Community-led development: The answer to the housing crisis?

Decoupling from the market? Sounds a bit radical... But there are already policies and examples in place of how this could work in practice.

Community-led development in Policy

The recently revised December 2023 National Planning Policy Framework (NPPF) has welcomed the inclusion of community-led housing friendly policies which did not previously feature within the September 2023 version.

These include:

- A definition of ‘community-led development’ to give councils more confidence in developing policies within their local plans to begin or continue developing community-led schemes;

- A requirement for councils to seek opportunities for small sites to support community-led development to contribute to meeting the housing requirement of an area (Paragraph 70);

- A requirement that local planning authorities should support the development of exception sites for community-led development on sites that would not otherwise be suitable as rural exception sites (Paragraph 73). This mechanism enables planning permission for community-led housing to be granted on certain sites not allocated for housing; and

- A requirement that local policies and decisions should be responsive to local needs, including proposals for community-led development to support opportunities to bring forward rural exception (Paragraph 82)

These policies mark a positive step towards creating a clearer path to gaining planning permission for community-led developments on smaller sites, providing a real boost for community developers.

Despite these policy changes, announcements around the Community Housing Fund (CHF) have gone surprisingly quiet. In 2021/22 DLUHC gave £4million of grants to support community-led housing projects, covering a range of costs incurred through the planning process. This included paying for spaces used for public meetings, administration costs or legal advice, design work and planning application fees. However, the CHF has been a notable omission from DLUHCs recent Spring and Autumn Statements and any revenue-based grant from the government is now looking unlikely in the near future.

What is community-led development?

Community-led development is defined in Appendix 2 of the NPPF as ‘A development instigated and taken forward by a not-for-profit organisation set up and run primarily for the purpose of meeting the housing needs of its members and the wider local community, rather than being a primarily commercial enterprise.’

Co-housing schemes are one example of community-led development, comprising intentional communities of like-minded residents who work together to build their own housing development on jointly owned freehold land. Each household has its own private dwelling but shares community spaces and facilities. Private dwellings are therefore typically smaller, cheaper and more efficient as residents benefit from these shared spaces. Co-housing offers huge potential to meet the aspirations of Paragraph 131 of the NPPF, which calls for ‘the creation of high quality, beautiful and sustainable buildings and places’. By allowing communities and residents to take the reins for development, this can often result in better quality developments with higher sustainability and efficiency standards, as well as outstanding architecture.

The government has secured new powers in the Levelling Up and Regeneration Act 2023 to introduce a new route to planning permission called street vote development orders. These Street Votes would function as another mechanism to grow community-led development “giving residents the ability to propose development on their street and, subject to the proposal meeting certain requirements, vote on whether that development should be given planning permission." Street Votes aim to support the governments long-term plan for housing facilitating housing delivery and growth in partnership with local communities. The consultation on Street Votes is currently open until 2 February 2024. Responses will inform secondary legislation that will set out the detail on how street vote development orders will operate.

How could community-led development address the housing crisis?

With the community-led development model embracing houses for people, not for profit, the movement has highlighted the role these developments could play in easing pressure on the housing crisis. Research commissioned by the Nationwide Foundation in January 2024 has demonstrated that 91% of community-led homes studied were genuinely affordable in the majority of cases with the average cost to typical households at 25% of their incomes. This affordability is maintained in the housing stock since houses are sold at their actual cost rather than at market value.

Community-led development can also ease the housing crisis by delivering housing faster. Due to the smaller size of these sites, there are typically fewer planning constraints which delay and complicate planning permission.

Just outside Cambridge, Girton Alms Houses are one such example of a community-led development targeted at meeting the needs of local residents and providing affordable housing in response to rising house prices in the city. Girton Town Charity own the land on which independent living space has been built to Passivhaus standards with shared communal gardens, allotments and an orchard.

What does this mean for landowners?

The recent changes to the NPPF and new Street Votes offer an opportunity for communities and landowners to bring forward proposals for community led housing. With greater policy backing community-led housing proposals, landowners are provided the opportunity to maximise development opportunities on their land whilst sparking social change in the housing system and better meeting social needs.

Contact our Planning Team for advice and services required through the planning process.