Stroud Council Housing Forum Agenda Item 3 4 June 2013 1 STROUD DISTRICT COUNCIL Stroud Council Housing Forum 4 June 2013 AGENDA ITEM NO 3 Report Title COUNCIL NEW BUILD PROGRAMME Purpose of Report To brief Stroud Council Housing Forum members on the progress of: 1) The Council New Build Programme 2) The Small Sites Strategy 3) Community Land Trusts (CLTs) 4) Delegating Authority to issue Demolition Notices in respect of HRA Properties to the Head of Asset Management and the Strategic Head of Tenant Services in respect of the New Build Programme. 5) Delegating authority to the Head of Housing Contracts to authorise Home Loss Payments to tenants under the Decant Policy specifically for the New Build Programme. Recommendation for consideration Stroud Council Housing Forum resolves to note the report and forward any comments and/or recommendations to the Housing Committee and for these to be considered. Report Author Peter Stoate, Head of Housing Contracts Tel: 01453 754196 Email: [email protected]Bryn Howells, Business Development Manager Tel: 01453 754153 Email: [email protected]Options None Performance Management Follow Up To be next reviewed at a Stroud Council Housing Forum in 2014 – date to be agreed. Background Papers/ Appendices Appendix 1 – Council New Build Housing Programme – 8 November 2012. Appendix 2 – Proposed Potential New Build Programme
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Stroud Council Housing Forum Agenda Item 3 4 June 2013 1
STROUD DISTRICT COUNCIL
Stroud Council Housing Forum
4 June 2013
AGENDA ITEM NO
3 Report Title
COUNCIL NEW BUILD PROGRAMME
Purpose of Report
To brief Stroud Council Housing Forum members on the progress of: 1) The Council New Build Programme 2) The Small Sites Strategy 3) Community Land Trusts (CLTs) 4) Delegating Authority to issue Demolition Notices in
respect of HRA Properties to the Head of Asset Management and the Strategic Head of Tenant Services in respect of the New Build Programme.
5) Delegating authority to the Head of Housing Contracts to authorise Home Loss Payments to tenants under the Decant Policy specifically for the New Build Programme.
Recommendation for consideration
Stroud Council Housing Forum resolves to note the report and forward any comments and/or recommendations to the Housing Committee and for these to be considered.
Report Author
Peter Stoate, Head of Housing Contracts Tel: 01453 754196 Email: [email protected] Bryn Howells, Business Development Manager Tel: 01453 754153 Email: [email protected]
Options
None
Performance Management Follow Up
To be next reviewed at a Stroud Council Housing Forum in 2014 – date to be agreed.
Background Papers/ Appendices
Appendix 1 – Council New Build Housing Programme – 8 November 2012. Appendix 2 – Proposed Potential New Build Programme
Stroud Council Housing Forum Agenda Item 3 4 June 2013 2
1. Introduction 1.1 At its meeting on 8 November 2012 Executive approved the Council New
Build Housing Programme (see Appendix 1) 1.2 At this meeting it was agreed that the development options included:
I. Build new homes utilising existing assets (mainly garage sites) plus any available land.
II. Build a number of properties utilising the best/ easiest sites plus
acquire properties through the open market.
III. Sell the garage sites and utilise the revenue with finance to purchase properties via the open market and also where possible S106 properties (in competition with RSLs).
IV. Explore opportunities to develop in partnership with SDC with the
priority being regeneration sites such as Brimscombe Port and Littlecombe, where additional new build affordable housing may help viability and kick-start development.
1.3 The proposal approved was to:
i. Utilise ‘Easy and Normal’ garage sites to develop to build new homes.
ii. Appoint architects to commence feasibility studies in October 2012
for selected ‘Easy/Normal sites – prioritise larger sites to deliver economies of scale.
iii. List sites for alternative use such as Self Build or for disposal to local
Community Land Trusts to generate activity at a local level. iv. Tender Development Agreement with a Housing Association who has
experience of developing locally to project manage the build programme – agree partner by January 2013.
v. Commence tenders for developers by September 2013. vi. Start on site by July 2014. vii. Complete the first sites by April 2015. viii. Commence a new Development Project Board to oversee and clarify
budget, timeframes and design issues for new build programme. ix.Research ability to ‘lever’ economic activity – Jobs and Growth
agenda.
Stroud Council Housing Forum Agenda Item 3 4 June 2013 3
1.4 Funding for the New Build Programme (as part of the HRA 5 Year Medium Term Financial Plan) was approved by Council in January 2013.
2. New Build Programme 2.1 To date a number of sites have been identified and progressed. These
can be seen in Appendix 2. The programme is on time and on target to deliver the increased number of 150 New Homes within the next 5 years (an increase on the previous target of 100 units).
2.2 The prospective costs of utilising a Housing Association as a
development project manager has been investigated and considered. The quotations received ranged from 5% of build cost (for 150 houses this could be £750K) to £9k per unit (for 150 houses this could be (£1,350K).
2.3 It will be much more cost effective to take this service in-house as this
will generate substantial savings over the next 5 years. As such the staffing levels within development will be reviewed ongoing, subject to the number of sites coming on line (being developed), to ensure the target number of units are achieved whilst delivering value for money.
2.4 In addition, as part of the Development Programme it will be necessary
to engage a ‘Clerk of Works’ to ensure the standard of the works undertaken is to SDC’s requirements. Following the receipt of quotations it is expected that this would cost SDC around £30K per annum over the next 5 years. Again, in order to deliver cost savings it has been decided to absorb this role and costs within existing resources by reallocating a member of staff to the Development Team from within the Housing Contracts Team.
