29th June 2017
How partnering with local authorities can help beat the housing crisis
We all recognise the need to build more homes to improve affordability, particularly for young people who can face eye-watering deposits. More housing supply is a crucial part of the required response. The key to boosting this supply is diversification, which will enable a range of large and small housing companies and local authorities to bring their capacity and expertise to boost housing production.
Local authorities often face severe revenue constraints, so innovative new partnerships have a critical role to play in achieving the key aims of getting new developments underway and generating new income streams.
Within the last two years, we’ve seen a growing number of local councils take a more proactive approach to housing delivery. As revealed in a poll by 3Fox International, nearly half of the 112 councils which took part, had either set up or were considering creating their own housing company.
This is not only driven by a desire to regenerate local areas and provide the infrastructure that will attract further investment, but to create vital revenue streams for the future to support local government as it seeks to respond to rising social care, education and local costs. But setting up a company of this nature and delivering new housing, requires additional knowledge, experience, and resources which can put added pressure on councils.
Some councils are opting to partner in a joint venture with a specialist organisation which can bring complementary skills to the table. This can be done alongside a municipal housing company or the joint venture could, itself, undertake this work. In doing so, local authorities can realise a broad range of benefits. Pooling finance, planning powers and skills, balances risk and return for all partners and enables schemes to be planned and delivered more strategically. New funding models can also be developed which means local authorities can turn public sector land and capital assets into sources of funding.
Runnymede Borough Council has taken this type of partnership approach to deliver major regeneration across the borough, including housing and a broad range of new facilities and infrastructure.
Joining forces with Places for People, it is creating the £200m Runnymede Regeneration Programme (RRP), which will regenerate several sites, including Egham town centre. A mixed-use scheme, as well as a new leisure facility, are in the pipeline.
As the Council’s development partner, Places for People will manage the development and delivery process for all the sites from securing planning consent through to design and construction, and lettings.
Combining our expertise with that of Runnymede Borough Council will not only meet its regeneration and placemaking objectives, but maximise the value of the Council’s assets, and develop new income streams from new developments.
Our landmark partnership with Aberdeen City Council is another example of how joining forces can boost housing supply and revenue. The £300m Limited Liability Partnership (LLP) model is the first of its kind to be signed in Scotland. It will create 2,000 new homes in the city, half of which will be affordable, with the potential for a further 1,000 properties in the pipeline.
All properties will be built without any Government subsidy or grant funding. The deal will see the council transfer ownership of eight development sites to the new partnership organisation, receiving payment in the form of land receipts when each development is completed. Any development profits will be split equally.
Our experience in developing and managing large scale development will minimise costs and project timescales and our placemaking approach will ensure that key infrastructure and services like shops, schools, leisure facilities, transport links, and healthcare facilities, are incorporated into developments and delivered.
It’s clear that there is a growing appetite among local authorities to find new and creative ways to boost housing, regeneration and sustainable revenue streams. Joining forces with a development partner with the right experience and skills can hold the key to achieving these objectives.
By working together, we can find innovative solutions that benefit all parties and crucially, deliver the homes and facilities that will ensure local needs are met, communities can thrive and local economies continue to grow.
By David Cowans, Chief Executive at Places for People