Housing Regeneration

A Plan for Implementation

V. Charles Ward

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781351249928
• Edition: 1
• Topic: Architektur
• Subtopic: Stadtplanung & Landschaftsgestaltung

Written from an 'in house' perspective in response to the UK Government Housing White Paper released in February 2017, Housing Regeneration: A Plan for Implementation presents sustainable solutions to Britain's housing crisis and will be a useful practical guide for anyone involved in the process of regeneration. Taking as its starting point an idea for a housing regeneration scheme, it provides an overview of each of the issues to be considered and the options for addressing them. In clear and concise language, it explains the issues and work involved in a regeneration scheme, answering questions such as who is involved, how is it paid for, what options are available and, importantly, what are the risks. It will appeal to lawyers, councillors, town planners, surveyors, chief officers, finance officers, procurement officers, project managers and students, amongst others.

1
The route map

There may be several reasons why a local authority may wish to carry out a housing regeneration. In many cases it will be a second or third generation project. An example is Camden Council’s current third generation redevelopment of its Agar Grove Estate, to which Camden’s Cabinet gave the go-ahead in December 2013 and which got planning permission five months later.

The original Agar Grove Estate got its name from William Agar of Elm Lodge who, in the early 1800s, fought against the cutting of the Regent’s Canal through his property. Following his death in 1838 his widow began granting building leases on the estate, which became known as Agar Town. But the residents of that settlement were later displaced with the building of the Midland Railway’s St Pancras Station, with its associated tracks and goods yard. In the 1960s Camden Council carried out a redevelopment to provide 249 new homes and comprising a series of low/medium-rise blocks and an 18-storey tower block, which became known as Lulworth House. But by the date of the 2013 Cabinet decision it had become apparent that this 1960s development had also come to the end of its useful life. The problems were not social but physical. In paragraphs 3.3 and 3.4 of the statement of reasons to support a compulsory purchase order, the council explains:

3.3 The Estate is home to a stable and cohesive community including many householders who have lived there for a number of years and are established in the area. However, despite being a popular place to live, the existing stock suffers from a number of problems ranging from physical defects to the size, type and quality of the accommodation relative to modern housing needs. Furthermore, the existing configuration of the Estate represents an inefficient use of land given its accessible and sustainable location. All 249 homes on the Estate have very significant investment needs.

3.4 The Estate currently comprises a series of free-standing blocks surrounded by areas of open space which were laid out in response to solar orientation but do not measure well against today’s principles of good urban design and place-making. As a result the Estate comprises a series of ‘objects in space’ with a lack of definition between buildings and spaces; poor resolution of fronts and backs; poor legibility with expanses of green space with no clear programme of use; and an urban form which is detached from the wider area.

The current redevelopment comprises the demolition of all the low-rise buildings on the estate, apart from L & Q housing association blocks and the Agar Children’s Centre. Enough new Camden Council homes will then be built for all existing tenants who wish to continue living at Agar Grove. Some of the new-build flats and refurbished flats in Lulworth will be sold outright or on shared ownership to cross-subsidise the rest of the redevelopment. The regeneration also includes communal gardens and play spaces.

A larger scheme is Hackney Council’s rolling eight-year multi-site regeneration programme running from July 2011 to 2019 and which is forecast to deliver 2,485 new-build homes of which 1,236 will be affordable (comprising 717 homes for social rent and 519 homes for shared ownership). In addition, 195 social rented homes will be refurbished to a 30-year life standard and 80 leasehold homes will be externally refurbished. The scheme also has to cater for the additional demand for education, leisure, public realm, energy use, traffic and public transport, which will be assessed through the town planning process and addressed through planning obligations alongside on-site provision of facilities such as amenity space, play facilities and measures to reduce carbon footprint.

In September 2009 Hackney achieved Housing Investment Partner Status with the Homes and Communities Agency (HCA) entitling it to bid for an allocation of Social Housing Grant (SHG): for which it was allocated £10 million to build 115 homes for social rent under Round 1 of the bidding and a further £6.26 million to build 87 social rent homes under Round 2. Construction of those homes is now complete and occupied at Bridport (Colville Estate), Ottaway Court (now Dunnock Mews), Rendlesham House (now Goldcrest Mews); Alexandra National House; Brooklime House and Chervil House. Hackney then secured a further £4.26 million grant funding under the National Affordable Homes Programme 2011–2015, enabling the delivery of a further 93 social rent homes and 38 for shared ownership. However, the intention is that over the longer-term Hackney’s regeneration programme will be completely self-funding and deliver a financial return to the council, which will be achieved through:

• residual land value created through the sale of units constructed for outright private sale;
• receipt of initial equity tranche sales and the subsequent rental stream from shared ownership homes;
• ring-fencing rental receipts at target rents from the new social affordable units; and
• mitigating right-to-buy repurchase costs through the provision of equity-swap arrangements.

