Since 2005, Big Issue Invest (BII) has invested more than £70m into over 350 social enterprises and charities. The vast majority are local organisations that in some way share our own mission of dismantling poverty. Over the years, we’ve come to recognise that these local projects often bring added value because they are driven by local needs – like a library being transferred into community ownership that creates opportunities for local kids and the long-term unemployed; a local café providing training and life-changing jobs for people with disabilities; a creative arts and regeneration charity offering training for young people that leads to exciting new careers. All share a focus on local issues and the local area, with the potential to extend their impact through employing local people and using local volunteers.
Given the scale of the UK’s housing crisis and the history of the Big Issue, you’d have thought that BII had routinely invested into housing projects from the start, be it homeless shelters or move-on accommodation. But we wanted to be sure that any investment we made in this sector had all the provisions necessary to properly protect vulnerable people, so our first housing investment wasn’t made until 2014. The loan was to Phases a local charity based in Southwark which renovates empty properties to create affordable homes, whilst delivering training for individuals with a history of homelessness and unemployment. Not only has the loan helped to further our own mission, but it also helped us re-evaluate our offer around housing.
Then in 2015, we secured finance from the Greater London Authority (GLA) with the aim of enabling the equivalent of 15-20 new affordable homes to be built created each year in the capital. Our intention was to invest in innovative housing projects that fitted with our vision of combatting poverty, and over the last 3 years, we have invested more than £5m in eight different projects creating 37 new affordable homes to date. A further £4.5m of lending has been approved and will be invested over the next two years, meaning the fund is on target to meet its initial objective.
One of these organisations is Tamil Community Housing Association (TCHA), based in Tottenham but operating across London. It was set up in 1986 as the Tamil Refugee Action Group, a self-help initiative focused on the housing and support needs of the many Tamil refugees that arrived in London during the early 1980s. In 2003 it became a Registered Provider of Social Housing, and now manages over 300 affordable* homes in 11 London Boroughs. TCHA continues to cater for the Tamil community, but as you’d expect, things have evolved, and they now service a range of recent migrant communities as well as other people on low incomes. Our Investment (£3.8m in total) will help deliver 13 new affordable homes in Brent by the summer of 2019.
Overall, TCHA is a great example of what a small community-led initiative can achieve given the time and resources necessary. In this case, evolving to become a highly successful social enterprise whilst maintaining its core values and mission, and providing affordable homes and support to hundreds of Londoners. It’s also a good illustration of how smaller housing providers have a role to play in the delivery of affordable housing in the capital.
One of our many learnings in relation to financing housing projects, is that these often take time to mature and therefore need patient investors. And so our ambition is now to grow a permanently revolving loan facility dedicated to the creation of affordable homes. Beyond creating new homes, we aim to support the growth and sustainability of our sector by investing in mission-driven social enterprises and charities, so that our finance not only helps reduce homelessness but also extends to helping the local organisations whose mission it is to wrestle with these complex issues, all the while building their asset-base so that they can become more financially resilient over time.
Glenn Arradon is an Investment Manager at Big Issue Invest.
*Affordability is of course a relative concept. In the context of social/affordable housing it is often defined as being a maximum 80% of market rates.