The following is the definition document that defines the new non profit organization, its purpose, what it is to do and its operational time scale it should be operative by January to line up with the beginning of our new project on affordable housing.
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Non profit Company limited by guarantee, with the prime objectives of proactively creating opportunities for people to acquire their own homes in the area of their choice at half the going price or less, and the public sharing of information that allows people to become aware of the various means of obtaining affordable housing.
There are a variety of means by which a person can acquire a home at a lower cost, but land cost is a limiting factor as to how low a cost, homes can be created at. The value difference in many parts of the UK of land is from agricultural land at £3,000 an acre to building sites with approval at up to 1 million pounds an acre. The project is to seek out land that could be granted planning or as parts of joint projects with developers who have a planning commitment to provide affordable housing, where land can be acquired that will get planning consent at between these two extremes. There is also the suggestion that some surplus government land and some council owned land may become available at lower cost for low cost housing projects.
Research would also suggest that some people, companies and councils will be prepared to allow land to be acquired at a reasonable price but a long way short of the full price after planning has been acquired, if they can see it has positive local value, and makes homes available to local people, but only if this is a sustainable project rather than a free gift to the individuals. Housing associations may be prepared to become involved in joint ventures where some land is used by them to build houses to rent and through this project to sell.
Most developer based schemes are limited in that they merely give away the advantage of lower costs and therefore the person buying a home is offered it cheaper and therefore makes a larger profit on resale, so a once only advantage is provided and the home is within a short time added to the housing stock at its then higher value, further people unable to enter the housing market cannot be helped, without the constant provision of more low priced land becoming available. It is unlikely that individuals will be inclined at any point to sell land at lower prices to any scheme that in effect just gives it away to make others wealthy, and has no long term effect on solving need.
Our proposal is different in that we will offer the land on a lease with the option to buy the freehold at an agreed price and a condition that on the sale of the property the freehold has to be purchased. This will create two streams of income into the fund, a ground rent after a free period, on the value of the ground at the time of the build and the income from the sale of the freeholds when people move.
As the price is set initially the house buyer knows exactly what the freehold will cost and as this does not increase as property prices do, it means that they still get the full appreciation of the property, just not the gift of the subsidy to acquire the land, so house buyers will not be trapped in the property. These funds will then be available to provide further subsidies to other land purchased by the fund to replace that sold. As land prices rise it will mean that the income from the sale of freeholds alone will not allow it to replace like for like land, but given the ground rents the reduction of the land pool will be slower, or be maintained. Lease prices on land set to recover costs in buying land and any other cost involved.
In order to keep running and admin cost to an absolute minimum, and to allow as much as possible to go directly to the projects primary purpose, the project itself will not deal directly with individual house buyers in the first instance, but through approved joint venture partners. These can be clubs, associations or developers but all to be considered must with the help available through the project be able to show a way that individual homeowners can reasonably expect to get a home at half the going local prices or less for a comparable home. These joint venture partners at their own cost, or through reasonable membership fees to those who join have to be able to take an estate or a section of an estate.
Three funds are to be created,
A) land purchase pool
B) recycled margins pool
C) Admin and publications pool
Funded from donations, and any other sources available, it is a fund that is used as deposits or cash to purchase land, that planning consent can be acquired on and then split to form plots. By this concept the intention is to buy land at a lower cost than conventional building plots are available at. These plots would then be offered through approved joint project partners who would use this to enable lower cost homes to be provided. The pool is not depleted so on the sale of each site, the cash is recycled to allow more to be purchased.
Receipts on ground rent and sale of freeholds, used to allow later land to be purchased and offered under the same arrangement.
Initially all admin cost will be sponsored by New Atlantis, and provided under contract by Maximum Coverage Ltd who will also provide banking arrangements. No staff or directors are to receive payment for any work done and over time additional member and directors for this organization is to be recruited from those who will donate their time and cover their own expenses. This will widen the management base.
Company formation Nov 04
Web site registrations Nov 04
First joint venture partner approval = Self Build Homes Club Nov
2 Handouts available (3 fold) end Nov 04 (1) about the project, (2) suggestions on how to get a home at half price
Letters to other organizations etc December 04
Web site live Dec 04
Large scale press release end December 04
Organization fully operative end December 04
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Self Build Homes Club is an international club
and trading title of Self
Build Homes Club llc. Local services
to serve members are commissioned for the club by New
Atlantis International Services Corporation.
All major commissioned companies involved, have New Atlantis trust status.