Process, people, place: the role of stewardship in residential development

The need to deliver high quality new housing where people want to live, that supports sustainable economic growth and promotes social value, is now surely beyond political debate.

Yet successful delivery and all the good that comes with a thoughtful process of place-making and place-keeping can still too often be elusive. The need for quantity frequently overrides a consideration of quality. The long-term sustainability of a new community - physically, economically and socially – is regularly an afterthought, particularly for an industry whose recent raison d’etre has been to get in, get on and get out. Or, to put it less eloquently, build out and bog off.

There is, however, an increasing drive to do better. Through the stewardship of the process of development and meaningful engagement with the people who are the heart of the new communities being established, we can see many opportunities to turn spaces into successful, thriving places. And so we have the trinity of stewardship: process, people, place.

Mills & Reeve, together with representatives of Letchworth and Garden City Heritage Foundation Trust welcomed a group of talented, expert voices to Letchworth to discuss the role of stewardship in delivering, nurturing and being the custodians of sustainable new communities. And where better to reflect on experiences and thoughts than in one of the places where the garden communities movement began over 100 years ago? Our guests included representatives from Homes England, Urban&Civic, Community Stewardship Solutions, Croudace Homes, K and K Consulting, Settle Group and Savills. 

What follows here is a summary of the thoughts from that discussion and some of our reflections following it.

Introduction

We started out framing our discussion by asking the question: what do we mean by stewardship? Rather than (as is so often the experience of many) an afterthought about the ownership and maintenance of assets local government can no longer afford to adopt, we focused upon stewardship being about:

1. Process – a commitment to being a custodian of the whole development program, and one that takes a long-term view of its design and delivery from pre-planning to post-occupancy and the in perpetuity legacy.
2. People – the nurturing of an emerging community, to facilitate engagement in the development process from those who live in – and with- its newly created spaces. The key is to ensure delivery of a development that meets those communities’ needs and to empower a body to whom the custodian baton can be passed should the initial steward wish to exit.
3. Place – the in-perpetuity sustainable maintenance of public spaces with a governance structure and viable funding model that allows for long-term safe-keeping for the benefit of all residents and local communities.

Process: master-planning and the master-developer

It was clear that stewardship needs to be at the forefront of master planning new development schemes, not least because a scheme’s design ultimately results in the public realm spaces that will need to be maintained in perpetuity. But perhaps more fundamentally it shapes the lived experience of the residents who call it home: what we will call the livability of place.

It’s quite easy to identify the more successful development schemes being those overseen by a master developer. Often this is a:

1. landowner intent on creating a legacy by overseeing the development of its own land, or
2. development partner contracted to work with the landowner to deliver a project over the long term. 

These sites often benefit from a greater consistency in design and quality, as well as a comprehensive plan for the delivery and maintenance of open spaces and community facilities. By anchoring these expectations into the site-wide planning consent, as the delivery process progresses to involve numerous housebuilders (as well as commercial occupiers), the spaces emerge to contribute to, not distract from, the creation of a livable space.

Large scale consortium sites brought forward in the absence of a master developer can result in many different approaches to community spaces across parcels of land intended to knit together as part of the new development. At its worst, there is no coherent or coordinated thought behind the spaces created across the parcels. Funding can be challenging and maintenance inconsistent and haphazard. Developers and community development voices alike agreed there is demonstrable value that comes from the “controlling mind” of a master-developer as custodian of design and steward of the delivery process.

Our experienced guests bore testament to this value, speaking of sites overseen by a master developer “in it for the long haul”, where the house builders can achieve sales rates of new homes double that compared to comparable sites nearby, often at increased sales values. For the master developer/legacy landowner, the quality of development achieved on one phase drives value on the next. It’s an argument now well-rehearsed, and perhaps most notably highlighted in the Building Better Building Beautiful report. 

Upfront investment and a patient approach to the return on capital investment is key to this model. The early investment in community spaces made by Urban&Civic at Houlton has been key to creating neighbourhood destinations (a cafe, nursery, visitors centre, supermarket, schools) and has given early life to the emerging community. In such an example, it is easy to see the merit in the role of a custodian who can take a long-term patient approach to a return on its investment, to drive not only quality but ultimately value, too.

What also emerged as a key focus in the process of stewardship was the benefit of greater clarity from local authorities at the planning stage on what they expect to see in terms of stewardship. The important questions they should ask include:

1. What scrutiny can they give to an estate management strategy at the outset and how can that be secured?
2. What sort of management organisation is best suited to the development and how will it be funded?
3. What are the community assets and which, if any, will be adopted?

By giving clear direction at this early stage of development, a scheme can be designed by reference to a planning strategy that manages the expectations of landowners and developers alike at the delivery stage. Something surely has to change: these aren’t new concepts or opinions and yet in spite of previous recommendations, not least from the BBBB report, we still appear to have to fight to push stewardship up the agenda. Doing so as part of the planning obligations will push to forefront of future disposals to housebuilders the funding implications of managing the legacy estate. This will usually take the form of commuted sums and/or residents’ service charges and gives a much better chance of putting the in-perpetuity legacy on a more viable financial footing. Money doesn’t guarantee success, but it certainly provides some protection from failure. 

That said, no one expects a scheme to be laid out in finite detail at the outset To deliver new communities at scale takes time, and over time it’s likely the needs of and approaches towards community spaces will change. It’s important that the initial design and uses of community spaces allow for a degree of flexibility, so that they can accommodate that change so far as possible

People: nurturing the community

Those involved in community engagement and development echoed the need for flexibility when considering stewardship in the context of the nurturing of an emerging community. It was considered essential so that communities with the lived experience of the places being created, and those existing neighbourhoods alongside them, have an opportunity to shape what is delivered.