2.5 The development programme listed in Appendix 2 can be split into the
following:
1) Woolaways regeneration 2) First Division sites where SDC own the site 3) Second Division sites where the site is more problematic 4) Potential acquisitions and developments with a partner.
The number of sites being progressed can be highlighted as follows: Narration Number of Sites Number of new
units to be delivered
Estimated Budget £’000’s
Woolaways 3 33 3,000 First Division 6 52 6,135 Second Division 3 16 2,000 Acquisitions 5 103 11,700 Total 17 204 22,835
Stroud Council Housing Forum Agenda Item 3 4 June 2013 4
2.6 Appendix 2 indicates that as part of the Woolaways programme SDC are also looking at ways to generate more social housing. At the site at Leonard Stanley the proposal is to build a number of shared ownership properties as well a new social rented/ affordable homes. This will substantially increase the supply of social properties whilst providing a capital return for SDC.
2.7 The six ‘First Division’ sites can be seen to be those that have
progressed the most. For most of the sites it is expected planning to be achieved in the near future with delivery within the next 24 months.
2.8 The three ‘Second Division’ sites are those that are subject to further
enquiries and may have historic issues attached to them. 2.9 Apart from developing on sites owned by SDC, negotiations are also
taking place on a number of potential developments to either acquire land or to agree a complete development scheme e.g. where the builder owns the land or is proposing to purchase land and SDC will purchase a ‘finished product’. These can be see in Appendix 2. It should be noted that in order for SDC to achieve its target new land acquisitions and new development agreements will need to be completed. In addition, with a view to ensuring future delivery SDC is also looking to ‘land bank’ sites.
2.10 Approval will be requested from Housing Committee to continue
progress on the sites and New Build Development Programme as listed in Appendix 2 and highlighted above and to receive any recommendations or amendments to the programme.
3. Small Sites Strategy 3.1 Assessment of the SDC owned garage sites is ongoing. However,
results have already yielded a number of sites which are small in terms of the likely delivery of housing units from them. In terms of an economic base level for us to deliver units to any sort of economic price and having regard to our resource implications; a cut off of around 4 units is proposed as a minimum threshold level. Therefore, as these sites are limited in their potential either by size or technical considerations, they would not currently figure as a priority given the scope of other, larger issues that we have to address.
3.2 This leaves us with a garage estate with quite a number of void areas of
land and/or garages which are under utilised and suitable for demolition. This is a situation which will only get worse over time as it is uneconomic to invest monies in their repair and upkeep.
3.3 In addition, small builders in the local area are faced with extreme
difficulty in raising finance for development as credit restrictions are imposed by banks and finance providers. Land acquisition in these circumstances; which is often an upfront cost and can even be a risk purchase, represents a barrier to continued economic activity.
Stroud Council Housing Forum Agenda Item 3 4 June 2013 5
3.4 It may therefore be of interest to the Council to reach agreement with locally based developers to, where possible and commercially viable, progress these sites to crystallise value for the Council. This would also provide job opportunities in the local area as well as provide links to education locally.
3.5 In outline terms, an approach along the following line is proposed:
a) Terms are agreed at the outset for the acquisition of the site by the developer from the Council and a contractual agreement entered into. This could be achieved by way of a mini tender process, interview and in accordance with procurement rules and asset disposal policy.
b) The developer is responsible for undertaking the technical appraisal
of the site and securing a planning approval that maximises its value and for all associated costs. Alternatively to ensure quality of property to be delivered SDC may want to keep control and undertake the design and planning themselves.
c) The site will remain in the ownership of the Council and the developer
is granted a license to re-develop the site within agreed timeframes in compliance with the planning approval. SDC would retain the right to purchase any completed properties which could be utilised as social housing (at agreed market rates). SDC would also undertake regular site visits to ensure progress is being made and the developer is undertaking the programme in compliance with planning conditions.
d) As part of the development process, the developer commits where
possible to the use of local consultants, labour and suppliers. An example of this could be using students from the college to provide technical services (e.g. surveying, draughtsmen, procurement etc) as real time experience.
e) The council transfers the freehold on the sale of each property upon
receipt of the agreed land value from the sale proceeds. Sums received from the process are then re-invested in the provision of affordable housing programmes.
3.6 There does seem to be scope here for value in the Council’s garage
asset portfolio to be crystallised from otherwise low priority sites, at the same time as contributing to local employment and skills training.
3.7 This will create resource issues which will need to be resolved. 3.8 It is proposed to trial a pilot in two locations and progress these on the
above basis. These are:
i. Upton St. Leonards - 2no: 3 bed houses. (Vacant land-former garage site).
ii. Whitminster- 2no: 3bed houses. (Existing garage block).
Stroud Council Housing Forum Agenda Item 3 4 June 2013 6
3.8 The advantages and disadvantages of this proposal with risks and
benefits can be seen below: Advantages/ Benefits Disadvantages/ Risks • Generates local economic activity. • Removes sites which are not
contributing and causing possible ASB.
• Increases no of homes in District. • Provides educational opportunities. • Generates funds which can be better
utilised elsewhere. • Potential to supply more social
housing when and where required.
• Sites may be suitable for Community Land Trusts.
• Not guaranteed to deliver more social housing units.
