London collective Assemble has been named on the shortlist for the Turner Prize 2015, marking the first time an architecture or design studio has been recognised by the UK's most important art award (+ slideshow).

Assemble, a team of 18 young architects and designers, was nominated for a series of architecture and public realm projects that vary from a pop-up wooden theatre to a collaborative workplace clad in colourful tiles and an adventure playground.

The project that secured their inclusion on the shortlist is Granby Four Streets, a collaboration with the residents of a rundown council housing estate to clean up the neighbourhood, paint empty houses and establish a local market.

It encapsulates the team's ethos, which is to "address the typical disconnection between the public and the process by which places are made" and to "champion a working practice that is interdependent and collaborative".

The announcement marks the first time that a "collective" has been nominated for the Turner Prize in its 31-year history.

"In an age when anything can be art, why not have a housing estate?" said Alistair Hudson, the director of Middlesbrough Institute of Modern Art and one of the award judges.

Assemble was founded in 2010, when the team got together to build a temporary cinema in an abandoned petrol station in London's Clerkenwell. All recent graduates at the time, they followed it up with a year later with a temporary canal-side cinema under a motorway flyover – a project that cemented the reputation of their studio.

They are currently working on a new gallery for London art college Goldsmiths in a converted bathhouse.

The architects will compete against a trio of females artists – Bonnie Camplin, Janice Kerbel and Nicole Wermers – for the £25,000 prize, which is awarded annually by Tate gallery to a British artist or group under the age of 50.

The winner will be announced in a ceremony at the Tramway arts venue in Glasgow on 7 December.