With relentless rows of boarded-up windows, punctuated by half-demolished corner shops and purple shocks of buddleia sprouting from the rooftops, the streets of Toxteth in inner-city Liverpool present an eerie, post-apocalyptic scene.

It is the result, not of some great environmental disaster or mass industrial collapse, but of a series of failed regeneration plans since the 1980s, most recently New Labour’s “Housing Market Renewal Pathfinders”, that have drained the streets of all life, to make way for promised visions that never arrived.

But turn the corner on to Cairns Street, at the bottom of the Granby Triangle – where only 70 out of 200 homes are still inhabited – and a busy scene erupts into life, an oasis amid the desolation. A street market is in full swing, beneath a dense bower of trees and climbing plants, while trainee builders erect scaffolding across the fine redbrick frontages either side of the road.

Relentless rows of boarded-up windows ... school children outside a house in Toxteth, Liverpool. Photograph: Gary Calton

After 30 years of neglect, the few remaining residents of the Granby Four Streets have taken the future of the neighbourhood into their own hands: they’ve established a community land trust (CLT), taken ownership of the derelict properties from the council, and will have the first 10 homes refurbished by March.

“We never thought we’d see this day come,” says Eleanor Lee, 65, who moved to the area in 1976 and has witnessed its progressive decline since the 1981 race riots, which saw buildings torched and 500 people arrested. “After the riots an invisible red line was drawn around the area – it was an unspoken policy of no maintenance and no investment. Once houses are boarded up it sends a signal.”

“We were condemned,” says Hazel Tilley, 59, who lives a few doors down. “It was punishment for the riots. Bins weren’t collected, streets weren’t swept and a mythology built up: people came here to buy their drugs or dump their shite.”

Things began to change four years ago, when residents organised a guerilla gardening group to green the streets, with tubs and wild planting that have since won a Northwest in Bloom award, and began organising a monthly market, selling vintage clothes, cakes and Caribbean food. “It completely turned the atmosphere around: now we had a pretty street that we could all be proud of,” says Lee. “Even if it was still empty.”

Spectacular ... Assemble’s proposed winter garden for a gutted house on Ducie Street in Toxteth.

With the help of local housing campaigner Ronnie Hughes, they formed a CLT in 2011 and attracted funding from a Jersey-based social investor, Steinbeck Studios, to put together a plan for the area, drawn up by young London architecture collective, Assemble. With a track record of building temporary projects that have breathed life into abandoned sites with unusual beauty and wit – from converting a petrol station into a cinema, to making a performance space beneath a flyover – the practice has brought a fresh approach to how these empty homes could be rethought on the tightest of budgets.

“We want to retain the generosity and flexibility of the original buildings,” says Assemble’s Lewis Jones, pointing out how nearby pathfinder new-builds have much meaner windows and tighter space standards. “We’re also celebrating the idiosyncrasies of what’s already there: if a floor is missing, why not leave it out and have a double-height space? There isn’t the usual pressure to extract the maximum possible value from the site and put profit before people.”

Inside one of the boarded-up houses in Toxteth.

A second phase of work, planned for the next street along, imagines a spectacular winter garden within the empty brick shell of a gutted house, as well as a new terrace to complete the other side of the street – which was bulldozed to make way for a plan that failed to materialise. The plans for the first 10 homes are kept simple, says Jones, and don’t require wet trades in order to open up the process of construction to local young people. Five will be put up for market sale while the other five will be available for affordable rent to members of the CLT.

“I love Assemble’s attitude,” says Lee. “They’re so bold and fearless in their designs, and they’ve worked so closely with us to interpret our vision. It’s so different to how the housing associations operate.”

Assemble’s bold plan celebrates the idiosyncrasies of the derelict buildings – a missing bit of floor becomes a double-height space.

The project, which is joint-funded by Steinbeck, central government’s Empty Homes initiative and the Nationwide Foundation, represents a rare example community land trust in an urban context. Originally imported from the US, the model keeps the land in community ownership in perpetuity, with houses sold or rented at a rate that is permanently linked to local incomes. There are now over 170 such groups in the UK, mostly in rural areas due to prohibitive land values in cities, but a national CLT network was launched in July with a pot of £3m, to encourage their growth in urban areas.

“It’s a tipping point,” says Ann O’Byrne, Liverpool’s cabinet member for housing. “The council has abandoned these people for the last 30 years and left them to fester. But now we’ve gifted the homes to the CLT and they’re showing that this will be the place to live, right on the edge of the city centre.”

“What’s happening in Granby is an important prototype for northern councils, who’ve been so badly hit by the cuts,” says Ronnie Hughes. “Two years ago, the whole area was nearly signed over to a private developer, but now the people who live here have finally got a formal stake in the place. It’s an extraordinary achievement – and now it’s extraordinary forever.”