How community rights can bring us more affordable and community-led housing – video

On 5th September 2018, Dave Boyle (The Community Shares Company) gave a workshop on how community rights can bring us more affordable and community-led housing.


(if the video above appears blurry when watching, click Settings and then Quality in the YouTube player and select the highest quality your internet connection can handle)

More information

Dave also provided us the following information on community rights.

If you’re looking to make a community-led housing project work, there’s a series of legal rights that can be used at various times to push the agenda forward.

They won’t be suitable for every project and have very distinct uses at different phases of your project.

In summary:

Right Ease of use Applicable to housing Relevance score
Right to bid Easy – 3 Medium – 2 6
Right to plan Hard – 1 Medium – 2 2
Right to challenge Hard – 1 Low – 1 1
Right to reclaim Medium – 2 Medium – 2 4
Right to build High – 3 High – 3 9
Right to use Medium – 2 High – 3 6

Community Right to Bid

This enables community groups to nominate land or buildings as ‘Assets of Community Value’ (ACV) which then means that any attempt to sell it in future can be stopped for up to 6 months to enable a community bid to be made for it.

It can be useful to put a marker down that the community has an interest in the asset, and to signal that it’s might better dealt with than simply by a transaction on the open market between a willing buyer and seller.

That said, the owner of the land that is nominated is only prevented from concluding a sale for 6 months. That’s to give the community time to get their own bid together, but the owner is under no obligation to accept a community bid even if one is made.

In addition, that fact that something has ACV status means is a ‘material condition’ that councillors can cite when they wish to reject a planning application to demolish the asset or change its use.

Finally, a pub that has an ACV has its ‘permitted development’ rights removed, meaning that any changes to the pub (to convert it to housing or another type of retail outlet such as an estate agents) must go before the local council for approval.

Applications are made to the local council, who have to satisfy that four tests have been met:

  1. You are eligible to nominate the asset
  2. The asset is eligible to be nominated
  3. The asset was used to directly to provide social well-being or further the social interests of the community in the recent past
  4. The asset could provide community benefit in the next 5 years

1) Who can nominate?

a) Independent, incorporated not-for-profit groups with a local connection:

b) An independent group with 21 members registered to vote in the local elections of the council in which the asset is located (or a council bordering that in which the asset is located).

c) A parish council for the area in which the asset is located (or a parish council bordering an unparished area in which the asset is located)

d) A legally-designated Neighbourhood Forum

Most housing-related groups will use the first two routes. Note that co-operatives societies are not eligible, but co-operative companies limited by guarantee with common ownership provisions could be, and co-operative community interest companies will be.

To be defined as having a local connection, you need to firstly state in your objects that your focus is on the local authority area or some smaller area, and have clauses saying that the assets of the group would be distributed to other organisations in the local area upon dissolution.

Independence means that you’re not part of a larger organisation, such as local branch of a national organisation.

If your group doesn’t formally exist as yet, then forming a local group might be the simplest and quickest route, but it’s important that you find out whether or not people have registered to vote. Some people might have forgotten, or might be new to an area and not on the local register. You can download this template constitution which you can use for the purpose of registering an asset of community value.

2) Ineligible assets

Residences and gardens and outbuildings are excluded, as are assets owned or licensed for use as airports, public utilities, waterways and harbours. The exception is a building with residences associated with it, such as a pub or shop, where the fact that there is a flat upstairs doesn’t prevent the pub or shop being nominated.

This applies to the use land is put, not who owns it; land owned by an airport but not part of their airport site is eligible, land inside the airport isn’t.

3) Directly used in the recent past to provide social wellbeing or further the social interest of the community in the recent past

Every element of this is important, so lets break it down.

Directly used means that the community value must derive from the main purpose of the asset. For example, lets say there was a school playing field that was used by dog walkers and the community more widely out of school hours, and the school wanted to sell it for housing. This would iunliely succeed, because the main use of the field is to provide playing fiels space to a school – the wider community’s value is derived indirectly from them being able to also use it.

