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Decision details

CHE S142 New Council House Building Programme and 1,000 Homes for Social Rent Commitment

Decision status: For Determination

Is Key decision?: Yes

Is subject to call in?: No

Decision:

RESOLVED

 

That the Cabinet:

 

Agreed to include the 15 anchor locations set out in the report within a new house building programme, subject to scheme design, viability testing and further resident engagement.

 

Agreed to include additional sites and development opportunities in the vicinity of the anchor locations within the programme, subject to scheme design, viability testing and resident engagement.

 

Agreed to delegate authority to the Capital and Asset Steering Board to include additional sites not in the vicinity of the anchor locations within the programme or a future housing delivery programme, subject to scheme design, viability testing and resident engagement.

 

Agreed to delegate authority to the Group Director Finance and Resources, in consultation with the Mayor and relevant Cabinet Leads, to approve the Small Assets Fast Track Policy, the framework as set out at Appendix 1.

 

Agreed to the commissioning surveys and other investigations for the locations and sites set out in 3.1 to 3.3 of the report.

 

Agreed to commissioning architect design team services for the locations and sites set out in 3.1 to 3.3 of the report.

 

Agreed to commissioning cost consultancy and employer’s agent services for the locations and sites set out in 3.1 to 3.3 of the report.

 

Agreed to commissioning other consultancy services as may be required in relation to the delivery of new homes at the locations and sites set out at 3.1 to 3.3 of the report.

 

Agreed to submit planning and other applications in respect of the locations and sites set out at 3.1 to 3.3 of the report.

 

Agreed a budget cap of £10m for the next steps set out at 3.5 to 3.9 of the report, noting that lead consultants will be commissioned on a stage by stage basis, and programme delivery will be monitored by the Capital and Asset Steering Board.

 

Agreed to request a further report setting out details of the delivery models, funding arrangements and financial assumptions for the new house building programme.

 

Agreed to request a further report providing an update on the other programmes of housing delivery referred to in this report, including the risks and opportunities.

 

Agreed to authorise the Director of Legal, Democratic and Electoral Services to prepare, agree, settle and sign the necessary legal documentation to effect the proposals contained in this report and to enter into any other ancillary legal documentation as required.

 

Agreed to authorise the Director of Legal, Democratic and Electoral Services to enter into planning agreements, unilateral undertakings and any other ancillary legal documentation as required to effect the proposals contained in this report.

 

Delegate authority to the Group Director Finance and Resources and the Director of Legal, Democratic and Electoral Services to agree all commercial terms and prepare, agree, settle and sign the necessary legal documentation for sales and purchases authorised following approval of the Small Assets Fast Track Policy.

 

RESOLVED

 

That the Cabinet:

 

Agreed to include the 15 anchor locations set out in the report within a new house building programme, subject to scheme design, viability testing and further resident engagement.

 

Agreed to include additional sites and development opportunities in the vicinity of the anchor locations within the programme, subject to scheme design, viability testing and resident engagement.

 

Agreed to delegate authority to the Capital and Asset Steering Board to include additional sites not in the vicinity of the anchor locations within the programme or a future housing delivery programme, subject to scheme design, viability testing and resident engagement.

 

Agreed to delegate authority to the Group Director Finance and Resources, in consultation with the Mayor and relevant Cabinet Leads, to approve the Small Assets Fast Track Policy, the framework as set out at Appendix 1.

 

Agreed to the commissioning surveys and other investigations for the locations and sites set out in 3.1 to 3.3 of the report.

 

Agreed to commissioning architect design team services for the locations and sites set out in 3.1 to 3.3 of the report.

 

Agreed to commissioning cost consultancy and employer’s agent services for the locations and sites set out in 3.1 to 3.3 of the report.

 

Agreed to commissioning other consultancy services as may be required in relation to the delivery of new homes at the locations and sites set out at 3.1 to 3.3 of the report.

 

Agreed to submit planning and other applications in respect of the locations and sites set out at 3.1 to 3.3 of the report.

