CITY OF COUNCIL CYNGOR DINAS CAERDYDD

CABINET MEETING: 17 JULY 2014

INTRODUCTION OF AN ADDITIONAL LICENSING SCHEME IN THE PLASNEWYDD WARD

REPORT OF DIRECTOR OF ENVIRONMENT AGENDA ITEM:14

PORTFOLIO: ENVIRONMENT (COUNCILLOR BOB DERBYSHIRE)

Reason for this Report

1. To report on the results of the consultation exercise approved by EBM on the 19th December 2012, and detail the case for declaration of an Additional Licensing Scheme in the Plasnewydd Community Ward of Cardiff in relation to houses in multiple occupation (HMOs) in the private rented sector.

2. To make Cabinet aware of progress with the Additional HMO Licensing Scheme and to seek authorisation to commence all consultation required for the redesignation of the scheme in 2015.

Background

3. A motion was put to Council on 20 November 2008 highlighting the impact of a high student population in certain areas of the City. The motion called for officers to explore how the provisions of the Housing Act 2004 for extending licensing of HMOs might be applied to Cardiff. A Task & Finish group consisting of Officers and Members was established to consider options for moving forward.

4. The Group established that Additional Licensing of HMOs could provide part of an effective solution. It then considered which area would benefit most and what could be reasonably achieved within the time available. It showed that Cathays would benefit most from the introduction of a licensing scheme, although the statistics also suggested Plasnewydd and might merit from the extension of the licensing scheme in the future.

5. On the 4 March 2010 the Council’s Executive approved the introduction of an Additional Licensing Scheme for the Cathays Community Ward of Cardiff. The scheme became effective on the 1 st July 2010 to operate for 5 years.

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6. Work began in early 2013 to explore the feasibility of extending the Scheme into Plasnewydd and Gabalfa which required updated information on the stock conditions in the areas concerned as well as undertaking a full stakeholder consultation exercise.

Legislative Context

7. The Housing Act 2004 radically overhauled the way local authorities regulate standards in private rented housing. From 30 June 2006, the Act introduced a number of new provisions:-

• The Housing Health and Safety Rating System (HHSRS) is a comprehensive regime allowing Councils to take action in relation to 29 potential hazards. • Mandatory licensing which requires the Council to operate a licensing scheme for Houses in Multiple Occupation (HMOs). This scheme applies to all HMOs with five (or more) people in properties with three (or more) storeys. • The Act allows the Council to introduce further licensing schemes of private rented properties to meet the needs in their locality.

8. Licence conditions are used to control the ongoing maintenance and management of HMOs and are granted when the Council is satisfied that:

 The property is suitable (or can be made suitable) for the maximum number of occupants;  The licence holder is a fit and proper person  and there are suitable management arrangements in place

9. Mandatory licensing cannot deal with all the problems highlighted in the private rented sector because it applies to only a small proportion of the stock and makes little visible impact in an area.

Council Powers to Introduce Additional Licensing

10. Under the Housing Act 2004, there are two powers available for the Council to extend licensing to other categories of property:-

• Additional licensing powers enable the Council to extend the scope of its HMO licensing to other descriptions of HMO either in all or in part of its district. • Selective licensing powers enable the Council to extend licensing to other types of properties other than just HMOs in an area of the City where there may be issues relating to low housing demand or anti- social behaviour.

11. The Welsh Assembly Government issued a General Approval to Local Authorities in April 2007 to implement additional licensing. This means that no additional approval is required from the if the criteria for the general approval are met.

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12. Before using these discretionary powers the Council must carry out a thorough appraisal and a consultation exercise with stakeholders and must be satisfied that the following requirements are met:

• Criteria 1 - Before making a designation the authority must consult persons who are likely to be affected by the designation and consider any representations. • Criteria 2 - The authority must consider that a significant proportion of the HMOs of that description in the area are being managed sufficiently ineffectively as to give rise, or to be likely to give rise, to one or more particular problems either for those occupying the HMOs or for members of the public. • Criteria 3 - The authority must have regard to any information regarding the extent to which any codes of practice approved under section 233 have been complied with by persons managing HMOs in the area. • Criteria 4 - The authority must ensure that the exercise of the power is consistent with the authority's overall housing strategy. • Criteria 5 - The authority must seek to adopt a co-ordinated approach in connection with dealing with homelessness, empty properties and anti-social behaviour as regards combining licensing under this part with other courses of action available, and as regards combining such licensing with measures taken by other persons. • Criteria 6 - The authority must not make a particular designation unless they have considered whether there are other courses of action available to them that might provide an effective method of dealing with the problem. • Criteria 7 – The Council must consider that making the designation will significantly assist them in dealing with problems in the area.

