Affordable housing provision in the recession : the HCA’s role

1. Affordable housing provision in the recession : the HCA’s role Presented by Stephen Oakes Director HCA London Region Date 9th March 2009

2. Our vision To create opportunity: • For people to live in homes they can afford in places they want to live • For local authorities and communities to deliver the ambition they have for their own areas • A national agency that works locally

3. What we do Growth Adelaide Wharf, Hackney Affordable Affordability Barking Riverside Sustainability Renewal Christian Fields, Gravesend Millennium Primary School, Greenwich Peninsula

4. How we do it • Investment • Land • Research and best practice • Expertise

5. The new world • Organisation with increased flexibility • Challenges – both short term and long term • Culture – national objectives and local ambitions • Partnerships with local authorities, the private sector, RSLs and regionally • Approaches: • New business process (the single conversation) • New business products (the HCA toolkit) • Relationship with Government – the voice of delivery

6. Our tasks Support the delivery of new homes Secure the delivery of affordable homes Accelerate regeneration of under-performing towns and cities Improve the quality of existing stock and transform deprived neighbourhoods Ensure delivery is economically, socially and environmentally sustainable with good design Homes and Communities

7. HCA Funding – Significant Investment Property and Regeneration £1.7bn Decent Homes £2.6bn (London circa £5 bn) National Affordable Housing Programme £8.4bn Gypsies and Travellers £0.1bn Growth funding £1.1bn Thames Gateway £0.4bn

8. Continuing the Journey Transformation Start-up Set-up 1 December 2008 1 April 2009 1 April 2010

9. The Nine Regions

10. HCA Main Board (Chairman Robert Napier) London HCA Board (Chaired by the Mayor of London) HCA London • Representatives from • London Councils • The LDA • London Thames Gateway Development Corporation • The HCA’s Chair & Chief Executive • The Board makes it’s own investment decisions • Largest of the nine regions in budget terms • Expenditure 2009-11 circa £3bn • Funding includes • National Affordable Housing Programme • Property & Regeneration • Decent Homes • Thames Gateway (London) • FTBI

11. Partnership working • Joint Vehicles and LABVs • Surplus Public Sector Land • Local Housing Companies • Low Cost Home Ownership • Rolling Infrastructure Funds • Developer Panels (Reducing procurement costs) • Best Practice Guidance and Support

12. Principles for Investment & Intervention • Invest directly to assist the building of affordable housing for those who cannot find reasonable opportunities in the market • Support the delivery of new housing within a broader context of sustainable regeneration and ‘place-shaping’ • Work in partnership with others • Require investment leverage from others • Seek to optimise the strategic impacts from out investment • Are keen to take a longer term view of our investment

13. The Market Downturn • Global liquidity crisis means reduced access to credit for: • Employers • Consumers • Housebuilders and RSLs • In the wider economy - reduced economic activity, reduced confidence, increased unemployment - recession • Leading to reduced demand for housing • Supply slower to respond • Further falls and expectations of falls in house prices

14. Responding to the Market Downturn: key downturn issues • High density housing – cash inefficient • 2006/2007 Land values (viability) • Affordable Housing reliant on S106 planning gain • Collapse of confidence & liquidity in the banks • Cross subsidy from Private for Sale Housing • Mixed use schemes hit hardest • Capital Receipts impacting on Agency & LA programmes • RSL’s not immune to the downturn

15. Responding to the Market Downturn: Good News • Olympic Games 2012 • Crossrail • Jubilee Line & DLR Upgrades • Strong private rented sector • Major Contractors are cash rich

16. Responding to the Market Downturn: Tools the HCA have • The National Affordable Housing Programme • Flexibility and new models • The Property & Regeneration Programme • Gap funding, site acquisition and infrastructure support • Priority Projects • Kick-start programme • Estate Renewal • Changing the rule of ‘additionality’ • Place Shaping & Place Making

17. Responding to the Market Downturn: Recent Initiatives • Grant flexibilities • Introduction of flexibility in the level of grant that is able to be awarded • Package approached to NAHP bids • New invitation to submit portfolios of schemes • Substituting intermediate rent and rent-to-buy for LCHO and market housing • Helping to make unviable schemes viable • Homebuy Direct • Purchase of developers’ surplus stock and conversion to shared equity affordable housing • National Clearing House • Assist developers who can offer bulk volume programmes of stock • Working closely with local Boroughs to bring forward their land

18. Responding to the Market Downturn: what the Agency is also exploring • Tailored programmes for individual housing associations • Potential for LAs to come forward with their own development packages • Funding of infrastructure works on a return basis • New approaches to the private rented sector • Flexible tenure models • Better use of public sector land • Longer term joint ventures

19. Towards a Single Conversation • Strategy • Capacity • Investment • Delivery • Programmes • Standards and mechanisms • Investment tools • Both capital and revenue investment • Area-wide and specific interventions • Toolkit being developed

20. Design Standards • Building on a strong inheritance • Good design and sustainable development • High core standards and monitoring • Address the ongoing management of projects • Promote market improvements and exemplar initiatives • Build capacity and in partnership with national, regional and local agencies

21. A New Agency • With new approaches and new methods of working • Increasingly will offer greater flexibility • The single conversation will be the most important business process • The key goal is to make a difference on the ground • Responding to the downturn • Preparing for the new world

22. homesandcommunities.co.uk