The Business Case for Community-Led Housing

Community-led housing can and does support the strategic priorities of local authorities and housing associations in ten important respects:

It adds to the supply of new homes, particularly those not readily delivered by the market

As well as tackling larger schemes on standard sites, community-led housing organisations can overcome the barriers presented by small, often complex sites that may be of little interest to mainstream developers, meeting a local need that would otherwise not be met.

It can provide genuinely and permanently affordable homes for people in need

Community-led housing provides a way of delivering permanently affordable rented homes, with rents linked to median incomes, capped at Local Housing Allowance rates or up to 80% of a market rent, as well as also providing different forms of low cost home ownership. Many CLH groups have developed new and locally tailored products to address particular affordability issues in their communities.

It can give social housing tenants a stronger voice

Public sector tenants have an increasingly important role to play in the management of social housing, post-Grenfell. Community-led housing can help to ensure the safety and security of local communities, tackling familiar issues around equality and diversity, whilst giving a voice to those who are marginalised and vulnerable.

It diversifies the housing market and increases choice

Many community-led housing schemes involve a mix of tenures that not only enable local people to remain in their area but also maintain the viability of the community by increasing choice and diversity.

It can reduce the opposition to development

Homes targeted at local people, that are genuinely affordable by them and available to them on a long-term basis without, in many cases, a Right to Buy, can be decisive in winning local support. This applies as much in urban areas as rural ones. Community-led housing is also becoming an increasing feature of Neighbourhood Plans in many areas.

It can support urban and rural regeneration and help return empty properties to use

In both urban and rural areas, community-led housing can play a role in refurbishment as well as new provision. Working closely with local authorities and housing associations, existing community organisations, particularly those with assets already, can help to add to the available housing stock through acquisitions and conversions of unused housing, attracting new investment, rebuilding local confidence in neighbourhoods and strengthening local economies.

It can empower local communities, helping them to become more self-reliant and resilient

Encouraging communities to become more sustainable and resilient is a key feature of many community-led housing schemes. Empowered communities make decisions about their areas, often leading to practical, self-generated solutions to local problems. Community-led schemes enable local people to remain in their area and help maintain the viability of their community.

It can enable older people and vulnerable people to live well in their own communities

Community-led housing schemes can enhance well-being and reduce dependence by enabling older people to have a role in decision-making and the chance to be part of active and self-sufficient communities that encourage mutual care and support. They can help local authorities manage demand for support services at a time of public spending pressure.

It can lever in financial and other resources that are not available to other housing providers

Community-led schemes have access to significant dedicated capital and revenue grants and loans, both from Government and the social investment sector. They are increasingly using crowd funding and community bond issues to raise their own scheme funding, keeping the homes they produce genuinely affordable to local people.

It can strengthen and help sustain local economies

Community-led housing schemes often make use of local labour and can re-invest surpluses in the local economy to help maintain or improve community facilities and services. In rural communities this can mean bringing pubs, post offices and shops into community ownership. In urban areas where market failure is a problem, it can increase confidence in a neighbourhood, bring stability and help attract further investment.

All these factors are seen as important by many local authorities. They reflect the findings from the Co-operative Councils’ Innovation Network’s Commission on Co-operative and Community-Led Housing. They are also supported by some housing associations, both large and small, particularly members of the Placeshapers Group.


Last updated in March 2018