Councils should think different on housebuilding

29 Jun 15

The need to build more houses is overwhelming, but we need to move on from traditional models of delivery. Councils can create the conditions for new development to thrive.

We need to drastically increase the amount of new homes we build in the UK, yet we are not doing so. Something has to change.

Councils could be the key to unlocking the building potential in local areas. They have the potential to facilitate partnerships and create the conditions for new development to thrive. LGiU’s research for Under Construction, released last week in partnership with Mears, shows that local government is not yet in a position to play that role effectively, however.

This role will require councils to move away from the traditional function they have tended to play. The majority of housing officers responding to our survey had relatively traditional views of local government’s role in housing supply as direct deliverers. We also found that alternative models and partnerships, such as joint ventures, wholly owned companies and special purpose vehicles, were not widespread across the sector.

After years of underinvestment in housing departments, many local authorities lack the necessary skills and confidence, while structural barriers often prevent housing, planning, infrastructure and design priorities from aligning properly within organisations.

There are pockets of innovation, however, that demonstrate some of the things that councils could do to make the most of the opportunities available to them

As the second biggest city in the UK, Birmingham faces some serious housing challenges and the population is predicted to grow significantly over the next decade or so. Innovative approaches are being adopted to meet the challenges this entails.

A place-making strategy is enabled by the dual role of director of planning and regeneration, which draws together several key portfolios that many councils hold in separate departments. The council has also instigated an open and productive dialogue with developers. It produced a “Housing Prospectus”, which lists all potential development sites, including major brownfield sites, as a means to attract large private sector investment. The prospectus covers a mixture of tenures and is a key part of the council’s plan to build 80,000 homes by 2031.

Meanwhile, Oxford City Council set up Barton Oxford LLP, a 50/50 joint-venture investment partnership with Grosvenor Developments Ltd, and has secured planning permission to deliver 885 homes on a 90-acre site of land owned by the council.

Rather than setting up a local housing company immediately, or sell the land to a developer, the council works on a site-by-site basis, making plots of land available in partnership with individual investors. The strategy gives greater control over the developer and the plans and the first round of bids for the partnership were all turned down on the basis that they did not meet the design requirements set by the council. An independent design review panel was established and the council insisted that the scheme had a Master Planning Architect to ensure the standards and frameworks in each plan.

This type of innovation needs to be more widespread if local government is to begin to unlock the housing development that we need up and down the country.

We are not there yet, but the report makes some recommendations that may help us to get there. Councils should rethink departmental structures, address their skills gaps, and consider housing as a central part of future devolution packages.

Despite serious challenges there is a growing consensus around a positive understanding of what councils can do. But they need to step up to the plate to make the most of the opportunities available. Action may entail risk, but the opportunity cost of inaction could be far greater.

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