Affordable Housing Seminar

Affordable Housing Seminar

Wednesday 19th June 2013

Conference Chair

Cllr John Boyce, Oadby & Wigston Borough Council

Successful places with homes and jobs

A NATIONAL AGENCYWORKING LOCALLY

Affordable Housing Seminar

East Midlands Councils

Graham Dobbs Head of Area HCA

19 June 2013

Contents Current delivery context

Delivery and 2013 Budget Announcements

Focus on AHP and AHGP

HCA role in Investment, Land, Market Interventions and Regulation

Conclusions

Current delivery context Continued limits on public funding Focus on growth Localism Risk – diversification and complex

environment HCA activity focused on five key

areas:– Affordable housing

– Market interventions

– Public land

– Economic Assets Programme

– Regulation

2012/13 Delivery A strong year of delivery HCA has met or exceeded all core

targets:– 114 ha of previously developed land back

into productive use

– 323,000 sqm of new employment floor space created

– £944m of private sector investment attracted

– Exceeded housing delivery targets: 26,635 completions and 41,142 starts

Support of partners was key New programmes & initiatives are

foundation for strong delivery in 13/14

Budget 2013 Significant new investment channelled

through the HCA– Help to Buy

– Build to Rent

– Affordable Homes Guarantees Programme

Builds on success of existing programmes

Increased Resource but focus on– Returnable Investment

– less on Gap or Grant

Speed of delivery is vital to maximise the impact of this investment on the economy.

2013 Budget announcement - HCA

Programme Budget extra

Impact

Build to Rent £800m Additional due diligence & bidding round 400% increase & extra year to 2015/16

Help to Buy £3.75b New homes purchase programme to 2015/16

Affordable Homes Guarantee

£225m 100% increase to existing programme – extended bidding round & timeline to 2016/17

Local Infrastructure Fund - tbc Move from single initiative for 8 large sites to open bidding round to incl sites >1500 & EZ.

Total £4.775b

Growth in value of capital programmes…

Programmes have doubled in value during the SR

Growth in number of Capital Programmes – CSR2010- Budget 2013

Successful Places with Homes and Jobs

Supporting local growth:Housing, LEPs and Cities

Importance of housing and construction in helping drive economic growth is well recognised

HCA activity supports growth at a local level

Working with Local Enterprise Partnerships and Core Cities that identify housing, land and regeneration as growth priorities, and to develop joint investment models

Supporting the delivery of Enterprise Zones

Supporting local partners bidding for the Regional Growth Fund

Our investment and expertise support local aspirations and deliver economic growth.

Our delivery role:Affordable Homes 2011-15

£4.8bn for up to 170,000 new homes Up to £300m care and Support

Specialised Housing Fund Bringing up to 10,600 empty homes

back into productive use £2.1bn programme of investment in

Decent Homes TPF, Homelessness Change, Mortgage

Rescue Meeting locally identified needs Influencing RP Business Plans –

generating capacity

We are helping to deliver the Government’s ambitions to build up to 170,000 new affordable homes, improve existing homes, and assist first time buyers

Affordable Homes Programme 2011-15

The role of Local Authorities

Articulate a clear vision and ambition for their area. Assets delivery of affordable homes Need continuous and meaningful

ongoing dialogue with providers Nominations to new homes Agreement to conversions and

new supply as ‘affordable’ rent or

Affordable Home ownership Maximise cross subsidy solutions

e.g. land, S106, New Homes Bonus,

HRA etc. Maximise funding opportunities – government initiatives –

flexibility/innovative

Affordable Homes Programme 2011-15

What next…

Continued Contract and Programme Management of Affordable Homes Programme– Quarterly review – delivery certainty, clarity on forecasts, final push for

100% scheme profiles

– Significant emphasis on Starts by September 2013

Prepare for new programmes– Help to Buy – contracting with developers - Underway

– Empty Homes 2 – Announcement 20th June

– Care and Support Specialised Housing – Announcement imminent

– Build to Rent – shortlist announced and due diligence started

– Local Infrastructure Fund – Assessment phase, announcement imminent

– Affordable Homes Guarantees – Due diligence phase

Affordable Homes Guarantees Programme- The Basics

Combined funding up to £450m (£225m Autumn Statement, £225m 2013 Budget) – including London

