Memorandum submitted by the Housing Corporation
INTRODUCTION
1. The Housing Corporation welcomes the
opportunity to give evidence to the Committee's Inquiry on "Housing:
Building a Sustainable Future".
2. The Housing Corporation is the Government's
affordable housing agency. We are a non-departmental public body,
sponsored by the Office of the Deputy Prime Minister. Our three
functions are:
— to invest public subsidy in order
to provide affordable housing. We do this through our Annual Development
Programme which distributes Social Housing Grant to registered
social landlords (often known as housing associations);
— to regulate the activities of registered
social landlords; and
— to provide housing policy advice
and expertise to Government and others.
3. The level of new house building by registered
social landlords over the last few years is given in the following
table. Not all of our investment results in new building: our
grant also helps purchase (and if necessary refurbish) existing
buildings for use as affordable housing.
DWELLINGS PROVIDED BY RSLS AND NEW DWELLINGS
BUILT IN ENGLAND 1998-99 TO 2002-03
| Year | Dwellings
provided by RSLs
[22]
| New dwellings completed by RSLs [23]
| All new
dwellings completed |
% of all new dwellings by RSLs |
| 2000-01 | 22,920 | 16,610
| 133,689 | 12% |
| 2001-02 | 23,634 | 14,326
| 130,050 | 11% |
| 2002-03 | 24,975 | 13,330
| 137,891 | 10% |
| 2003-04[24]
| 23,027 | 16,710 | 141,680
| 12% |
| 2004-05 | 28,756 | 20,176
| 154,600 | 13% |
| | |
| |
4. Our investment objectives are not confined to the
provision of additional affordable housing. Our programme reflects
the Government's other housing and public policy priorities. For
example, we support the use of modern methods of construction,
and our grant is used to procure affordable housing in the context
of broader urban regeneration projects.
THE HOUSING
MARKET AND
SUSTAINABLE DEVELOPMENT
5. We subscribe to the Government's definition of Sustainable
Development objectives:
— social progress that meets the needs of everyone;
— effective protection of the environment;
— prudent use of natural resources; and
— maintenance of high and stable levels of economic
growth and development.
6. In addition, we are convinced of the importance of
good building and urban design, and good management, in creating
homes and places that people want to live in now and in the future,
and that adapt themselves to changing circumstances. Finally,
it is clear to us that a diverse community (in terms of people
of different incomes, ages, cultural and ethnic backgrounds, including
those who are vulnerable or have special needs) is a pre-requisite
of sustainability.
7. There is considerable evidence that in recent years
the operation of the housing market has hindered the achievement
of the sustainable development goals of social equity and economic
growth. Some of this evidence is in Kate Barker's Interim and
Final report, and it includes:
— rising use of temporary accommodation to house
homeless households, because of a shortage of permanent and affordable
housing;
— levels of overcrowding in social housing that
are 3.5 times those found in the owner-occupied sector;
— recruitment and retention problems in public services,
because key skilled workers are unable to afford what they consider
to be reasonable housing for themselves and their families. In
turn this undermines the Government's public service improvement
objectives; and
— pressure on transport and other infrastructure
as an increasing number of people commute over extended distances
from home to work.
8. Our view is therefore that a sufficient level of housing
provision must be provided in order to meet sustainable development
objectives, but that this must and can be done in ways that minimise
its environmental impact. At best, this development can actually
bring back into productive use land that is currently standing
derelict and unused. Indeed the Office of the Deputy Prime Minister's
Sustainable Communities Plan, which guides current housing policy,
states that:
"it will be essential for all development, especially
of new housing developments, to respect the principles of sustainable
development and address the potential impacts on the environment
alongside social and economic goals".
THE HOUSING
CORPORATION'S
RESPONSE TO
ENVIRONMENTAL ISSUES
9. At the Housing Corporation we are proud of the strength
of our policy focus on environmental issues, and the real impact
that this has on what gets built with our funding. In the introduction
to the recent report of the Sustainable Buildings Task Group,
the Housing Corporation is identified as an excellent example
for
"looking beyond lowest initial costs and demanding that
development goes beyond the minimum standard required by Building
Regulations."
