Plans for Medway Council housing company rubber-stamped by cabinet
PUBLISHED: 15:42 11 July 2017 | UPDATED: 15:42 11 July 2017
We revealed earlier this year there were some 21,980 people on its waiting list
Plans for Medway Council to try and alleviate its growing housing crisis by setting up its own property development company were rubber-stamped today.
A report presented to the unitary authority’s cabinet sets out proposals for the creation of a business to maximise the opportunities to invest in, or develop, property both within and outside of Medway.
Chiefs hope it will enable the development of a number of council-owned sites as it looks to bring down huge numbers on its waiting list for housing.
Earlier this year, we revealed there were a staggering 21,980 people on the council’s list in January, with 1,354 of those joining more than a decade ago.
When challenged, housing bosses at the town hall pointed out the register includes people who have lived in Medway for two years, earn less than £50,000 and own assets worth less than £50,000.
On what the council describes as the “active housing register”, which includes those eligible to bid for homes, there were 5,829 applicants at the start of 2017 – 404 of which were classed as “exceptional priority”, meaning their bids would be assessed before others on the register.
Regardless, it was slammed as proof of mass under delivery of homes in the area over a number of decades.
And the pressure is building further on Medway, with the council recently consulting on its local plan - a framework used to shape development in the area until 2035 - in which regeneration chiefs intend to grow Medway’s population from 276,492 to 330,200 over the next two decades.
That would would require another 30,000 new homes - 25 per cent of which would be affordable housing, bosses say.
Creation of a housing company could help speed up that development, particularly as the council sees a number of obstacles currently in its way.
There is currently planning permission for 7,500 units across the borough on sites owned by third parties that are not being brought forward, according to the report.
Reasons for this non-delivery vary, but where the reason for non-delivery is due to the commercial interests of the land owner or developer, the council has a very limited ability to encourage activity on the part of third parties.
The idea is growing in popularity in council chambers up and down the country, with town halls having to come up with innovative ways to stay ahead of the curve.
The housing company could also provide an income for the council, which would be a real boost in an environment where funding from central government is being ruthlessly slashed.
Medway’s Conservative leader Alan Jarrett told us he anticipates progress on the project to begin to accelerate as early as October.
“It’s something we’ve been researching for a while, and we’ve looked at other local authorities such as Wokingham in Berkshire, and the London Borough of Harrow, who have very successful models,” he said.
“By October we will be thinking about which sites, if any, go into it - this is very much a step in the right direction.
“We have got the potential to cut down the cut any developer might take from 20-30 per cent down to a single figure.”
The proposal appears to have cross-party backing, as leader of the opposition Labour group, Vince Maple, told us he was equally enthusiastic about the plans.
He said: “The council has got to play a proactive role in getting the housing crisis dealt with.
“We have seen too often too many contractors – sometimes multi-national companies – getting planning permission and doing nothing with it.
“There are 20,000 on the waiting list and that figure is not going down, so I broadly welcome the council doing this piece of work and we’ll see how quickly it delivers – I want to see spades in the ground as quickly as possible.
“There are a number of sites highlighted for regeneration, if they are the first, that would be great.
“While I don’t begrudge a developer making a profit, we have seen an increase in them trying to plead poverty.
“For example, the developer at Battersea Power Station says it can’t afford to build an extra 250 social homes, but it turns out they’re set to make a profit of £1.8 billion - that is unacceptable in my mind.
“We’ve not seen quite that level here in Medway but I have very little time for developers who act like that – if you can’t afford it, don’t come forward.”
The possibility of creating new revenue streams for the council is particularly key with hostility between the two parties high following a number of controversial recent decisions.
Earlier this year, Tory chiefs proposed the closure of 19 children’s centres, in a move which even drew the attention of Labour frontbencher, Angela Raynor, who described it as “an absolute scandal”.
In protest, opposition members boycotted council-run events to commemorate the 350th anniversary of the Battle of Medway.
Cllr Maple added: “I would hope this generates an income but it depends on the business model.
“As a concept we are supportive and have been for some time – this is not a new idea to us, but the numbers have got to work.
“We are moving into a situation where, rightly or wrongly, the government grant is being pulled back, and in principle we will received things like business rates, but if you can generate your own income then obviously that’s a positive.”
The report does highlight a number of risks in the proposal, however, including the possibility of a housing market crash, and tenants exercising their right to buy properties in which they are living, at a significant discount.
The council insists its business case outlines actions to avoid or mitigate those risks.
Cllr Jarrett said: “We will just have to see how that goes, but a housing company gives us more flexibility and the chance to maximise your land values.
“Local government has moved on rapidly in response to the financial climate we’re in as well as the housing targets we’ve had imposed on us.
“It sharpens your thinking and the sector is learning.”