To deliver up to 30,000 new affordable homes – both Affordable Rent and Shared Ownership

Completion by March 2017 but preferred delivery by 2015

Grant alongside guarantees and asset management flexibilities

Expectation that guarantees will drive good VFM for available grant

Affordable Homes Guarantees Programme- Prospectus and requirements

Bids required for named, firm sites Scheme grant rate (not average payment rate) Registered Providers – classified to the private

sector Schemes must start on site by March 2015 End date for completion March 2017 BUT

significant proportion March 2015 s.106 must be delivered at nil grant Products - Affordable Rent & Affordable Home

Ownership Design and Quality 2007 standards

Affordable Homes Guarantees Programme – Timeframe

Deadline for submission of bids – 21 May 2013

Assessment of bids – May-June

National aggregation & liaison with debt guarantee delivery partner – 26 June – 5 July

HCA Board & Ministerial sign off – Early July 2013

Announcement of allocations – Mid July 2013

Appetite – Those whose AHP allocations were scaled back?

Our delivery role:Market interventions

Increasing private sector housing starts through equity loans and other market interventions– £1bn Build to Rent

– £570m Get Britain Building

– £225m unlocking large scale sites

– S106 mediation

£10bn Guarantees – linked to £500m AHP funding for new housing delivery

Increasing HCA loan portfolio – c.£1bn £3.5bn Help to Buy to support aspiration

Our delivery role:Land

Bringing surplus public land to market to drive housing growth

HCA land development and disposal plan – land for 14,000 new homes by 2015

Enhanced role for HCA – additional £290m funding announced in Autumn statement

Pioneering ‘Build Now, Pay Later’ approach of deferred payment

Supporting central government in its land disposal

We are using new ways to increase the supply of public land and speed up development

Our delivery role:Economic Assets

Supporting local economic growth through the development of assets

A major £700m asset portfolio – land, property and joint venture companies

Nationally important sites – Enterprise Zones

£120m invested and 100,000m2 employment floor space in 12 months since programme established

100 more sites to be disposed in next 12 months

We are a key delivery partner in Government’s ambition to make the best use of public assets to benefit communities

Regulation: a challenging environment

Sector is becoming more complex and challenging– Changing mix of funding sources

– Welfare system changes

– Diversification

– For-profit providers

– Bond finance

Regulator needs to keep pace Regulatory Judgements – vast majority

of providers meeting the standards

Conclusions Public finance remains constrained;

complex and challenging operating environment

Housing, land and construction as key drivers of local economic growth

But Budget builds on HCA success of existing programmes – more to come?

Risks and opportunities – needs partnership working by LA/RP/Developers/Govt. Dept. to maximise investment opportunities?

Future programmes ‘Bidding’? Challenge or Opportunity?

We are innovative, flexible and commercial in our approach to delivering public value and responding to challenges.

Keeping in touch homesandcommunities.co.uk

// /HCA_UK

/homes-&-communities-agency

Delivering Affordable Housing – challenges and opportunities

Cllr Keith House, Eastleigh Borough Council

Workshops

Workshop 1 – Suite 1 (this room)

Delegates with Green dots attend the New Homes Bonus workshop

Workshop 2 – Ferneley Room (next door)

Delegates with Orange dots attend the Rural Affordable Housing Delivery workshop

Delegates attend one workshop in the first session and the other in the second session

Use of New Homes Bonus to support Use of New Homes Bonus to support

affordable housing in Leicestershire affordable housing in Leicestershire

Sharon Wiggins Ian Jones

How did LCC start out on this process?

•DCLG letter confirming New Homes Bonus (NHB) received March 2011•Leader keen to explore ways of using LCC NHB to deliver bricks and mortar on the ground•Various ideas explored•Preference for supporting delivery of rural affordable housing emerged •First LCC Cabinet report on NHB considered Sept 2011

What practical steps were taken?

