KENT HOUSING GROUP: ASHFORD 29 SEPTEMBER

2011

HENRY CLEARY – HOUSING & GROWTH TRANSITION PROJECTS

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DIRECTION OF TRAVEL

Coalition Government policies – some generalisations

• Out large rigid spending programmes and controlling public bodies

• In local tax freedoms, social enterprise, release of public land, selective, competitive public funding, better vfm

• Out National Government direction

• In local leadership and innovation

• Out Government imposed targets

• In Market incentives, deregulation, liberalisation, local choice

eg. Tax Increment Financing/ Business rate retention, Community Infrastructure Levy

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Housing supply is a key political priority

“A housing offer fit for the 21st century, providing new homes in the right places, is…vital for our

future economic competitiveness…”

“…let me be entirely explicit. Britain needs more homes”.

“…a clear and pressing need for more homes to meet growing

demand…”

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Why do we need to build more homes?

The underlying demand for housing is strong...o We’re a growing societyo 232,000 new households projected to form each year until 2033

...and house building has consistently fallen shorto 2010: 102,500 completions (lowest since 1923-24)o But persistent mismatch for several decades

We’ve seen a significant deterioration in affordabilityo Average house prices – 2000: £114,000; 2010: £216,000 o Lower quartile house prices – 2000: 3.9x earnings; 2010: 6.8x earningso First-time buyers increasingly locked out

Budget 2011 recognised that home building makes a significant contribution to economic growtho Each new home creates 1-2 net jobs for a year o Housing construction represents 3.5% of GDPo Increases tax-take, lowers JSA counto Underpins our long-term economic performance

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DIRECTION OF TRAVEL ON HOUSING

Making the housing market work better

Putting LAs and communities in the driving seat

De-regulation and attracting greater private investment

Encouraging new models eg major increase in self build

More ambitious targets for public funding vfm eg on leverage, more selective or short term assistance

Encouraging LAs and providers to work together at scale and to innovate

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Housing – work to encourage effective demandThe challenge

Lowest level of house building since 1923/4 – a lack of ‘effective demand’ is immediate constraint

Mortgaged purchase of new build properties down over 50% 2006-2009

The response

Dialogue with regulators, lenders and developers

Budget announced introduction of a new First Buy product:o Equity loan co-funded by Government and developerso Will support nearly 10,500 FTBs by Spring 2013o First homes already sold

Encouraging equity investment in ‘build-to-let’o Reform of Stamp Duty Land Tax on bulk purchaseso Removing barriers to residential REITs

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Housing – Work to bring forward supply and help delivery

Tackling barriers and improving incentives

• Planning simplification (eg Use Class changes)

• Empty Homes Strategy (forthcoming - £100m earmarked)

• Growing Places Fund• Using public land • Simplifying standards eg zero

carbon• Access to borrowing – eg TIF

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Growing Places Fund

Upfront investment in infrastructure is challenging. Community Infrastructure and Growth Funds demonstrate good vfm

Chief Secretary announced a £500m Growing Places Fund (18.09.11) to help unlock housing and economic development

Ministers want to put local areas in the driving seat:o Local partners to identify investment priorities (LA accountable

body)o Flexibility to define geographical scale and mechanismo Opportunity to create a “revolving fund”

Final scheme details published around Autumn Budget Statement (29 November)

Focused discussion with local partners in October

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Freedoms and incentives to support delivery

Local Government Resource Review

Local Business Rates retention – an incentive to support business growth

Tax Increment Financing – a potential tool for forward-funding infrastructure to support growth

Community Infrastructure LevyA more transparent and efficient way of capturing developer

contributions. Newark and Shropshire – other front runners.Intended to give LAs greater flexibility and ensure communities feel the

benefits

Duty to Co-operate on plans and infrastructureAn enabling power for strategic matters and not prescriptive but LAs

will be required to address this as part of their local plan and examination

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Why does it matter?

An estimated 40% of land suitable for housing development sits in public land banks

Significant proportion owned by central government and agencies

What are we doing?

Budget 2011 committed to accelerating the release of government land

Homes and Communities Agency led the way:o Announced first tranche of sites on 31st Marcho Enhanced land release strategy published in Juneo Use of ‘Build Now, Pay Later’ techniques

In June Govt committed to release land for 100,000 new homes in SR

Major landholding Departments to publish land release strategies in September and held to account by ‘Star Chamber’

Accelerating release of Government land

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MULTI LA INVESTMENT APPROACHES

Why the portfolio approach will pay……

• LAs banding together can package land and assets to secure investment Scale can secure greater leverage

• Weaker sites and inner areas can benefit from cross subsidy. Politics of growth should underpin leafy areas supporting brownfield

• Easier to attract competitive public funding eg Affordable Rent

• Provide social housing without grant on gifted land to charity or with build now pay later – deferred receipts

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A more flexible Social Housing system

Giving LAs greater flexibility in the types of tenancy provided – powers in Localism Bill -

• Making better use of stock by reducing underoccupation –more responsive to need

• Allowing greater flexibility on waiting lists and transfers

• Tenant cashback

• payment by outcomes for housing services

• Benefit changes - DWP pilots of “management of safeguarding of landlord income” – proposals invited for 4 in England

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INNOVATION ON THE PLACE OFFER

• Re-thinking how public assets are used - Ashford

• Importance of top quality design – new approach with DCCabe

• Art, temporary uses, new events rather than large public projects

• Local dialogue on growth and benefits – eg CIL

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KENT HOUSING ISSUES - CONCLUSION

Innovation and trial

• Kent has a high reputation on joint working and innovative thinking;

• Freeing up of national frameworks creates major opportunities eg on flexible approaches to tenancy and benefits changes

• Cross LA structures will get the best results on investment

• Government is encouraging a multi-LA approach on growth funding and on planning co-operation but LAs must decide

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