• Risk exists of developer going into liquidation.
• Removes control of site from SDC. • Possible disruption to existing
residents. • Possible planning issues with such
small sites. • Uneconomic cost of developing
sites. • Risk of market prices not obtaining
required amount to generate return.
3.9 Whilst it is recognised that there are definitive disadvantages and risks it
is recommended that the advantages and benefits outweigh these. 3.10 There will be an initial investment in drawing up a process and creating a
licence but this can then be used for further potential projects. 3.11 Approval will be requested from Housing Committee to continue the
approach with regard to the HRA Small Sites Strategy and to receive any recommendations or amendments.
4. Community Land Trusts 4.1 At its meeting on 8 November 2012 Executive approved the Council New
Build Housing Programme. 4.2 In Appendix 1 (page 13) the Executive Report ‘The Council New Build
Programme’ includes the Proposal “List sites for alternative use such as Self Build or for disposal to local Community Land Trusts to generate activity at a local level.”
4.3 Following the publication of the programme SDC has already been
approached by two potential CLTs requesting assistance to put forward proposals for them to take on developments.
4.4 The salient points include:
i. Transferring land for nothing to the CLT ii. Providing financial assistance in the way of ‘seed capital’. iii. Providing project management assistance
Stroud Council Housing Forum Agenda Item 3 4 June 2013 7
iv. Availability of Section 106 funds 4.5 It should be noted that land already identified by one potential CLT
provides a significant income to the HRA which would be forgone if the project goes ahead with all the potential implications of parking displacement. Against this must be weighed the real positive effects of local organisations taking control and the increased economic activity.
4.6 A report detailing the proposed implications following the initial two
meetings is being prepared by Officers within Asset Management and is due to be presented to Stroud Council Housing Forum and the Housing Committee within the next few months.
4.7 In the interim, Officers will be requesting approval from the Housing
Committee to continue discussions along the above lines in conjunction with the Chair of Housing Committee and to receive any recommendations or amendments.
5 Demolition Notice 5.1 SDC has a number of sites where economies of scale can be achieved
by increasing the size of the site by demolishing property and thus develop more new homes. In addition, there are some sites where the option of demolishing property is a more viable and cost effective option than trying to repair or refurbish the property.
5.2 In such instances the Council needs to issue a ‘Demolition Notice’. This
will suspend any Right To Buy applications. The Notice will be served on tenants living in a property which may be demolished during a re-development programme. This means that they will have their right-to-buy suspended for up to five years. Before the Initial Notice comes to an end the Council can either:
• serve a "Final Notice of Demolition" which means the right-to-buy will
be suspended for a further two years; or • rescind the Initial Demolition Notice
5.3 The 2004 Housing Act introduced exemptions to the Right to Buy (RTB) where demolition work may be proposed. If a Local Authority is considering demolition of some of its homes it can serve an initial demolition notice on the tenant. This is valid for up to 5 years. The notice doesn't cancel any current RTB application on a property or stop a tenant making an application after the notice has been served, but the Council’s obligation to complete can be suspended. The RTB carries on to completion if the demolition doesn't take place. However if a project involving demolition is confirmed the Local Authority can serve a final demolition notice. This ends current RTB applications and prevents new ones being made. Where an initial or final notice is served on a tenant with a valid RTB application, the tenant can claim compensation for conveyancing expenditure. If a notice is served but the Local Authority
Stroud Council Housing Forum Agenda Item 3 4 June 2013 8
decides not to proceed, a revocation notice must be served on the tenant.
5.4 A number of sites have already been identified where demolition of
empty properties would result in the provision of increased social housing.
5.5 The Housing Committee will be asked to delegate authority to the Head
of Asset Management and the Strategic Head of Tenant Services Officers to be able to issue Demolition Notices in respect of properties within the New Build Programme.
6 Home Loss Payments 6.1 SDC has an agreed De-Cant Policy which contains the facility for tenants
to apply for a Home Loss Payment of £4,7000. 6.2 A Home Loss payment is a statutory payment made to compensate
tenants for having to permanently move out of their home. It is not payable for tenants who temporarily move out of their home and are able to return to their original property once the work is completed. However, if their area is being totally redeveloped and they return, they would be entitled to Home Loss as they would be returning to a totally new home.
6.3 This mandatory lump sum payment is fixed by Section 30 of the Land
Compensation Act 1973 with its level being reviewed by the Government each September. As at September 2012, it is set at £4,700.
6.4 This Home Loss payment is for a tenant (or joint tenants but only one
payment – not a payment for each) who has lived in their property as their principal home for at least 12 months and is required to move out of their home permanently, either because of improvement works their landlord is carrying out, or because their home is being demolished.
6.4 Tenants would become eligible for Home Loss payment following a formal
decision to improve or demolish their homes. 6.5 Tenants who have rent arrears, court costs and rechargeable repairs will
have these deducted directly from this lump sum payment. 6.6 In order to facilitate an efficient and effective move it is requested that
the Housing Committee delegate authority to the Head of Contracts to be able to authorise the mandatory and legal Home Loss Payment of £4,700 under the SDC Decant Policy.
