The potential for developing Community Land Trusts in Europe HOUSING in the EU The potential for developing Community Land Trusts in Europe Brussels 2 July 2013 alice.pittini@housingeurope.eu

What is CECODHAS - Housing Europe? CECODHAS - Housing Europe is the federation of cooperative, public, social housing … a network of national and regional housing federations of housing organisations. Together the 43 members in 18 European members States manage 25 million dwellings which represent 12% of the total housing stock in the EU.

What we do Our members work together for a Europe which provides access to decent and affordable housing for all in communities which are: socially, economically and environmentally sustainable… …and where all are enabled to reach their full potential.

Housing bubble at the heart of current crisis Subprime crisis in the US triggered the financial crisis Burst of housing bubble in the US but also Ireland, Spain… What happens in the housing market can have a strong impact on the whole economic and financial stability of MS.

Main factors Increase in house prices up to the crisis Shortage of affordable housing Nominal house prices increase

Mortgage indebtedness in Europe Residential mortgage debt to GDP ratios in the EU 27 EU average: from 32% in 1998 to 52.4% in 2010 In 2009, residential debt to GDP was over 100% in NL and DK for the second consecutive year. Linked with easier access to mortgage markets, relatively low interest rates, demographic and socio-economic developments. But also strongly linked to specific policies encouraging home ownership such as mortgage interest rate deductibility.

Cost of housing in Europe 8% of Europeans and a third of Europeans at risk of poverty spend more than 40% of their budget on housing 8% live in severe material deprivation 17% Europeans faced either utility or rent/mortgage arrears, or both in 2011 (14% in 2007) 6% Europeans thought it was quite or very likely they will have to leave their accommodation within the next 6 months because they can no longer afford in 2011 (4% in 2007)

Housing needs in the EU In France 1.7 million pending social housing demands, and yearly construction is 27.5% below the level required to meet housing needs. In Spain, 300 000 households are being evicted, and it is estimated that 4 million people stopped warming their homes because they could no longer afford it. In England social housing waiting lists increased constantly from about 1 021 000 in 1997, to over 1.8 million households in 2011 the number of those in need of local authority housing in Ireland has increased by 75% since 2008, from 56 000 applicants to 98 000. It’s proving unsustainable, as shown by the number of housing foreclosures/repossessions

Issues raising from the crisis Raising poverty and inequalities as consequence of the crisis = pressure on SH sector Including ‘working poors’ – more vulnerable middle classes Decreasing public support (direct and through taxation) Difficulties in access to credit

Housing markets diversity in the EU Tenure split, UE 27

Trends in tenures Home-ownership in European OECD countries (1980-2004) Social housing in selected EU countries (1980-2008)

Social rental housing in the EU27 Largest in NL, followed by AT and DK. UK, FR, SW and FI also have a large social/public housing sector On the contrary, no rental social housing in EL, very small share in CEE as well as PT, ES

Providers of social housing Different providers usually co-existing Public (municipalities, publicly owned companies) often retreating from new construction due to budget constraints often focusing on the poorest/most vulnerable Private (mainly not for profit/limited profit organisations, but increasingly also commercial developers) In most cases ‘registered’ or ‘approved’ providers acting on not for profit basis In some countries also ways to mobilise (temporarily) dwellings owned by private individuals or commercial developers for social goals Cooperatives sometimes market actors, sometimes social role (special case Eastern Europe) Today in most ‘old member states’ of the European Union we find a combination of actors involved, with public provision (usually by municipalities, either directly or through dedicated publicly owned companies) often coexisting with a growing private sector, mainly consisting of specialised non-profit or limited-profit bodies (such as for instance UK’ ‘housing associations ‘and Dutch ‘housing corporations’). In recent years local authorities are in many cases (e.g. UK, Austria) retreating from the production of new social housing and concentrating on the management of the existing stock. In some cases the public sector has specialized in the provision of what can be defined as ‘very social’ housing. This is the case for instance in Italy where different types of options for housing at controlled price exist but the public sector offers the lowest rents and targets the poorest people, similarly to Spain where ‘socially protected housing’ is provided for sale by a number of actors including the private sector, while a small proportion of social rental housing is provided by the public sector. A particular case is that of most Central and Eastern European countries where, with the exception of Poland and the Czech Republic, with massive housing privatisation after 1990, municipalities were left with a very small public housing stocks which largely still constitutes the only form of social housing today. Some countries in the region (e.g. Poland, Slovenia) have recently set up legal arrangements allowing for the creation of a non-profit housing sector.   Interestingly, recent years have seen the increasing involvement with social housing provision by non-specialised actors (commercial developers and private landlords, as opposed to specialised ‘approved’ providers) who have been included as possible recipients of public subsidies in exchange for the use of dwellings for social purposes (low rents, tenants from social housing waiting lists), usually for a limited period of time. The typical example of this type of policy is Germany, where this change went hand in hand with the decentralization of housing policies to the local level and the privatization of public housing on a large scale.

