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An as-yet-under-wraps corner of west Leeds has been chosen as the location for the city's first co-housing project.

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The futuristic energy-saving commune will be almost completely self-sustaining – with houses built primarily from straw bales, virtually no artificial heating and recycled rainwater running through the taps.

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It will also be the first green living project of its kind to be affordable for ordinary folk – families with a minimum salary of just £16,000 can buy into its new-style shared ownership scheme.

Far from being a hippy-town – as similar schemes have sometimes been branded – the developers say LILAC (Low Impact Living Affordable Community) will be modern housing designed for city-folk – but with a green and affordable theme at its core.

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On the UK Co-housing Network website, the creators say they are building "a pioneering, carbon neutral, permanently affordable, sustainable mixed urban housing community".

If the idea takes off in Leeds, they hope it will be replicated across the country.

Alan Thornton, director of LILAC, which was formerly known as the Leeds Eco-Village, said the plan would cut energy consumption by a "massive amount".

He added: "Having something like this in an urban area is particularly rare.