7. Conclusion 7.1 The new build programme is progressing on a number of sites. As such
Officers will be requesting approval or seeking any recommendations or amendments to the programme from the Housing Committee in respect of:
Stroud Council Housing Forum Agenda Item 3 4 June 2013 9
i. Continuing the New Build Programme through:
a) Woolaways sites b) Developing sites owned by SDC – 1st and 2nd Division sites c) Negotiations to either acquire land or development agreements
with developers or through acquisition through Section 106.
ii. Approving the ‘Small Sites’ Strategy iii. Approving the continuing approach with respect to Community Land
Trusts iv. Delegating Authority to issue Demolition Notices in respect of HRA
Properties to the Head of Asset Management and the Strategic Head of Tenant Services in respect of the New Build Programme.
v. Delegating authority to the Head of Housing Contracts to authorise
Home Loss Payments to tenants under the Decant Policy specifically for the New Build Programme.
STROUD DISTRICT COUNCIL
EXECUTIVE
8 November 2012
AGENDA ITEM NO
10 Report Title
COUNCIL NEW BUILD HOUSING PROGRAMME
Purpose of Report To seek approval of the Council New Build Housing Programme.
Decision(s)
Executive RESOLVES to Approve the Council New Build Housing Programme.
Consultation and Feedback
Consultation has taken place with the Executive Leads for Housing, Finance and the Environment. Consultation has also taken Tenants Representative Groups, including the Housing Management Forum on 6th March 2012, a Special Policy Panel on the 20th March 2012 and a Housing Advisory Panel on 17th October 2012.
Financial Implications and Risk Assessment
It is important to ensure the new homes programme utilises all additional funding opportunities as outlined in the report. This will both maximise the capacity to build new homes and support the funding provided by the £10m of further borrowing capacity afforded by Self Financing. When the additional borrowing is identified to be required, careful consideration is needed to the duration and rate of borrowing in order to ensure the properties built are an effective resource of the HRA. Ian Garrett, Business Accountant (HRA) Tel: 01453 754121 Email: [email protected]
Legal Implications
The Council has legal powers to build new housing. At this stage it is not clear to what extent HRA funds can be used for the construction or provision of housing that is not “council” housing, and the Council requires further advice on this before proceeding. Peter Woodcock, Legal Services Manager Tel: 01453 754369 Email: [email protected]
Report Author
Peter Stoate, Head of Housing Contracts Tel: 01453 - 754196 Email: [email protected]
Portfolio Holders
Councillor Mattie Ross; Executive Policy Lead for Housing Tel: 01453 826587 Email: [email protected] Councillor Tom Williams; Executive Policy Lead for Finance Tel: 01453 822684 Email: [email protected]
Councillor Simon Pickering, Executive Policy Lead for Environment Tel: 01453 824654 Email: [email protected]
Options
It is essential that there is a Council New Build Housing Programme in place to achieve its objective of building at least 100 new Council Homes within the next 5 years.
Performance Management Follow Up
The Council New Build Housing programme contains a Development plan with actions with timeframes. These will be reviewed by a Development Board consisting of Executive Leads and Officers on a monthly basis.
Background Papers/ Appendices
Cabinet Paper – 5th April 2012 (Agenda item No 8) HRA update Medium Term Financial Plan. Development Plan – Appendix 1 Special Policy Panel – Tuesday 20th March 2012 Housing Advisory Panel – October 17th 2012
1. Background 1.1. The new Housing Revenue Account (HRA) Self Financing Regime came into
force in April 2012. For Stroud District Council this meant that it involved borrowing £91.7 Million from the Public Works Loan Board (PWLB) and then handing this over to the Government to buy our way out of the current Housing Revenue Account subsidy arrangements.
1.2. Part of this funding included £10 million (known as the Head Room) additional
finance which Stroud District Council (SDC) has the ability to draw down. 1.3. A fundamental Corporate Objective for SDC is to provide additional social
housing for its residents and as such the ‘Headroom’ has been allocated to developing and building new social houses.
1.4. The following Council New Build Housing Programme has been drawn up to
ensure that it achieves its objective of building at least 100 new homes within the next 5 years.
2. Context 2.1. This Programme sets out the approach the Council intends to take in
developing sustainable new homes within the District. 2.2. The context for this programme is the Council’s vision: ‘To make Stroud District a better place to live, work and visit for everyone’. 2.3. The programme will enable delivery of various elements of the Council’s overall
objectives, the specific details of which are set out in the Corporate Delivery Plan. The Programme will be implemented alongside the Council’s overall Corporate Asset Management Plan, Tenant Services Asset Management Strategy, and the Local Housing Strategy.
2.4. The aim of the programme is to set out the parameters within which the
Council will operate to begin to build its capacity as a new developing council.
2.5. It is a key business objective to produce at least 100 new homes over the next five years through a range of opportunities. There are seven strategic objectives underpinning the programme;
• To meet identified need for affordable housing in the Council’s strategic
area • To deliver the highest standards of design in new homes • To provide homes to replace those lost through the Right to Buy • To secure grant funding and other resources where possible to finance the
development of new homes • To deliver sustainable homes • To involve residents in the planning and implementation of the strategy • To involve local contractors and suppliers in our procurement process to
deliver local benefits, jobs and growth 2.6. The programme has been formulated with the following guiding principles:
• New homes will be consistent with and contribute to the Council’s vision and values.
• The desire to provide good quality homes which residents will want to live in and we can be proud of.
• Development is undertaken in line with the requirements of regulators and funders.
• Development must meet with the Council’s approved financial and risk management framework parameters and assumptions.
• That residents will be involved. • That we will embrace partnership opportunities especially on a local level in
order to generate economic activity within the District. • That we will examine opportunities within our own assets.