Note: figures only refer to CECODHAS members Cooperative housing In Poland almost 30% of the housing stock: housing cooperatives (homeowners) In Czech republic: 17% of the stock: rental housing cooperatives In Sweden, Norway: 15% to 17% of the housing stock Note: figures only refer to CECODHAS members

Cooperative housing in a nutshell A housing coop is a housing business in the form of a consumer cooperative mutually owned by its members, which operates in accordance with the Cooperative Principles and Values. democratically controlled by their members, according to the principle of “one person, one vote”. Equity model can be: Individual ownership = the resident member holding full (most common in Eastern Europe), or partial title to the housing unit. Or collective ownership= the cooperative owns units and common parts and members receive a contract, right to occupy the individual housing unit on a permanent basis. Non-equity model (or rental coop): the member has no ownership stake, he pays a rent and has to surrender the housing unit back to the cooperative if he leaves. Non-equity cooperatives are usually non-profit. In many parts of Canada and the United States, Germany, also Austria, Danmark, Belgium, Switzerland 

Are there other ways? Co-housing Building Communities (Germany) Self-build experiences … CLTs? Have the advantage of combining long-term affordability, community involvement and cohesion, partnership at local level, not only housing but a range of local initiatives/services

3 MAIN EUROPEAN UNION POLICIES SOCIAL ECONOMIC ENVIRONMENTAL COHESION ANTI-POVERTY SOCIAL PROTECTION SSGIs ENERGY ENVIRONMENT WATER LAND protection… INTERNAL MARKET COMPETITION STATE AIDS VAT RULES LEGISLATION EU FUNDS OPEN METHOD OF CO-ORDINATION (OMC) BEST PRACTICES EU STANDARTS EU LEGISLATION RESEARCH EU FUNDS ? GREEN VAT ? LEGISLATION CONTROL NOTIFICATION DISPUTE – ECJ RULING HOUSING POLICY « FRIENDLY » HOUSING POLICY « COSTLY » HOUSING POLICY « FRAMELY »

Housing in the European Semester More attention is given to housing in the framework of the European economic governance: recognition that dysfunctionalities of housing markets are an important cause of the crisis The European Semester 2013: 8/14 country in-depth reviews concern the housing market: UK, ES, FR, IT, NL, SI, FI, SE, DK “Turning to households, deleveraging pressures are visible in a number of Member States and are mainly linked to pre-crisis housing market upswings. Downside risks for household balance sheets and consumption are linked to potential further corrections in housing markets.”

EU opportunities: Cohesion policy Structural Funds; period 2007-2013: 9 billions € potentially eligible for housing energy upgrade, and 4 billions for urban renewal and housing for marginalised community. Beginning of 2012, less then 2 billions had been invested. Next period: housing fully eligible for ERDF funding! Energy efficiency: Former objective 2 regions will have to dedicate at least 20% to support shift towards a low-carbon economy, including energy efficiency and use of renewable energy in the housing sector Social infrastructures: “(a) investing in health and social infrastructure which contribute to national, regional and local development, reducing inequalities in terms of health status, and transition from institutional to community-based services; (b) physical and economic regeneration of deprived urban and rural communities”; Urban development: 5% of ERDF resources allocated to integrated actions for sustainable urban development delegated to and directly managed by cities. The current programming period (2007-2013) saw a gradual increase in opportunities for the sector, especially with regards to the use of funding from the European Regional development Fund to invest in energy refurbishment and renewables in the housing sector, as well as (since 2010) to improve the housing conditions of marginalised communities. Under the current legislative proposals for the new Cohesion Policy 2014-2020, housing is fully eligible - compared to the previous programming period, where housing was eligible only under certain strict circumstances. There are at least 3 areas where investment in housing could be co-financed by the European Regional Development Fund. With regards to energy efficiency, former objective 2 regions (the most developed EU regions in the EU) will have to dedicate at least 20% of their operational programmes to investment in supporting the shift towards a low-carbon economy in all sectors. In particular, investment should be made to support energy efficiency and use of renewable energy in the housing sector. There is therefore no ceiling any more for investment in energy refurbishment in housing, which means that a region is free to invest as much ERDF as they want on energy refurbishment in housing. One have to note that reference is made of housing sector in general, which means that every kind of housing is eligible to support and not only social housing. Furthermore, the European commission foresees an expenditure code for housing infrastructures under the area of social infrastructures, distinct from the investment in energy refurbishment of housing. It means that they expect the possibility of regions willing to renovate their housing stock under at least 2 circumstances, namely “investing in health and social infrastructure which contribute to national, regional and local development, reducing inequalities in terms of health status, and transition from institutional to community-based services”, and “physical and economic regeneration of deprived urban and rural communities”. Last but not least, the regulation stresses that at least 5% of the ERDF resources allocated at national level shall be allocated to integrated actions for sustainable urban development delegated to and directly managed by cities. It means that cities will manage at least 5% of the ERDF national pot directly to support urban development/renewal. Furthermore cities will be allowed to support pilot projects and studies to test innovative solutions linked to sustainable urban development.

…. Thank you for your attention! Alice.pittini@housingeurope.eu