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Community Land Reserves
Community Land Reserves (called Community Land Trusts in the US) have been in existence around the world for over 40 years. They are non-profit organisations with a mission to provide affordable housing to low income groups, for all time. Someone starts one off by providing a gift of land. The organisation then takes this gift of land off the market to hold it in trust forever thereafter. Ownership of the land remains with the organisation, which cannot sell it. Individual parcels are given out to owners who build on them and own the construction but not the land. On resale, the owner recoups the cost of his construction, adjusted to present-day value, but not the appreciation in land value. As a result, the incoming occupant can also get housing at an affordable price, because it is unburdened by land value. Critical to success are the format of governance of the organisation and the resale formula.
If poor people are to have affordable housing distributed through a city, the cost of land on which they reside needs to be somehow taken out of the equation. One way of doing this is by policies of inclusionary housing (Patel 2011), by which when anyone builds anything in the city, whether it is a mall, or a cinema, or an office building or high value residential apartments, a specified fraction of the built floor space is additionally constructed, on the same plot or a plot close by, for inclusionary housing. The cost of construction is fully reimbursed to the developer, but not the cost of land. Approval of his principal construction, which is for sale, is contingent on his making this inclusionary housing available, at the cost of construction only, to the agency designated to manage it.
The proportion of floor space to be so built is about 25% in most countries; in Spain it is 50%. Given our complete neglect of public housing in the past, in India the figure should perhaps be closer to Spain’s than to other countries’. Any such policy will be stoutly opposed by builders, but they might console themselves by recognising that no builder in the world, anywhere, likes his country’s policy of inclusionary housing.
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