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HRA Sites Affordable Housing Development Feasibility Study

Meeting: 13/10/2016 - Growth Committee (Item 23)

23 HRA Sites Affordable Housing Development Feasibility Study - Reference from the Housing Sub-Committee pdf icon PDF 110 KB

To report the recommendation of the Housing Sub-Committee in relation to the findings of the HRA Sites Affordable Housing Development Feasibility Study and to seek approval to enter into discussions with Registered Providers and private developers to dispose of the sites in the study and, if successful, to dispose of the sites to enable the development of homes on the sites.

Additional documents:

Minutes:

The Committee considered entering into discussions with Registered Providers and private developers in order to dispose of the sites identified by the HRA Sites Affordable Housing Development Feasibility Study, as recommended by the Housing Sub-Committee.

 

With housing development land being finite in supply, increasingly innovative solutions are being sought in order to create new affordable housing development projects. The Affordable Housing Strategy for 2015-2017 has identified new opportunities to create affordable housing sites, typically by exploring prospects for infill development or for redeveloping existing buildings and land more intensively. The strategy was agreed by the Residents, Health and Care Services Committee (RH&CS) in September 2014.

 

The report identified HRA sites with potential for redevelopment where affordable homes can be created and recommended that each site is assessed in more detail with the most appropriate method of development taken forward. The report included a proposal to dispose of a number of garage blocks no longer considered to be fit for purpose and the receipt of these sales contributing towards capital funding to develop the sites.

 

The Committee received late material at the meeting that amended the recommendation in the original report and the following two sites were subsequently withdrawn from the scope of the report:

 

·         Garages 58-64 Marshall House off Rodney Road

·         Garages 16-11 Downfield House.

 

Resolved that the Committee endorses the recommendations of the Housing Sub-Committee and that:

 

1.    the 5 sites in scope (as amended by the Late Material) which were appraised in the feasibility and viability study are disposed of to Registered Providers or private developers using a mix of approaches, as set out in Option 1 (paragraph 14) in the report and Option 2 (paragraph 15) in the report in order to enable the Council to develop homes on the sites.

 

2.    all disposals of sites to a Registered Provider should be:

 

a)    for housing, with affordable housing use in perpetuity where affordable housing is provided and the Head of Property, in consultation with the Head of Housing are authorised to agree the terms of the disposal; and

 

b)    through a competitive tendering process.

 

Voting: Unanimous.


Meeting: 13/09/2016 - Housing Sub Committee (Item 16)

16 HRA Sites Affordable Housing Development Feasibility Study pdf icon PDF 109 KB

To report the findings of the HRA Sites Affordable Housing Development Feasibility Study and to seek approval to enter into discussions with Registered Providers and private developers to dispose of the sites in the study and, if successful, to dispose of the sites to enable the development of homes on the sites.

 

Additional documents:

Minutes:

The Sub-Committee considered a report on the findings of the HRA Sites Affordable Housing Development Feasibility Study which sought approval to enter into discussions with Registered Providers and private developers to dispose of the sites in the study to enable the development of homes on the sites.  As the Growth Committee holds the remit for ‘Asset Management’, the recommendations from the Sub-Committee would be referred to that Committee.

 

As housing development land is in limited supply, increasingly innovative solutions are being sought in order to create new affordable housing development projects.  The Affordable Housing Strategy for 2015-2017 (agreed by the Residents, Health and Care Services Committee in September 2014).identified new opportunities to create affordable housing sites, typically by exploring prospects for infill development or for redeveloping existing buildings and land more intensively.

 

HRA sites with potential for redevelopment where affordable homes can be created have been identified and each site has been assessed in more detail for the most appropriate method of development.  It is proposed to dispose of a number of garage blocks which are no longer considered fit for purpose to contribute the receipts of these sales towards capital funding to develop the sites.

 

A report by Tibbalds Planning & Urban Design in May 2016 after detailed assessment and feasibility and viability appraisals on the sites concluded that seven RBK HRA sites could generate approximately 75 homes at an estimated overall cost of £11M.

 

The main source of capital funding which RBK has for housing development projects is one-for-one (141) Right To Buy (RTB) receipts.  To date, RBK has retained £5.1m of one-for-one receipts.  As these receipts can be used to fund a maximum of 30% of the development cost of new social housing units, an alternative source for 70% of the capital cost of the projects must be found.  If RTB receipts are not used within 3 years, 4% interest must be paid to the Government on the returned receipts.

 

Therefore in order to progress development of these sites, RBK will need to identify 70% of the capital funding (approx. £7.7M) and, assuming all units built will be affordable/ social rent, this could utilise approx. £3.3M of 141 RTB receipts.  If sites are disposed of, RBK can grant 141 receipts to Registered Providers or private developers towards their development of units to be let at affordable/social rent.

 

Three capital funding options to progress the development of the sites are set out in paragraphs 14 -16 of the report of which the two recommended options are:

 

·         Option 1 Sell sites to Registered Providers (Housing Associations)on the condition that they provide 100% affordable housing

 

·         Option 2 Disposal of the sites to Registered Providers or private developersto develop out the sites for a mix of affordable and private use with the private homes cross-subsidising the affordable ones

 

Feasibility studies are the key stage in the housing development process.  The overall finding of the HRA sites affordable housing development feasibility and viability study is contained in Annex 1 of the  ...  view the full minutes text for item 16