DCLG stocktake presentation

Empty Homes ProgrammeStocktake Report

February 2014

Tackling Empty Homes is a Ministerial priority & numbers are reducing

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Why is it important to address empty homes?

• Ministerial priority

• Commitment in Lib Dem manifesto & coalition Housing Strategy.

• Potentially cost effective and sustainable way to increase affordable housing supply

•Economic/social benefits incl. employment, training, neighbourhood renewal & reduction in ASB/crime

•Move away from Pathfinder policies of demolition to a focus on locally led refurbishment & regeneration

Number of empty homes is reducing

• 14% reduction in Empty Homes between 2010 & 2012

• More than 93,000 empty homes brought back into use since 2011 – more than 38,000 between October 2012 & October 2013

• Birmingham (1,466) & Liverpool (1,244) returned more empties in 2013 than any other authority

• Provision of £235m funding through Empty Homes Programme

• Councils being offered New Homes Bonus on homes created from empty property

• Introduction of Council Tax premium on long term empty homes and discretion for councils to remove Council Tax exemption on short term empties

Challenges and Successes

Challenges

Projects taking 9 -12 months to establish

Enforcement procedures take longer than Programme timescales

Identification of Empty Homes more difficult than programme assumes

Negotiations with owners can be difficult & time consuming

Lack of resource capacity to tackle empty homes

Difficulties engaging with mortgage lenders

Lack of understanding of flexibility of programme by some practitioners

LA Cluster funding cannot be clawed back

Successes

Projects are refurbishing empties to create high quality homes

Innovative ways of identifying empty homes

Additional social benefits such as employment, training & neighbourhood renewal

Creation of learning and expertise across Programme strands

Developing models to deliver sustainable programme when funding ends

Delivery models adapted to fit local contexts

Genuine enthusiasm & desire by delivery organisations to continue to tackle issues

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The wider social benefits are a real success of scheme & should be celebrated

• Specific communities led strand, highlights importance of delivering additional social impacts• Focus on empty homes, not empty houses but success only measured against housing units delivered• Housing Strategy, business case & application guidance highlight importance of delivering social

benefit• Monitoring data of softer impacts rarely collected by DCLG. Delivery organisations have the information but

have no consistent or organised way of reporting • Focuses on hardest to tackle properties which can take longer to bring back into use, but have greatest

social benefits• Examples of additional social benefits include:

Employment & Training

• Community Campus, Teesside providing 15 jobs & 17 apprenticeships• Somerset Care & Repair developing employment skills/qualifications

with local prisoners• VCS projects (i.e. Windrush Alliance) keen to use local contractors to

boost local economy

Social cohesion &

neighbourhood renewal

• Five year tenancies to build continuity & strengthen communities• Stoke’s regeneration of problematic neighbourhoods & rebuilding of

communities through range of different tenants• Neighbourhood renewal, helping to tackle problems with vandalism,

anti social behaviour & drugs

Indirect benefits &

other policies

• Provides catalyst for others to refurbish their homes – LAs would like to count these against their Empty Homes targets

• Increasing housing stock could help tackle homelessness• Multi agency approach joining with other DCLG policies including

Troubled Families to tackle wider causes and issues

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Measuring social impact is hard, but it can be done

Ways to measure softer outcomes

• Measuring proxy data on employment, crime, property prices & planning applications can illustrate indirect impacts of policy

• Other sources incl. Integrated Household Survey, Quality of Life surveys, British Crime Survey & British Social Attitudes Survey, may show some impacts

• Monitoring of social impacts alongside outputs as part of regular data returns

• Regular assessment of cases studies, with evidence from interviews, surveys, focus groups & visits

• Economic based theories such as Social Return on investment place monetary value on social benefits

• Systematic assessment of social impacts, similar to Tribal’s £10,000 evaluation of VCS strand

• Hard to achieve value for money with hard outputs alone, so must take wider benefits into account• Measuring outputs only tells half the story - measuring softer outcomes as well can present a more

accurate assessment of success• Uncertainty exists about how to collect data on outcomes in robust format. • Some data has been provided by organisations, but has tended to be ad hoc and can be inconsistent• Social impacts are measured over long term & may be difficult to judge by 2015• Hard to prove causal links between programme & wider social outcomes in crowded policy landscape

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Identifying empty homes is difficult, with no guarantee of engaging with owners

Identifying empty homes Why don’t empty home owners engage?

