Funding and Delivery Strategies for New Housing

Transcription

1 Funding and Delivery Strategies for New Housing Steve Cox Corporate Director, Environment & Place Chair of Gloriana Ltd March 2017

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4 An appetite for Growth Need for c20-30,000 homes over 20 years to support 26,000 new jobs Housing delivery rates have never been good enough. In 2005 there were c.1,000 completions. In 2009 it was c.75. 8,000 consented homes not built, values are low Quality of new housing has generally been of poor quality and increasingly in the green belt harming our wider regeneration ambitions Good quality housing in short supply, wider choice vital to meet aspirations for more high value jobs Recognise the clear link between good quality housing and improved health outcomes

5 Strengths on which to build Proximity to London and connectivity to the capital and wider south east Capacity within the General Fund to borrow Significant asset base within both HRA and General Fund Capital project capacity within the Authority Clear focus on delivering real change within our Growth Hubs particularly within Purfleet, Grays and Tilbury Increasingly strong demand for housing Cross party appetite to innovate and lead

6 Gloriana the Drivers We wanted to get more directly involved Increase housing supply rates across all tenures in response to local needs Encourage improvements in housing design and construction Provide local labour and contracting opportunities Support our regeneration ambitions by bringing forward the right mix of housing in the right locations Maximise the value of Council assets and borrowing capacity Tackle difficult Council owned sites Prove to the private sector that good quality housing has a value in Thurrock

7 Gloriana: Why a Wholly Owned Company? Options: HRA, Leasing, Development Partner or General Fund? Clarity of control and risk: Wholly owned so separate but no third-party stakes or interests Clarity of funding: General Fund borrowing use of prudential Clarity of purpose: About housing but not HRA housing - no secure tenancies About development and growth a catalyst not a competitor

8 Gloriana: Company Structure Gloriana is a lean organisation most functions & services provided by Council as agent Shareholder (Council represented by General Services Committee) Gloriana Wholly Owned Company Directors (Council Staff): Corp. Dir. Env. and Place Senior Financial Officer Head of Housing HCA Director Seconded Thurrock Staff (as required) Agency Agreements with Council

9 Gloriana: Commercial Structure Prudential Borrowing Loan repayment and interest Issued share capital Loan funding Thurrock Council (GF) Loan repayment and interest and distributions Land Wholly Owned Housing Company Loan and equity funding Construction contract M&M contract Sale receipts Private for sale housing D&B contractor M&M contractor (HRA) Sale receipts Shared Equity Properties Rental income and open market sale receipts Affordable Rent properties

10 Achievements so far Established in 2014/15 with a Business Case for 350 homes Operates alongside our AHP, JVs and other GF activity it is not the only show in town One project on site St Chads in Tilbury. First of 128 new homes completing in March 2017 Second project in planning 82 units in Grays Pipeline is growing. Two further sites in feasibility which could deliver a further 300 units c. 50m currently deployed - anticipated return (debt and equity) is c. 18m

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13 Lessons learned (to date ) Governance, Governance and Governance Decision making protocols and the role of Councillors Maximise transparency and accountability, while operating in Company s best interests Make the first development straight forward, establish the brand, build confidence Do not take the planning process for granted Principles are great but they don t always generate a return Get the right skills mix housing, development, legal, finance Flexibility and adaptability in development and governance

14 Opportunities and challenges ahead 1% reduction in Council rents means that Gloriana is the increasingly preferred/default development route it will do more than we originally thought possible Council land is available now but it will eventually run out Gloriana needs to mature to be able to viably develop where it has to acquire land The ability to use Gloriana alongside other programmes Estate Regeneration and Starter Homes etc Why just housing? Increasing opportunities around commercial and mixed use schemes