In our first blog of the year, we take a look at some of the funding opportunities that are currently available to community-led housing projects. At the moment there are a number of great innovative funding mechanisms out there which HSCHT believe can really benefit communities around the country.

A) Private Finance

There are various proivate organisations out there - whether they be banks, energy companies, or other organisations, who are looking to invest in a community that they already operate within. These organisations have a selection of funding schemes available for communities to use in an attempt to improve life in the local area by developing sustainable projects.

Quite often to be able to successfully apply for finance from a private organisation you'll have to demonstrate that you're proposed development, whether it be new build or renovation, would indeed be a benefit to the community. One way this could be shown is by providing homes for key workers, or providing homes for young families who are trying to stay in/move back to the area. Such projects provide social and economic benefit to the community, by increasing the number of skilled people within an area, while also contributing to the school role and local businesses.

HSCHT have worked with such organisation in the past, and are happy to offer our advice. If you would like more information on some of the private finance routes available, please get in touch via [email protected].

B) Partnering

Another way to generate funding for a community-led project is to seek partners from within the community who stand to benefit from the increase in new housing. Quite often these partners could be local businesses looking for somewhere to house their essential staff. if this is the case, then it may be possible for them to contribute to the funding of the project.

Alternatively, or perhaps additionally, communities may partner with a local housing association. If a community group partnered with a Housing Association, this could perhaps provide management services, or they may act as a development partner, taking a considerable burden off the community group.

This is an area in which HSCHT has much experience in, having being able to assist in building partnerships in the past between local community organisations/trusts and businesses that operate within the local area. Most recently we have facilitated such a relationship on the Isle of Rum, which will hopefully provide additional housing units for the local community trust, as well as a company who are requiring homes for their employees on the island.

C) Public Funding

Scottish Government

The Scottish Government has recently introduced several new funding schemes to assist in the development of affordable housing throughout the country. The Scottish Land Fund, The Rural Housing Fund, and The Empty Homes Fund are 3 such funds that can be utilised to great effect by rural communities seeking to develop their own housing units.

- Scottish Land Fund

The Scottish Land Fund supports both rural and urban communities to become more self-reliant and sustainable through the ownership and management of land and land assets.

Funded by the Scottish Government and delivered in partnership by the Big Lottery Fund and Highlands and Islands Enterprise, the Scottish Land Fund offers grants of up to £1 million to help communities take ownership of the land and the buildings that are important to the growth of their community. It also provides practical support to these communities, in an attempt to develop their ambitions into achievable projects.

The Scottish Land Fund is available to organisations in both urban and rural Scotland. As long as these are community-led, community controlled and have a defined geographic area.

HSCHT have also supported community groups in their applications to this fund. Including recently the purchase of land in Strontian by the Strontian Community School Building Ltd, who are embarking on building Scotland's first community owned Primary School. The plan is to convert this building into affordable housing in the future, should the Primary School move into the existing High School building. For more information on this project, see: www.bbc.co.uk/news/uk-scotland-highlands-islands-38303561

​For more information on The Scottish Land Fund visit:
www.biglotteryfund.org.uk/scottishlandfund

​- Rural Housing Fund

The Rural housing Fund, which was only launched in 2016, is a £25million fund that will provide an estimated 500 new affordable homes in rural areas around Scotland.

The Rural Housing Fund will increase supply of long-term affordable housing to rural areas during the next three years, by assisting the building of new homes and refurbishment of existing buildings. These new homes will add to the Scottish Government’s commitment to build another 50,000 new homes throughout Scotland over the next five years.

The fund is open to a wide range of applicants, including long-established affordable housing providers, and also community-led organisations and private landowners, allowing them to take a more active role in meeting the housing needs of their local community.

In addition to providing support toward the capital costs of housing projects, the fund will offer much needed feasibility support to enable organisations to develop robust plans for their projects.