• Empty owners can be irrational in decision making - understanding their needs can be complex & time consuming

• Some show enthusiasm during negotiations, only to drop out at the last minute

• Identification is resource intensive & costly - many organisations don’t have staff to dedicate to systematically search for properties

• May be waiting for property to appreciate in value & not want to engage immediately

• Council Tax & Land Registry records are common source of info but can be incomplete/inaccurate

• But, can be irrational/contradictory & some don’t want to invest for long term & want more control over tenancies

• Many organisations use leaflets and letters to target owners, but these tend to have poor response rates

• Can be harder to engage with owners for Lease & Repair scheme if they feel social rents are too low, & private rented sector is more lucrative; or if they are put off by social tenants

• Multiple websites for public to report empties, but no effective central resource – Gov.uk could be developed to create more coherent reporting tool

• Some properties bought by investment groups, to use as security for borrowing – they have little intention of finding tenants

• Landlords may be more attracted by other grants allowing them to let to private tenants for higher rents

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Despite these issues, we identified lots of examples of best practice

• Windrush Alliance used contacts in community & local media to identify a number of properties

• Local networks can be a good way to identify empties - many VCS organisations use local communities to identify empties

• Good working relationships with LAs seen as crucial by smaller VCS organisations to identify properties & find tenants

• Bristol YMCA used local estate agents to source properties - effective approach but can be expensive

• AGMA (Empty to Plenty) & Kent County Council (No Use Empty) created strong brands & used social media to engage with empty home owners

• Thanet Council use auctions to identify properties, avoiding resource intensive negotiations with owners

• Discussions with Council of Mortgage Lenders to develop mechanisms of reporting empty home owners in breach of mortgages

• Reportemptyhomes.com – collaboration by voluntary orgs & Channel 4 enabling public to report empty homes. Submits information direct to LAs. More than 9,500 reports since 2008

Delivery agents are using a variety of techniques to identify and engage with empty home owners

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Enforcement is an essential tool for Local Authorities, but takes too long

150% Council Tax

• Seen as effective way of engaging with empty home owners• LAs use as stick for owners, giving financial motivation to engage &

increasing number of homes available• Can be costly for Agents liable for council tax premium once

property is purchased & refurbishment is underway• Some owners falsify occupancy when levy is threatened by

‘furnishing properties’

Compulsory Purchase

Orders (CPOs)

• Can be effective, but only as last resort• Can take between 9 & 24 months to apply – streamlining process

may increase effectiveness & take up• LAs would like a more systematic process with CPOs triggered

when certain level of evidence presented to reduce appeals• Length of process disproportionate to length of project

Empty Dwelling

Management Orders

(EDMOs) & others

• Once EDMO is applied lasts for between one (interim EDMO) and seven years (Full EDMO) – but owners can sell property at any time

• Few LAs use EDMOs - seen as too complex & time consuming• Debt management notices, s215 & environmental orders can be

quicker & more effective for LAs to take control of empties & are more likely to be used to engage or take control of properties

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There is scope and desire to build on existing good practice to develop stronger Programme coherence

Good Practice, Knowledge Sharing & Information Provision is Taking Place

• E.g. AGMA and HCA Yorkshire have formed practitioner groups to highlight best practice, build capacity and discuss issues

• These groups involved organisations from across delivery stands and often outside of the geographic area.

