Working with Local Authorities to Deliver Affordable Housing

It is no coincidence that England last delivered in excess of 300,000 homes in 1977, at the height of its council house building programme.

Since then the number of homes delivered by local authorities has dropped from 145,070 in 1977 to 3,800 in 2019. While the proportions delivered by both housing associations and private sector has increased significantly, the deficit of affordable homes looks set to remain.

However, from Scarborough to West Sussex and Maidenhead to Cambridge, Carter Jonas is involved in innovative partnerships and pioneering developments. 

Jon Pinkerton, a Development Partner in Carter Jonas’ London team works closely with local authorities in establishing joint venture models. He explains, ‘Our advice to local authorities, as landowners, begins with options testing. We consider a series of development models set along a spectrum of involvement and risk. At one end of the scale, the local authority has minimum risk, but also minimum involvement: the site is sold, then planning consent is achieved and the scheme built by a developer. Moving along the spectrum, the next option is for the council to put in place a development agreement, which allows for a little more control over the masterplan and an agreement about the point at which financial returns are received. The spectrum then moves into the world of joint ventures. This might be a contractual or corporate arrangement with a private sector partner through which the council contributes the land and takes its returns at later stages in the development process. Finally at the end of the spectrum the council could set up its own wholly owned development company taking on all risk, along with the financial uplift.’

Carter Jonas is currently conducting this decision-making process with Scarborough Borough Council, as Steven Soper, Development Associate in Carter Jonas’ Leeds office explains: ‘The Council owns ten sites, which range in capacity from four to 600 homes. The work initially comprised a portfolio review which highlighted the constraints and opportunities for each site. A shortlist of the most viable sites was drawn up and, based on an overarching objective of the Council to deliver affordable housing, we’re working towards selecting an appropriate partner.’

Paul Belton, a Partner in Carter Jonas’ Cambridge office is working with Cambridge Investment Partnership (CIP) to deliver 1,000 new council homes in Cambridge. He explains, ‘CIP was established as a partnership between Cambridge City Council and local housebuilder Hill, in response to the ever-growing housing list which, bearing in mind local land prices, clearly wasn’t going to be solved by the private sector alone. The initial project completed with CIP was a site purchased through the open market which achieved policy compliant levels of affordable housing, at 40%. Since then, several projects have focused on sites already owned by the Council, delivering 100% of the new homes as Council homes.

‘Two further schemes, for which Carter Jonas achieved planning consent in November, will not only deliver 100% council housing, but will be constructed to Passivhaus standards. They include wheelchair-adapted, family homes, electric vehicle charging points and generous cycle storage. These schemes also meet ambitious biodiversity goals, typically achieving a minimum of 20% biodiversity net gain ahead of the legal requirement coming into force.’

These schemes exemplify the benefits of the public sector retaining an interest in its land, to the benefit of local residents. Furthermore, says Paul, ‘Cambridge City Council has an unrivalled insight into its tenants’ needs and is uniquely placed to communicate effectively with tenants and help deliver the type of housing most in need.

‘Complementing this, the private sector, led by Hill and assisted by Carter Jonas, provides the skills to navigate the planning system and advise on appraisals, construction schedules and the many technical issues. Carter Jonas’ advice on the site capacity, risk and opportunities helps shape the delivery of these exemplar new housing projects, ensuring the Council can make the most of its assets.

‘The CIP projects have been very successful, all receiving planning permission at the first attempt. Key to this success has been the attention to detail adopted by CIP and its commitment to engagement. CIP invests substantially in consultation throughout the pre-planning phase. Listening to local residents and engaging with all interested parties and consultees plays an important role in de-risking the planning submissions. CIP takes time to prepare planning applications thoroughly. It is very good at responding to local issues and has a clear focus on securing community benefits such as and the delivery of new open spaces and new community facilities, as well as achieving high design standards and physical accessibility. 

‘Councils must also respond to social and environmental issues and Cambridge, one of the first councils to declare a climate emergency, must be seen to be leading the way in order to make this a requirement of the private sector. CIP has responded very positively to this climate emergency and places significant attention on delivering energy efficient and sustainable developments, consistently exceeding policy standards for energy and water consumption.’

With the CIP model now being rolled out in neighbouring South Cambridgeshire, led by the same teams at Hill and Carter Jonas, Paul reflects on the potential to replicate its success elsewhere. Specifically, is this success in Cambridge partly due to its high land values? ‘Local house prices provide some security for CIP, enabling viability to be achieved, if necessary through open market sale. However, the model is proving very successful and combining the knowledge and insight of the Council with the expertise of its development partners is resulting in a very timely and positive uplift in the delivery of affordable housing within the City, very often in this locations which are most in need of investment.’  The benefits of combining expertise and experience and taking the time to deliver well-researched and carefully considered sustainable development proposals is key to the success and is a model that can undoubtedly be successful elsewhere.