3. Tenant Involvement & Consultation 3.1. The Council has a good track record of involving residents in service delivery
and service review. Involvement in the Council New Build Housing Programme should be no exception.
3.2. Our developments will reflect the needs and aspirations of our residents. We
will find ways of engaging individually and collectively with our present and future residents to involve them in the decisions we make about our development programme, the design of homes and the types of neighbourhoods we create. We aim to involve residents in the following ways:
• Through the Housing Management Forum which will have input to the
budget, programme and policies feeding into the strategy • Involving residents directly in consultation on the design where
development involves replacement or regeneration of existing homes • Reviewing each project on completion, taking account of the comments
made by residents in post completion satisfaction surveys and using this information to influence future schemes and our design standards.
Appendix 1
Stroud Council Housing Forum 4 June 2013
Agenda Item 3 Appendix 1
4. Equality and Diversity 4.1. The programme and its implementation will have regard to the Council’s
Corporate Equality and Diversity Policy and to equality and diversity considerations generally and specifically in relation to the design and accessibility of homes, and to procurement.
4.2. Design and accessibility - we aim to design and build all of our new homes to
the Lifetime Homes standard and we will ensure that our developments and new homes are accessible to residents and visitors with mobility problems or other disabilities.
4.3. Procurement – working within the Council’s procurement rules and procedures,
we will promote mechanisms within contracts that ensure that partner organisations delivering our new developments have employment policies in place that adhere to, believe in and promote best practice in equality and diversity.
5. Resources 5.1. The resources for the implementation of the programme may come from a
number of sources including the following:
• Use of borrowing headroom within the HRA Financial Plan • Use of surpluses generated through the HRA • Land holdings within either the HRA or the General Fund, including
regeneration of existing estates where appropriate • Grant from the Homes and Communities Agency (HCA) under their
Affordable Housing Framework or other funding programmes • Land held by the HCA and / or other public bodies • S106 or Community Infrastructure Levy (CIL) contributions coming through
the development control framework. 5.2. There may be other sources of funding available through ad hoc grants or
through partnerships or joint ventures and it will be important that the Council is alert to such opportunities. The Council will also seek to identify “off market” opportunities where discounts may be available.
5.3. The development programme will be restricted to the Stroud District area. Any
opportunities outside this area will be passed to partner organisations for potential utilisation.
6. Partnership working 6.1. The Council recognises the importance of continuing to work in partnership
with other organisations engaged in the delivery of affordable and market housing in the District, particularly housing associations and other Registered Providers who have access to HCA grant funding. Development in the district needs to reflect demand from both private and affordable sectors of the market and there will be benefits from collaboration between the respective sectors. It will be important to safeguard against an escalation in land prices and build costs driven by competition between partners, including the Council.
Appendix 1
Stroud Council Housing Forum 4 June 2013
Agenda Item 3 Appendix 1
6.2. Partnership working will need to be structured and monitored in line with the local Housing Strategy and through proactive implementation of the Council’s strategic housing role. The objective of partnership working will be to maximise the inflow of resources to the district through partner organisations and to ensure that the resources achieve value for money and are targeted at meeting the objectives of this strategy and the Local Housing Strategy.
7. Housing Needs 7.1. The projected housing demand and need in the district will be actively
assessed and monitored through a range of mechanisms including:
• A periodic Housing Needs / Housing Market Assessment for the district and its surrounding economic area (the last HMA was carried out in 2008/09)
• Local housing needs assessments on an ad hoc basis for instance to
assess housing needs at parish level to support building on exceptions sites
• Reference to the Gloucestershire Homeseeker database
7.2. The information from these and other sources will be used to prioritise areas
for delivery of new homes taking account of constraints arising from land availability, planning considerations and the need to generate or support sustainable communities.
7.3. The information gathered will be used to ensure the delivery of new homes that
match as far as possible the projections of demand, taking account of factors such as household size, tenure aspirations and the need for specialised housing (supported, sheltered, or extra care housing or lifetime homes).
Design and Sustainability 7.4. The Council is committed to developing high quality sustainable homes that
meet the needs and aspirations of the people that live in them. We are committed to the sustainability agenda and will work with developers to provide homes that cost less to run as well as to build. We are however keen to seek out affordable and desirable solutions to these challenges on a scheme by scheme basis and do not believe one solution will fit all types of development. Our approach is one of flexibility and working with our key partners to achieve the best end results. We recognise the benefits of developing homes in line with the standards set out in the Code for Sustainable Homes, but also recognise the additional costs of doing so. We will therefore continually seek out innovative solutions aimed at increasing the energy efficiency of homes and reducing the carbon footprint and running costs for tenants whilst maximising the number of homes that can be provided.
7.5. The specification for new homes will take account of best practice and other
guidance including:
• Homes and Community Agency (HCA) Design and Quality Standards • Building for Life standard • Lifetime Homes Standard • Code for Sustainable Homes
Appendix 1
Stroud Council Housing Forum 4 June 2013
Agenda Item 3 Appendix 1
• Secured by Design standard
8. Construction Methods 8.1. The Council will ensure that it has up to date knowledge and information on the
full range of construction methods available to inform decisions on a scheme by scheme basis. The decision on construction method used for individual sites will need to take account of a range of factors including:
9. Tenure Mix 9.1. From site identification and initial appraisal the Council will carefully assess the
most appropriate tenure and unit mix balance. The tenure balance needs to recognise the importance of ensuring a holistic approach to the provision of affordable housing within the district.
