In the United Kingdom, there exists a chronic lack of affordable housing to meet existing demand. Current structures—in terms of policy, finance, and legal mechanisms—inhibit the creation of an affordable housing solution at the appropriate scale and over the long-term. Bob Paterson is creating an intermediate housing market through a set of tools and resources he has developed to promote Community Land Trusts as the preferred mechanism for providing UK citizens with equal opportunities for home ownership.
The New Idea
Bob is creating an intermediate housing market where citizens themselves take responsibility for the distribution of wealth inherent in land and its stewardship for generations to come. In order for this housing market to function properly, Bob establishes three core elements. First, he champions new tools and resources to reinvent and spread Community Land Trusts as a vehicle whereby land is used to provide affordable housing and its value is held in trust for the community. Second, he creates innovative financial mechanisms, such as a community land facilitation fund, that he then works with mainstream lenders to adopt. Finally, he campaigns with government to change policy and create a new legislative framework for community asset and land ownership. By working in this multifaceted way, Bob seeks to increase the scope and control of affordable housing and transform the housing market throughout the U.K. Land values will be captured by communities rather than individuals, and benefits will be passed, in perpetuity, to citizens who were previously excluded from these benefits.
Across the U.K., it has become harder and harder for low-income individuals and families to find affordable housing or purchase a home. While property prices have risen dramatically, wages have been stagnant.
Contributing to the problem, state housing and subsidized housing have decreased in recent years. After the Second World War, vast tranches of social housing were built by local authorities. In the 1980s the majority of this state-owned housing stock was privatized through ‘right to buy’ legislation. Thus assets that previously existed for the benefit of communities were sold to individuals and lost to the communities that needed them most. This is further compounded by a policy environment that promotes the centralized provision of housing, with little or no opportunity for community involvement and control.
The Community Land Trust (CLT) mechanism was first developed in Britain and Ireland out of experiments in practical land reform to capture land value for community benefit. They led to the development in 1903 of Letchworth Garden City using the ‘cooperative land society’ system devised by Ebenezer Howard. Since then perhaps a dozen or so have been established in the UK, struggling against financial, legislative, and cultural barriers that make success very difficult. Although they serve to illustrate an opportunity, this lack of scale means CLTs currently contribute almost nothing towards addressing the U.K.’s problem of increasingly inequitable access to land and housing.
Until recently access to the information and knowledge needed to establish a CLT has been a major barrier to development, with groups having to reinvent the wheel each time one was established. The resulting lack of a critical mass of activity around CLTs has meant to many that their effectiveness remains unproven—there are simply not enough of them in existence. In this way they are perceived as risky by both current players in the social housing sector and by financial institutions that provide capital.
In order to create an intermediate housing market through a Community Land Trust model, Bob has had to first establish a number of key elements that will support such a market. The first element concerns knowledge sharing at a large scale. Bob created the definitive information source on CLTs, founded a CLT in his home village in southwest England, and advised the government on how to support CLTs across the UK through changes in legislation and policy. His website is a collective repository of information for communities developing CLTs both in the UK and beyond. Bob has secured a baseline for action by gathering anything related to CLTs and making it publicly available.
The second element is the creation of an appropriate financial mechanism. Bob is establishing the Community Land Trust Facilitation Fund (CLTFF) that will see at least fifteen new CLTs financed. This fund is raising £10M to provide: Pre-development grants and loans to prepare feasibility studies for CLTs; funds to develop business plans, engage the community, plan applications and acquire the land; development finance; and, technical assistance to support CLTs in becoming sustainable. Through the development of the Fund, Bob is creating a new financial mechanism tailored specifically to the needs of CLTs. In addition, by supporting fifteen CLTs the fund will provide a broad enough sample that proves CLTs can be an effective way of delivering social housing. In this way, the fund will increase demand, and as a secure financial investment, reduce the cost and increase the supply of capital needed to make CLTs more deliverable.
The final piece of the jigsaw for Bob is to ensure that legislative and policy change occurs. His work in this area has recently culminated in legislative changes and government funding being proposed for CLTs in the government’s 2007 Green Paper (a pre-legislation consultation document), paving the way for CLTs to play a significant role in addressing the UK housing crisis.
Going forward, Bob will enlist the heads of the various CLTs that have been established to help him champion the concept. Successful demonstration of the CLT model to government and financial institutions will encourage further adoption resulting in the establishment of the intermediary housing market—and a sustainable solution to the affordable housing issue that also represents a paradigm change in access to the asset-based economy.
Bob attended a pacifist public school where the British economist and social reformer William Beveridge was president. Bob clearly remembers speech days at school with Beveridge, and considers his early education, along with his parental upbringing, as key to the development of the ethos that underpins what he has achieved in his career.
Bob left school when he was seventeen to work in an aircraft factory. At twenty-one, he returned to study economics at university where he became politically active. Upon graduation, Bob worked briefly in local government but recognized it was not the best avenue to pursue his interest in improving societies and took a full-time position as CEO of a housing association he had previously been involved with on a voluntary basis.
Bob grew this housing association from an organization with a handful of properties to one with more than 5,000. This involvement in housing triggered a range of other entrepreneurial activities including founding a housing scheme in India in partnership with Paroda University. While he was involved in this project Bob observed that many UK-based but internationally focused housing projects were acting in isolation and not benefiting from contact with similar efforts. This motivated him and a group of colleagues to found the award-winning organization called Homeless International immediately following the UN International Year of Shelter for the Homeless in 1987. In the 1990s Bob founded another organization called the Young Builders Trust that is now a major provider of apprenticeships for troubled youth across the U.K.
In the mid-1990s Bob and his wife decided that it was time for something different, so they moved from their home in South East England to a small village in South West England called Holsworthy where they built their own house and where to this day they manage woodland and a kitchen garden. At the same time Bob was awarded a scholarship from Lever-Hulme to study different ways for people to escape poverty. During this study he ‘rediscovered’ the Industrial and Provident Society (IPS) model, originally established in the 1800s as the legal vehicle for the development of mutual approaches to work and housing. IPS models had fallen out of use during the 1970s to 1980s when increased privatization collapsed the old mutual organizations. Bob became part of the movement to reintroduce them as a viable alternative to the predominant financial and legal structures.
This led Bob to think about how to adapt the structures of the IPS model into the field of economic betterment of disadvantaged people and over the last ten years he has been working to develop a concept called Community Reinvestment Trusts (CRTs). CRTs have pioneered the field of both business and individual microfinance in the U.K. As a direct result of Bob’s work, twelve CRTs have been established and are paving the way for the U.K.’s microfinance community.
Now, after years of working on housing and financial exclusion, Bob has migrated to the tackle the larger problem of housing and shelter through the creation of an intermediate housing market.