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The Promises & Pitfalls of Resident Management Companies

Kate Swade

Green amenity space is a common aspect of housing developments, be they newly built communities, town extensions or traditional council estates. This type of space presents particular management challenges, but also, seen in the right way, lots of opportunities. This blog looks at the ways in which these spaces are managed and governed.

You can probably picture it right now. Slightly patchy grass, maybe some straggly privet hedges or silver birch trees. A small, fenced in “play area” with a couple of bouncy, unidentifiable animals on springs, a slow, low to the ground roundabout, and some swings that have been slightly worn out by all the teenagers who drink cider and see how high they can go (or get). The dog poo bin is full (if you’re lucky), and there is probably a “No Ball Games” sign on the nearest wall. Amenity green space on housing developments – new or old – rarely features in lists of most-loved green spaces, but for many of us, it’s our closest, most immediate, and most frequent encounter with  nature. So why are these spaces so often both badly managed and boring?

Earlier this year we completed some work for Kirklees Council looking at some of the issues they faced in managing the green spaces arising from new housing developments. The work was funded through the Cabinet Office’s “delivering Differently” programme and undertaken with our friends at Locality.

Most new housing developments will include some sort of amenity green space, even if it’s just grass verges. Developers have traditionally had two broad options when it comes to the ongoing management of the green space – transfer it to the local authority, with a lump sum to cover ongoing costs (usually based on an estimate of e.g. 10 years worth of management costs), or create a management company to take on the management, funded by service charges levied on the residents.

For local authorities the problem is clear. At the end of 10 years the  council still has the management liabilities (which are only likely to increase with age), but no new income to cover them. At a time when public spending is under pressure local authorities are reluctant to take on these new burdens.

The service-charge-funded resident management company takes this responsibility away from the public purse, but has other challenges. In general, a new company will be set up, controlled initially by the developer, and a private contractor appointed to run the estate, collect the service charges and keep everything spick and span. The market for these services is dominated by just a few contractors, often based many miles from the area. There is no incentive for the developer or the contractor to strengthen the role of the local residents in the governance of this process, and even where residents have the right to take control of the management of their local green spaces this is often not made clear to them. What we found in Kirklees was that the vast majority of the income from the service charges was being spent on management fees and debt collection.  Residents were left acutely dissatisfied with the level of service they were receiving.

So how might this whole system work better? One of our key recommendations in Kirklees was to make residents who were already paying service charges aware that they had the right to become a member of the management company, to elect the board and to chose the contractors and level of service they receive themselves. Much like tenant management organisations in the social sector, they can make huge changes to the quality of their communal space with a little self-organisation.

In many ways, the amenity space on a relatively private estate is a classic common pool resource with some familiar challenges: how do you ensure everyone benefits while no-one freeloads? How do you collectively agree standards of behaviour and use? Elinor Ostrom created some ‘design principles’ to help manage common pool resources and we’d love the opportunity to work with a developer or a group of residents to work out how they could be applied in these situations.

Next week: how could the design of these spaces improve?

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