9.2. We will explore approaches for acquiring and building new homes across a
wide range of tenures, including housing for rent at social and affordable rent levels, low cost home ownership and flexible tenure. Providing for a broad range of tenures increases customer choice, enables the generation of cross-subsidy and ultimately leads to more mixed, diverse and sustainable communities. Low cost home ownership (LCHO) is an important tenure component which can contribute towards the financial viability of any given project.
10. Value for Money 10.1. The programme involves the spending of significant sums of money over an
extended period of time. Value for money is therefore a major consideration. The major factors affecting achievement of value for money include:
10.2. Value for money (VFM) will be assessed on a scheme by scheme basis at pre
tender, pre contract and completion stages. Benchmarking will be used to assess individual schemes and the VFM performance of the overall development programme.
Appendix 1
Stroud Council Housing Forum 4 June 2013
Agenda Item 3 Appendix 1
10.3. We will explore options for achieving best VFM results in procurement, including the use of framework agreements, term contracts and other approaches that achieve savings on the procurement process whilst still achieving competitive prices for contracts.
11. Rents and Affordability 11.1. The Council will work within the statutory and regulatory guidelines for rent
setting and will explore opportunities for providing new homes at affordable rents where demand exists. We will seek to ensure that rents for our properties are set at levels that are affordable for existing tenants and those wishing to become our tenants. The level of rent charged will need to ensure that there is continuing demand for our properties.
12. Allocations and Tenancies 12.1. The Council will work within the statutory and regulatory guidelines and to its
approved policies on allocations and tenancies when letting new homes. 13. Risk Assessment and Management 13.1. We recognise the need for a flexible approach to development assessing risk
factors on a scheme by scheme basis. The Council has a robust Risk Management Strategy and policies and procedures which will provide the framework for risk management for the development programme as a whole. In addition every new scheme must go through an investment and appraisal process overseen by the Project Board. This not only assesses the financial and operational risks the Council will face in undertaking a new development, but also the risks that are faced in terms of ongoing management and maintenance.
14. Conclusion 14.1. The introduction of the Housing Revenue Account (HRA) Self Financing
Regime has provided Stroud District Council (SDC) the opportunity to build new social housing for the first time in over a generation.
14.2. The Council clearly has an ambition to build new homes and has set itself a
target to build at least 100 new homes within the next five years. 14.3. These homes need to be built in line with the Housing demand and to the high
quality sustainable standard required by SDC utilising the most optimum of materials (e.g. Modern Methods of Construction).
14.4. The Development Programme, where ever possible, needs to utilise local
suppliers and firms to generate economic activity within the District and improve sustainability.
14.5. An initial Development Plan (Appendix 1) has been initiated which will be
reviewed and updated on an annual basis and also at the Development Project Board.
Appendix 1
Stroud Council Housing Forum 4 June 2013
Agenda Item 3 Appendix 1
Appendix 1
Stroud District Council Development Plan 1. Housing Need Assessment 1.1 The Housing Needs Assessment (published in June 2010) reports on the need for
affordable housing and the supply and demand for housing across all tenure groups. The report estimates that there are approximately 47,784 households in the District. Of these households, 77.5% are currently owner-occupiers, with 14.2% living in the social rented sector and 8.3% in the private rented sector.
1.2 The report takes account of both the need for and supply of affordable housing and
splits this into four categorises:
• Current (backlog) need • Available stock to offset need • Newly arising (future) need • Future supply of affordable units.
1.3 The conclusion is that 2,593 households (5.4%) in the District are currently living in
unsuitable housing – main reasons being mobility/support needs, overcrowding and expense of accommodation.
1.4 1,571 of the 2,593 households would need to move home to find a solution to the
unsuitability of their housing. Of these, 1,027 could not afford a suitable solution without the form of subsidy. 64.7% of households in current need are found in the social rented sector and 22.8% in the private rented sector. At the time of publication there were 791 units which could be used to meet this need thus resulting in a backlog of 236 (1,027 – 791).
1.5 The future need for affordable housing is estimated at 809 units per annum with a
supply of 463 units per annum resulting in a shortfall of 346 units per annum. 1.6 Assuming the backlog of need is to be met over five years, the estimated figure for
additional affordable housing units is therefore 393 ((236/5) + 346). Taking into account shared ownership the figure increases to 424 units required per annum.
1.7 The levels of gross housing need are not evenly distributed across the District, with
much higher levels in Stroud, Cam and Dursley than in Painswick, City Fringe (bordering Gloucester), Wotton and Frampton sub-areas.
1.8 In the last three years the following new social housing took place in the District –
2. Current Social Housing Demand 2.1 As at October 2012 the demand for social housing can be highlighted as follows:
No of Bedrooms Demand Demand excluding Bronze band
1 Bed 1,859 699 2 Bed 848 315 3 Bed 303 127 4 Bed 53 39 5 Bed 9 8 6 Bed 2 2 Total 3,074 1,190
3. Tenant Services Development Proposals 3.1 Whilst SDC in an enabling role will continue to work with registered social landlords
to build and provide new units this will not satisfy the demand. As such with the potential finance available under the new HRA regime SDC can build and develop in its own right.