If the asset is still in use providing the community value, then you’re laughing. But if it’s no longer being used, then the recent past is a critical definition. Councils have absolute freedom to determine what they mean by ‘recent past’. Some councils take a long view, others much, much shorter. Brighton and Hove Council doesn’t have a policy defining what it considers to be the recent past, and so whilst there is a degree of consistency in their judgements so far, there’s no guarantee that will continue. They rejected a nomination of the Hippodrome as it had closed in 2006, but have allowed pubs to be nominated that closed over 12 months’ prior; informally, it would seem like 5 years is there rough rule of thumb.

To some extent the easiest to prove can be that it provides social wellbeing or furthers social interests

– a pub, for example, can be easily demonstrated to provide this, and supporting documents to submit along with the application that can prove it might be photographs of parties and social events, or evidence that sports teams or clubs regularly used the venue. Facebook posts from former or current users stating how much they valued it, and how much it was a part of their life and that of the wider community are really helpful.

Different council have interpreted this is different ways. Some councils have rules that Hospitals provide medical care to individuals, not social welfare collectively, whilst other Council have taken a different view. The more the asset can be said to be the very reason a community exists, the better chance it has.

4) Benefit in the next 5 years

This isn’t as onerous as it first might seem. Case law has established that it’s not about showing that you have a costed business plan in place, and funding lined up, but that the pathway to it being re-used as a community asset isn’t fanciful. So, the fact that the building has closed isn’t a problem, but if it’s been closed, and a fire has gutted it, that’s a problem.

Linked to this consideration will be the planning status of a building. If a community centre has got planning permission to be converted to residences, then the chances of the community converting it back into a centre is fanciful, but if the building hasn’t yet got that permission, then the ACV process has to treat the building ‘as if’ it won’t get planning permission, rather than that it might.

Timescales

Once council’s receive a nomination, they should respond in 8 weeks or less (Brighton council have been known to take much longer).

Once nominated, asset owners have 8 weeks to appeal the decision to the council, who have 8 weeks to conduct that appeal review. If they lose that, owners have 4 weeks to lodge an appeal it to the special court. Nominating groups aren’t able to be represented as a matter of law, but in practice, a nominating group should be able to be party to the appeal process.

If the council reject a nomination, there’s no appeal for community groups, though you can re-apply to nominate; this is possible, but you should carefully consider the grounds the council has given for rejecting the initial nomination and make sure you’re providing new information that directly addresses weaknesses in the original application to nominate.

What happens then?

Once nominated, the asset stays on the list of Assets of Community Value for 5 years. In that 5 year period, an owner who wants to sell the property or issue a lease longer than 25 years must notify the council. The Council then contact the nominating group and ask if they would like to trigger the moratorium preventing a sale or lease being assigned for 6 months after the date the Council received notification from the property owner.

Only constituted community groups (listed under section a) in the eligible organisations to nominate can trigger the moratorium, and as you’ll only have 6 weeks to decide whether or not to trigger it, if you do use a local group with 21 members to nominate, you should seriously think about becoming legally registered so you can trigger the nomination and don’t get caught out by this.

If you do trigger it, then the property can’t be sold in that period. An agreement to sell it can be made, but it can’t formally change hands in that period. As stated above, there’s no guarantee any owner will accept a bid or even respond to a bid made.

How it could be used?

The right to bid can be used in several ways, but it’s important to understand the limitations. The only right it gives is the right to force a pause whilst you lodge a bid, but there’s nothing stopping that bid from being made anyway, so it tends to be a last resort to frustrate a seller who isn’t listening to the community. Often, seller’s think the community are all talk, so giving them 6 months to raise the finance to make a serious offer can be a game changer, but by the same rule, preventing a sale for 6 months could poison relationships and make any deal more difficult to achieve.