•Discussion with district housing officers, registered providers and Rural Housing Enabler

• Could LCC NHB funding plus district funding help to deliver stalled schemes?

•Drew up criteria for ‘shovel ready’ schemes• Systematic appraisal of schemes required to meet

State Aid rules

Wider context for the use of NHB in meeting Leicestershire’s Rural Housing Need?

•Strong track record of rural affordable housing delivery• Leicestershire Rural Partnership (LRP) has

supported delivery of rural affordable housing over last 20 years

• Mrs Pendleton CC, former LCC Cabinet portfolio holder for rural affairs and Chair of LRP, long term champion of provision of rural affordable housing

Wider context for the use of NHB in meeting Leicestershire’s Rural Housing Need?

• Modernisation review of the Rural Housing enabling role has recently been undertaken. All rural districts are now financially contributing

• Mrs Pam Posnett CC recently taken on Chair of LRP, provision of rural affordable housing continues to be a high priority

• Building schemes on the ground creates desire for further schemes eg. Croft

Wider context for the use of NHB in meeting Leicestershire’s Rural Housing Need? (contd)

•Already good partnership working between district local authorities, Rural Housing Enabler and registered providers working in Leicestershire

•There is a will to make things happen in Leicestershire

So what has been achieved so far?

o Extra funding from LCC and district partners has enabled earlier delivery of schemes which had stalled

2011/2012Sapcote scheme 12 affordable homesBlaby DC Complete September 2012East Midlands Housing Group

Somerby scheme 7 affordable homesMelton BC Complete April 2013Nottingham Community Housing Association

Costs

Sapcote scheme 12 affordable homes

Blaby DC £100,000LCC £332,000Total scheme costs £1.607 million

Somerby scheme 7 affordable homesMelton BC £88,000LCC £188,000Total scheme costs £927,650

Sapcote site planSapcote site plan

Sapcote completed homes Sapcote completed homes

Sapcote opening ceremony Sapcote opening ceremony

Somerby, view from entrance Somerby, view from entrance

Somerby opening ceremony Somerby opening ceremony

So what has been achieved so far? (contd)

o Start on site before the end of March 2013 for the following schemes (2012/2013):

Husbands Bosworth 8 affordable homes

Tilton 6 affordable homes

Breedon 10 affordable homes

Bitteswell 2 affordable homes

Elmesthorpe 4 affordable homes

Carlton 11 affordable homes

TOTAL for 2012/2013 41 affordable homes

So what has been achieved so far? (contd)

•60 new affordable homes either completed and occupied or under construction by end of March 2013 through this approach

•Leicestershire County Council’s NHB investment of £1million has enabled total investment of £7million in the building of new homes for local people in rural communities

The story continues…

LCC NHB programme for 2013/2014 agreed by LCC Cabinet 12 June 2013

Extra Care scheme at Winchester Road, Blaby 50 units

Refurbishment and remodelling of existing sheltered housing scheme at Brooklands Gardens, Market Harborough

10 additional units

Sharnford 8 affordable homes

North Kilworth 6 affordable homes

Asfordby and Melton 10 affordable homes

84 affordable homes

• A further 84 new affordable homes and 43 refurbished affordable homes to be supported by NHB in 2013/2014

• Leicestershire County Council’s further investment of £1.8 million (£595,000 NHB plus £1.2m from Extra Care Programme) will enable total investment of over £16 million in the building of new Extra Care schemes and rural affordable homes

Looking forward to the future…

•Build on momentum and positive news• Continuing difficult economic climate with

competing priorities for NHB funding

•Development of a stronger pipeline of schemes

•Lynn Aisbett, Chief Executive of Melton Borough Council, leads the LRP rural affordable housing priority

• Rural Affordable Housing Commissioning Plan for the County, key outputs include:

• Development of Strategic County Plan• Five year rolling plan to survey all parishes

• Rural housing ‘asks and opportunities’ include:• Enabling new and innovative methods of

delivery beyond traditional rural exception site model, including mixed tenure developments

• Ageing population - Leicestershire Together and LCC

priority• Partners have valued early information that NHB

funding available for the following year• Slippage in HCA Affordable Housing Programme

Thank you

Any questions?Sharon Wiggins [email protected] 0116 305 8234

Ian Jones [email protected] 0116 272 7516

mailto:[email protected]

Keeping the Derbyshire Dales clean, safe, healthy & beautiful

Cllr Lewis Rose OBE

Derbyshire Dales DC


Why build new homes?

