Community Asset Developers are building the futures we need: how can capital finance back and not break them
By Catherine Harrington
In the face of decades of under-investment, growing regional and place-based inequalities, sharpening community divisions (as plainly exposed in the recent local elections), and the intensifying impacts of climate breakdown, there’s a burgeoning network of communities working at the grassroots to regenerate and transform neighbourhoods.
Frequently in areas that have suffered long-term economic decline and where others, both private and public sector, have failed to act, these Community Asset Developers (CADs) are delivering affordable homes, renewable energy infrastructure, affordable workspaces, hospitality and a wide variety of social infrastructure including youth clubs, public living rooms and cultural centres. They’re creating thriving and future-proofed places. And are already delivering on the Government’s vision for Pride in Place, a key part of their mission for economic growth.
It’s not just what they’re building, it’s how they do it that matters. Taking land and buildings out of private, and often extractive, ownership and putting them into community ownership, CADs are building community control, power and wealth into the long-term.
But capital is not getting to this work and in the way needed for it to scale and stabilise. Even for existing CADs with performing assets and proven revenues, what is available (mainly from the social investment market) is short-term (1-5 years) and high cost (8-11%) debt. Even longer term (10-25 years) is difficult because repayments eat up so much of the cashflow that is needed for the work on the ground. This is not to mention the challenges of covering the riskier pre-development phases, or securing development or acquisition finance quickly enough to seize opportunities.
On a mission to solve the lack of long-term, patient and flexible capital needed, the Mycelial Network of CADs, supported by the Joseph Rowntree Foundation, is scoping out the establishment of a Mutual for Community Asset Development, a capital platform that pools CAD assets to support collective investment, where CADs themselves govern the vehicle. The intention is to start with catalytic capital, to both strengthen the individual CADs and, most crucially, build the market infrastructure needed for future collective finance, including from institutional investors - organising demand, building readiness, standardising without losing local difference, and building the evidence to make community asset development more legible and investable as a field.
Still in the concept stages, the work is part of a broader Mycelial Network project, ‘Reimagining Finance’, supported by the Lloyds Bank Foundation, that over the next 12 months is exploring and testing a wider set of solutions to the right capital for CADs.
CADs are building the futures we need, and capital needs to be in service of that. As Rana puts in her recent article in Alliance, here ‘capital becomes a means for sustaining life-affirming infrastructures’.
We want to work with funders to solve this challenge. If the work is of interest please get in touch.
To find out more and engage further:
Contact Catherine Harrington on Catherine@harringtonconsultancy.co.uk and/or or Dr Jess Steele on jess@jerichoroad.co.uk
For members of the ACF SIIG, attend a special learning session on the Mutual (and two innovative solutions to scaling community housing) on 17th June
Listen to an audio podcast featuring the Mutual.
