Webinar: Cooperative Economic Democracy – Pathways for the Great Transition

Meeting Summary

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Monday, February 18th, 2013

Download presentation slides: Click here

Listen to the webinar recording: Webinar Recording Feb 18th

Full webinar transcription: Summary Meeting Feb 18th

Presenters:

Patrick Conaty- Research Associate at Community Finance Solutions at the University of Salford, Research Associate with Co-operatives U.K. in Manchester and Senior Fellow of the New Economics Foundation in London.

Discussion:

Pat Conaty led an engaging discussion on the transformative potential of cooperatives. Whereas, for profit entities are not structured to be transformative, cooperatives are adaptable to change; not wired for profit or for charity but rather for service.
A new approach to think about the economy is as a foundational economy, as an economy that is wired for a broad range of social innovations.

Community Land Trusts (CLTs): own land for improving and preserving its affordability for housing for both tenants and owner occupied homes. CLTs take the land out of the market and maintain the land as static in the trust, thereby keeping housing and rental prices lower. CLTs allow affordable housing in perpetuity. In the UK it really has been in the past 15 years that community trusts have been revived.

CLTs have other applications as well, including workspace, community buildings, community gardens, community supported agriculture and use for community energy.

For more information, visit the National CLT Network.

In “The Resilience Imperative, Co-operative Transitions to a Steady State Economy”, Pat Conaty and Mike Lewis argue for 4 ways to transition to stable economy from unstable, volatile economy:
1.    Sharing ideas, resources and co-operating intensely
2.    Seeing the universe and opportunities radically differently but co-operatively
3.    Seeking by practical experiment positive, socially inclusive and economically democratic solutions
4.    Securing generative pathways to accelerate the Great Transition

Commonwealth Wheel: 6 Steps Linked to National CLT Fund

The process of CLT development is a process of introducing the idea, building the model (through collaborative education) and detailed planning, These steps happen before the construction of the homes themselves and the lending or selling to home owners.

Commonwealth Wheel

The Commonwealth Wheel is a model for CLT development- many organizations in the founding stages of CLT do not necessarily start at the very beginning stages of the process; they are not working around the clock. The process of CLT development is a social, environmental, legal, financial, operational and physical process. To follow through the process, start at “1:00 O’Clock” and work your way clockwise down the wheel. These 6 steps are critical to understand how to carry out CLTs and other types of social innovations.

National CLT Fund in England and Wales

The new economics foundation and University of Salford set up a national facilitation fund for CLTs, but was faced with a lack of support from government and banks. However, three national charitable foundations were willing to support this project and donated approximately $2 million pounds ($3.5 million CAD). The national fund was open to projects in England and Wales who met the definition of CLTs. The requirement of the project was that at least half of their developments had to be housing. They had the freedom to allocate the rest of the funds for other applications (i.e. employment and food).
The project secured additional finance from Social Banks, Community Land and Finance (CDFI) and Venturesome (Community Development Venture Capital Fund). This fund was related to the 6 step process outlined above.

CLTs Established in Rural England
1.    80 CLTs formed, 20 have built rural housing under the National Demonstration Project
2.    229 homes: 137 built and 92 under construction
3.    Tenure types: 59% part sale, 35% affordable rent and 6% for outright sale and cross subsidy
4.    Part sale property range: £85K to £115K – well below market price, very affordable

Q & A Round 1- Q & A FEB 18TH- ROUND 1

Cooperatives for a Sustainable Energy Future Case Studies:

Low Carbon Economy Project: West Midlands (Birmingham)
•    About 2 years ago, the West Midlands and Marches Energy Agency worked on a joint venture with county council area (funder) pursue this low carbon economy project,
•    Challenge: How to support community energy projects under say 1.5$ mil CAD capital size?
•    Carried out baseline survey of county area to determine all community energy projects we could find
•    Looked at packages of funding for them- there was no national (CLT like) framework
•    Considered a range of technologies (alternative energy)

Bayston Hill, Shropshire
•    Skilled group of people: tech people, finance and business modeling skills in the church
•    Developed financing scheme through church, generated 8% return on investment
•    Followed the 6 steps of the Commonwealth Wheel
•    One benefit to the community was that they didn’t have to set up community land trust; they used the church and community center, they shared this with over 20 other churches,
•    Scaled out to country

Tutbury Hydro, Staffordshire
•    Hydro scheme, community activists in Tutbury,
•    Spent over a year working near a site that was not suitable for the project, which resulted in wasted time. The project went through 3 sites.
•    The third site had a river  that was divided between 2 municipalities, so they had to work with another planning system
•    Lessons: all the things that can go wrong, because of ignoring precedents, and the time as volunteer time wasted (several years) had 12 organizations backing them
•    Lesson: follow 6 steps of the Commonwealth Wheel

What has happened since?

  • Now there are over 1000 in the USA
  • See trade body site on slide
  • Community Development Credit Unions- 250 of these, very different from typical Canadian Credit Unions, lend money to the poorest..?
  • Today these have over 43 billion in assets, really a people’s banking movement
  • To get from radical edge idea to prototype takes about 7 years
  • To transfer CLT knowledge in UK
  • Developed a road map
  • Community development of finance
  • Policy teams
  • 140 million was raised for 5 year phase
  • Task force set up to develop tax relief to support these organizations

Summary: What has been achieved?
–    New lending every year is about 200 million (English currency) ,
–    A lot of these organizations are repeat borrowers
–    The unmet demand annually shows there is a long way to go
–    These projects really are loanable but do not receive support from banks
–    One of the reasons that CLTs in the US are so much bigger and successful is because they started with affordable housing and then moved to enterprise lending.
–    The R & D should not be underestimated for civil service (e.g. policy research)
–    Loan products diverse to meet affordability (Capital and Interest repayment, Interest Only, Rolled up interest (70 years plus), Equity share loans (LRS and Street UK)
–    Very good performance (very low loan delinquency (1%)
–    Low interest (4-5%) low interest rates have kept the delinquency low
o    In Wessex, the lenders make home visits to make sure that borrowers can pay back the loan and that the borrowers fit the model

