land market doesn’t work in this area, so we’re going to get together and change it.’”