13. The survey work and supplementary data were not supportive of an additional licensing designation for Gabalfa at this time. It may be appropriate to re-consider the case for Gabalfa in future in conjunction with the analysis of HMO conditions in other wards across the City.

The Case for Extension to Plasnewydd Ward

Criteria 1 - Consultation Undertaken

14. A Public Consultation Document (Appendix 1) together with an online questionnaire was sent to approximately 7900 residential addresses and 550 businesses in Plasnewydd, as well as to 140 lettings agents across the city and to all landlords via the Cardiff Landlord Forum distribution list, to ascertain stakeholder views. The questionnaire was also made available in paper format for those that requested it. The consultation ran for a period of 6 weeks between 11 th April and 22nd May 2014.

15. Other stakeholders also submitted their views and Appendix 2a lists the comments received and Appendix 2b gives a summary of the electronic survey results.

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16. Although 61% of private tenants state that they believe their landlord/agent manages their property well, responses show that landlords are failing to provide information on how the bond is protected (only 72% tenants received this), a copy of the gas safety and energy performance certificates (45% and 36% respectively), waste collection data (43%) and general information about responsibilities as a tenant (63%). In terms of the property conditions, over a third of private tenants responding had concerns about their home with the highest reported issues being damp and mould (49%), energy efficiency (30%) and heating (25%).

17. Landlord responses show that 40% had been affected by the introduction of Additional Licensing in Cathays. 35% of respondents stated that they owned mandatorily licensed HMOs in Plasnewydd and 67% of respondents would be affected by the introduction of an Additional Licensing Scheme in the area.

18. Local Ward Members from Gabalfa and Plasnewydd, along with those from Cathays attend an Additional Licensing Working Group to discuss private rented sector issues in these wards, including the potential extension of Additional Licensing. Due to the strong feeling expressed by landlords at the introduction of the Cathays Scheme, it was felt pertinent to invite representatives from the landlord and letting agent sectors to join with Ward Members to oversee the ongoing feasibility study processes. In total 6 landlord representatives and 2 letting agents’ representatives attended the meetings.

19. These joint meetings began in December 2013 and discussed issues including changes to fee structures, findings from the stock condition survey and evaluation of the Cathays Scheme.

Criteria 2 – HMOs Managed Significantly Ineffectively

20. In 2005, the Council commissioned a Private Sector Housing Stock Condition Survey. The City was divided into 10 sub areas for the purposes of the survey. Cathays and Gabalfa were combined to form one area (Area 5) and Plasnewydd and formed another area (Area 7). The survey focused on non-Council housing only, so included owner occupied dwellings, stock owned by Registered Social Landlords (RSLs), vacant dwellings and private rented properties.

21. As this data could not be fully relied upon due to its age, it was decided to undertake specific surveys of a sample of 294 HMOs across Gabalfa and Plasnewydd wards. An external specialist consultant was appointed to undertake this work between October and November 2013. Assessments were also made of the general street scene where these HMOs were located. The findings (see Executive Summary at Appendix 3) show that:

• Private rented housing in Plasnewydd has increased by 1,506 dwellings from 29.8% to 55.1% between 2001-2011 (Census data). There are approximately 1969 HMOs in Plasnewydd.

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• Under the Housing Health and Safety Rating System, Category 1 Hazards were found in over 22% of HMOs surveyed. Category 1 hazards are serious risks to health and safety where the Council has a duty to take action against the landlord. • 11.1% of properties are classed as Band E and lower in terms of their energy efficiency rating. • 37.5% of HMOs failed the Decent Homes Standard, which is a widely recognised benchmark covering Category 1 hazards, disrepair, thermal comfort and modern facilities. • Data indicates higher levels of sub-standard homes and Category 1 Hazards in HMOs compared to all housing stock. • The main environmental issues in Plasnewydd relate to issues around the condition of gardens, general litter and neglected buildings.