3.2 SDC as part of its Corporate plan has published that it has an ambition of building at
least 100 units over the next 5 years. 4. Development Considerations
• The Availability of Finance – SDC will utilise the £10.6 million via the HRA Headroom (£2 million of this has already been apportioned for 19 new build units at Leonard Stanley and Top of Town as part of the Woolaways regeneration scheme).
• Resources/expertise – there is little expertise within SDC in respect of building new social housing. It is recommended to utilise a local Registered Provider who has experience of developing within the District with the potential benefit of obtaining grant funding from the HCA as SDC is currently not a registered partner (meetings with the HCA are programmed).
• The proposals are for a build programme focusing on the next 5 years with an aspiration to build at least 100 new units.
• The overriding objective is for SDC to build, own and manage new Council properties.
• The programme will be based on the identified need for affordable housing in SDC’s strategic area. Demand is primarily for one and two bedroom properties.
• The programme will deliver the highest standards of design in new homes and where appropriate utilise Modern Methods of Construction.
• As part of the development programme consideration needs to be given to the possibility of providing a number of homes for sale (shared ownership) to help meet the demand for home ownership for those unable to access the open market (subject to legal confirmation that the HRA can undertake this type of activity).
Appendix 1
Stroud Council Housing Forum 4 June 2013
Agenda Item 3 Appendix 1
5. Existing Assets – Garage Sites
5.1 SDC has 949 garages through 96 sites. These have been surveyed and been
‘banded’ according to their development potential as can be seen below:
Garages Easy Normal Difficult Not Known Total No of Garages 117 352 263 217 949 Number of sites 21 35 15 25 110 Estimated no of new units
16 92 55 0 163
They can be further organised into:
Garages Easy Wins
(Easy/Normal) Not easy Wins (Difficult/Not known)
Total
No of Garages 469 480 949 Number of sites 56 40 96 Est no of new units 108 55 163
5.2 The above shows over 100 new units can be built utilising garage sites. The next
step would be to begin the development process of obtaining feasibility reports, consulting residents and approaching a number of developing housing associations to gauge the cost of a development agreement.
6. Development Options
I. Build new homes utilising existing assets (mainly garage sites) plus any available land.
II. Build a number of properties utilising the best/ easiest sites plus acquire
properties through the open market.
III. Sell the garage sites and utilise the revenue with finance to purchase properties via the open market and also where possible S106 properties (in competition with RSLs).
IV. Explore opportunities in partnership with SDC priority regeneration sites such as
Brimscombe Port and Littlecombe, where additional new build affordable housing may help viability and kick-start development.
7. Development Plan – 5 years 2013- 2018 7.1 It is our objective to deliver at least 100 owned new build homes by March 2018. The
proposal is to:
• Build utilising garage sites • Purchase empty properties to bring back into use; purchase via the open market to acquire units in strategic locations either off plan in the market or via Section 106.
Appendix 1
Stroud Council Housing Forum 4 June 2013
Agenda Item 3 Appendix 1
7.2 It is proposed to allocate £10.6 million via the following over the next 5 years starting in 2013/14:
Cost of New Build utilising garage sites: note cost of new build on garage sites is estimated at 20% higher than on a clean and multiple units site.
Bedrooms Cost of build to Code 3 £K
Cost of build to Code 4 £K
Cost of build to Code 5 £K
Cost of build to Code 6 £K
Market Value £K
S106 (75% Mkt Val) £K
One 75 80 90 105 140 105 Two 110 115 135 155 175 131 Three 120 130 150 165 215 161
Assume two beds are built (to Code 4 at an average cost of £115K) and purchased at an average cost of £131K. Utilise economies of scale to reduce build cost to £101K/unit and purchase cost to £125K/unit. The following is a possible scenario:
Units built 2013/14 2014/15 2015/16 2016/17 2017/18 Total Woolaways 9 10 - - - 19 Purchase - 4 4 4 4 16 New Build 9 15 15 15 11 65 Total 18 29 19 19 15 100
8. Investment Appraisal for Development 8.1 Return on Capital Employed
• Purchased I. Each property purchased cost £131K II. Social rent for two bed currently £78.63/52 week year = £4,089/annum
III. Gross return 3.1% IV. Affordable rent (80% 0f market rent) £5,760/annum V. Gross return 4.4%
• Built
I. Each property build cost £115K II. Assuming grant of £15K per property
III. Social rent for two bed currently £78.63/52 week year = £4,089/annum IV. Gross return 4.1% V. Affordable rent (80% 0f market rent) £5,760/annum VI. Gross return 5.8%
NB ROCE does not assume any rent increases over 30 year period.
Appendix 1
Stroud Council Housing Forum 4 June 2013
Agenda Item 3 Appendix 1
NB Build cost does not take economic value of site into consideration – may be worth an average of £25K to £40K per site.
NB Does not take into account possibility of grant from HCA partner and does not take
into account RTB receipts which could increase number of units built NB Assumes all units are rented – as development programme progresses SDC may
wish to undertake Shared Ownership which would generate increased receipts. 8.2 A Net Present Value (NPV) calculation, utilising an accepted methodology via a
Development Modelling programme will need to be undertaken for each potential development in conjunction with finance and minimum NPV targets should be agreed and set to ensure parameters within the development programme.
9. Purchase 9.1 It is envisaged that this would be via stalled sites, S106 properties, empty properties
that could be improved (utilising small local builders etc) and brought back into use under SDC’s ownership and management and also previous Right To Buy properties where SDC wants to buy back (e.g. to create a developable area of land).