Policy framework
10. It is important to understand the context within
the Corporation works. Regional housing bodies and local planning
authorities prepare development plans, which aim to provide sufficient
housing to meet the housing requirements of areas. The areas the
Corporation can develop in and the speed at which the Corporation
can encourage the construction of new homes is significantly determined
by Planning Policy Guidance Note number three.
11. Our policy framework requires us to consider sustainable
development principles in how we conduct our business, in our
investment strategy and procedures, in our actions as regulator,
and by developing and disseminating good practice and practical
tools.
Investment requirements
12. This policy framework is translated into the following
practical impacts on the housing in which we invest our subsidy:
Sustainability toolkit
13. We require registered social landlords to assess
the environmental performance of proposed developments in accordance
with our "Sustainability Toolkit". This is designed
to ensure that new developments are and will remain attractive
to tenants, and continue to attract demand over their lifetime.
Scheme Development Standards
14. We also require all new build housing to meet our
`Scheme Development Standards'. These standards include achieving
the "Good Practice Standard" of the Housing and Energy
Efficiency Best Practice Programme (and we recommend that it achieves
"Best Practice Standard").
15. To illustrate what this means, the Good Practice
Standard requires that housing is built to achieve specified minimum
carbon emissions, has U-values no greater than the elemental U-values
of the Building Regulations, and that at least 50% of rooms should
be lit by energy efficient lights. The Best Practice standard
raises the minimum carbon emission threshold, reduces the elemental
U-value threshold, and requires 80% of rooms lit by energy efficient
lights.
Eco-Homes Standards
16. Our Scheme Development Standards require the achievement
of Eco-Homes "Very Good" standard. Currently approximately
180,000 homes are built each year. At present only 2% of these
are built to the "very good" standard. The Corporation
funds the construction of 35,000 homes. The Corporation's "very
good" requirement will is expected to raise the total number
of homes built to EcoHomes levels to 15% of the total number of
homes built each year.
17. The Eco-Homes standard assesses the performance of
homes according to a range of environmental impacts, grouped together
under the headings of Energy Use, Transport, Pollution, Materials,
Water, Land Use and Ecology, and Health and Well Being. To give
two practical examples, credits are achieved if the home is located
within 1km of a bus route and local amenities, and if ozone-friendly
insulation and efficient boilers are installed.
Brownfield land
18. The Housing Corporation has not set a specific target
for the proportion of our investment that we wish to see on "brownfield"
developments. Instead we have had a target for investment in "regeneration"
projects which includes brownfield sites as well as renewal and
refurbishment of existing stock. Our target has been 65% and we
have comfortably exceeded this for a number of years: in 2002-03
we achieved 83%.
Flooding
19. The Government has taken a risk based approach to
flooding. This approach is set out in Planning Policy Guidance
25 (PPG25). PPG25 does not prohibit construction on all sites
with a risk of flooding. Instead it uses a risk based approach
to determine what type of development is suitable for a given
site. There are two decision making tools in this process.
20. The first is the flood risk assessment which estimates
the probability of a risk event occurring and the vulnerability
of sites if the event occurs (number and type of properties at
risk). The second is the sequential test, which considers the
suitability of a particular site for a specified development ranging
from no flood risk, therefore suitable for development, to high
risk, where only conservation areas such as parks would be allowed.
PPG25 also recommends the use of Sustainable Urban Drainage Systems
(SUDS) as a means of allowing a place for water to go, reducing
run off building up down stream.
21. PPG25 requires that flood risk are assessed and ameliorated
to the satisfaction of the Environment Agency and Planning Authority.
As a Government funded body the Corporation will be working to
ensure developers work to best practice standards and the Environment
Agency are engaged at an early stage when development receive
Corporation funding.
Housing Quality Indicators
22. Since 1996, we have been developing a Housing Quality
Indicator (HQI) system, which assesses the quality of key features
of housing developments under three main headings: location, design
and performance. Registered social landlords are required to assess
new developments against these indicators and submit the information
to a national database. To receive funds during 2006-08 grant
recipients will need to meet minimum HQI scores. These include
minimum scores to be achieved for unit size, unit layout, accessibility
and energy use.