But not all regeneration involves the replacement of post-war tower blocks. Perhaps a piece of council-owned land has become surplus to requirements, as council services and their operational requirements contract, and has become ripe for redevelopment. Perhaps there is a prospect of central government funding becoming available if development deadlines can be met. Often it is a combination of all of them.

Having identified a prospective housing regeneration project, the first formal step may be to present a report to the appropriate Cabinet or councillor committee seeking political support for the principle of regeneration and the allocation of a budget to pay professional fees to work up a detailed and costed scheme for final approval. That report may also outline possible options and seek authorisation for a tender exercise to find a potential development partner to carry out the construction and for a registered provider to manage the affordable housing once it has been constructed. That initial Cabinet or committee approval and budget will then enable the engagement of property professionals to work up a scheme and begin the process of tendering for a development partner.

Surveyors will be appointed to check that the land is physically capable of redevelopment and to provide valuations. Lawyers will check the titles to the land and its ownership and identify any third-party rights or interests which might inhibit the carrying out of development or which need to be re-acquired. In the case of the Agar Grove regeneration, this would include Camden Council’s need to repurchase homes previously sold under right-to-buy as well as providing suitable alternative accommodation for existing council tenants who are still in occupation. Where such rights or interests are identified, it is those same lawyers who will need to advise on how those development constraints can be overcome.

The next stage is to put in hand a transparent procurement process to identify a potential development partner. That process will need to be compliant with European Rules and the council’s own contract standing orders. Prospective development partners will be invited to bid against a development specification. Annexed to that specification may be drafts of any development agreement or other documentation which the successful appointee will be expected to sign.

However, before that appointment can actually take place, a second report will need to go back to Cabinet or the appropriate committee with a fully costed and worked-up scheme and a report on the bids received with a detailed recommendation as to which development partner should be appointed to implement the project.

Following that second resolution, the council will notify the prospective development partner that their bid has been accepted. From notification of that appointment, the council and the development partner will be in a formal contractual relationship, even if the development agreement itself has not yet been signed.

Before development can actually start, there are other preliminary hurdles which must first be overcome. Planning permission will first need to be applied for and obtained. If there are multiple third-party interests to be acquired, it may be appropriate to put a compulsory purchase order in place. There may also be roads and footpaths crossing the site which need to be stopped up to enable development to take place.

Only when all of these preliminary issues have been surmounted can the development-partner be allowed on site in accordance with the terms of the development agreement to commence and complete the redevelopment. On completion of the redevelopment, ownership of the appropriate parts of the site will be transferred by the local authority to the development partner or, as the case may be, the registered housing provider. The affordable housing will then be let by the housing association on assured shortholds or sold on shared ownerships to persons nominated by the local authority as being in housing need. The allocation criteria will be set out in a nomination agreement signed between the local authority and the registered provider.

Key to the success of any regeneration project is the support of the people whose lives it will directly affect. No programme of regeneration can succeed in the face of an entrenched and united campaign of opposition. It is why a programme of planned human engagement is just as important to a regeneration project as compliance with legal formalities. Someone whose home is being compulsory purchased will need to be convinced that there will be a better home waiting for them once construction is complete, that their community will not be broken up and that they will be no worse off financially. It means that councils embarking on a regeneration project must be able to offer a range of options to those people who will potentially be displaced, including the possibility of one-for-one swaps as an alternative to a cash payment.

It is a lucky project which goes entirely to plan. Most do not. It is why a project team must anticipate everything which could possibly go wrong, list them in a ‘risk register’ and put in place contingencies. That risk register will then need to be regularly updated as the project progresses. Some risks will fade as project milestones are reached, whilst other – previously unforeseen risks – may be added to the register. Typical risks for a regeneration project might include:

• insufficient interest amongst potential development partners;
• tenders for the construction work are higher than anticipated;
• planning permission is refused, delayed, or granted on terms so onerous that they undermine the financial viability of the project;
• difficulty in negotiating terms for the rationalisation of land interests required for site assembly;
• expected grant-funding required for the project is not forthcoming – or is less than expected or offered on more onerous terms;
• delay in finalising terms between the council and its development partner;
• unexpected physical constraints which add to the construction cost – such as the discovery of an underground cellar;
• uncertainties of continued member support for the project, particular in the face of an organised campaign of opposition by those residents most affected;
• a collapse in the housing market, which reduces the overall profitability of any project which is being cross-subsidised by the development of homes for private sale.

