Leeds Planning Network Masterclass - What is the future for affordable housing?

Leeds Planning Network Master Class: What is the future for affordable housing?

17th March 2016 #LPNLEEDS

Chair Introduction Jane Kettle Housing Consultant & Researcher #LPNLEEDS

Geraldine Howley Chief Executive, Incommunities

#LPNLEEDS

The Changing Landscape for Housing Associations Geraldine Howley, Chief Executive, Incommunities Improving lives Incommunities

History of incommunities 



Housing stock transferred from Bradford Council in 2003 36,000 homes

How Bradford Compares England

Bradford

Mean house prices £265,888 in 2014 Mean annual £26,499 earnings in 2014

£146,613

Unemployment rate in 2015/16

8.9%

7.4%

£22,641

Deprivation in Bradford 







Almost 40,000 children and young people aged 0-18 are living in poverty.

61% of children in the district live in low income households, compared with 44% nationally.

Roughly equal proportions of children in poverty live in families headed by a couple as headed by a lone parent. In Tong ward a higher proportion of children live in lone parent families.

Average household incomes of Incommunities tenants: £14,000

Most (over 90%) Incommunities customers sit in the lowest 10% band for household income levels nationally Improving lives Incommunities

Our Customer Profile  The majority of customers are aged over 66+

Improving lives Incommunities

Recent Challenges Facing Affordable Housing    

Bedroom tax Universal Credit Budget 2015 – rent cut Latest: LHA rates

Coalition Government  Spare

Room Subsidy

 Universal

Credit

Queen’s speech

Summer Budget

Comprehensive Spending Review

Housing And Planning Bill Proposal

Spring 2016 Budget Update 

 

On Thursday 16 March 2016 George Osborne announced his latest budget. Quite a few of the initiatives were trailed in the media. In contrast to last October, there were very little housing related announcements. In summary the key elements are: Housing: There is a starter homes land fund giving local authorities access to £1.26m to remediate brownfield land for at least 30,000 starter homes.



13,000 affordable homes 2 years early, bringing forward Capital spending.



Capital spending:



Lifetime ISA used by under 40s to purchase their first home.



Joint working for unlocking land around railway stations to provide sites for new development.

Spring 2016 Budget Update 



  

 





Planning reform – further efforts to streamline the planning system.

Garden towns/cities – locally determined smaller settlements on the outskirts of towns.

Stamp Duty Land Tax – some release of funds for development of new homes.

PRS Sector Committee – to stimulate institutional involvement.

Rough sleeping – additional funding of £100m to provide low cost ‘second stage’ accommodation.

Welfare: Additional support to self-employed Working Tax Credit claimants.

Changes to benefits for the disabled.

Business Rates - some reduction in Business Rates for commercial property depending on the Rateable Value.

Response By The Sector

Surviving the short term threats in order to exist and hope to thrive later?

Organisational Change   

  

Non-core services being cut Staffing Diversification Service delivery Commercial activity Mergers

Asset Management Appraisal   





Asset Management Strategy LSVTs – legacy Right property, right location, right type Looking at demand patterns – reliable evidence/research essential Development – social housing vs for sale

What Does This Mean For Our Customers?

Housing Demand What else is changing?  Demographic change  Changing household formation patters  Rising health costs  Affordability crisis

Perspective Of Incommunities

Development 

Since 2006 we have developed 591new homes in the district for rent, shared-ownership and sale

Development Today

Challenges 

Sustainability of business plan



Rental income and revenue reduction



Sustaining social purpose and values



Low demand in Bradford



Delivering development programme and funding projects



Impact on viability – downgrades



Merger code/Consolidation



Nationalise/Privatise?

Opportunities Working differently: digitalisation  Meaningful partnerships (collaboration with Councils, other HAs, third sector, health, etc.)  Different forms of construction  Diversification of product  Commercialisation  Devolution  Northern Powerhouse/ H4n 

What does the future look like?

Global Challenges - Increasing social mobility – diverse communities - Population growth - Global inequality - Lack of stability in government as government and organisations come under greater scrutiny - Climate change and resource depletion

Resilient Leadership in a changing world   



Values Based Organisations Technological advances Good Governance Talent Management and Succession

Jenny Wood Harrogate Borough Council

#LPNLEEDS

The demise of the council house (and why kidnapping a Housing Minister is never the answer)

Housebuilders extraordinaire(s)

Local Ward Member with council houses

The problems 2000 households on our waiting list 60 families in bed and breakfast and homeless hostels Affordable housing shortfall of 313 per annum Highest average house prices in Yorkshire and the Humber Highest market rents north of Watford Gap  Ex-council house (with conservatory) for sale at £300,000

Housing and Planning Bill ( the best bits) • • • •

Enforced sale of high value council houses Pay to stay Starter Homes Voluntary Right to Buy of HA stock

Spotlight on Enforced Sale Stock and valuations as at 31/03/15

Total Stock

Bedsits/1 beds

1496

Properties Suggested valued at or "High above "High Value" Cap Value" cap £85,000

1442

%

96%

2 beds

3 beds 4 beds 5 beds

Note

1253

£130,000

410

33%

1023 69 4 3845

£165,000 £265,000 £375,000

522 1 0 2375

51% 1% 0% 62%

Includes87% of 2 bed houses

The cumulative effect • • • • • • • •

Spare room subsidy Rent reduction Local Housing Allowance Cap (2018) Reduction in benefit cap to £20,000 (families) and £13,400 single people NPPF Affordable Housing Definition HCA Grant (shared ownership) Reduction in HB for 18 – 21 year olds (2017) Pay to Stay ..........

Starter Homes - Affordable Housing I cant keep up......

• £250,000 – 80% market value • £70,000 income • FTB under 40 • 5 years The big question - how much real affordable housing will they displace?

Location, location, location

Martyn Broadest Connect Housing

#LPNLEEDS

Q&A

#LPNLEEDS

Key Points & Conclusion

#LPNLEEDS

Our next events:Workshop 16th April 2016 ‘Writing Neighbourhood Planning Policy’ Master Class 12th May 2016 ‘Future of Retail’ #LPNLEEDS