Summary overview for diffusing and scaling social innovations:

  1. Develop a process model for financing and education – then you can teach people who can become managers how to run this process >>Incorporate the early adopting entrepreneurs into this model
  2. Then you can find product diversification, where you are developing different loan products, for urban, rural, sub-urban, renters, homeowners, food projects, etc.
  3. Trade bodies come in- the  process accelerates through knowledge of trade bodies >> This is where we begin to scale
  4. Even with CLTs it is possible to find some scales, for e.g. Irvine, CA, is developing Land trust for 10,000 people. When it is fully developed it will be for 35,000 people, the largest community land trust in the US.

Scaling Up Solutions

  • We need to build public social partnerships, municipalities, public, etc.
  • We’ve had years of public private partnerships
  • The coop is so important internationally for us to develop this great transition
  • The coop sector in the UK has grown faster than the national economy
  • Small but growing number of “cooperative cities” in the UK
  • We need to take the coop sector to the scale
  • Capital reform has to be thought of by the credit union sector
  • Mutual stakeholder coops, like mutual home ownership model, building community food, energy, housing sectors
  • Early pioneers have understood the ABCs of a cooperative economy
  • Without land reform and finance reform we are not going to be able to mobilize the capital and access to space

Q & A Round 2- BALTA Webinar Series Q & A Part 2

Research Questions

What scale are we talking about? How far and how wide are we looking to apply these ideas and how far along is this diffusion and scalability going to reach? Are we looking at national (Canada) or global?

Where the opportunities are to actually have an impact on public policy and public service to engage with the coop sector on these issues: to identify individuals and department, opportunities where we can have this kind of conversation. Who are the people? Where are the openings to actually have this kind of partnership possible, at regional or cross-regional level. Where are the openings, who are the people, and where are the opportunities?

A lot of what we are talking about in terms of the summary overview, how can we move from reactive to proactive? We need to address more concretely how to deal with this overwhelming power of the private sector on these issues?

Which comes first: national or provincial intermediaries to get themselves organized to build partnerships, to do learning and engage community stakeholders? We don’t have coalitions of intermediaries; we need to get organized at that level before the policy changes.

When I look at the private sector, there are multiple players in the private sector. We have to un-bundle that private sector. Are there private investors? Chambers of commerce? I live in a small community where I make a clean distinction between big box chains and the local stores that re buying locally and providing. I think that our last work in BALTA tried to make this argument in, I really think that we can play with that concept a bit more and try to find alliances there

A lot of this transformation is looking at how public goods have become privatized. Seeing throughout this process: how this is going to affect income distribution, inequality and overall increase at income levels for those on the outside looking in? Distribution of income, wealth, in small communities- what is the tipping point of the shift in income distribution? How much do income levels have to factor out the majority of consumers that are able to be in the economy and benefit from this transformation?

Developing CLT process here- what stage are we at right now? What are the challenges that we see?

If we looked at actual processes for diffusion and what we call scaling, we would see that there are different ways in which this has happened, there has to be a system in which local or various bits of government, showing that if this is to become substantial, they play a role within a system rather than us going to them. If they are interested, they must see that we are involved as well.

To revive the economy, we need to go to the local level. The alliances are with those people that are hardwired to the local economy. That’s why I think the points about small business sector locally, with local interests, partnerships with local private sector are really key, the private sector is really critical. It’s also the side of the private sector that we are talking about. Why emphasize the coop sector? How do we get them to invest in these smaller projects is a critical research question….

When you look at this scaling, if you are moving from constructive to proactive, there is an emphasis to integrate: working in silos, each sector and each area has its own challenges. What do they have in common? We need to access policy framework helpful to us, etc.

There are lot of generic areas that overlap despite the differences in sector, there needs to be a dialogue so that these sectors are talking and bringing together common problems and common solutions, this is very important for scaling. How do we bring these needs together?

How to research building joint advocacy?

More Information:

Nesta has issued an open call for proposals that aim to challenge conventional wisdom and identify and address
knowledge gaps to deepen our knowledge of social innovation. We are especially interested in proposals that relate to practice and improving the impact of social innovation.  http://www.nesta.org.uk/about_us/working_with_nesta 

4 responses to “Webinar: Cooperative Economic Democracy – Pathways for the Great Transition

  1. Josh Evans:

    I thought the presentation was really well done. Nice combination of big ideas with nuance and detail.

    How do we move from experimentation and lesson-drawing to systemic integration? For me this seemed like the overarching question.

    The point I took was that the cooperative economy requires its own institutional framework. The notion of ‘scaling up’ presupposes that this institutional framework is assumed to be supra-local. Perhaps this presupposition is valid and is a reflection of the transition challenge more generally: widespread, rather than niche, adoption is required to achieve sustainable futures.

    The case of how innovations (solar power) of one church in the uk was taken up by the pre-existing, national church organization (institution) and distributed (scaled out?) is one example.

    But there was also lots of talk about action learning/peer learning and how these practices fed into and sustained national networks (trade org.). This seemed to me to be a different type of ‘scaling up/out.’

    In any case, rich soil indeed…

    ***************************************************************************************
    Joshua Evans, PhD
    Assistant Professor, Human Geography
    Centre for Social Sciences
    Athabasca University

  2. Pingback: Scaling innovation in community land trusts for farmland access and affordable housing | BALTA·

  3. Pingback: Webinar: Scaling innovation in community land trusts for farmland access and affordable housing | BALTA·

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