Are Developers needed to Build Homes?

The fideicomiso model allows residents and architects to bypass bureaucracy. Could it help to ease the UK housing crisis?

Inside one of Buenos Aires' fideicomiso apartments 

“Developer,” the late architect Paolo Soleri used to say, “starts with ‘D’, like ‘devil’ and ‘demon’.”

While Soleri was unique in many pronouncements, his suspicion of developers is not so uncommon amongst fellow architects. Bloated fat cats, squeezing budgets while maximising profit, they are often seen as inconvenient obstacles between the design vision and future users of the building.

House builders are the worst offenders, generally not using architects at all, while “conning the public into buying hugely overpriced rubbish, the architectural equivalent of the turkey twizzler,” as Alain de Botton recently put it to the Guardian. In an ideal world, couldn’t we cut developers out of the process all together?

Architects in Argentina have been exploring this for some time, as researcher Elias Redstone discovered on his travels around Buenos Aires, as part of the British Council’s Venice Takeaway initiative, exploring ideas to change British architecture.

“There is a different culture of architects acting as entrepreneurs in Argentina,” says Redstone. “It is very common for them to work directly with a group of future residents as investors, thanks to a form of legal agreement called fideicomiso.”

A fiduciary contract based on trust, fideicomiso allows the architect to take on the risk of a development, using the residents’ collective assets to buy the land, fund the project and deliver the scheme. It enjoyed a resurgence as a model of house building after the 2001 banking crisis, when many people withdrew their savings from collapsing coffers and looked for somewhere more stable to invest.

“It was also a product of necessity for architects,” says Redstone. “There weren’t many developers around to commission buildings, particularly from smaller practices, so they decided to go out and do it themselves, constructing small apartment blocks for groups of friends and family.”

Across Buenos Aires in traditionally low value areas, these self-built blocks, usually of around eight apartments, have become a common sight. The cumulative effect of these interventions has led to the revitalisation of neighbourhoods, such as Palermo, Caballito, Nuñez and Barrio Norte.

A fideicomiso building by Adamo Faiden architects 

The standard plot widths of 8.6m, along with specific neighbourhood planning codes, define the permitted development and the value of the property, making it easier for architects to propose a scheme and a business plan for any given site. Resident investors, meanwhile, can enter the project at different stages, with the rates increasing as the scheme develops: early investors – taking a bigger risk – receive a greater return. Overall, buying an apartment in this way is thought to be 20–30 percent cheaper than on the open market, and with the added benefit of being able to have a say in the final design.

So could the model work in Britain and help to moderate our hyper inflated, developer-dominated market, increasing the supply of much needed urban housing? Architect David Kohn doesn’t see why not.

“From looking at housing in London, it has become clear that shortage of land is not the problem,” says Kohn. “Instead it is the shortage of developers willing to build out the planning permissions that they already have, because they’re not deemed to be sufficiently profitable.”

Kohn, who is teaching a diploma unit looking at the potentials for self-build on the Olympic site (part of an initiative recently announced by the London Legacy Development Corporation) argues that this model of co-housing could fill the gap.

“Self-build isn’t the whole answer, but it could be a way of kick-starting the process,” he says, seeing the co-housing model as a complementary part of a wider ecosystem, working alongside conventional development. “The end-users provide the capital, reducing the developer’s outlay, and once the project has taken root it will help to increase the wider value of the site.”

While self-build has traditionally been associated with the Grand Designs vision of suburban dream homes for wealthy middle-class clients, Kohn is interested in how the urban nature of Argentina’s fideicomiso schemes can inform work in London.

“There are whole self-build towns on the continent that look as if someone has emptied a toy box on the floor,” he says, bringing to mind the whimsical forms of Almere in the Netherlands. “But what works for suburbia won’t necessarily make a good piece of city. I’m interested in how you make public space when everyone’s doing their own thing.”