Saturday, 6 February 2016

Affordability lessons from Lilac (Low Impact Living Affordable Community), Leeds

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[1]. 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.”[2]
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”.

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[3]. 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[4].
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[5]. It is a lesson about following a different development process[6], 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."[7] 

[1] 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.
[2] Dale, S (2015) “Why LILAC co-housing scheme in Leeds is still setting trends two years on”. The Yorkshire Post 8th April. [accessed 4th February 2016]
[3] 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.
[4] 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.
[5] Transition Network (2014) “Paul Chatterton on Lilac Leeds Co-housing”. [accessed 4th February 2016]
[6] Chatterton, P (2015) Low Impact Living: A Field Guide to Ecological, Affordable Community Building (Earthscan, Abingdon).
[7] Paul Chatterton quoted in; Anon (2014) “Top 10 eco homes: Lilac, Bramley, Leeds”. Guardian 18th April [accessed 4th February 2016]

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