A GROUP of York residents has launched radical plans to create new community-owned housing within the walled city-centre.

The YorSpace group and Bishophill residents want to raise at least £1 million to buy and convert Oliver House, the empty former care home at the junction of Priory Street and Bishophill Junior.

They leafleted homes in the area last night and have called a public meeting for Sunday night. They hope to attract hundreds of investors from Bishophill, the wider York area and across the UK but have only two weeks to raise as much money as possible. City of York Council has invited bids for the building by the end of the month.

If successful, the group will turn the building into 11 homes, ranging from one to four bedrooms each, with potentially some space for small businesses or renewable energy production.

They say their project would create a fully-affordable housing development and would be a pioneering example nationally of social housing. They suggest a variable rent model, where the amount tenants pay could vary according to their income.

Under the plans, the site would have separate homes but also communal spaces such as a common room and shared garden. There is already a community allotment beside the building, adjoining Lower Priory Street, which the group hopes to use as a springboard.

YorSpace was founded by a small group of York residents and neighbours in 2012, with the aim of creating environmentally sustainable houses that make and sustain a community. They were inspired by Lilac (Low Impact Living Affordable Community) in Leeds and are working on a bid for Oliver House with the Bishophillbillies, a local community group that works to improve Bishophill.

Under their plans, investors would lend to YorSpace so it could buy and develop the site. Once developed, the new residents would become shareholders and would sell back their shareholding when they moved out at a rate agreed collectively by the residents and company.

Lenders would not have a say in the use of the building but the group envisages paying a return comparable to ISAs yet lower than commercial lenders, to create what it sees as a mutually-beneficial arrangement. The group hopes the deal will appeal to savers in York and around the country looking for ethical investments.

Susannah Bird, a director of YorSpace, said: "We are hoping something like this could mark a sea-change in the city. There are lots of co-housing groups up and down the country trying to find ways to do it. It's such a tricky task."

She said traditional co-housing models relied on residents contributing and pooling money themselves, but this would allow community-minded investors to make a difference.

The council need not accept the highest cash offer for the site if other bids display other benefits, and Ms Bird's fellow director James Newton, who works in architecture, said the group would seek to demonstrate how it would improve the local community and help tackle the lack of affordable housing in York.

Local resident Pete Kilbane, of the Bishophillbillies, said: "We are trying to achieve 100 per cent affordable housing, to keep the neighbourhood varied."

Mr Kilbane, who previously helped spearhead the community buy-out of the Golden Ball pub in Cromwell Road, said the traditional rental market could feel insecure for residents and said the "churn" of tenants could make it hard to foster a community. He said he hoped people would commit to the neighbourhood more by buying into a community.

Oliver House became empty in 2012, during changes to elderly people’s care in York. An attempt by York CVS to take it over in 2013 came to nothing when they could not raise enough money.

YorSpace and the Bishophillbillies are holding an open public meeting about their plans in The Priory Street Centre at 6pm on Sunday. Anyone interested, but who cannot make the meeting, should email yorspacehousing@gmail.com or phone James Newton on 07743 344776.

More information is also available online at yorspace.org or on twitter at @yorspace