• A range of good, well-branded online and paper resources both nationally (e.g. reportemptyhomes.com) and locally (e.g. No Use Empty in Kent)

However this is not consistent across all of the Programme

• Activities to join up strands are patchy countrywide, with some groups (e.g. Wind rush CIC) feeling excluded from LA-led discussions

• Practitioner Groups are formed only in areas that have the resource• Some LAs reported a need to bring the scheme to the attention of all (e.g. Chief

Executives)• Support available to community groups through Self–Help-Housing is of good

quality but is over stretched• There is a desire for more support, encouragement & recognition from central

Government• Diversity of websites (particularly nationally focused ones) can make the

programme appear disparate and fragmented 9

Recommendation Practical suggestions for increased delivery

Develop thorough & systematic mechanism to measure additional social impacts of Empty Homes Programme

- Collect evidence of additional social benefit from practitioners- Consider counting empty homes that have been returned to use

as an indirect result of Empty Homes Programme

DCLG, HCA & Tribal to proactively highlight & encourage use of flexibilities within existing programme to practitioners to maximise delivery by 2015

- Clarify freedom to switch between Lease/Repair & Purchase/Repair models

- Consider requests for limited localised demolition and/or relaxation of social/affordable housing criteria where clear benefits identified

Ensure Empty Homes Programmes remains on agenda for DCLG and Cross Whitehall engagement with Council of Mortgage Lenders (CML)

- Highlight benefits to CML, including attracting new customers & stable rents from previously empty homes

- Sharing of empty homes information between LAs and mortgage lenders

Support LAs to give them confidence to use full range of enforcement tools

- Encourage flexible application of Council Tax premiums, to engage empty home owners, but to recommend relaxing 150% premium while refurbishment is taking place

- Encourage sharing of enforcement knowledge & best practice between LAs

Strengthen identity of Empty Homes Programme, through central and local communication celebrating success and sharing best practice; making it easy to record empty properties

- Improved knowledge sharing across different strands- Single interface to provide information/support & central empty

homes reporting mechanism

Our recommendations could enhance Programme delivery between now & 2015

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Annex A – Wider Social Benefits Case Study The Grand Trunk Hotel - ARK Churches Wirral

Wirral Churches ARK & The Grand Trunk Hotel• Provides support & guidance to adults at risk of

homelessness and assistance in finding suitable, long term accommodation

• Received £105k from the Empty Homes Fund – used as part of £400k project

• Took pub which was empty for nearly 10 years & created sheltered housing

• Created six self contained flats for homeless people in need of long term support

• Also created office space for organisation

Wider social benefits• Encountered problems with local community when project first agreed – campaign to try and block

development supported by local councillor, as community were worried about the impact of sheltered accommodation in their neighbourhood

• Wirral ARK worked hard to break down barriers with locals & put themselves at the heart of the community, including providing and maintaining hanging baskets on elderly residents’ homes

• Have transformed a building that had blighted area for a number of years – at one stage having been taken over by Hell’s Angels who used it as a base for drug taking & other criminal activity

• Have provided suitable accommodation for six homeless people. Flats are fully self contained and offer freedom & independence for residents, while removing some dependency on the welfare state

• Working hard to become part of the local community built links and broke down opposition – This has enabled organisation, residents and community to benefit.

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Annex B – Enforcement Case Study Newcastle City Council

Newcastle City Council Cluster Programme• £490k Empty Homes funding to deliver 116 empty

homes• 4 clusters - 2 selective licensing areas with 600-

1,000 private properties & 2 smaller areas• Funding used to finance grants & loans. Have

found grants effective way to persuade owners to engage

• More than 1,200 long term empties in Newcastle• 125 empties brought back into use by March 2014

A multi option approach to enforcementEnforcement is used to encourage empty home owners to engage with the programme. Newcastle City Council used the following approach on 18 properties, vacant for between 1 & 8 years, all owned by the same person: owner1. Good condition no enforcement action undertaken2. Tenant Finder Service offered (declined)3. Lease and purchase options offered (declined)4. Empty homes grants and loans offered (declined)5. EDMO application started6. Owner applies for grant assistance7. EDMO application restarted8. Tenant Finder Service re-offered