• Derbyshire Dales house price to income ratio is 14:1, the second worst in the country

• New Homes Bonus• Replace homes lost through RTB• Offer alternatives to tenants

effected by Welfare Reform


Track record of Delivery

• Since LSVT in 2002 we have enabled 1000 affordable homes across the Derbyshire Dales

• Market Town, infill and rural exceptions

• Recognised through Awards and funding allocations for our approach

• LA Land and funding of £2m


DDDC achievements

• Shortlisted Beacon Status Affordable Housing 2006

• Housing Heroes Award 2010 Development Team of the Year

• Shortlisted UK Housing Awards Housing Development 2011

• Shortlisted MJ Awards Customer Engagement 2011

• Shortlisted UK Housing Awards 2012 Debt Advice

• Shortlisted Housing Heroes Award 2012 Development Team of the Year


Making your authority easy to invest in

• Housing Associations want to add stock

• Developers need to build• A variety of funding opportunities

are promoted by the HCA• Land owners and entrepreneurs are

responding to development opportunities


Local Authority support

• Potential financial options– Right to Buy receipts – Section 106 income – 2nd homes council tax– New homes bonus– DCLG Homelessness grant– Capital receipts


Local Authority Support

• Pre application support• Concept statements for some sites• Rural Housing Enabler central to

community engagement • Corporate approach to delivery,

Housing, Planning, Legal, Estates, Highways, Finance, Environmental Health, Car Parks


Inspiring confidence

• Successful programmes take time and effort from a variety of partners

• The local authority role is central;– Identify need through your Housing

Teams– Accessible Planning Teams to give advice

and support– Assist with resources where possible– Leadership


Why Leadership is important?

• Identifying priorities – officers and partner agencies need direction in where to focus resources

• Planning Committee….. affordable housing schemes can be 2 or 3 years in the pipeline, often at significant cost to developers

• Approvals generate confidence, developers and the HCA need to know your authority is a safe bet


Wider benefits

• We know from independent research:– Happy residents! Even the majority of

objectors come round in the end– Schools, local shops and services– Employment and apprenticeships– New Homes Bonus– Local trades and materials


Going forward

• Positioning your authority to make the best possible bid for the resources available whether HCA, Housing Association or developer

• Exceptions site policies, cross subsidy(?), S106 contributions

• Supporting the role of Rural Housing Enablers


Derbyshire Dales DC

• 118 homes completed in 2012/13• 70 homes to complete in 2013/14• Bid to HCA of 164 homes with LA

funding of £832,000 financed from RTB receipts, S106 income and 2nd homes council tax

• Total package of investment £16m


If a council as small as the Derbyshire Dales can build new homes in one of the most protected environments in

the East Midlands….

So can most other authorities

EAST MIDLANDS COUNCILSAffordable Housing Seminar

19 June 2013

Chan Kataria, Group Chief Executive

About EMH Group

EMH Group formed 65 years ago 17,000 homes, £90m turnover Working with 35 local authority partners Leads the Quantum Development Consortium Develop 200-300 affordable homes a year Annual capital spend of £30m Rural specialist through Midland Rural Housing (MRH) Help to Buy Agent for East Midlands region Administers the Mortgage Rescue Scheme (MRS) Established the EMH Academy providing apprenticeships Care and support business with c£20m turnover Long established partnership with builders

