Rebalancing the housing system: Building new communities – does local authority housing hold the key?


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Recommendation 47 in the Affordable Housing Commission's report “Making Housing Affordable Again: Rebalancing the Nation’s Housing System" addresses the way new communities are delivered, calling for government support and innovative financial techniques. 

It is hard to fault this - public infrastructure funding is often the key to success, given its potential to unlock major schemes.  And capturing uplifted land values and using tax increment financing (or other mechanisms) could be vital too. 

These are all issues with which the various Garden cities and town schemes across the country have been grappling. 

It is also the case that these large-scale initiatives offer the chance to increase housing supply -including affordable housing supply – at scale.  Thousands of homes over a decade or more are planned in many areas.

But this scale can also be a problem for getting these new communities off the drawing board.  They are often controversial – and this public pressure translates into the need for local support and above all local political support if they are to succeed.

The dilemmas for local authorities, in their different statutory roles (not least planning, and the implications of the current planning proposals warrants separate conversation) – are obvious; and the issue is particularly acute if more than one local authority is involved.

It is also worth appreciating that even when a delivery vehicle of some kind is involved, the local authority or local authorities are very much in the lead (through the refashioned development corporations) – and in the frame.

Among the key decisions confronting them will be affordable housing.

Conventionally this is simply about planning – 'what percentage of a residential scheme will be (genuinely) affordable?' or about responding to local concerns - 'why not more [or sometimes fewer] affordable homes?' or 'how will local services cope with the influx of new residents'.  And so on.

And if the decisions are made in this way – as they so often are – then it is easy to see why local authorities lose confidence and impetus is lost.

Perhaps an answer is to give local authorities a more direct role?  More skin in the game, as it were?

Very often the new affordable homes are delivered by housing associations. And there are good reasons for that – not least because the prime sites are often owned or optioned by them. 

But there will be circumstances where local authority home-ownership will be possible – even if they don't own the land and compulsory purchase is inappropriate. But this scale can also be a problem for getting these new communities off the drawing board.

Joint venturing with a developer, a funders' lease-back deal or simple acquisition (whether through section 106 arrangements or otherwise) all offer routes to new local authority homes.

Most local authorities would like to own the new stock themselves but wholly-owned companies might be useful for various reasons, as the spate of local housing companies over the past few years has shown. 

The result would not be new council estates – the drawbacks are obvious; but significant numbers of new homes could still be involved.

Local authorities with stock would obviously be attracted to adding to their portfolios – but those without stock may be too, as witness the increasing number now re-opening their Housing Revenue Accounts.

Clearly local authorities leading new communities projects would need to separate their planning and housing delivery roles; but they are well used to wearing more than one statutory 'hat'.

The interest, even excitement, could be game-changing – a new perspective for local politicians dealing with the challenges of new communities – which would be more likely to succeed and in doing so, deliver many more affordable homes. 

Worth a thought?

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