We often hear that social investment isn’t reaching smaller organisations, particularly in deprived parts of the UK. However the community-led housing sector seems to be an exception.
It’s not difficult to see why community-led housing and empty homes projects are of interest to socially motivated investors, with both the depth of social impact and the creation of assets that generate a rental income stream. As outlined in some of the evaluation work in this area, these models help to tackle some of the country’s biggest social problems including property abandonment and offering housing options to those often excluded from the mainstream as well as offering employment and training opportunities for people where these are lacking.
The creativity in these projects has been famously highlighted by Granby4Streets, the Turner Prize winning collaboration between the residents in Toxteth and the architectural collective Assemble – interestingly the commitment of a social investor in this project helped to facilitate the asset transfers involved.
We recently organised an event to discuss past and future funding in this area - thoughts from some of the experts, as well as a summary of the discussion. We’d really welcome ideas and suggestions on type of finance that would help better support community led providers, and will continue to explore this gap in the coming months.
Geetha Rabindrakumar & Anna Shiel, Big Society Capital
For small organisations aspiring to get into housing, vacant property has often been the first stop. In fact many of today’s largest housing associations started out by simply acquiring empty street properties and bringing them back into use. However, in recent years there’s been a problem of access to capital funding for small aspiring housing organisations. The DCLG £50m Empty Homes Community Grants Programme resolved the problem in 2013 and suddenly a wave of activity took off.
Although grants were quite generous, where acquisition was involved, it was often necessary to raise additional funding. Returns from 66 organisations revealed that an additional £26m had been raised. £11.5m being via commercial loans, which showed that debt finance had an important part to play.
The Programme ended in June 2015 and although Nationwide and Land Aid foundations are leading the way in putting in place programmes that provide new capital funding, these won’t replace the EHGCP and it’s necessary to examine alternative financial models that might enable organisations to make use of their newly acquired assets and lever in further funding.
The event in December was the result of an innovative collaboration between Big Society Capital and the Association of Charitable Foundation (ACF)’s Empty Property Special Interest Group and brought together trusts, social investors and self-help housing organisations, in order explore what had worked to date and what options there might be for going forward.
Following the event, steps are now being taken to look at what could possibly be put in place. Areas for consideration could include; the availability of patient capital and bridging finance; and how readily available/ tailored loan finance might possibly underpin and encourage further asset transfers from social landlords.
Jon Fitzmaurice – Self Help Housing
Canopy was keen to borrow from a lender whose values aligned well with our own. Unity Trust Bank is a social enterprise itself, with a track record in investing in the social sector. We borrowed money in order to finance projects under the Empty Homes Community Grant Programme, which was successful for us, and we are now borrowing in order to fund future purchase and repair projects.
It was really useful to be in a room with so many fantastic delivery agencies, grant funders and lenders to look at how empty homes might be funded innovatively given the difficult environment regarding public sector finance and the relative shortage of subsidy to the sector.
It was great to see a genuine enthusiasm among investors, so I would encourage all of the participants to continue the dialogue, as well as using connectors like Jon Fitzmaurice to keep exploring how best we might work together to tackle some of the greatest needs in society.
Steve Hoey, Director of Canopy Housing
Bringing empty properties back into use as homes for people in need is something the Nationwide Foundation has a real passion for and it has been a key part of our Decent Affordable Homes strategy since 2013.
We launched a second funding programme in autumn 2015, offering a total of £1 million. We’ve found that the lack of funding in this area has meant our grants are even more in demand – we’ve had almost 150 applications, with over £24 million requested in funding, comprising grant and social investment. With more worthy projects than our pot of funding can accommodate, we find it very difficult having to decline good work.
The discussions which took place at the workshop were really positive and encouraging. The opportunity to discuss what is needed in terms of funding mix and to hear others views on the future of bringing more long term empty properties back into use as homes for people in need gave me a sense of what could be achieved – collaboration is key. This collective approach and shared vision, as well as the overall positivity and enthusiasm, made me believe that there really could, and should, be more significant progress in this area.
Lorna Mackie – Nationwide Foundation (Programme Manager Empty Properties)