Shelter's delivery solutions – actions councils can take
The recession has created many challenges for the delivery of affordable housing. However there are things that councils can do to overcome these challenges and build more affordable homes.
Shelter hopes that the Local Housing Watch site will prompt councils to share innovative ways of boosting affordable housing delivery. As a starting point, we have identified five actions that councils might take:
- Public sector land at below market prices
- Encourage landowners to take a longer-term view of land value
- Splitting up larger sites
- Encourage the building of affordable housing on smaller sites
- Being creative about other sources of local funding
1. Public sector land at below market prices
The government and councils own land. More than a quarter of it could be used to build homes. But many opportunities are being lost because the land is sold to the highest bidder, making it too expensive to build affordable housing on.
By treating affordable housing as a strategic priority and selling their land ‘undervalue’ councils can start to change this. See this extract from the Government’s Circular 06/03:
If the ‘undervalue’ does not exceed £2 million, specific consent is not required where the disposal of any interest in the land will help to secure the promotion or improvement of the economic, social or environmental wellbeing of its area; and, where applicable, authorities should have regard to their community strategy.
It has become much easier to sell unused public land for affordable housing, because the Homes and Communities Agency (HCA), a government agency responsible for funding new affordable housing, now works closely with the government and councils to ensure that public land is used for this purpose. The HCA also manages the sale of smaller sites.
2. Encourage landowners to take a longer-term view of land value
When house prices go down, so does the cost of land. This makes some landowners hold on to their land until the price they can get for it stabilises or rises, so less land is available for housing.
Council planning departments are aware of the changing cost of land and can look at ways of encouraging landowners to make their land available for development.
One of these is to encourage landowners to lease land to developers, but to delay taking money for the land until the housing stock is sold.
3. Splitting up larger sites
In the past much affordable housing has been delivered as part of larger developments, but during the recession it has been harder to get larger developments built and without Government funding many of these have stalled.
This means that using smaller sites is really important. That’s why some councils have been looking at ways to encourage smaller developments, and considering splitting up bigger building sites to maintain housing delivery. Councils have found that this approach can provide more opportunities for smaller, often local, builders, increasing competition and boosting the local economy.
4. Encourage the building of affordable housing on smaller sites
When development takes place, any building site of 15 homes or more should include some affordable housing. However, councils can be flexible and encourage affordable housing to be built on smaller developments.
Many local authorities are already taking the initiative and using their powers to do this.
5. Being creative about other sources of local funding
Since councils were given the option to reduce the discount on council tax for second homes, some have started using the money this generates to invest in affordable housing provision.
This can be particularly effective in areas where there are lots of second homes.
In its first year, the reduced discount raised more than £46 million for rural councils, money that has been used support the building of new affordable housing.
You can find more solutions, and case study evidence of their successful implementation, in Building blocks: exploring ways to deliver more affordable homes in the economic downturn (PDF 1.9Mb).
