Clear guidelines and strong partnerships between the public and private sector are the key to delivering much-needed affordable homes, experts agreed at Real Asset Media’s Towards Affordable Cities briefing, which took place online this week.
“Councils that have a clear vision and clear objectives allow investments to happen,” said Anette Simpson, director of development & partnerships, Legal & General Affordable Homes. “It’s also important to be clear about what each side wants to get out of the partnership.”
The lack of affordable housing is a huge problem in the UK, with over 1.2 million people on waiting lists, she said. In England alone, 150,000 homes a year are needed but only 50,000 are actually built. There is a shortage in Scotland as well.
“In Edinburgh the social housing stock’s been very depleted by the selling policies of the ‘80s so we have a large programme to build more,” said Adam McVey, council leader, City of Edinburgh. “We’re building 20,000 affordable homes but we need thousands more.”
Housing associations can play their part.
“We’re a big fan of partnerships with housing associations because we can achieve so much working together,” said Simpson. “We can bring our capital and expertise to enable them to do more.”
In Stirling, which has been rated the most affordable city to live in the UK for several years, there are two housing associations, one focusing on the city and one on the rural hinterland.
“Our role is to create opportunities for the private sector to provide different types of housing,” said Scott Farmer, leader of Stirling Council. “We must make it easier in terms of the regulatory framework while keeping standards high. The one-stop approach shows you’re open for business and attracts investment in affordable housing.”
Clear vision for city development is needed
Local authorities must assess what types of housing are needed and set out a clear vision for the city’s development, Farmer said. Clear parameters will give confidence to investors and create a positive dynamic to enable the private sector to invest.
“Some councils have a partnership approach and they’re great enablers,” said John Harcourt, managing director, Kajima Properties. “By combining private sector skills and public sector bankability you can achieve a lot.”
It can be difficult to know exactly what is expected in affordable housing provision and the rules vary in different places.
“New York City is extremely prescriptive, the requirements are standardised, the permits process clear and all developers know exactly what to expect,” said Adina David, director of urban living, Greystar. “But in other cities, including London, it’s a big unknown. If the rules were clearer and the process more streamlined and transparent, it would help us deliver more homes.”
But if the authorities are still debating what the exact definition of affordable housing is, what the cap rates should be and what level rents should be at, then companies are at a disadvantage and homes don’t get built.
“Transparency and clarity are key,” said Simpson. “Too many unknowns are off-putting for investors.”