This approach has created 5 properties competed, a further 5 underRenovation. No sign of first 5 being occupied (grant only paid on occupation) 12

Annex C – Flexibility Case StudyAGMA

Background • AGMA were awarded £3.6m for their Empty

Homes • Within Greater Manchester boundaries there

were an estimated 13,500 long term empty homes

• This equates to circa 31% of the council housing waiting list

• AGMA’s target was to bring 343 empty homes back into use through the programme

• By Sept 2013, 138 had been brought back into use

Programme Flexibility - Reinvesting funds • Used flexibility to reinvest money made from

empty homes• A particular property cost £40k to bringing

back into use was later sold for £60k • The original £40k investment and the £20k

“profit” was then put into another property, creating a recyclable scheme

Programme Flexibility - Clusters • Found only four areas across Manchester

eligible for cluster funding• In Openshaw there were enough empty homes

to count as a cluster but they were not located sufficiently close to qualify

• AGMA used other stands of EH funding to redevelop housing and delivered broader regeneration in the area

• This is encouraging other property owners to make improvements to their homes

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Annex D – Flexibility Case Study Pennine Lancashire

Background • Pennine Lancashire were awarded £9.5m

for their Empty Homes programme • Within the Pennine Lancashire area there

were 5,912 long term empty homes • This equates to 49% of the council housing

waiting list• Target of 457 long term empty homes

brought back in to use• By September 2013, 71 empty homes had

been brought back in to use

Programme Flexibility - Affordable Housing • With more programme flexibility, felt they could

achieve better results • Greater flex on affordable housing would

increase eligibility and help target more properties

• Affordable housing supply is not an issue in many Pennine Lancashire areas – they want to attract more private tenants and owners to restored properties

• Supply of Affordable Homes is strong enough that a narrower focus risks displacement

Programme Flexibility- Demolition• Would like to undertake selective demolition• Some empty properties were so structurally

damaged that it was costing more to redevelop them than it would be to demolish them and build again

• Demolition on previous HMR programme was not widespread but generally worked well

• Demolition proposed in very limited circumstances and on a handful of homes e.g. to clear arson damage

Selective demolition has helped transform localities. The costs of restoring two properties were cited at twice the market value of refurbished homes, preventing development and guaranteeing bad VfM.

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Annex E – Joining Up Case Study HCA Yorkshire and Humber

HCA Y&H has developed a Good Practice Group to build capacity and knowledge structures both for this Programme and beyond 2015.

• Early identification of the need to share good practice and problem solve because little refurbishment work had taken place for years.

• Unilaterally established a quarterly good practice group• Initially only invited practitioners linked to their programme however

recognised that wider capacity-building was need • Broadened participation to involve organisations from others EHP strands

and LAs who were not part of the programme• The Group actively invites speakers from across the country to enhance

learning from a range of sources and perspectives

Example of Benefits

Many practitioners where not aware of costly compliance audits and had not built them into their financial forecasts. The Yorkshire and Humber HCA Group has helped by:

• Creating wider awareness of compliance audits. • Developing a streamlined compliance process. • Members have volunteered to compliance audit each other (cost free )• The group is now considering sharing Empty Homes Officers across LA boundaries.

However, could only do this because of motivated individuals – Not as part of the Programme

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Annex F– Our Research

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Campaigning Groups and Networks

Community Groups and Funders

Local Authorities

South and South WestEast and South EastMidlandsYorkshire and HumberNorth EastNorth West

Windrush Alliance CIC

Policy Team and Former Policy Team Members

Using an agreed Questions Framework established from an analysis of major programme issues, we undertook a series of one hour face-to-face interviews with organisations from across the various strands of the Empty Homes Programme.