Community housing project in dispute as GSA pulls back from sale
A row has erupted over the future of a housing scheme in Birmingham, after a housing association pulled out of an agreement to transfer the development due to the rising costs of the project.
The Stirchley Co-operative Development claimed Green Square Accord had dented hopes for co-operative led housebuilding projects across the country, after the housing association announced plans to retain ownership of 39 new homes and three commercial units it’s currently building on Pershore Road.
But GSA says it cannot absorb a near £1.2m cost overrun on the scheme, leaving it with no choice but to take on the development.
Formed in 2016 by members of two housing co-operatives and three local businesses, Stirchley Co-operative Development had teamed up with Green Square Accord to buy the site in 2022.
The building was intended to be a community-owned housing and retail scheme, launched in response to rising rents in the Stirchley area.
GSA bought and developed the site as part of its ongoing development programme, with the intention of selling the site to SCD at construction cost once the three-storey building had been completed, then estimated at around £10.4m.
A ground-breaking ceremony which took place in 2023 was the result of several years of groundwork by SCD, which had secured £210,000 from the government’s Community Housing Fund in order to get the project off the ground.
However, the collapse of lead contractor Tricas and subsequent takeover of the scheme by GSA lead to delays on the project – with costs on the development overrunning by a claimed £1.16m.
In a statement, GSA said the Stirchley Co-operative Development could not meet the escalating costs of the project with an improved offer to purchase the site, leaving them with little option but to retain and manage it themselves, describing the decision as “the responsible thing to do”.
The building is scheduled to be completed this month.
“While we appreciate this is not the expected outcome for SCD and our partners, as a not-for-profit social housing provider it would be irresponsible for us to absorb the £1.16m shortfall between the cost of the development and SCD’s offer, which would ultimately compromise investment into homes and services for our customers,” said Ruth Cooke, chief executive of GSA.
“It has always been our intention to sell this site to SCD and for it to be run as a community-led scheme. The initial cost of the development has increased due to a number of challenges during construction – including the original contractor liquidating and associated challenges which we had to pick up when we took over the site. We have been clear about these cost increases with SCD throughout this process.”
In response, SCD said the housing association was “misrepresenting the current situation”, claiming that delays which took place after GSA had taken over had led to the increased construction costs.
“Social rent housing and affordable work premises mean rents are capped and so is our ability to go above the original sale price – something GSA have always been aware of,” said a spokesperson.
“Far from being ‘the responsible thing to do’, GSA’s decision represents a large institution taking control of a project created through community labour and public support, while transferring consequences that were outside of the control of SCD onto the local community.
“SCD rejects the notion that GSA can own the building and still retain the community-led aspect of the project. SCD is rooted in the community.”
GSA said it would work with Birmingham City Council to make the homes available for social rent, whilst attempting to reach an agreement on terms with three co-operative businesses for commercial units built as part of the scheme.
