Memorandum by The Places for People Group
(AFH 26)
INTRODUCTION
The Places for People Group owns and manages
55,000 homes across the UK and provides affordable housing, housing
for sale, housing with care and support, market rent and a series
of regeneration products—childcare, employment and training
and financial inclusion programmes through the Group's regeneration
arm.
The Group welcomes the opportunity to provide
evidence to this very wide ranging and important inquiry. Our
evidence is focused on the following:
— the scale and location of demand
for affordable housing;
— the quality of affordable housing
and creating mixed tenure; and
— the policies and practices needed
to facilitate the increased supply of sustainable housing in areas
of demand.
These are drawn from the sub-committee's indicated
areas of interest.
SCALE AND
LOCATION OF
DEMAND FOR
AFFORDABLE HOUSING
Household projections based on 1998 figures
from the Governments Actuary Department and past trends in household
formation, suggest that between 1996 and 2021, England will need
accommodation for an extra 4.3 million households. This makes
no allowance for new homes needed to meet the backlog of existing
needs for groups (temporary accommodation, concealed homeless/sharing,
hostel residents etc). In 1996 this was estimated at 650,000 households.
It is unlikely this figure has declined.
Given the current output from the building industry
and from affordable housing providers it is clear a gap exists
now and will further develop in the next 20 years to just over
a million homes, due to a shortfall of output from a required
demand of some 56,000 homes a year. This is concentrated in particular
areas:
— within London's travel to work areas,
as well as rural areas within travel to work reach of other major
centres;
— 70 per cent of the population growth
is in London and the South of England but only about 50 per cent
of house building takes place there; and
— the London Mayor's Housing Commission
estimated 28,000 affordable homes for key workers and low income
households were needed but only 2,743 such homes were built in
2000.
This regional dimension to the UKs housing problems
cannot be categorised as a movement of population from the North
and Midlands to the South. Only 8 per cent of the growth in household
numbers in Southern England is due to net internal migration from
the North and Midlands.
The low housing demand experienced by the older
industrial cities in the North and responses to the process of
reversing this decline was well documented by the report of Transport,
Local Government and Regions Selection Committee on Empty Homes.
The Places for People Group gave oral evidence to the Committee
and welcomed many of its recommendations, particularly the Pathfinder
Projects announced by the DLTR to tackle low demand. We would
hope that the conclusion of this inquiry recognises the differing
investment needs and approaches required in some regions of the
North and Midlands and that recommendations will integrate with
those of the Empty Homes Report.
House prices and market rents would be affordable
to a higher proportion of the population if there was a better
balance between supply and demand. Otherwise, even if incomes
are increased or purchasers given special grants, then the cost
of each house will simply rise further, as there is the same number
of homes to go round. The danger of the Starter Home initiative—without
an increase in the total number of homes—will mean they
will displace those slightly better off. In any case the amount
of resources allocated to the Starter Home initiative will only
scratch the surface of the problem of housing and key workers.
The fundamental problem is one of under-supply of housing of the
right type, size and cost in the right places.
MIXED TENURE
NEIGHBOURHOODS
The Group believes that current policies and
Housing Corporation grant rates and standards do not encourage
quality mixed tenure neighbourhoods. To achieve this the development
of schemes should ensure that the appearance and design standards
for affordable homes should be the same as other tenures particularly
owner occupation. This will require different approaches than
currently undertaken by RSLs and developers. By having a building
for sale subsidiary within the Places for People Group and a series
of specialist providers the profit gained from development activity
can be committed to the long-term investment of the neighbourhood
and to cross-subsidise affordable housing.
To illustrate this the Group have agreed a development
in Hertfordshire with Three Rivers Council and in Chilwell Gardens
Developed by our for sale arm, Emblem Homes, this provides:
— 120 homes with 35 per cent affordable
and key worker homes pepper potted throughout;
— flats and houses for sale; and
— a respite scheme for people with
learning difficulties and a nursery facility.
The cross subsidy from the sale of homes allows
the Group to provide the nursery facility and a greater balance
of affordable homes than a developer would offer plus the design
and quality standards being the same throughout the scheme. The
affordable houses are indistinguishable from the houses for sale.
This is an example of maximising value, a one
stop approach and ensuring social inclusion. The scheme would
not have been possible under the current funding arrangement to
RSLs. However, the extra specialism, companies and resources brought
by the Group's structure delivers a better value scheme for the
local authority and creates true mixed tenure. This is a model
that can be replicated.
THE QUALITY
OF AFFORDABLE
HOUSING
The Report of the Urban Task Force stressed
the need for quality and innovation in design by increasing density,
reclaiming and re-using urban land and the need for redevelopment
of "unloved" social housing estates to "intensify"
development as well as create facilities that sustain the place
and neighbourhood.
The Places for People Group believe that quality
design in the right context—urban, town extension, rural
is crucial for the long term sustainability of affordable housing.
Our recently published "Design Guide" sets down the
following principles:
— identifying and understanding the
context of an existing community and a visioning exercise of how
a future community will work;
— building on and working with existing
local facilities and the potential for developing new, more sustainable,
facilities and services. These would include, for example, not
only open space and play creation but also opportunities for renewable
energy sources, sustainable food production and more local employment;
— understanding and assessing local
landscape features and heritage;
— continuing the involvement of all
local stakeholders in the design and implementation of the development;
— creating and maintaining of strong
partnerships with all agencies responsible for the planning and
implementation of the project;
— using sustainable materials during
the construction process; and
— reducing materials waste and waste
of operative time during the construction phase.
