Affordable Housing Seminar Wednesday 19 th June 2013

Conference Chair Cllr John Boyce, Oadby & Wigston Borough Council

Successful places with homes and jobs A NATIONAL AGENCY WORKING 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 ProgrammeBudget extra Impact Build to Rent£800mAdditional due diligence & bidding round 400% increase & extra year to 2015/16 Help to Buy£3.75bNew homes purchase programme to 2015/16 Affordable Homes Guarantee £225m100% increase to existing programme – extended bidding round & timeline to 2016/17 Local Infrastructure Fund - tbcMove 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 5 funded programmes plus 1 unfunded programme c/fwd 6 funded programmes 18 funded programmes plus 5 unfunded programmes 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  £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 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 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 20 th 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 100,000m 2 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 affordable housing in Leicestershire Sharon WigginsIan 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 2011/2012 Sapcote scheme12 affordable homes Blaby DCComplete September 2012 East Midlands Housing Group Somerby scheme7 affordable homes Melton BCComplete April 2013 Nottingham Community Housing Association

Costs Sapcote scheme12 affordable homes Blaby DC £100,000 LCC £332,000 Total scheme costs£1.607 million Somerby scheme7 affordable homes Melton BC£88,000 LCC£188,000 Total scheme costs£927,650

Sapcote site plan

Sapcote completed homes

Sapcote opening ceremony

Somerby, view from entrance

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 Bosworth8 affordable homes Tilton6 affordable homes Breedon10 affordable homes Bitteswell2 affordable homes Elmesthorpe4 affordable homes Carlton 11 affordable homes TOTAL for 2012/ 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 Ian Jones

Keeping the Derbyshire Dales clean, safe, healthy & beautiful Cllr Lewis Rose OBE Derbyshire Dales DC

Keeping the Derbyshire Dales clean, safe, healthy & beautiful 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

Keeping the Derbyshire Dales clean, safe, healthy & beautiful 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

Keeping the Derbyshire Dales clean, safe, healthy & beautiful 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

Keeping the Derbyshire Dales clean, safe, healthy & beautiful 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

Keeping the Derbyshire Dales clean, safe, healthy & beautiful Local Authority support Potential financial options –Right to Buy receipts –Section 106 income –2 nd homes council tax –New homes bonus –DCLG Homelessness grant –Capital receipts

Keeping the Derbyshire Dales clean, safe, healthy & beautiful 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

Keeping the Derbyshire Dales clean, safe, healthy & beautiful 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

Keeping the Derbyshire Dales clean, safe, healthy & beautiful 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

Keeping the Derbyshire Dales clean, safe, healthy & beautiful 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

Keeping the Derbyshire Dales clean, safe, healthy & beautiful 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

Keeping the Derbyshire Dales clean, safe, healthy & beautiful 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 2 nd homes council tax Total package of investment £16m

Keeping the Derbyshire Dales clean, safe, healthy & beautiful 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 COUNCILS Affordable 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 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 Pritchard Director of Policy & Infrastructure

Housing Supply in the EM

The Affordable Housing Challenge ● 75% reduction in HCA funding for affordable housing in the East Midlands for ● 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 31 st 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