Prioritising our investment
23. In practice, we do not have sufficient funds to invest
Social Housing Grant in all the schemes that are proposed to us
and that meet our basic requirements. As we prioritise those schemes
that will be funded, we give greater weight to those that perform
better in terms of sustainability and quality. Of course we also
take other factors into account, such as the amount of grant required,
and the evidence of the housing need that the scheme will meet.
Specific initiatives
24. During 2005 the Corporation funded Sustainable Homes
to provide regional seminars to associations, developers, architects
and Corporation on how to move from "good" to "very
good" Eco-Homes levels cost effectively. A guide will also
be released in December to best inform how to move to obtain more
points (do the less damage to the environment).
25. In 2004-05 the Corporation also funded the development
of a sustainable products buying group (One Planet Products).
The bulk buying of products, which will start early 2006, is expected
to reduce prices of Eco-Homes related products by up to 40%.
26. The Corporation also funded research into a zero
emissions and zero waste to landfill community of 2,000 homes
(Z-squared) to develop a viable plan which a development organisation
could take to developers and landholders. This project is now
being taken forward by Bioregional Development Group, sustainable
development specialists.
Good practice
27. As well as setting clear minimum standards in terms
of outputs and process, the Housing Corporation has supported
an extensive good practice programme to develop appropriate evaluation
frameworks, and to publicise the importance of sustainable development
practices to registered social landlords and other developers.
The outcome of this includes funding for:
— the Sustainable Homes project, run by Hastoe Housing
Association, which provides advice and support to registered social
landlords to improve their sustainability and environmental performance;
— the development of "Green Street", a
web-based tool to help identify environmentally friendly ways
of refurbishing existing dwellings;
— work by the Building Research Establishment to
develop a method of assessing existing homes, which will allow
landlords to target improvements to their stock in a way that
will gain most environmental benefit;
28. A number of associations are also doing a significant
amount of work reducing fuel poverty which can drastically reduce
fuel consumption. Warm Zones is a project many Newcastle, Gateshead,
Stockton and Hull associations are contributing to. Warm Zone
identifies fuel-poor households and delivers energy efficiency
improvements the most cost effective way.
ISSUES OF
CONCERN TO
THE COMMITTEE
29. The remainder of this submission draws on our experience
in order to respond to the specific questions set out in the terms
of reference of the Committee's Enquiry.
(A) THE CODE
FOR SUSTAINABLE
BUILDINGS
Can a voluntary code possibly deliver the degree of change
needed in the building industry to achieve well designed homes?
30. The development of a code is useful in several ways.
It will develop a standard requirement for Government funded buildings.
It may also usefully pilot changes to the building regulations.
31. On its own a voluntary code may not be sufficient
to encourage the wider building industry to build to a higher
standard. Incentives are needed. These could everything from lower
stamp duty, as recommended by the Energy Savings Trust (EST),
or quicker planning consents for homes built to higher standards.
In order to drive consumer demand for more sustainable homes,
it is important the public recognise that the higher of the code
bands (gold, silver and bronze) equate to cheaper bills and an
even lower impact on the environment.
Is the Government doing enough to promote the code?
32. It is well known that the code will be in place from
early 2006 and that it is setting standards for water, waste,
materials and energy in new build properties. Further promotion
of the code would be helpful once the minimum requirements of
the code and how it interacts with the Eco-Homes standard is decided.
Should the Government be introducing fiscal measures to reward
higher building quality and greater environmental performance?
33. The wider housing sector appears to be reluctant
to develop sustainable homes to a measurable standard. A well
respected brand for environmentally friendly houses (Eco-Homes)
has been available for four years. There has been negligible take
up (less than 1%) from the private house builders.
34. Two years worth of research by the Energy Savings
Trust including, in depth interviews with householders and a survey
of 2,000 households, reveals that financial incentive could shift
the market. The Housing Corporation support the recommendations
of the Energy Savings Trust "Changing Climate, Changing Behaviour"
report, which recommends "two linked measures:
— the introduction of a Stamp Duty Land tax rebate
of £1,000 for the first sale of new properties built to a
high energy performance; and
— the Barker proposed tax on `planning gain' should
be modified to reward developers who build to a high energy performance
standard by an average of £1,000 per property.
35. It is expected that these twin measures for new build
would address the key barriers to building beyond current regulations,
and could save up to 8,400tC per year in 2010". Other benefits
to Government from homes built to a higher standard include a
reduction in fuel poverty, less pressure energy resources and
improved health of occupants.