The 14th June 2017 Grenfell Tower tragedy also provides a stark reminder that risk does not end on practical completion – or when the last private-sale home is sold. It continues. At the time of writing, a public inquiry has been announced but has yet to take place into why more than 80 people lost their lives as a result of a flash-fire which consumed almost the whole of the 24-storey 67.30 metre high building and which was caused (it is believed) by flammable cladding installed during a 2012 £10 million refurbishment project designed to improve insulation and make the building warmer in winter and cooler in summer. Building services engineers, Max Fordham’s, 17th August 2012 Sustainability and Energy Statement explained the purpose of the refurbishment: ‘Poor insulation levels and air tightness on both the walls and windows at Grenfell Tower result in excessive heat loss during the winter months and addressing this issue is the primary driver behind the refurbishment.’ It added, ‘The chosen strategy is to wrap the building in a thick layer of insulation and then overclad with a rain screen to protect the insulation from the weather and from physical damage.’

The situation was not helped by a stay-put fire policy. A May 2016 Gren-fell Tower Regeneration Newsletter advised residents:

The smoke detection systems have been upgraded and extended. The Fire Brigade has asked us to reinforce the message that, if there is a fire which is not inside your own home, you are generally safest to stay put in your home to begin with, the Fire Brigade will arrive very quickly if a fire is reported. The only reason you should leave your home is if the fire is inside your home.

It must be expected that the inquiry, when it happens, will consider not only the direct causes of the fire but also the extent to which that fire risk was – or should have been – foreseeable to those responsible for its installation. In that respect it is noteworthy that similar insulation materials were used in many other tower blocks across the UK and Europe. Each of those tower blocks will require extensive and urgent works to remove existing cladding and substitute a fire-resistant alternative. Because of the likely extent of those works there are also the associated logistical issues as regards the temporary rehousing of residents living in the blocks. An added complication is that many of the flats in those blocks will have already been sold under right-to-buy.

What is certain is that the conclusions of the public inquiry will have implications for all housing regeneration projects. A regeneration project team cannot be held responsible for everything which happens after a project has been delivered. Even if the project was problem-free at the point of delivery, subsequent lack of maintenance could risk health and safety. However, it is the job of a regeneration team to deliver a project which is free from inherent risk or defect, according to the state of scientific knowledge at the date the project is delivered.

There will be many variants on this model, but the fundamental route-map will always be the same. The good news is there is so much information about current regeneration projects which is freely available to download. Each one is a textbook providing ideas and knowhow for the next generation of projects. Examples of project documentation which is already in the public domain include: Cabinet reports and resolutions; compulsory purchase orders; statements of reasons; demolition notices; community engagement; planning reports and decisions: even complete development agreements.

2
Information gathering

If the starting point for any housing regeneration project is the idea, the next stage is to test the feasibility of that thought. This is initially a desktop information-gathering exercise. It is about trying to find out who owns what. Even if a local authority is redeveloping its own housing estate, it is unlikely that the council will own everything.

Some units may have previously been sold under right-to-buy. So, the council will need to buy them back. There may be electricity substations and other utility-owned services within the regeneration site. There may also be roads, public footpaths and public amenity areas. This particular desktop exercise would normally comprise:

• a review of Land Registry records;
• a review of such physical documentation as exists;
• standard conveyancing searches.

The assessment would need to be carried out by an experienced conveyancer with electronic access to Land Registry records. And all that conveyancer would need to begin that exercise is a red-line plan showing the location of the proposed regeneration site in relation to surrounding streets and landmarks. Using that red-line plan, the conveyancer will be able to search Land Registry records and provide a detailed report on the different ownerships which make up the regeneration site. As well as identifying ownerships, the ‘title report’ will also detail and highlight known documented third-party interests which might obstruct – or make more difficult or expensive – the process of carrying out a redevelopment. Those third-party interests might include contractual restrictions on the way land can be developed or used, the existence of private rights of way, or the rights of adjoining owners to use pipes, wires or other utility services running through the land.

The process of collecting title information is made easier by the process of land registration which exists in the UK and which means that most title information is available for instant download. Modern land registration began with the Land Registration Act 1862. But the scheme, as launched, was entirely voluntary and little used. Inner London became the first area of compulsory land registration in 1899. Compulsory registration means that every time unregistered land is sold, the purchaser is placed under an obligation to apply for first registration of their title. Until that registration takes place, title does not fully transfer to the new purchaser. Compulsory registration is therefore a piecemeal process. Unless and until a transaction takes place to trigger first registration, the land remains unregistered.

By contrast, title to unregistered land is evidenced by an examination of the physical title deeds in a system which has barely changed since medieval times. As the documentation is ‘unregistered’, the information contained within i...

Table of contents

• Cover
• Title
• Copyright
• Contents
• Table of statutes
• Table of statutory instruments and circulars
• Table of cases
• Table of other source material
• Introduction
• 1 The route map
• 2 Information gathering
• 3 Statutory constraints
• 4 Development options
• 5 Compulsory purchase
• 6 Other statutory tools
• 7 Constitutional and procurement issues
• 8 Funding considerations and options
• 9 Documenting the project
• 10 Local authority companies
• Index