9.2 For Empty Homes, Tenant Services would work in partnership with Environmental
Services to identify and locate suitable properties and utilise a ‘local’ framework agreement to bring them up to the Stroud Standard
10. Advantages/Disadvantages of Purchase /Build 10.1 There are advantages and disadvantages to build utilising SDC’s garage sites or
alternatively purchase via Section 106 or through stalled sites. Advantages Disadvantages Purchase Units
Help stalled sites Discounts available especially through S106 Can start programme quickly and easy Benefits from RTB Cost floor rule Bring back long term empty homes back into use and generate work in local area Sell less advantageous sites and utilise capital more efficiently
Specification may be restricted Costs substantially more Not utilising own sites Cost of purchasing empty homes with refurbishment cost may be prohibitive
Build Units Utilise land asset – reduce cost Lever local employment & growth Choose own specification
Asset could be utilised via a sale Does not enjoy economies of scale Lead in time – time lag Requires additional resources Local residents complaints about building disruption Potential risk of projects not proceeding if feasibility or planning fails. Right To Buy implications as ‘land’ value not credited.
Appendix 1
Stroud Council Housing Forum 4 June 2013
Agenda Item 3 Appendix 1
11. Proposal
a) Utilise ‘Easy and Normal’ garage sites to develop new build programme (see Attached) • Appoint architect to commence feasibility study in October 2012 for
selected ‘Easy/Normal sites – prioritise larger sites to deliver economies of scale.
• List sites for alternative use such as Self Build or for disposal to local Community Land Trusts to generate activity at a local level
b) Tender Development Agreement with local RSLs to manage project build – agree partner by January 2013
c) Commence tenders for developers September 2013 d) Start on site July 2014 e) Complete first sites by April 2015 f) Commence new Development Project Board October 2013 to oversee and clarify
budget, timeframes and design issues for new build programme. g) Research ability to ‘lever’ economic activity – Jobs and Growth agenda
12. Conclusion/Recommendation
• There is a Corporate objective to build at least 100 new units over the next 5 years. With the implementation of the HRA Self Financing Regime SDC has the opportunity through the HRA Headroom to allocate £10.6 million for new developments.
• There are advantages to build utilising the larger SDC garage sites or
alternatively purchasing empty homes or units via Section 106 or through stalled sites. A combination of the two with the largest focus on building is recommended.
• Initiate feasibility study to prioritise and formulate and commence build
programme whilst also completing Development Agreement (see attached for budget and timetable)
• Create a programme to maximise the Multiplier effect within Stroud
Appendix 1
Stroud Council Housing Forum 4 June 2013
Agenda Item 3 Appendix 1
List of ‘Easy’ Garage Sites
Area/Site Garages Est Houses Type of Development Windyridge – Bisley 7 1 Bungalow Draycott – Cam 5 1 Detached House The Crapen – Cam 4 1 Small Bungalow Coldwell Lane - Middleyard 7 2 2 Story Houses The Tynings - Minchinhampton
6 1 Detached House
Slad View, Gaineys Well – Stroud
2 1 Small Detached
Ash Grove – Upton-St-Leonard
8 2 Semi Detached Houses
The Close - Whitminster 8 4 Terrace Houses Berrymore - Woodchester 3 1 Small detached House Dryleaze Court – Wotton-Under-Edge
Highfield Road - Stroud 12 6 Houses Nouncells Cross - Stroud 16 3 Detached Houses Summer Street - Stroud 9 5 Houses Target Close - Stroud 10 2 Houses Reservoir Close - Stroud 16 1 Detached House Raglan Way – Uley 4 2 Semi Detached Houses
Appendix 1
Stroud Council Housing Forum 4 June 2013
Agenda Item 3 Appendix 1
Capel Court - Uplands 6 1 House John Bevan Close - Uplands 12 2 Semi Detached Dryleaze Court West Wotton-Under- Edge
11 2 Bungalows (Semis)
Mount Pleasant –Wotton-Under- Edge
18 5 Terraced
Pitman Place –Wotton-under-Edge
17 2 Detached Houses
Misc Other Sites 58 0 Total 352 92 Misc Sites
Area/Site Garages Est Houses Type of Development
Moseley Cres, Sunnyhill 8 Terraced Total 8 Proposed Timetable / Programme / Budget for New Build Investigation / Feasibility Timescale
(weeks) Target date
Appoint architect to carry out feasibility study of selected sites, consultation on design and submission of outline planning application and to check Title
8 Nov 2012
Appointment of Development Agent (DA) 8 Nov 2012 Appointment of Employer’s Agent (EA) 8 Nov 2012 Outline planning consent obtained 8 Jan 2013 DA obtains quotations for the following;
1. Site surveys 2. Ground investigations 3. Traffic surveys
4 Dec 2012
Reports commissioned / received 8 Feb 2013 EA prepares specification, draft contracts and tender documents 8 Jan 2013
Tender process 16 May 2013 Contracts with developer completed (includes cooling off period) 8 July 2013
Developer submits designs for approval 4 Aug 2013 Planning approval process 8 Oct 2013 On site Site investigations / services / drainage / highways / other planning requirements resolved 12 Jan 2014
Build time 36 Oct 2014 Handover and first tenants move in October 2014
Appendix 1
Stroud Council Housing Forum 4 June 2013
Agenda Item 3 Appendix 1
Proposed Budget for initial 25 new build units Item £ Spend Feasibility studies / design consultation / planning application/Title Verification