Councillor John Lines, Cabinet Member for Housing, discusses how Brimingham’s Municipal Housing Trust will deliver more homes for social rent and outright sale.
Most people associate me with banging the drum for more council housing and for local authorities to build those homes. In May 2009 I told the last government what I thought of their laughably small £100 million ‘housing pledge’ cash. I said I could easily spend all of it in Birmingham alone, such was (and remains) the need for more homes.
Even before the recession, council house funding was in need of desperate reform. In Birmingham there was and remains a severe shortage of homes and this was the main reason we set up the Birmingham Municipal Housing Trust in early 2009 to help to deliver more new homes across the city.
Important role
We recognised early on that local authorities had an important role to play in supporting the house building sector and saw the logic and opportunity to work alongside them to deliver both rented and market housing. It was with this in mind that I invited private developers to a forum in late 2009 to discuss how we could work together to meet my pledge to provide 500 new homes per year in Birmingham.
We knew developers would be risk-averse and I wanted to work with them to find a solution that could be mutually beneficial to both sides, with the housing needs of Birmingham’s citizens driving the relationship. So we talked.
The developers knew we were serious about finding new ways of breaking down systems associated with planning, design and delivery, so that housing could become part of a broader, more sustainable approach shaping neighbourhoods and regenerating communities.
We shared a common view that no one wanted to create estates where you could see which houses were rented and which were for sale. We also wanted to help to shape and support some of the more fragile housing markets across the city and help other council’s do the same by sharing our good practice.
Developers told us that trying to secure planning permission cost them both money and time. In some cases they simply walked away from a scheme. In their view, the planning process was overly bureaucratic and time consuming, with councils looking to squeeze every last penny of planning gain they could out of the developer’s profit.
On the flip side, Birmingham needed affordable housing and we were determined to make the profits of development subsidise that provision, rather than line shareholder’s pockets.
We have spent the last year talking about our model for delivering housing for rent and sale side-by-side with key housing figures across the country. It’s also shaped discussions with the Homes and Communities Agency.
Developers have told us what their concerns are and the risks they need to avoid. We have told them of our vision and our priorities around addressing fuel poverty, good design and tackling unemployment. Both sides have listened and are signed up to this.
Major frontier
At the end of the day, we can adapt or go under and I don’t believe that any major city wants to see their house builders and the precious jobs and training that go with it fall by the wayside. So, I think we have crossed a major frontier. Allied with our building contracts for developing homes for rent, we have come up with a development agreement that locks the developer in to building homes for sale. We ask our partners to do this within a three-year period, with the rented homes being built first.
The council uses its own design team to develop schemes up to planning approval stage, which includes brokering all planning obligations and procuring all of the associated surveys, consultation and permissions. The planners that are ultimately charged with writing the reports to planning committee are at the table from day one. So are our highway engineers and urban designers. We even have our own landscape architects pitching in.
In this collaboration, we get to design the new homes to our own standards and the developer gets to build them and potentially share in the profit. We release sites that are manageable, with the largest being 60 homes. We talk to the developer to agree where rented and sale units go, but we all agree that it has to be tenure blind. We all know those dreadful sites were the affordable housing is all together, tucked around the back of the development.
The economies of scale are clear. The developer gets the certainty of building homes that the council pays for, while building a limited number of homes they can sell. In simple terms, it’s de-risking development – and it works.
The house builders found this approach strange at first. They came straight back to us and said they could get more houses on the sites by using their own standard house-types. They told us we could make more profit if we used more standard materials. We resisted that and explained why.
Rich tapestry
Those who know Birmingham, will be aware that we already have a proud collection of housing that reflects all of the historic architectural styles: Georgian, Victorian, Edwardian. I’d like to think that what we are doing now adds to that rich tapestry of design styles.
Birmingham’s politicians and officers have long sought to return to the days of Parker Morris and to build a legacy of new homes for the future that will stand the test of time.
I’d like to see the new government give a clear pledge to supporting the development of mixed tenure housing through council-led partnerships such as those I’ve mentioned above.
I also hope they make sure councils have the tools to do this rather than the rules to trip over. The changes to Housing Revenue Account subsidy will be a good start, but I’m hoping for more. Its time to herald the new era of council-led house building – but then I would say that wouldn’t I?
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