delivering affordable housing in london
DESCRIPTION
This presentation was delivering at our event 'Delivering affordable housing in London: Senior seminar', that in part launched our research paper for the Joseph Rowntree Foundation Changes to Changes to affordable housing in London: implications for delivery'. This event took place on 6 March 2013. This presentation includes slides from the speakers: o Jo Wilson, Director, Future of London o Professor Ken Gibb, Professor of Housing Economics, University of Glasgow o Andrew Heywood, independent housing consultantTRANSCRIPT
Senior Seminar
Delivering affordable housing in London 6 March 2013
Affordable Housing in London Jo Wilson, Director, Future of London
• Mean social rents in London higher than rest of England • Private monthly rents high and rising • Affordability of housing for first time buyers in London:
Affordability Delivering affordable housing in London • 6 March 2013
• Average number of people on household waiting lists:
• Overcrowding • Homelessness
Acute need Delivering affordable housing in London • 6 March 2013
New affordable housing starts and completions
Contracting supply… Delivering affordable housing in London • 6 March 2013
• 2011 Census data – 10 million megacity by 2030:
• Welfare Reform
…and Rising Demand Delivering affordable housing in London • 6 March 2013
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
20
01
20
03
20
05
20
07
20
09
20
11
20
13
20
15
20
17
20
19
20
21
20
23
20
25
20
27
20
29
20
31
20
33
20
35
20
37
20
39
20
41
Source: Greater London Authority (2012) ‘GLA Population Projections 2012 Round, Trend Based, Borough SYA’
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• Affordable Rent Model
• Local funds e.g. Southwark
• HRA reform e.g. Hackney
• Affordable homes in Barking and Dagenham
• GLA land assets
Solutions? Delivering affordable housing in London • 6 March 2013
• Agreeing definitions of ‘affordability’ and ‘need’:
Who are we building for?
• Boroughs should continue to innovate, but national policy response urgently required
• Building on the Affordable Rent Model
A sustainable delivery model Delivering affordable housing in London • 6 March 2013
Finance Innovation and Affordable Housing Supply:
An International Evidence Review
Kenneth Gibb
March 2013
Introduction
• A Joseph Rowntree Foundation evidence review project with Duncan Maclennan and Mark Stephens
• The project combined desk-based review, the application of researcher specific knowledge of countries and systems, plus advice from consultants and in-country colleagues
• Semantics: - international & national – policy transfer - what does innovation mean? - what does affordable mean? - what about financing? - policies, models or projects
Project Overview
Findings from the Literature
• No simple market solutions that will close the gap between private cost and return requirements, remaining affordable, without effective subsidy of some kind.
• The national housing system and all of its institutional features and path dependencies, is a critical frame within which approaches to finance innovation take place.
• Many models and potential approaches exist or can be conceived but they all have strengths and weaknesses when set against key criteria: - scalability; - dependence on supporting, complementary institutions; - value for money; and - effective targeting
Ten Themes
1. Appetite for state-backed guarantees 2. Contestable supply & partnership 3. Devolved governance 4. Flexible, blended subsidy 5. Collaborative solidarity 6. Separable management role 7. Simplicity & design features 8. Affordable = shallow subsidy 9. Exploiting or ‘sweating’ existing assets (including
revolving funds) 10. Regulatory stance
Conclusions: Re-thinking Policy
• The need for a wider long term policy framework
• An approach to affordable housing policy within a wider vision of place and a clearer recognition of market failures and the risks to the most needy
• National policies must be based on consistent local estimates of need to maximise the best use of scarce resources
• In the light of the AHP/S106 debacle, we would support ‘rule consistency’ in housing policy
• We must also test policy ideas against rigorous criteria
• We caution against the flavour in some quarters for fundamental radical overhaul
Delivering affordable housing in London
Wednesday 6 March 2013
The Affordable Rent Model in London
The Future of London project
Andrew Heywood
Andrew Heywood
Housing, Mortgage markets, Regulation, Governance, Europe • Housing: finance, policy, low-cost homeownership. • Mortgage markets: trends, opportunities, threats. • Regulation: policy, practice, lenders, housing providers. • Governance: effective decision making, strategy, audit. • Europe: housing and mortgage markets, regulation. Andrew Heywood is an independent consultant specialising in the above areas and an associate
of leading consultants Campbell Tickell. A visiting fellow of the Smith Institute, Andrew has written and spoken extensively on housing and lending issues. He is Editor of the journal Housing Finance International (www.housingfinance.org. Andrew was formerly Deputy Head of Policy at the Council of Mortgage Lenders. He has been at the centre of housing, housing finance and mortgage market developments for many years and has unrivalled contacts amongst policy makers, housing providers and lenders.
Andrew Heywood Consulting: [email protected] 01440 730218/07929512057
Affordable Rent model (ARM)
The FoL project will focus on:
• Who is building ARM in London and why,
• How much ARM is being built and where,
• The extent to which ARM is viable in the short term and after 2015/16
• Whether ARM is consistent with housing strategy and housing need in London
• What part ARM should play after 2015/16
ARM project
What we are doing:
• Review of existing literature,
• Interviews with HAs, LAs, and other stakeholders,
• Analysis of the data on ARM in London
• Case studies highlighting aspects or effects of ARM development, and;
• A final report.
ARM: some emerging questions
Conversions (re-lets):
• Will RPs achieve the rate of conversions they require and at sufficient uplift?
• To what extent are lower than anticipated conversions being subsidised by RCGF or other sources?
ARM: emerging questions
Affordability: • Welfare reform is key; particularly the cap but
also downsizing and direct payment, • Will the Treasury necessarily save money with HB
reform/ARM combination? • To what extent will lower rent levels mean lower
numbers? • What about larger homes and the Mayor’s target
for family-sized homes (36%)? • Where are these homes being built?
ARM: emerging questions
Risk and sustainability:
• How much riskier does the higher borrowing and market risk (market-linked rents, LCHO etc.) make ARM?
• What about housing benefit risk?
• Will RP financial capacity be eroded?
• Will HAs continue to undertake ARM rather than LCHO or market renting?
ARM: emerging questions
Who will be housed in ARM homes?
• It appears not to be working households- though is this product more suitable for them?
• Will ARM attract interest via choice-based letting systems?
• Will HAs be forced to refuse LA nominations on affordability grounds?
• Will LA stock become still more residualised?
ARM: emerging questions
Other questions:
• What additional risks are incurred by cross subsidy from LCHO or market renting?
• Will London find ARM more or less difficult than elsewhere?
• Overall, will ARM meet GLA targets (16,614 ARM homes 2011-15 plus size and space requirements)
Senior Seminar
Delivering affordable housing in London
Discussion: • How should we define affordability in London? • What should a future affordable housing development
model look like?