Local Authority Direct Provision of Housing Final Report

Local authority direct provision of housing Professor Janice Morphet & Dr Ben Clifford, Bartlett School of Planning, University College London December 2017 Contents Acknowledgements .......................................................................................................................... 3 Executive summary and recommendations ........................................................................................ 4 Recommendations ........................................................................................................................... 6 1. Introduction ...................................................................................................................................... 9 1.1 The research objectives ............................................................................................................. 9 1.2 Research Methodology ............................................................................................................ 10 2. The context for local authority housing provision in 2017 ............................................................. 12 2.1 Government policy focus on private sector provision .............................................................. 13 2.2 Demographic change ............................................................................................................... 14 2.3 Land issues and land supply in planning ................................................................................. 16 2.4 Investment and second homes and short-term rentals ........................................................... 18 2.5 Viability and affordable housing ............................................................................................... 19 2.6 Homes of social and market rent ............................................................................................. 20 2.7 Housing quality ........................................................................................................................ 21 2.8 Central government policy on Right to Buy and benefit funding ............................................. 22 2.9 Development and construction skills ....................................................................................... 22 2.10 Conclusions on context .......................................................................................................... 23 3. What motivates local authorities to engage in housing provision? ............................................... 24 3.1 Delivering housing numbers .................................................................................................... 26 3.2 Tackling homelessness ........................................................................................................... 26 3.3 Income generation ................................................................................................................... 27 3.4 Building for particular needs .................................................................................................... 28 3.5 Private sector build out rates too slow ..................................................................................... 29 3.6 Factors related to specific sites ............................................................................................... 29 3.7 Place regeneration ................................................................................................................... 30 3.8 Quality of design ...................................................................................................................... 30 3.9 Because local authorities should be building housing ............................................................. 31 3.10 Perceptions of place .............................................................................................................. 31 3.11 Supporting small business ..................................................................................................... 31 3.12 Conclusions on motivation ..................................................................................................... 31 4. What powers and sources of funding are authorities using to engage in housing provision? ...... 32 4.1 Powers being used .................................................................................................................. 32 4.2 Sources of funding ................................................................................................................... 32 4.3 Conclusions on powers and funding ........................................................................................ 36 5. In what ways are local authorities engaging in housing provision? .............................................. 37 5.1 Housing Revenue Account ...................................................................................................... 39 2. 5.2 Retained stock: Right to Buy receipts, estate renewal and hidden homes ............................. 39 5.3 Purchase on the open market .................................................................................................. 40 5.4 Land banks and estate agency ................................................................................................ 41 5.5 Partnership approaches ........................................................................................................... 41 5.6 Planning documents, tools and advocacy ............................................................................... 41 5.7 In-house development teams .................................................................................................. 42 5.8 Local authority companies ....................................................................................................... 43 5.9 Conclusions on approaches to provision ................................................................................. 47 6. What housing tenures and how many homes are local authorities building? ............................... 48 6.1 Tenures being built .................................................................................................................. 48 6.2 Number of homes being built ................................................................................................... 49 6.3 Conclusions on type and amount of provision ......................................................................... 51 7. What prevents local authorities building more housing? ............................................................... 52 7.1 Reasons for not engaging in housing delivery: Survey and interview evidence ..................... 52 7.2 Desk research to identify characteristics of those authorities not engaging in housing provision in any way ....................................................................................................................... 54 7.3 Barriers inhibiting greater delivery of housing ......................................................................... 55 7.3 Conclusions on barriers ........................................................................................................... 57 8. What is the relationship between local authority housing provision and planning? ...................... 58 9. Conclusions ................................................................................................................................... 61 10. Recommendations ....................................................................................................................... 63 Appendix 1: Stakeholder group ......................................................................................................... 66 Appendix 2: Roundtables, industry discussions and individual contributions informing the research ........................................................................................................................................................... 67 Acknowledgements The authors are very grateful to the Royal Town Planning Institute and National Planning Forum for funding this research, to our stakeholder group for their useful guidance as the research progressed, to the regional RTPI branches who hosted the series of roundtable discussions across England, and to those local authority officers who took time to respond to are survey and those who met us for case study interviews. 3. Executive summary and recommendations Local authorities are engaging in the provision of housing through a wide variety of mechanisms and means. This report focuses primarily on the extent of this activity, considering local authority motivation and means, particularly in relation to the creation of companies to achieve local housing objectives. During our research we have become aware of the momentum that is behind this engagement, with 30 local housing companies created in 2017 alone. Our large-scale questionnaire survey of local authorities conducted in summer 2017 found that 65% of authorities reported being directly engaged in housing delivery themselves. This includes house building through housing companies and those still building using the Housing Revenue Account (HRA). It has also emerged that local authorities are using a wider range of means to provide housing. These interventions include building directly under the general fund, through Joint Ventures with developers, providing land for housing, giving loans to others to build housing or to bring it back into use, and building for

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