Development Context

Development capital subsidies are reducing Affordable Rents do not increase development capacity in this region Borrowing costs are rising and banks are only lending on short term basis

and with onerous covenants Welfare reform will have significant impact on viability and sustainability of

schemes Asset management disposals to pay for development is not sustainable in

the long term Housing market conditions are uncertain, reducing the viability of mixed

tenure schemes Competition for planning gain sites is driving up costs New regulatory pressures designed to ring-fence social housing activities

will restrict development plans

Partnership With Local Authorities – What Works? Support on political, strategic and financial basis Understanding and acceptance of impact of housing investment on

employment, health, care and support Engagement with government on role of HAs and value of housing

investment Understanding the current operating context and restrictions on

HAs Clear strategic housing objectives and LIPs based on robust

evidence of need Consultation and engagement on development of housing and

planning policy and strategy

Partnership With Local Authorities – What Works?

Joined up policy on housing, planning and older persons’ strategy Adequate resources for the “enabling/strategic” function Strong, timely support for HA bids to HCA Financial support through New Homes Bonus and RTB receipts to

support development of affordable homes Subsidised land to support housing development Clear planning policy on s106 sites Contribution from commuted sums Engagement of LEPs with the housing agenda

Rural Housing

East Midlands Rural Housing Group identified need for 1600 rural homes in the region

Support for Rural Housing Enablers Engagement from the Parish Council and local community Clear exceptions policy in Local Development Framework Identification of exception sites National/regional rural homes target are missing High level of pre-planning consultation with local stakeholders and planners

will overcome opposition Establishment of CLTs/community led development to attract funding NPPF makes it possible for exception sites to contain market rents to

subsidise affordable homes

Examples

Leicestershire CC capital contribution for extra care scheme bid on Winchester Road to deliver their older persons’ strategy

County Council funding for Rural Housing Enabler in Leicestershire Leicester City support for mixed tenure, housing and care scheme

with land subsidy in Manor Farm scheme North West Leicestershire DC funding to pay for additional costs

relating to higher aesthetic specification at the Leys scheme in Coalville

County, Blaby DC and parish council made joint contributions from NHB to fund rural exception site in Sapcote

Blaby DC offered loans to first time buyers at affordable rates Establishment of Community Land Trust in Youlgrave

Comments and Questions

The East Midlands Declaration on Affordable Housing

Andrew PritchardDirector of Policy & Infrastructure

Housing Supply in the EM

Housing Supply in the East Midlands2000-1 to 2011-12

0

5,000

10,000

15,000

20,000

25,000

Dw

elli

ngs

Total Housing Starts Total Housing Completions

All Affordable Housing Total Net Additions

The Affordable Housing Challenge

● 75% reduction in HCA funding for affordable housing in the East Midlands for 2011-15

● Lack of understanding about strength of the East Midlands investment case

● Perceptions about the challenges of ‘doing business’ in some areas

● Lack of a joined up approach between key institutions and interests

Smith Institute Report Published in September

2012 Highlighted the

declining share of the national resources for the EM since 2010

Challenged councils, LEPs and MPs to develop a collective case for investment

Our Response

Affordable Housing Prospectus: setting out the ‘East Midlands Offer’

East Midlands Declaration on Affordable Housing: demonstrating local political commitment

Examples of Best Practice: showing what we can deliver given the chance

Affordable Housing Prospectus

Based on the Smith Institute research

Sets out both the economic and social benefits of investment

Demonstrates the value of investing in the EM to UK plc

Affordable Housing Declaration

Sets out a list of key commitments

Supported by EMC, NHF and the HCA

Derbyshire Dales the first to sign up – we now have 31 councils and counting…

Case Study: Gainsborough

Case Study: Derbyshire Dales

Case Study: Leicestershire NHB

What has happened since?

Between 31st March 2012 and the end of February 2013, the HCA has committed an extra £9.2 million into the East Midlands, which will deliver an extra 575 new units

What else are we doing?

Working with the new EM MPs Group to improve the voice of the EM in Parliament

A wider ‘Investment in Opportunity’ prospectus to promote infrastructure investment across the EM launched in February 2013

Supporting efforts of housing associations to form an East Midlands lobbying group (similar to those existing in London & WM)

Seminar Close

& Lunch

Documents

Affordable Housing Seminar