22. In addition, other supplementary data on Plasnewydd was collated (Appendix 4). This shows that Plasnewydd experiences the second highest reported crime levels after Cathays and in particular experiences the highest rate of domestic burglary. Plasnewydd has also experienced by far the highest growth in net accommodation units through conversions per annum of any ward since 1994. During 2013/14, Plasnewydd recorded the second highest number of complaints to the Housing Enforcement Service regarding property condition after Cathays (1 st Cathays 210, 2 nd Plasnewydd 179, 3 rd Grangetown 144). Similarly, Plasnewydd has seen the second highest number of statutory notices served in respect of risks to health and safety (1 st Cathays 124, 2 nd Plasnewydd 106, 3 rd Grangetown 75).

23. The feasibility study also explored the potential impact of HMOs in Gabalfa as requested by Cabinet in 2012. However findings from the Stock Condition survey work and the supplementary data showed that issues did not warrant extending Additional Licensing into this area and therefore no public consultation was required.

Criteria 3 – Codes of Practice

24. The Rent Only Residential Management Code for adopted by the Welsh Assembly Government in February 2006 gives guidance to landlords & agents on their responsibilities towards each other and to various clients. The code requires managers to protect any money held by them, but not owned by them in the form of bonds. The code specifically instructs that inventories should be provided and that managers must be aware of their obligations relating to gas safety. Substantial parts of the code relate to the completion of works and specify that managers should maintain good communication with the tenants about what and when works are to be carried out. Such works should be completed within a reasonable time, to a reasonable standard and that disturbance to the tenants should be minimised. The results of the stakeholder consultation outlined in section 16 above give an indication of the extent to which landlords are complying with the code of practice.

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25. Cardiff established the voluntary Landlord Accreditation Wales Scheme in 2008 and to date has accredited 831 landlords with properties in Cardiff. The importance of landlords having a wide and detailed knowledge of the many issues surrounding the letting of residential property was recognised and as such the scheme provides landlords with information and professional development opportunities to allow them to operate a successful business whilst providing their tenants with safe, high quality accommodation, thereby reducing the need for intervention from Local Authorities.

Criteria 4 - Consistent with Local Housing Strategy

26. ’s Local Housing Strategy 2012-2017 sets out the key issues facing housing in Cardiff and outlines opportunities, constraints, problems and priorities for this period. The introduction of an Additional Licensing Scheme is acknowledged as key to improving standards of accommodation across the city and will strengthen the opportunity for further access into the private rented sector for those in housing need.

Criteria 5 - Co-ordinated Approach

27. Cardiff Council has a number of strategies and policies dealing with housing, energy efficiency and sustainability, homelessness, empty properties, waste management, student communities, crime and anti- social behaviour which support and integrate well with the introduction of an Additional Licensing scheme.

28. The Council currently has a team focussing on Additional Licensing in Cathays working proactively with the above mentioned partners. The extension to Plasnewydd will be delivered through this team and any additional resources required will be funded through any additional income received as part of the Scheme.

29. Community Safety, anti-social behaviour, sustainability, energy efficiency and waste management are all priority considerations for the Council. The Licensing process and the Housing Health and Safety Rating System provides the Council with the mechanisms to take action to secure improvements on these issues. Appropriate standards will be developed in conjunction with appropriate partners such as the Police, and South Wales Fire.

30. The HMO licensing approach in Cathays has complimented the work of Waste Management in tackling waste storage and disposal issues with a requirement on all licence holders to ensure that suitable and sufficient bin storage is in place, that tenants are educated on their waste and recycling responsibilities and by placing an over-arching responsibility on licence holders to manage their HMOs and remove waste where tenants fail to do so. Plasnewydd now has the highest level of complaints to the Waste Management Service with Cathays now third (1 st Plasnewydd 1,529 2 nd Grangetown 964 3 rd Cathays 859).