 

Agreed a budget cap of £10m for the next steps set out at 3.5 to 3.9 of the report, noting that lead consultants will be commissioned on a stage by stage basis, and programme delivery will be monitored by the Capital and Asset Steering Board.

 

Agreed to request a further report setting out details of the delivery models, funding arrangements and financial assumptions for the new house building programme.

 

Agreed to request a further report providing an update on the other programmes of housing delivery referred to in this report, including the risks and opportunities.

 

Agreed to authorise the Director of Legal, Democratic and Electoral Services to prepare, agree, settle and sign the necessary legal documentation to effect the proposals contained in this report and to enter into any other ancillary legal documentation as required.

 

Agreed to authorise the Director of Legal, Democratic and Electoral Services to enter into planning agreements, unilateral undertakings and any other ancillary legal documentation as required to effect the proposals contained in this report.

 

Delegate authority to the Group Director Finance and Resources and the Director of Legal, Democratic and Electoral Services to agree all commercial terms and prepare, agree, settle and sign the necessary legal documentation for sales and purchases authorised following approval of the Small Assets Fast Track Policy.

 

REASONS FOR DECISION

New house building programme

The Housing Asset Management Strategy 2019-2027 established an asset review process, to undertake a coordinated and comprehensive assessment of investment options for Housing Revenue Account (HRA) land and building assets, considering the longer term performance of the asset base, cost of maintenance, quality of provision, usage and meeting local needs.

On 29 April 2019 Cabinet considered a comprehensive update on the delivery of the Council’s regeneration programme (Key Decision No NH P65), including a refreshed development strategy. This report introduced the principle of commencing a new Council house building programme, alongside the existing Estate Regeneration and Housing Supply Programmes. It was anticipated at the time that the development sites for this new programme would be identified predominantly through the asset review process referred to above, formed of underutilised land across the borough, as well as buildings at the end of their lifecycle which are no longer cost effective to maintain.

The Asset Review team has, since early 2021, been carrying out the review of HRA land. This has involved mapping more than 1,000 non-dwelling assets, which were then filtered to remove those with limited or no development potential, with the remainder being ordered according to their potential to deliver new homes. A separate process is underway to analyse the condition of the existing stock in preparation for planned investment.

The top 70 locations have been reviewed through a two-stage appraisal process. At the first stage, officers identified key constraints, risks and opportunities, and liaised with internal teams including Housing Services and Area Regeneration. During the second stage, core surveys such as trees and underground services were undertaken for each location, further exploring their suitability for the delivery of new housing and other uses. A broader range of internal stakeholders was engaged at this point, including Finance, Legal, Planning, Regeneration Strategic Design and Strategic Property Services. Following both appraisal stages, recommendations from a menu of eight options set out in the Housing Asset Management Strategy were made for each location, in accordance with the governance framework.

Through the above process, 15 anchor locations have been identified on HRA land, as shown in Table 1 of the report, which collectively have capacity to deliver around 400 new homes. These are also shown on the location plan at Appendix 2. Following resident consultation carried out during spring and summer 2022 (as detailed in section 6), it is proposed to include all 15 anchor locations within a new Council house building programme. For clarity, no design work has been carried out at this stage, nor have any decisions been made as to the number and type of homes that would be provided at each location. However, the ambition is for 75% of these new Council homes to be for much needed social rent across the programme, as set out in section 6.

 

It is anticipated that, through the design process for the 15 anchor locations and by working closely with residents, further development opportunities may be identified on other land and buildings in the local area. These could include additional infill sites, ‘hidden homes’ such as undercroft conversions or rooftop extensions, and potentially small-scale demolition projects where residents support the proposals. These additional sites will be included within the anchor locations for delivery purposes, as this holistic, area-based approach will result in economies of scale and greater benefits for residents.

 

Further, officers will seek where possible to sequence programmes of planned investment in the existing homes with the timeline for new homes being built at the locations, so that everyone gains from these improvements. This supports the manifesto commitment to set out five-year plans for future estate investment which capture the aspirations of residents to improve where they live.

