Housing Delivery Partnerships – breaking down the barriers Presentation ———— 28 June 2017 Housing Delivery Partnerships – breaking down the barriers

Speakers Geoff Raw – Chief Executive, Brighton & Hove City Council Tom Shaw – Development Director South, The Hyde Group Tonia Secker – Partner, Trowers & Hamlins Amy Shaw – Partner, Trowers & Hamlins  

Introduction Chronic under supply of housing Challenge to deliver more Housing Delivery Partnerships Local authority view Housing association view Legal considerations

The council perspective Context - LA view on local housing market Local authority drivers The advantages from the LA side Challenges The future – opportunities and the market

The housing association perspective Housing association drivers The advantages from the housing association side Context - HA view on local housing market Social and economic benefits - an example from the Hyde / Brighton & Hove model The procurement challenge The future – opportunities and the market

Nothing (Joint) Ventured, nothing gained Very obvious alignment between HA and LA partners objectives – shared mindset Both have an open culture which encourages collaboration Both have strong governance which gives assurance Stretched capacity; capital able to go further to deliver more projects and more homes Risk sharing reduces exposure Shared technical expertise and skills A long term strategic relationship which will deliver tangible benefits for both HA and LA, as well as social and economic benefits for the local area

What’s in it for the LA Portfolio of LA sites identified for disposal as part of existing asset management plan LA secures budgeted capital receipt through disposal of sites to JV SPV Unlike under its usual disposal arrangements, the LA gets to retain a 50% interest in the asset through its long-term interest in the JV SPV LA secures long-term revenue stream, gets access to HA commercial developer skills, place-making and regeneration expertise and volume buying arrangements LA gets to expand its housing product range outside the constraints of the housing revenue account

What’s in it for the HA Access to sites, working with like-minded LA partner Model supports delivery of affordable housing without cross subsidy requirement and therefore no risk from market sale activity Able to accelerate delivery without usual phasing constraints due to risk of market saturation from sales Access to LA housing register, nominations from low income working households Flexibility to explore new affordable models – bespoke genuinely ‘affordable’ housing to meet local incomes Able to share skills and expertise, both parties contribute to the delivery of a successful project

Accelerated delivery: 10x increase in affordable supply over 5 years

Impact of a Living Wage = £2 Impact of a Living Wage = £2.8M annual saving in rent for 500 low income households

Access to home ownership: 500 shared ownership homes with average £6,640 deposit. Total housing costs lower than private renting.

Social & Economic benefits for Brighton & Hove from 1000 new homes Over 700 opportunities for education, training and apprenticeships 400 FTE construction jobs supported £6.7M of new Council Tax revenues (5 years) £5M new homes bonus (5 years) £6M community investment S106 (5 years) Estimated Gross Value Added to the economy of £350M over 5 years

Streamlined, efficient procurement All time, resources and combined effort is invested into delivering tangible outputs for both parties – nothing is wasted 50:50 JV SPV structure motivates the right behaviour of both parties and ensures value for money For each £ of LA money invested there is a £ of HA money – this is the best motivator that exists to drive value for money out of the project All services from project partners provided at cost All consultant and contractor services procured through an OJEU compliant framework – open book on all costs

The market for future opportunities LAs have capacity to deliver now outside of HRA caps – Brighton & Hove is a perfect example Innovation and partnership can unlock funding for new supply, accelerate delivery and provide both capital and revenue streams for LAs whilst delivering on their local social and economic priorities Replicable model – easily repeated, set-up is quick and costs are small (and no specific consents needed) LA pension funds are already major investors in PRS asset class, could invest in lower risk affordable income streams taking long term inflation linked returns for beneficiaries HAs are gearing up to play their part in addressing the structural under supply of new homes and open to JVs Successful partnerships = innovation, risk, resource and skill sharing with tangible benefits for both parties

Legal considerations Complexity Procurement Understanding control Funding options Exit mechanisms

Q&A Any Questions?

Amy Shaw Partner – Housing and Regeneration d +44(0)20 7423 8384 e ashaw@trowers.com Tonia Secker Partner – Housing and Regeneration d +44 (0)20 7423 8395 e tsecker@trowers.com