M29, 30, 33 Build-to-Rent… 12 March

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Tuesday 12 March afternoon: extra session for matters not discussed on Feb 27
M29. Build to Rent
M33. Large Scale Shared Living Development
M30. Supported and Specialised Housing

Build to rent: the panel’s questions
M29. Would Policy H13 provide a justified and effective approach to build to rent housing to meet housing need? In particular:

a)  Would the criteria to define build for rent set out in Policy H13B be justified and would they be effective in supporting delivery?
b)  Would the approach to affordable housing requirements be justified and effective? Would it be effective in meeting local needs? Would the approach to discounted market rent homes be effective? Should the discount level be defined locally to take account of local circumstances?
c)  Are there specific design requirements of this type of housing and would the policy be effective in delivering them?
d)  Overall, would it meet the objective of Policy GG4 to delivering the homes Londoners need?

GLA James Clark and Robert Wacher: providers of BtR are not discontented by this policy.
Answering questions from the Panel:
Why not use NPPF definition? A: we wrote the definition before the NPPF 2018 came out, and we think it’s good.
Criteria in NPPF and SPG, defining BtR, accepted by the industry
What about the “distinct economy” of this form of provision? A: BtR and BtS have different attributes. Some positive, some negative from a profitability point of view (lists them) justifying a distinct planning regime.

The appeal of this form to developers is reflected in a growing pipeline.  43,000 units recorded by Molior (and more data in the Mayor’s submission for today). The gap between BtR and BtS has been narrowing since the SPG appeared.
Low cost rent could be justified by LAs where evidence supports it and this is reflected in a proposed further alteration.
James Clark; The mix of tenures within BtR reflect partly our view that it’s good to have unified management, which wouldn’t happen with normal mix, where management of affordable part of a scheme is normally done by an RSL.
Viability testing was done assuming LLR levels and 50% of market level
Fast track added along with the threshold.
(“NPPF has a 20 20 provision”: what does this mean?)
BPF are  very discontented with the change now proposed by GLA – to enable some social rent…  This is what the GLA has proposed in its submission of 12 February: add as 4.13.9A

Where justified in a Development Plan, boroughs can require a proportion of affordable housing as low cost rent (social rent or London Affordable Rent see 4.7.4) on Build to Rent schemes in accordance with Policy H7 A. Low cost rent homes must be managed by a registered provider. The low cost rent affordable housing would contribute towards the relevant threshold required to meet the fast track route, as set out in paragraph 4.13.6. DMR is an intermediate product and is managed and allocated as such, therefore it is not appropriate to seek DMR at or close to social rent levels.

Get Living London (owners/operators of the Olympic Village). capitalised rental value of BtR is always less than market sale. We spend more on building cost: shared space, better public realm, spec of homes normally higher because we repair it!  So we build on bigger sites, and thus get special problems,  3.15-4.25 % yield on costs.  Operational efficiency. IRR is about half what the BfS model gives. Doesn’t like having to build separate passages, entrances etc for social tenants. Better to have a tenure-blind approach.
Greystar: unified management is crucial.  Resisting the social housing dimension. Social housing would normally mean putting it in a separate building, mainly for management reasons. Another problem: at what stage would the social housing requirement be imposed? Only in  S106 stage?
London First is very supportive of the new sector. Disappointed that social rent amendment was not part of the fine consultations we had in the period leading up to the consultation draft.
Fast Track is OK but the 35% figure is premature. Not enough evidence yet. Would create expectations among councils in cases where 35% can’t be viable (yet).
Opposes double management regime. Scrap the social housing option, or as a compromise limit it to large multi-block schemes.
Michael Ball (Southwark CDG) for Just Space supports main thrust.  But why is the covenant only for 15 years? 30 years covenant has been agreed agreed at Elephant & Castle. We don’t understand why the split is different from policy H7. Elephant scheme was agreed on a basis much closer to Policy H7.
This 35% setting will have a deeply undermining effect on the mayor’s 50% target.
London Tenants Federation. We see no reason why resources should be diverted to this sort of housing.  The more of this you do, the less we have of social rent which is what London needs.  Median equivalised incomes in London make LLR unaffordable in almost every ward in London.
GLA James Clark: on the social rent suggested change: Given the needs shown by SHMA and needs in boroughs.
No need for separate management. some private developers have become registered providers; some RPs do BtR; Where there are really no options there’s always cash in lieu.
M33.  On the separate matter of Large scale shared living development – a tiny but potentially growing kind of housing.  [comment by note-taker Main interest is that GLA proposes that contribution for affordable housing should be  split 50:50 between a lump sum and a perpectual payment related to the rents.  A kind of equity sharing.]
M30. On separate “supported housing” policy. Richard Lee says where is the evidence? JS asked a question at the technical seminar on why no evidence was being collected on the specific housing needs of minority groups. We were told the work had been done in various parts of GLA…and we expected now to see it collected from other parts of the GLA.  But the mayor’s statement now has NO reference to the needs of any specific group. No footnotes. No studies or documents cited.  Delivery:  how could it be delivered? Totally missing. A policy without a policy. The list in the draft Plan is simply a descriptive list of things boroughs might want to do. The reference to needs assessments is the nearest we get to a proper policy. The audit of existing provisions (incl refurbishment needs).  The policy should have included health and care services + the smaller specialised housing associations in partnerships.
No reference either to user groups, most of whom are vulnerable groups: users need to be fully involved. Some needs are so small that unlikely to be met on a borough level and may need multi-borough or pan-London level.  LGBT for example very keen to be active on a pan-london basis.   Inadequate guidance to boroughs on how to engage with the various groups.  Who is missing?  completely missing BAME and LGBT+
Hostels and temp accom: some discussion of where people can go AFTER hostels, but nothing on temp acomm and hostels for homeless, esp rough sleepers. HLG stats emphasise the particular vulnerability of LGBT BAME and young people to homelessness.
Specialist accom which includes service provision – advice and service as part of housing service very important indeed and that’s another omission.
We want the policy to be fit for purpose and would like to help the mayor achieve what he aims to do.
GLA response: essentially saying this policy is not on the needs of particular groups but more a reminder to boroughs of what they should consider doing…

Notes by Michael Edwards