36. While this measure focuses initially on energy efficiency
other elements such as water could be added at a later date.
(B) SUSTAINABLE COMMUNITIES:
HOMES FOR
ALL
Does the ODPM Five Year Plan, Sustainable Communities: Homes
for All demonstrate a greater recognition of, and greater commitment
to tackling, the impact of increased house building on the environment
or does it merely pay lip service to it?
37. The Five Year Plan notes work on going and future
work on a number of important environmental issues including using
brownfield land, increasing density and increasing green belts.
38. There is an opportunity to link some of the statements
to more measurable outputs. For instance the statement on sustainable
construction "we want all developers to reach the standards
of the best" could be strengthened to "we will contract
with those that comply or are looking to comply with best practice
site management and monitor reduction in site impacts on energy,
waste, water and timber".
39. On the standards that will be set for Government
funded homes it is not yet clear what level the Code for Sustainable
Buildings will set for water, energy, waste and materials.
To what extent does the Five Year Plan address the environmental
implications of the geographical distribution of demolition versus
new build?
40. The Five Year Plan focuses on building more homes
in London and the South East because this is where there is the
greatest increase in number of new households. Between 1997 and
2001, an additional 130,000 households were created in the South
of England. This is substantially less than the 300,000 new homes
that were completed in the same period. Over the same period approximately
210,000 homes were completed for 130,000 households in the North.
41. The publication of Sustainable Communities: building
for the future in 2003 emphasised the importance of partnerships
and strategic approaches in dealing with low demand and market
renewal, in particular stressing the need for radical and sustained,
but flexible action. It acknowledged that derelict and obsolete
housing needs to be replaced in dealing with the renewal of neighbourhoods.
The changes to Compulsory Purchase procedures are seen by Government
as part of developing effective long term strategies. The emphasis
in the Communities Plan on liveability, the importance of space
and effective design in regeneration complements the other actions.
42. Regional Housing Boards in the North and Midlands
have recognised in their strategies that it is necessary to demolish
some houses which are obsolete, abandoned, in excess supply or
no longer capable of providing decent homes.
43. The Corporation occasionally funds demolition in
market renewal areas or other regeneration areas usually as an
overall approach to replacement. National, regional, local spatial
strategies and market renewal strategies drive the regeneration
of these sites. Option appraisal, which includes public consultation
and an evaluation of the whole life costs/benefits of a home precede
demolition. Housing associations can demolish homes for asset
management reasons without funding from the Corporation.
(C) LPS2020
Will the new standard LPS2020 have a positive force for change
and add value to the construction process?
44. The LPS 2020 standard was developed by BRE Certification
to provide an effective method of assessing the performance and
design of new methods of construction that do not have an adequate
track record in service in the UK.
45. Its introduction is particularly significant in light
of the current pressure from Government and others to increase
the use of so-called modern methods of construction in dwellings.
The standard is expected to reduce the overall costs of certification
and approvals for manufacturers, because it should cut the number
of certification / approval processes required to demonstrate
that they perform as required.
(D) INFRASTUCTURE
Is Government doing enough to secure funds for the timely provision
of infrastructure, such as transport links, schools and hospitals
in the four Growth Areas?
46. The question of infrastructure, and in particular
the provision of public transport links, is very important in
the preparation of plans for growth areas. As the major funder
of affordable housing we are concerned that appropriate infrastructure
is in place, or at a minimum there are absolute commitments to
provision before we agree to funding.
47. Many major sites for development have been identified
and there are good examples of Local Development Vehicles working
to agree infrastructure provision (for example, the "tariff"
arrangement in Milton Keynes) and ODPM have committed funding.
In addition local authorities are preparing the necessary planning
and development control frameworks. Despite this there is still
considerable uncertainty surrounding the question of transport
links and other infrastructure provision in a number of key growth
areas. Should this not be rectified it will impact on our ability
to deliver our programme.
November 2005
22
New dwellings plus acquisition & rehabilitation of existing
dwellings for use as affordable housing. Back
23
This column includes some dwellings built by registered social
landlords without grant funding from the Housing Corporation. Back
24
From 2003-04 these figures includes home produced for Key Workers. Back
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