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Community ownership of assets

Number: 
6
Perhaps derelict sites such as this one might be better developed by the community itself

Challenge

Development, like money and energy, is usually something done to communities, rather than by or with them. How can we step outside of that by enabling communities to own their own assets, so that any development directly benefits them?

Description

Development is a particularly large hole in our leaky bucket (see Tools for Transition No.19, page xx) and is something over which communities have very little control. It is also a huge driver for social inequity, for taking money and value out of communities that could have been retained there. As the authors of The Spirit Level: Why equality is better for everyone argue, communities with greater equity are healthier, happier and more resilient.

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Solution

Steadily increase community ownership of assets through mechanisms such as development trusts, community bonds and shares. Bring land and property into community ownership for development, Community Supported Agriculture or renewable energy projects.

Full description

Development is a particularly large hole in our leaky bucket and is something over which communities have very little control. It is also a huge driver for social inequity, for taking money and value out of communities that could have been retained there.

As the authors of The Spirit Level: Why equality is better for everyone argue, communities with greater equity are healthier, happier and more resilient. Communities taking charge of their own assets is a key tool for building greater social justice and empowerment.

“For hundreds of years the idea of community owned assets has run like a golden thread through our social history. Generation after generation, people have called for a different way of doing things, where land and buildings would belong neither to private landowners nor to the state, but would be held instead in trust and controlled by local communities, to provide amenities and create prosperity for the common good.”  Steve Wyler

Localisation often depends on communities owning and developing their assets. While this is not always essential, it is usually very beneficial. For example, if your community wants a crèche, it doesn’t need to own the building. I asked two experts in the field of community asset development, Sarah Neuff from Coin Street Community Builders (a community-owned development on the South Bank in London) and Dave Chapman of Locality, (a national network of over 600 community-led organisations) why they felt communities should own their assets.

Sarah’s reasons were as follows.

  • If your community organisation has a freehold or long leasehold, it goes on the organisation’s balance sheet as an asset. This puts you in a much stronger position to act as a business.
  • Any added value that you can generate through ownership of that asset benefits the community and pays for services that are otherwise hard to fund.
  • Thirdly, “the other reason why it’s important is around control and independence, and that’s both political and financial controls. If a community owns its assets, then the community itself can decide what’s important within that community and it’s not subject to the vagaries of say, changes in local government or changes in government funding even. All of those things mean that you can actually keep going regardless of the chaos around you, you can control your own situation, earn your own money and deliver your own balance of business in that way.”

To these points, Dave added self determination. This means that a community gains control of where it wants to go; where it sees its future economic direction. While other approaches tend to suck resources out of a community, this enables more money to cycle locally. It leads to redefining the idea of profit. He elaborated:

“It means that you start to return profit – which is either job creation, local wealth in terms of social capital that might be gained through training, education, supported employment schemes or opportunities to access services that don’t currently exist because public sector providers can’t provide them – you get the opportunity to create that mix at a local level.”

So why do we not see communities everywhere acquiring assets and developing them in their long-term interests?

According to Sarah, the main reason is because it isn’t easy. I asked her what she sees as being the key things a Transition initiative needs to succeed in such a project.

Firstly, she suggested, they need a strong community spirit. They need good leadership, a strong vision, and to be tenacious, as they will be in for the long haul. Sarah reminded me: “Coin Street bought the land 26-odd years ago, and that was after a seven-year campaign, and we’re still developing – we still have two undeveloped sites.” They also need to check feasibility rigorously if they are not to waste a lot of time, money, energy and goodwill. The group must have the skills to run a business. Scrutinise your organisation, and bring in new people if possible.

For Dave, legal structures and organisational form are essential. There must be access to people who understand bureaucracy, finance and business planning. The ideal projects, he suggests, are “a mix of people, plan and passion”. For Sarah it similarly boils down to “actually understanding what it is you actually want to do, being imaginative about what the opportunities are in your local area and creating something which is strong, positive and everybody can get behind. This is actually the first step.”

Almost since it began, Transition Town Totnes has, with the Totnes Development Trust, been trying to buy an eight-acre site in the centre of town, next to the train station. At the moment, thousands of people’s initial impression of Totnes when they arrive in the town is of a decrepit ex-milk-processing plant.

The project that emerged is called ‘The Atmos Project’ (named after Isambard Kingdom Brunel’s experimental ‘atmospheric railway’, which was piloted there but never took off because of technical problems). The intention is to bring the site into community ownership and develop it so that it catalyses a green/Transition local economy. It would offer low-carbon work units, a School for Food Entrepreneurship, a restaurant/venue space, a microbrewery, affordable low-carbon housing and a ‘hub’ for emerging businesses and edible landscaping. It has been a long, involved and testing process.

Dave, one of the key movers behind ATMOS, explained why the community should acquire that asset.

“To start with, owning a chunk of real-estate land – that in itself is quite significant. It’s a context changer, because all of a sudden you’re taken as credible in certain circles. It has the tendency to open up doors for discussions that you weren’t previously engaged in, which starts to enable you to position a community and the stuff that goes on within a community in a completely different way. You can then think about things you can do within those buildings that you weren’t doing before, so all the stuff around education and training that is right for this community, it doesn’t compete with what’s going on already, but it generates added value in so many areas.”

Transition initiatives may benefit from learning how to bring land and property assets into community ownership. This is a big step, but an essential one. It is a complex field, requiring far more space than is available here, so I have included below a list of organisations/resources who can support and guide communities wanting to know more.

Resources

Comments

drewbarr66's picture

How to acquire community assets

Thanks for this post, really interesting. I'm a newbie, and this is my first post, so I hope I'm doing things right.

Here is Oz, we have a mandatory retirement savings system, where everyone is required by law to put 9% of salary and wages into a complying fund. If the Labor Government gets its way, that 9% will become 12% very soon. The national pool is currently at about $1 trillion, and growing fast.

The complying funds can be lots of different things, including self-managed funds (SMSFs in local parlance) where the fund members also act as trustees of the fund, with considerable, but regulated freedom to invest where they see fit.

I've only just started devoting my thoughts to how this money might be directed toward community, and transition-directed investment, so I'd really welcome anyone's (Pom or Aussie) ideas on how that might be achieved.

SMSFs tend to be larger sums, for older people. Often its just a way to get around the outrageous commissions charged by commercial funds, and the investments underneath are typical stocks and bonds. In Oz that means mining stocks inflated by the Chinese property bubble, and banking stocks or commercial property, inflated by the Australian property bubble, which is inflated by the Australian mining bubble.

Doesn't sound too transition-friendly to me, and I'm convinced that community assets can be seen as legitimate long-term secure investments, particularly against the economic prognosis based on peak oil and climate change predictions.

Needless to say, these views would be seen by the Australian financial mainstream (and maybe the British too) as total anathema, so they are definitely worth investigating!

Any feedback would be most appreciated!

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