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Criteria 6 – Other Courses of Action

31. As mentioned previously, Cardiff continues to actively promote the Landlord Accreditation Wales (LAW) Scheme. This will in future be replaced by the statutory duty on private landlords and managing/letting agents to register with the Local Authority in the area where they operate and to become licensed. There will be duty on Authorities to maintain a register and take enforcement action against a non compliant landlord or agent. Landlords will be required to register and successfully complete approved training before they are licensed and will be unable to let property until they, or an agent acting on their behalf is licensed. Agents will be required to become a member of an approved body and ensure that two thirds of staff directly involved in letting and managing residential properties are accredited.

32. In March 2009, the Council adopted the “Private Sector Housing Enforcement Policy”, which outlines the Council’s obligations to comply with legislation in order to improve housing standards in Cardiff. The Council firmly believes that securing sustained improvements to the private sector stock in Cardiff can only be achieved through a robust partnership approach involving tenants, landlords, local communities, the voluntary and private sectors.

33. The Council has partnership arrangements in place with landlords which have been strengthened over the last few years. The Council has a number of ways in which they educate and work collaboratively with landlords including:- • The Cardiff Landlord’s Forum and ALMA are both supported by the Council but are landlord/agent led organisations providing valuable information to Cardiff landlords. • The Council holds Landlords’ Open Days; the last event held in 2013 was a national event that attracted over 300 delegates. • A Landlords Newsletter is produced on a quarterly basis providing valuable information and knowledge.

34. The ‘Cardiff Digs’ website was launched in 2008, predominantly targeted at students in their second or third year of study looking for and living in privately rented accommodation. There was a lack of information for those students regarding moving into their new homes and the impacts they have on their communities.

35. Additionally, the Council, working in conjunction with Cardiff Students Union, have run an annual campaign since 2005 called “Get it Out for Cardiff”. This campaign targets students to educate them to place refuse out for collection on the correct day when moving out of their tenancy. Whilst this annual campaign has been very successful, results of the consultation questionnaire show that 71% of all respondents remain concerned about litter, rubbish and waste in the Plasnewydd area.

36. In addition, the Council’s Waste Management Team has created an Education and Enforcement Team to work proactively in Cathays and Plasnewydd as they have been identified as areas requiring additional

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input. The team identifies problem areas and takes appropriate action. Waste Management actively participate in the "Get it out for Cardiff" initiative to remove the waste.

Criteria 7 - Making the Designation will Assist the Local Authority to Deal with the Problems

37. The introduction of an Additional Licensing Scheme in Plasnewydd would have the following direct benefits:

• Improvements to Accommodation will be secured by licensing conditions including means of escape from fire, amenities and space standards. • Improvements to Health & Safety will be secured by ensuring gas and electrical installations are safe. • Sustainable improvements to the Plasnewydd area will be made through licensing conditions to improve the “street scene” by requiring suitable waste storage facilities. • Better value for money secured by a proactive approach in one area – By making a concerted effort in one area, increasing presence and regularly visiting HMOs, it is likely that a more long term sustained improvement to overall property conditions and neighbourhood environments will occur. • Consistent approach to Tenancy Management & Property Conditions for tenants living within the area. Licensed properties will abide by a common set of conditions controlling property maintenance and tenancy management. Examples of matters controlled include:- • Fire safety management • Condition and appearance of communal areas, gardens and forecourts • Control of rubbish and waste • Maintenance of gas and electricity installations • Provision of a written tenancy agreement to each tenant • Improvements made through Landlord training – The conditions attached to each licence will require that the licence holder attend appropriate training on the legal requirements relating to private renting and tenancy management, such as the Landlord Accreditation Wales course. This aims to encourage a professional approach by landlords. • Eradication of bad landlords – Those landlords who are not “fit and proper”, e.g. with a criminal record or bad housing track record cannot hold a licence.

38. The introduction of an Additional Licensing Scheme would have the following indirect benefits:

• Improvements to Accommodation will be secured by using other methods such as the Housing Health and Safety Rating System. It is intended that minimum standards will be applied to secure improvements in relation to excess cold and security.

