Can CLTs Play a Role in Climate Policy?

The following contribution was written by Geert De Pauw, Co-Coordinator for Community Land Trust Brussels, as a contribution to the upcoming webinar on”Using CLTs to Deliver Energy Renovation and Permanent Affordability to Existing Housing” on 25 September. 

Community Land Trust Brussels (CLTB) is a non-profit organization that develops affordable housing for low-income families in Brussels with the support of the regional government. As for many other CLTs in Europe, the main focus is on new construction projects. To date, CLTB has built just over one hundred homes spread across six housing projects. The same number of homes is under construction. With this, CLTB wants to offer an answer to the need for more affordable housing in the region.

New construction (or heavy renovation of larger buildings) has proven to be a good strategy for bringing affordable housing to the market in a relatively efficient manner. This approach also gives CLTB the opportunity to involve future residents collectively in the housing development, which is the basis for our organization’s community-building.

However, one may question the long-term desirability of continuing to focus solely on new construction. This option may conflict with our organization’s own sustainability goals. Cutting unbuilt plots in an already densely built region can raise questions on some occasions. Due to climate change, the city increasingly needs to keep land that is undeveloped to play a role in water management, cooling, biodiversity, or recreation. Moreover, the building materials needed to construct new housing are responsible for emitting a lot of CO2. 

Brussels’ Housing Crisis, Government Response, and the CLT Approach

On top of our own sustainability goals, over time we must also take into account new government strategies and policies that will make new construction on virgin land, in an already densely populated region like Brussels, increasingly difficult. 

At the same time, the housing crisis continues to intensify. More and more families are being forced to leave Brussels because they cannot find affordable housing there. Those who do stay often have to content themselves with housing that is too small, unhealthy, and too expensive. Indeed, the Belgian and Brussels Governments have invested very little in social housing, leaving residents almost entirely dependent on the private market, where prices have continued to rise steadily over the past 20 years.

While there was no investment in social housing, the government did encourage home ownership. Through a variety of instruments, it helped modest households to buy a home. This helped many poor families to have access to housing, until rising prices made that impossible. 

Today, existing poor owners are now also in danger of getting into trouble. Brussels has an old, energy inefficient  housing stock. To meet its climate goals, the Brussels Region has developed an ambitious strategy called “Renolution.” An important part of this strategy is making private homes energy efficient. To encourage homeowners to invest in the renovation of their homes, the Brussels Government plans, among other things, important fines for those who default. This could have disastrous consequences. The danger is that it will lead to a situation where only wealthy residents or investors will be able to own homes in neighborhoods that stayed relatively affordable, and that the Brussels Region will be confronted with “green gentrification”. 

For all these reasons, CLTB has decided to diversify its approach and now also engage in the renovation of private housing. We believe that CLTs have the potential to provide an answer, in Brussels and in other European cities, to the double challenge of the need for permanently affordable housing and the need to renovate the existing housing stock in a sustainable way and make it energy efficient.

Pilot Projects and the Upcycling Trust Partnership

Today, the existing public instruments that aim to encourage owners to renovate their homes and make them energy efficient do not reach the poorest owners. These owners, “asset rich, cash poor”, do not have the means to finance the works in anticipation of the subsidies and have difficulties with the administration to ask for the subsidies. CLTB now wants to investigate whether it is possible to work out a new policy instrument whereby these owners are helped, through very intensive guidance and a very important financial intervention. In this way, they can increase the quality of their home, meet the new requirements and avoid fines, and regain housing security. In return, their home becomes a CLT home, making it affordable forever. Indeed, in our model the owner accepts the typical CLT terms regarding use and capital gains when the home is sold.

We believe that such an instrument would be an important complement to the existing government instruments of loans and grants. It has the great advantage of helping the most vulnerable, and providing a solution to that part of the building stock where the problems are greatest. Moreover, this approach increases the supply of permanently affordable housing, in a city where the vast majority of the housing stock is at the mercy of the free, unregulated market. On top of that, we do this without cutting undeveloped land. 

To achieve this, it is important to convince the government. To do so, we started a pilot project in Brussels. After a year of working on procedures and legal models, the first two owners are now about to sign on to get into the program. 

Noticing that we were not the only ones thinking along these lines, we took the initiative to bring together other European CLTs with similar ideas. Together with our colleagues from the City of Lille in France, we are now coordinating the EU-funded “Upcycling Trust” project. Together, with CLTs in Cork (Ireland), Ghent (Belgium), Lille (France), Rennes (France) we want to test this new upcycling strategy and use a circular approach to the renovation. Our CLTs will set up pilots where legal, organizational, technical, and financial strategies will be developed, and the first homes will be refurbished. This will benefit some 150 low income families who will be able to live in these homes, while lowering the environmental impact. Based on the experiences of the pilots, and by involving local and regional authorities as well as academic partners, we will use our findings to develop new urban policy. The context in which many cities are looking for strategies to address the housing crisis, strengthen the urban fabric and achieve climate goals, the upcycling trust model offers an innovative, structural approach that can accelerate a just urban transition. Given Europe’s climate ambitions, we believe that this EU-funded project is a perfect opportunity to test the approach and prepare its roll-out.

CLTB also wants to try other new methods. For example, in September we will start the “guided auto-renovation” of three homes. This will give future owners the opportunity to do part of the renovation of their future home themselves, thus reducing its cost. 

Scaling Challenges and the Future of CLTs

As promising as all these new methods may be, today they are still in their infancy. Scaling them up will require a lot of money and time. They are certainly not the final answer to the challenge described above of finding solutions to the housing crisis in a way that does as little harm to the environment as possible. Therefore, at the same time, we remain committed to new construction. We would prefer to do this in a more circular way, although for this we still need to look for innovative financing solutions that allow us to cover the additional cost of such a way of working.

Despite these limitations, we believe very strongly in the potential of the Upcycling Trust approach. By giving community land trusts a role in climate policy and converting private ownership to non-speculative community ownership, part of the housing market can be structurally reformed. If done on a large scale, this could play a central role in making our cities more livable while remaining affordable.