Given that the Council has been building new homes on its land for the past decade, the larger and more readily developable sites within the HRA portfolio have either already been built on or are included in the current Estate Regeneration and Housing Supply Programmes. The average scheme size within this new programme is estimated to be around 30 homes, subject to scheme design, viability testing and further resident engagement. It is proposed to group these locations for the purposes of design and delivery in order to ensure a more consistent and effective approach than with progressing each site on a standalone basis.

Beyond these 15 anchor locations, the opportunities for infill development on HRA land become further limited in scale. Such small sites are unlikely to be resource effective to develop on their own. However, some may lend themselves to using replicable designs and Modern Methods of Construction (MMC) to deliver new homes, and it is anticipated that this approach will be piloted through the house building programme set out in this report. Subject to further investigation, a supplementary small sites programme could deliver an additional 100-200 homes across 10-20 sites in future years. It is recommended that the Capital and Asset Steering Board has delegated authority to include additional sites that are not included in the anchor locations within this or a future housing delivery programme, subject to scheme design, viability testing and resident engagement.

 

As well as identifying potential development sites for the Council’s housebuilding pipeline, the Asset Review process has located a number of small, underused Council-owned pieces of land which serve little value to its strategic objectives. Enquiries are regularly received from residents and property owners looking to purchase small areas of unused Council land adjacent to their homes and properties. There is the potential for such unused small plots, where they are confirmed as surplus to the Council’s requirements, to be put to use by new owners while generating an income stream to the Council that could be reinvested in these programmes.

 

To address this opportunity, a Small Assets Fast Track Policy framework has been drafted, as set out at Appendix 1. The purpose of the policy is to define a ‘small asset’ and enable identified sites to be reviewed in a proportionate manner and, where they are deemed surplus to Council requirements, to be made available for purchase in a fair and transparent way, fulfilling the Council’s statutory obligation to meet the best consideration requirements of the Local Government Act 1972. The framework also proposes delegated authority for the acquisition of small assets where this is advantageous to the Council’s strategic objectives and where a budget is available.

 

Delegated authority is sought from Cabinet for the Corporate Director Finance and Resources, following consultation with the Mayor and relevant Cabinet Leads, to approve the final version of Small Assets Fast Track Policy, the framework for which is set out at Appendix 1 of the report.

Wider approach to housing delivery

 

 

It can be seen from above that the HRA does not at this point have sufficient underutilised land to meet the manifesto commitment for 1,000 new homes for social rent, regardless of the tenure mix, without further large-scale estate renewal plans. However, the Council is already delivering and facilitating the delivery of affordable housing via a number of other programmes, as follows:

 

 

Pipeline Estate Regeneration and Housing Supply Programme projects, and the Britannia regeneration

Buy-back of former Council homes using Right-to-Buy receipts

New housing association properties delivered through the Mayor of Hackney’s Housing Challenge, also using Right-to-Buy receipts

Town centre regeneration: new homes delivered in mixed use schemes in our town centres, where the Council is the landowner (such as at 55 Morning Lane), or in partnership with other landowners.

 

A position statement for each of these programmes is set out in Appendix 3. In summary, this portfolio approach will see around 1,000 additional homes for social rent brought on stream by 2026 (see Table 2 of the report), with some headroom to accommodate potential changes to programme delivery based on current projections. It should be noted that, where projects are delivered by partners such as housing associations, the Council will have nomination rights to the social rent homes.

 

The delivery of all these homes and programmes will be monitored by the Capital and Asset Steering Board. Given the scale of the opportunities, but also the delivery risks in the current economic climate, it is recommended that Cabinet requests a further report providing an update on the other housing programmes referred to in Appendix 3.

 

Publication date: 13/12/2022

Date of decision: 12/12/2022

Decided at meeting: 12/12/2022 - Cabinet

Accompanying Documents: