Affordable housing provision in the recession :
the HCA’s role
Presented by Stephen Oakes
Director HCA London Region
Date 9th March 2009
Thriving communities, affordable homes
Our vision
To create opportunity:
 For people to live in homes they can afford in
places they want to live
 For local authorities and communities to deliver
the ambition they have for their own areas
 A national agency that works locally
Thriving communities, affordable homes
What we do
Growth
Adelaide Wharf,
Hackney
Affordable
Barking Riverside
Affordability
Sustainability
Renewal
Christian Fields, Gravesend
Thriving communities, affordable homes
Millennium Primary School,
Greenwich Peninsula
How we do it
 Investment
 Land
 Research and best
practice
 Expertise
Thriving communities, affordable homes
The new world
 Organisation with increased flexibility
 Challenges – both short term and long term
 Culture – national objectives and local ambitions
 Partnerships with local authorities, the private
sector, RSLs and regionally
 Approaches:
 New business process (the single conversation)
 New business products (the HCA toolkit)
 Relationship with Government – the voice of delivery
Thriving communities, affordable homes
Our tasks
 Support the delivery of new homes
 Secure the delivery of affordable homes
 Accelerate regeneration of under-performing towns and
cities
 Improve the quality of existing stock and transform
deprived neighbourhoods
 Ensure delivery is economically, socially and
environmentally sustainable with good design
Homes and Communities
Thriving communities, affordable homes
National Affordable
Housing Programme,
Property
£8.4
billion and
Regeneration
£1.7bn
HCA Funding –
Significant
Investment
Decent Homes £2.6bn
(London circa £5 bn)
National
Affordable
Housing
Programme
£8.4bn
Total Funding
£17.3 billion
(2008-11)
HMR Funding,
£1.0 billion
Gypsies and Travellers £0.1bn
Hostels, £0.1 billion
PFI (credits),
£1.9 billion
Thames Gateway £0.4bn
Gypsies and Travellers
Thriving communities, affordable
homes
£0.1
billion
Growth funding £1.1bn
Continuing the Journey
Transformation
Start-up
Set-up
1 December
2008
Thriving communities, affordable homes
1 April
2009
1 April
2010
The Nine Regions
Thriving communities, affordable homes
HCA London
HCA Main Board (Chairman Robert Napier)
London HCA Board (Chaired by the Mayor of London)
 Representatives from
– London Councils
– The LDA
– London Thames Gateway
Development Corporation
– The HCA’s Chair & Chief
Executive
Thriving communities, affordable homes
 The Board makes it’s own
investment decisions
 Largest of the nine regions in
budget terms
 Expenditure 2009-11 circa £3bn
 Funding includes
– National Affordable Housing
Programme
– Property & Regeneration
– Decent Homes
– Thames Gateway (London)
– FTBI
Partnership working







Joint Vehicles and LABVs
Surplus Public Sector Land
Local Housing Companies
Low Cost Home Ownership
Rolling Infrastructure Funds
Developer Panels (Reducing procurement costs)
Best Practice Guidance and Support
Thriving communities, affordable homes
Principles for Investment &
Intervention
 Invest directly to assist the building of affordable
housing for those who cannot find reasonable
opportunities in the market
 Support the delivery of new housing within a
broader context of sustainable regeneration and
‘place-shaping’
 Work in partnership with others
 Require investment leverage from others
 Seek to optimise the strategic impacts from out
investment
 Are keen to take a longer term view of our
investment
Thriving communities, affordable homes
The Market Downturn
 Global liquidity crisis means reduced
access to credit for:
 Employers
 Consumers
 Housebuilders and RSLs
 In the wider economy - reduced
economic activity, reduced confidence,
increased unemployment - recession
 Leading to reduced demand for housing
 Supply slower to respond
 Further falls and expectations of falls in
house prices
Thriving communities, affordable homes
Responding to the Market
Downturn: key downturn issues
 High density housing – cash
inefficient
 2006/2007 Land values (viability)
 Affordable Housing reliant on
S106 planning gain
 Collapse of confidence & liquidity
in the banks
 Cross subsidy from Private for
Sale Housing
 Mixed use schemes hit hardest
 Capital Receipts impacting on
Agency & LA programmes
 RSL’s not immune to the downturn
Thriving communities, affordable homes
Responding to the Market
Downturn: Good News
 Olympic Games 2012
 Crossrail
 Jubilee Line & DLR
Upgrades
 Strong private rented
sector
 Major Contractors are
cash rich
Thriving communities, affordable homes
Responding to the Market
Downturn: Tools the HCA have
 The National Affordable Housing Programme
– Flexibility and new models
 The Property & Regeneration Programme
– Gap funding, site acquisition and infrastructure support
 Priority Projects
– Kick-start programme
 Estate Renewal
– Changing the rule of ‘additionality’
 Place Shaping & Place Making
Thriving communities, affordable homes
Responding to the Market
Downturn: Recent Initiatives
 Grant flexibilities
– Introduction of flexibility in the level of grant that is able to be
awarded
 Package approached to NAHP bids
– New invitation to submit portfolios of schemes
 Substituting intermediate rent and rent-to-buy for LCHO and
market housing
– Helping to make unviable schemes viable
 Homebuy Direct
– Purchase of developers’ surplus stock and conversion to
shared equity affordable housing
 National Clearing House
– Assist developers who can offer bulk volume programmes of
stock
 Working closely with local Boroughs to bring forward their
land
Thriving communities, affordable homes
Responding to the Market
Downturn: what the Agency is also
exploring
 Tailored programmes for individual housing
associations
 Potential for LAs to come forward with their own
development packages
 Funding of infrastructure works on a return basis
 New approaches to the private rented sector
 Flexible tenure models
 Better use of public sector land
 Longer term joint ventures
Thriving communities, affordable homes
Towards a Single Conversation




Strategy
Capacity
Investment
Delivery
 Programmes
 Standards and mechanisms
 Investment tools
 Both capital and revenue
investment
 Area-wide and specific
interventions
 Toolkit being developed
Thriving communities, affordable homes
Design Standards
 Building on a strong inheritance
 Good design and sustainable
development
 High core standards and
monitoring
 Address the ongoing
management of projects
 Promote market improvements
and exemplar initiatives
 Build capacity and in partnership
with national, regional and local
agencies
Thriving communities, affordable homes
A New Agency
 With new approaches and new
methods of working
 Increasingly will offer greater
flexibility
 The single conversation will be the
most important business process
 The key goal is to make a
difference on the ground
 Responding to the downturn
 Preparing for the new world
Thriving communities, affordable homes
homesandcommunities.co.uk
Thriving communities, affordable homes