We believe that a focus on quality design, clearly
specified with its correct application in individual neighbourhood
context is vital for future affordable development.
THE POLICIES
AND PRACTICES
NEEDED TO
FACILITATE THE
INCREASED SUPPLY
OF SUSTAINABLE
AREAS OF
INTEREST
Although new homes are better sited on brownfield
urban sites, as far as possible, there must be acceptance that
not all of the homes can be built on recycled land. To realise
the 60 per cent target of development on brownfield sites, over
1.5 million more homes will need to go on greenfield land over
the next two decades. The Group believes this can be best achieved
by a combination of:
— high quality and high density homes
in urban areas, with a true mix of tenure and that link in with
transport infrastructure. However, the opportunity to develop
such sites in London particularly is dependent on complicated
site assembly and very competitive land acquisition focused on
capturing high house prices;
— in high value areas intermediate
housing markets will be required to provide affordable homes for
lower and middle paid staff. Such homes are likely to be based
on equity share rather than rented tenure. To illustrate this
the Places for People Group have devised an equity share model
which defrays the profit at point of sale. Together with a smaller
Housing Corporation grant this would reduce the cost of £100,000
homes, for example, to £75,000 which could be split between
rent and equity-share. Flexibility would be applied dependent
upon individual circumstances which would determine the split
of rent/equity;
— new types of regeneration agencies
are needed to deal with strategic use of land within a national
structure for strategic land assembly. These will have clear social
objectives, a strategy which emphasises long term investment rather
than the short term profit. They will have power to invest over
the long term and to take long term commercial risk and be credible
partners financially, to local authorities and with the community.
We believe some RSLs, like ourselves are well placed to be a model
for the development of this investment agency;
— the Places for People Group comprises
of:
— four general needs Housing Associations
providing affordable housing across the UK—NBH, a national
RSL, Bristol Church HA, Edinvar HA, Edinburgh, Capital City Homes,
Edinburgh;
— two specialist Housing Associations—New
Leaf, providing care and support; Kush, meeting BME needs in North
London;
— blueroom—providing market
rent to subsidise core housing activities and to extend the range
of tenure opportunities;
— Emblem Homes—developing
houses for sale to ensure mixed tenure and enable cross subsidy
in schemes to increase the amount of affordable housing that can
be provided; and
— JVCo—is the group's regeneration
arm which provides nurseries, employment and training, community
banking and other partnerships which add value to housing and
regeneration.
This combination of specialist companies working
together provides a one stop shop for local authorities as well
as public and private partners to facilitate sustainable regeneration.
It enables true mixed tenure—market rent, affordable homes,
for sale and key workers accommodation—together with community
facilities that make places work. The key point is that the Group
captures value—by recycling profits from housing for sale
and market rent into provision of affordable homes and community
facilities. By removing the need for a private sector developer,
what would have 15-20 per cent of profit for developers/shareholders
can be converted by the Group into affordable housing and regeneration
activities that benefit the community and its long term infrastructure;
— development of urban extensions allow
significant gains in scale—often several hundred homes of
mixed tenure—and these can integrate with existing, schools,
shops, facilities whilst reducing traffic congestion. This approach
lends itself to master planning together with a regeneration agency
which focuses on the wider aspects of making a place sustainable
and affordable. This could avoid the needs for dozens of harder
to develop smaller schemes or free standing communities in rural
areas with associated adverse environmental impacts. Although
it is our view that some new settlements will be required on land
currently in the green belt; and
— consideration should be given to
changing the power of Registered Social Landlords to allow them
to build houses for sale and to use the profits to create affordable
homes and sustainable infrastructure. Whilst we appreciate this
would be applicable to those with the strongest risk management
framework and financial capacity, it would produce increased resources
for affordable house/key workers. The only alternative is as we
have done, establishing a subsidiary which brings its own complexities
in terms of raising investment and security.
CONCLUSION
Our final point confirms the critical issue
of land release and assembly. In London and the South East, the
difficulty of meeting demand is hampered by the difficulty of
acquiring land, its high costs and the ability to assemble sites.
There is no fastrack way of doing this currently and clear change
is required. We would recommend:
— firstly, the establishment of an
agreed structure for dealing with land assembly. These should
be based on a Community Land Trust model to establish land banking.
This should not be left to the private sector as this will not
unlock sites for affordable homes development;
— secondly, grants should be available
to RSLs at the beginning of the process to assemble the site rather
than at the end of the development process. This will entail a
different way of developing but through this approach, will start
to ease the difficulties with land assembly; and
— it is inevitable that to achieve
the scale of affordable homes required, there will have to be
development of greenfield sites. This should be done preferably
through town and urban extension. Whilst we support the recycling
of brownfield sites, the process of unlocking them—even
if it is speeded up—will still not meet the overall requirements.
We believe the Places for People Group will
be able to contribute more effectively if these reforms are considered.
With a range of specialist skills in the Group and the ability
to manage land banking and masterplanning, it would mean we would
be able to maximise investment in affordable housing and sustainable
neighbourhoods.
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