Birmingham community housing scheme on brink of collapse over costs dispute

A housing development in Birmingham, touted as a model for community-owned housing in the UK, is at “serious risk of collapse” due to a dispute over construction costs.

The Stirchley Cooperative Development (SCD), founded by local residents and businesses in 2016, aimed to provide 39 affordable, landlord-free homes owned and managed by the community, with completion originally scheduled for 2024. Prospective residents described it as a “landmark community housing project” intended to be a national model.

However, a dispute with GreenSquareAccord (GSA), the housing association owning the land, has threatened the project. Problems emerged when GSA took over construction in 2024 after the previous contractor went bust, leading to delays and cost increases.

GSA was to sell the land to residents upon completion, but in March it announced it would not transfer ownership due to a £1.16m shortfall. John Holmes, an 80-year-old retired lecturer, now homeless and relying on friends, said: “We were trying to make a difference and develop something for ourselves.”

Sean Farmelo, planning to run his Birmingham Bike Foundry cooperative from a ground-floor unit, blamed GSA’s “mismanagement” for the crisis, saying delays left six people homeless and businesses at risk. Rachel Kershaw, co-director of bakery Loaf, said she had to reduce wages for nine staff since February due to delays.

Residents are now seeking loans through non-equity bonds to bridge the funding gap. West Midlands mayor Richard Parker and local MP Al Carns have backed the residents, calling on GSA to fulfill its obligations. Parker said it is “not acceptable for a large housing provider to walk away from its commitments.”

A GSA spokesperson said costs rose due to interest, inflation, and construction challenges, and as a not-for-profit provider it would be irresponsible to absorb the shortfall, which would compromise investment in other homes.