Part of the custodial role in stewardship of development must, therefore, be to engage and to listen, and to deliver on promises early. It is not to tell people what they want, but rather to create an environment encouraging and enabling conversation for those objectives to be shaped by the community as it emerges. And given that we concluded stewardship should be a key consideration at the master planning stage, those conversations need to start from the outset. 

Understanding the local market is key: placemaking isn’t merely about the aesthetic appearance of space. It’s clearly also about the curation and nurturing of a new community that will in turn see spaces evolve into vibrant and attractive places. It’s important to achieve a delicate balance of clear direction and an element of patriarchy from a development custodian, with good governance that gives the community a valued voice. There must be a tangible element of democracy that goes beyond a simple hope that a sense of benevolence and civic responsibility on the part of the master developer will lead to the achievement of the long-term independence of the community. 

Perhaps the true mark of success is in fostering community champions from those who want to participate in the long-term stewardship of a new development, because they come from a community that has been invested in and listened to. Thus the management organisation that takes on the baton of responsibility for maintenance in perpetuity may present itself: the local people. A successful exit strategy (and transition from developer-patriarchy to local democracy) starts in the years beforehand, in the efforts to establish and cultivate governance structures that allow for that custodial hand on the back to be slowly withdrawn from the emerging community, as it gains confidence and stakeholders’ willingness to participate and take control emerges.

There will often be a concern around how much the master developer ultimately relies on the capability of its emerging communities in these circumstances. It’s not an absolute certainty and there are few guarantees if and when it will be ready to take over “stewarding the ship”. In an ideal world, the master developer would rather facilitate, not do, when it comes to community engagement. And somewhat at odds with ensuring we create thriving places, the experience of those in our discussion suggested that the most successful results from a community development perspective were often borne of legacy of previously poor stewardship. Having a common focal point to criticise can become a common source of motivation to drive passionate community enablers to step forward and make changes. 

Place: ownership and maintenance

And so, what about ownership of these community assets in perpetuity? What is the step between place-making and place-keeping?

The traditional model, in the absence of adoption, is that each homeowner is required to pay an annual service charge and has a share in a management company that owns and maintains the public realm.

Yet in today’s current climate, private management company regimes and managing agents appointed to run these, particularly where there is no residents’ ownership or consultation, are under increasing scrutiny and they come in for some tough assessment in the Competition and Markets Authority’s recent working paper (produced as part of the Housebuilding Market Study) on the private management of public amenities on housing estates. That paper highlights the experience of many who are subject to high charges, poor service and little communication from the managing agents or company directors.

Such is the state of play that the Leasehold and Freehold Reform Bill now going through Parliament seeks to put freehold homeowners on an equal statutory footing with leaseholders in terms of a right to transparency in relation to charges, and an ability to seek redress for poor service and/or unreasonable charges.

But is homeowner ownership of the estate management company either practical and/or necessary? Part of the challenge many developers report is engaging with residents who have neither the time nor inclination to get involved in the responsibilities and liabilities that come with estate management.

Given that the intrinsic value of the remaining development on a large site can be impacted by the early decisions taken in respect of the stewardship of community assets, we suggest it’s simply not realistic that the master developer, nor its funders, are likely to relinquish control of the stewardship body to homeowners at the outset in any event. The question is whether it is the right thing to do in the long-term.

The conundrum is identifying the right management organisation model and finding the right people at the right time, assuming that at the end of a development project the developer will want to make a permanent exit. A more nuanced approach, avoiding absolute control followed by complete handover, can be achieved by ensuring community representation and participation in the management organisation from the start. By constituting the stewardship body with board positions occupied by both key stakeholders and community representatives, or enshrining an obligation for community representation and participation with sub-committees or other representative groups, it’s not only possible to protect a strategic overview for delivery, but allow for homeowner participation to shape that strategy and gradually take community ownership.

In addition, there is also merit in considering a diversity of owning entities according to the nature of the community assets. So, for some assets it may be appropriate to divest these to a community run entity (such as a community interest company), whilst others which retain a more strategic importance are kept within the remit of an experienced stewardship body. It’s important to think about each separately, as the right solution for the local landscaped areas may be quite different to that for the country park; likewise a local play area to community playing fields. Who will be using these places and spaces – just the residents paying for them, or the wider local community?

We all agreed there is always a tension between the creation of assets accessible to and used by the wider public, with the burden of funding maintenance of the same borne by a defined group of local residents. Again, diversity of ownership entities can help with that. And there are advantages, for example in terms of taxation reliefs and access to grants, that come with stewardship organisations established as charities, having objectives for wider public benefit.  

Of course other tensions can also emerge and continue to be grappled with. Should tenants of affordable housing or build to rent properties have a right to representation? Should they pay into a service charge? Or do those rights and responsibilities rest with their freeholders? 

Conclusion

While there never will, nor should there, be a “one size fits all” approach to delivering successful new housing projects, it definitely is the case that stewardship ought not to be an afterthought. Nor should the concept of stewardship be confined to management of community spaces in perpetuity. Rather it should be placed at the forefront of master planning and community development, be in the mindset of the developer and the local planning authority and be an objective of community engagement. Such an approach is vital to ensuring that the places and new communities are created become truly sustainable in the long term, both in terms of their physical assets and the local residents passionate to maintain them. As we said at the start, this is a holistic concept of process, people, place.