6 months isn’t a long time, all told, and if you’re starting from scratch, it’s unlikely to be enough time. That’s because most community finance raising efforts require lots of campaigning, talking and engaging with the local community to persuade them that your plans for the asset are realistic and will benefit the community, and that work can often take significantly longer than 6 months. So, if you need the community to buy-in to the project, then you need to keep the pressure up after nominating the ACV, rather than relaxing until such time as the owners decide to formally notify the council of an intention to sell.

There’s thousands of properties that have been nominated as ACVs, but less than 100 which have actually be bought after a moratorium. The ACV plays a much bigger role in the ‘dance’ between the current owners (be they the council or a private owner) and the community.

In reality, the likeliest use of the ACV process is to put a form of ‘poison pill’ on a piece of land to drive away other possible owners who don’t want the hassle, or where the owner just doesn’t believe you or your project is serious or credible.

Community Right to Challenge

Introduced at the same time as the Right to Bid, the Right to challenge enables community groups to request the opportunity to lodge a bid to run a council-provided service. Council’s can restrict  expressions of interest to certain times in the year (BHCC’s is 1st April – 30th June each year).

Eligible groups must set out their capacity (including finances and staffing) to run the service. If accepted, the Council must move to a procurement exercise in which the service is opened to all and sundry, including larger public service providers.

Community groups have rarely used the right because they can’t guarantee that the community will be awarded the resulting contract. Where the council’s services are in danger, local authorities tend to initiate discussions to see if community-based providers might offer a way to keep the threatened service active.

It’s not a very suitable right for community groups to use in developing housing, because the right relates to services, rather than assets.

More info on the My CommunityRights website here

Community Right to use (often called Community Asset Transfer)

A general power exists for local authorities to transfer assets worth less than £2M for less than their full ‘open market’ value, especially where so doing would enable wider social objectives to be met. These could easily include provision of housing on a community-led basis.

There is no formal process, so the first step is to identify land assets that could be utilised for community-led housing that are under the ownership of the council. Brighton Council maintain an asset register of all the land they own here: https://www.brighton-hove.gov.uk/content/council-and-democracy/council-property-and-land

There’s more info here at MyCommunityRights

Community Right to Build

See existing pages on CLT site

Community Right to Reclaim Land

Community Groups can force public bodies with unused land and/or building assets to make them available for use. Groups apply to the Secretary of State for Housing, Communities, and Local Government. If they agree that the asset is underused, they can order the Council to take action, which will usually mean that the asset will be sold on the open market.

As a result, it can work best where communities can see how a land asset could be made useful for their use, but where any resulting sale process won’t attract new parties to outbid them.

Given the wider financial climate of cuts to local authority services, the likelihood is that if a council has assets that are underused, and a community group wishes to use them for housing-driven projects, then they should ordinarily be amenable to considering using them or assigning a lease. Few councils have the financial freedom to not take serious offers into consideration, and the community-led dimension enables wider political support from councillors and others to be deployed in support. As a result, most authorities would have good reasons to reject a request to use land, and those good reasons would be less likely to be overridden by the Secretary of State.

There’s more info at the My Community Rights site here

Community Right to Plan

Neighbourhood planning is a potentially useful process whereby local communities (operating at the level of a ward or smaller, or across local authority boundaries) can create Neighbourhood Areas and associated neighbourhood forum made up of local people (and open to all to participate).

Once agreed by the council, this gives the Neighbourhood Forum the exclusive right to create a Neighbourhood Plan for the Neighbourhood Area. That plan has to be drafted, consulted on, examined by an independent expert, and finally, put to a referendum of people in the Neighbourhood Area. As long as 50%+ of those voting agree with the plan, it joins the existing raft of plans covering the area alongside the overall City Plan.

It could be useful to groups with grander ambitions than a small number of properties, but because it covers a wider area, is likely to be the result of a longer process of local engagement and discussion which, by its very nature, is likely to mean that the issues to be focussed on relate to more than just ensuring community-led housing is treated favourably by the planning process.

There’s more over at a dedicated website provided by Locality.

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