This is a fund that HSCHT have experience with, having assisted several community organisations with successfully applying for it. This has varied from giving initial advice, to undertaking the whole application process on behalf of the community group.
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For more information on The Rural Housing Fund please visit:
www.gov.scot/Topics/Built-Environment/Housing/investment/grants/rural-housing-fund

​- Empty Homes Fund (administered by Highland Council)

If a community group are planning on renovating an empty home in the local area, then The Scottish Government have said that they are keen to encourage the owners of such empty homes to return them to use as affordable housing. To kick-off empty homes work across Scotland, the Scottish Government has made up to £4 million available in the form of an Empty Homes Loan Fund. Having seen the pressures facing housing in rural areas, £2 million of the fund has being designated for refurbishments of empty homes in rural areas. 

The fund aims to support a range of projects to bring empty homes back into use as affordable housing.

Of the £4 million that the Scottish Government has set aside for this fund, £400,000 has been given to the Highland Council to administer with the aim of renovating 30 units in the Highlands. The Council has matched the £400,000 grant from the Scottish Government’s Empty Homes Loan Fund with £400,000 from its Private Sector Housing Grant to promote the initiative.

All of the funding will be provided as loans, however interest will not apply. Successful applicants have to repay at least 60% of the funding by 2019/20 and are expected to repay the remaining portion of the loan by 2023/24 at the latest.
 
HSCHT have experience applying for this fund, as we have previously done so on behalf of Coigach Community Development Company for their renovation of the Achiltibuie School House. Laggan Community Trading Company have also received funding from Highland Council to renovate an empty property in Strathmashie. To learn more about this project, click HERE.

For more information on The Empty Homes Loan Fund please visit:
http://www.gov.scot/Topics/Built-Environment/Housing/investment/grants/EmptyHomesLoanFund

D) Community Share Options for Housing

The final funding mechanism for community led housing that will be examined in this blog is community shares.

When using this funding mechanism, members of the community are offered shares as a means of raising the level of funding needed for the development. There are restrictions on the withdrawals to ensure the safety of the fund gathered for the community organisation would be necessary to protect the stability of the organisation until other funds were built up from excess income in order to buy back the shares. A payment on the shares would be payable from rental revenues.
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As a result of employing this form of funding; the organisation may have to make amendments to its current Memorandum and Articles of Association. This option also has the potential to enable the community to buy-in to the project as well as provide the required funds to pay for the project. By swapping the bank borrowing at both the development and after completion with a community share issue then the interest payable on loans is replaced by dividends payable to the shareholders.

To summarise, there are a number of different ways that communities can secure the funding needed in order to increase the housing provision within their area. Funding can be generated in many forms, from the likes of public funding, private funding, community shares, and partnering. 

HSCHT is always trying to help communities determine which route works best for them. For further information, please feel free to get in touch to discuss with us on 01463 233549, or via [email protected].

In her visit to the town of Dornoch, a place where HSCHT has developed many new homes recently. In the past 12 months, we have completed 6 new homes in the area. The first two properties in Dornoch were built through our first phase of Rent To Buy properties, working with local contractor J & S Gunn. Both are now occupied, with 2 families now been given the opportunity to own their own home after renting the property for 5 years before purchasing at a reduced, below-market price.  This is made possible by the attachment of a Rural Housing Burden to the property.

Since 2013, the Scottish Government has issued over £7 million to our Rural Rent to Buy scheme, as we continue to develop affordable housing throughout the Highlands.

Right next door to these properties are two new homes developed for the Highland Council through the Greener Homes Initiative. These properties have recently been completed very recently this year and have already been allocated to residents who have now moved into the properties. The Minister got the chance to not only meet these residents, but also view the inside of the homes.

Rent to Buy and Greener Homes projects are being developed across the Highlands thanks to an innovative partnership between Scottish Government, Highland Council and HSCHT.  The various schemes that have been developed through funding from the Scottish Government, have not only provided the Dornoch with new varying types of affordable housing solutions, but has also allowed for new members of the community to get on the housing ladder.

This innovative project is being driven by the community in order to provide community owned housing to ensure the future sustainability of the area. All statutory housing provision in the last 30 years has been provided in neighbouring villages, which has been detrimental and has led to out-migration from the community. Helmsdale went 35 years without any new affordable housing being made available for rent, and held a desire to solve this, as well as the aging demographic of the village.