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• Reducing Anti-Social Behaviour by making Landlords / Property Owners more accountable for the behaviour of their tenants and tackle anti-social behaviour. • Availability of information - Licensing allows the Council to maintain a public register of licensed landlords. This will allow the Council to share information more easily with other council services e.g. waste management with the resulting efficiency in services and enforcement activity. Also members of the public will have access to the information. This could bring benefits as neighbours will be able to write to a landlord highlighting their concerns.

39. The Additional Licensing Scheme in Cathays has resulted in a further 1,457 HMOs being licensed. All of these HMOs have been inspected and issued with licence conditions controlling the ongoing management and maintenance of the property as well as specifying any works that are required to meet minimum legal standards.

40. The following improvements have been made in Cathays:

• 467 HMOs with improved means of escape in case of fire • 372 HMOs with upgraded kitchen, bathroom and toilet facilities • 249 HMOs made secure against burglary • 217 HMOs with affordable warmth and energy efficiency improvements • 1030 hazards identified during Housing Health and Safety Rating System inspections removed. The hazards relate to fire safety, damp and mould growth, carbon monoxide, electrical hazards, food safety, falls on stairs and between levels, and asbestos. • Downward trends for burglary, noise complaints and pest control complaints • Joint working with the Police has led to an 81% reduction in burglary in the top 5 streets with this approach being extended to a further 10 streets. • 831 landlords with properties in Cardiff accredited by Landlord Accreditation Wales largely due to incentives offered under the Cathays Additional Licensing Scheme.

Cathays Re-designation

41. The Executive declared an Additional Licensing Scheme for HMOs in Cathays in March 2010 with the scheme going live in July 2010. The Housing Act 2004 states that any scheme will last a maximum of 5 years so the Cathays scheme will expire on 30 June 2015. HMO licensing is designed to control the ongoing management of HMOs through the imposition of licence conditions. Should the Council wish to continue with its licensing approach in Cathays it will need to carry out a further consultation with stakeholders and make a further HMO licensing designation for another 5 years.

42. If a further designation of Cathays is made the re-licensing process will be less resource intensive, with all HMOs already inspected, and the

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scheme therefore charging a significantly reduced licensing fee for landlords.

Plasnewydd Designation

43. It is proposed that the scheme will go live from 3rd November 2014. This would allow three months (as required in Regulation 9 of the Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (Wales) Regulations 2006, to allow for a marketing strategy to be developed and publicity to be undertaken.

44. Within seven days of the designation the Council would be required to publish the decision on the Council’s Internet site, public notice boards and within two local newspapers in order to notify all stakeholders.

Reasons for Recommendations

45. The extension of HMO licensing provides additional opportunities to secure improvements in the private rented sector as can be seen with the Scheme already introduced in Cathays.

46. Data shows that there are considerable concerns surrounding standards of HMO accommodation in the ward as well as supplementary issues relating to this higher density of population such as waste management and crime.

Financial Implications

47. Any additional expenditure required to administer the proposed extension into Plasnewydd will be funded from the additional license fee income generated by the scheme.

Legal Implications

48. The legal implications appear in paragraphs 6 – 11 of this Report. A full Equality Impact Assessment has been undertaken (attached at Appendix 5) and has not identified any major differential impacts on the protected characteristics.

Human Resources Implications

49. Any additional posts required to carry out this work will go through the standard council processes.

RECOMMENDATIONS

The Cabinet is recommended to:

1. declare the Plasnewydd Community Ward an Additional Licensing area with effect from 3 rd November 2014 to run for a period of 5 years.

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2. agree the Licensing Standards to applied to the Scheme in Plasnewydd (Appendix 6).

3. authorise officers to undertake consultation in the Cathays ward to evaluate whether to extend this Additional Licensing Scheme for another 5 years.

JANE FORSHAW Director 11 July 2014

The following appendices are attached:-

Appendix 1 – Public Consultation Document Appendix 2a – Summary of Consultation Responses Appendix 2b – Summary of Online Consultation Responses Appendix 3 – Executive Summary of the Stock Condition Survey Findings Appendix 4 – Supplementary Data on Plasnewydd Ward Appendix 5 – Equality Impact Assessment Appendix 6 – Licensing Standards for HMOs under the Scheme

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