HSCHT helped with this project in a number of ways. This included community engagement and facilitation, a local survey, initial project feasibility ans desktop funding options, negotiations with landowners and the local authority and the initial fundraising – a key challenge for the community in order to obtain the vision for this new project.

By partnering the Local Authority, local RSL along with guidance from HSCHT, Helmsdale community were able to deliver a feasible and practical solution to meet their longer term housing needs – four brand new rented homes to be managed by Albyn Housing Association using policies agreed with the Highland Council.

Helmsdale is part of the Growth at the Edge initiative by Highlands and Islands Enterprise. A local development officer consulted with the community through a series of open days and has produced a document “Shaping our future together”. In this housing features as a high priority for local people. Creating new community housing here will help make the community more sustainable:

Economic benefits:

• Provide construction work (local workforce preferred)
• Possibility of combining training in construction opportunities along the lines of the Cairngorm Construction Skills Project (managed by HSCHT)
• Sustain key workers i.e. carers, heath workers, teachers, estate workers
• Provide low cost home opportunities for young families who can spend in the local economy – shops/hotels/post office etc.
• Build on tourism and other growth sectors i.e. renewables
• Unemployment in the area is consistent – with no unfilled vacancies in the area (Nov 09) while 27 people in Helmsdale alone were receiving Job Seekers Allowance (in 2008).
• 12% of the households earn less than £10,000 annually. Highland average of 10% (CACI 2007)

 Social benefits:

• Improve the demographics of the community (currently over 50% of the population is over 50 years old)
• There is a marked absence of people in the 16-29 age group – new housing would help retain some of this age group
• From 2001 to 2008 the population has declined by 7.4% whereas the population for Highland has increased by 5%. New housing would help reverse this trend.
• As with the aging population the dependency on the health service increased – Helmsdale has the second highest rate of self-reported illness in Highland with 22% having a limiting long-term illness. There is a great need to retain younger people to prevent the decline of this community.

The local development group and community association gain skills and expertise from being involved in the delivery of this project to use on other projects i.e. partnership working, contact with the LA, grant applications, researching community need, consultation, financial planning etc.

There are a range of other benefits this project created including:

Community/Social

• Allows for a more mixed tenure community by providing an option between rented and full market housing.
• Redresses the outward migration of young families
• Creates sustainable communities
• Provides training and work opportunities for local unemployed
• Increases skills and income opportunities
• Reduces anti-social behaviour
• Retains the option of informal care. Young looking after old at no cost to state
• Healthier community by reducing those in BTS housing

Environment

• Local materials used as much as practicable
• Local labour used as much as possible to reduce transport pollution
• All timber felled on site will be used on site (fencing, wood stores and play equipment etc.) which will prevent extraction and importing of timber.
• A footpath and cycle link with the main village will reduce car use
• Efficient wood burning stoves are carbon neutral
• Solar panels assist with hot water provision in summer
• Growing own produce on site helps the environment

Economic

• Local labour used where possible
• Local materials through local suppliers
• Training project will help increase income opportunities
• Training project will help increase household incomes and reduce rent arrears
• Options for working from home will promote entrepreneurial development
• Self-sufficiency will increase disposable incomes
• Reduced fuel poverty will increase disposable incomes

Wider benefits

• Design guides can be produced for sustainable and affordable houses
• Best practice for developing on difficult sites will be developed
• The heating solutions used will be a helpful addition to options in affordable housing
• This will provide an alternative option for sustainable site and community development in rural areas

The day was a great success, and was seemingly enjoyed by all. Not only did Margaret Burgess perform the official opening ceremony of the Helmsdale & District Community Owned Housing Project, acknowledging the great success and work of the community, but it also allowed HSCHT to showcase the work we do throughout the Highlands.

If you would like any more information on these or any other projects we have worked on, please get in touch at [email protected].
Alternatively, should you be interested in how we can help you or your community, call us on 01463 233549.