Agenda item

[Report of the Director of Housing, Regeneration and Planning. To be introduced by the Cabinet Member for Finance and Strategic Regeneration.]

 

Cabinet is asked to approve recommendations to progress the next steps of the High Road West Scheme, including entering into funding contracts with the GLA, entering into a loan agreement and updating contractual arrangements. The report also seeks approval for the Council to acquire social rented properties. Delegations will be sought to progress the scheme relating to finalising commercial terms and legal arrangements. Approvals will also be sought to update previous delegations.

The Cabinet Member for Finance and Strategic Regeneration introduced the report which sought approval of a GLA funding package, which totalled £91,512,000 and consisted of £70,312,000 of Affordable Housing Grant and £21,200,000 of Mayor’s Land Fund. This funding was required to start the delivery of the first phases of the High Road West Scheme and the delivery of the 500 social rented homes.

 

This report further sought approval for the Council to acquire the additional social rented homes the Scheme will deliver, which would allow the Council to meet a long-held ambition, expressed by residents, that these homes, like the 145 replacement homes already secured under the Development Agreement, are owned and managed by the Council.

 

In addition, the report sought approvals with regards to the contractual arrangements required as a result of the decisions being made in the report that would permit the Council to deliver the Scheme in the event of a supportive ballot. The report also recommended updating an existing delegated authority regarding the level of spend on acquisition of properties required to deliver the Scheme, in accordance with the land assembly budget in the Capital programme agreed by Council in March 2021.

 

The Cabinet Member continued to outline the opportunity the scheme provided in supporting the Council’s objective of equality, regardless of background, providing increased affordable housing from 145 homes to 500, access to training, employment, community living, with increased green spaces.

 

The Cabinet Member responded to questions from Councillors Chandwani, Gordon, Brabazon, Cawley-Harrison and Amin:

 

-           Improvements to the scheme over the last 3 years included: the increased number of social rented homes from 145 to 500, changes to the commercial space and location of jobs, added improvements to the  park and new public square and options in relation to the location of the Library and Learning Centre.

 

-           The 297 homes on the Love Lane Estate referred to, included a number of leasehold properties and so they were not all Council homes.  There was a reduction from 212 existing Council homes to 145 new Council homes in the original proposals for High Road West. The GLA funding will ensure the Council can increase the number of Council homes delivered by the scheme from 145 to 500.

 

-           The Council and Lendlease recognised the importance of tackling climate change. Lendlease had set targets in aligning with the 1.5 Paris targets and aimed for net zero carbon by 2025.The Council did not have the figures on the carbon emissions to be released in the demolition of the Love Lane Estate, at this stage of the scheme, and were working towards compiling this information.

 

-           The new council owned social homes would meet the Housing Strategy mix, there would be 55 one bedroom properties, 225 two bedroom properties, 165 three bedroom homes, and 55 four bedroom homes.

 

-           Responding to further questions on secure tenancies and why the residents in temporary accommodation were not having the security of secure tenancies offered ahead of the ballot, it was explained that it is only through the delivery of the Scheme and the 500 Council homes that the offer of a secure home to eligible non-secure tenants in temporary accommodation could be made. This increase in Council homes would allow for the rehousing of secure and eligible non-secure tenants on Love Lane Estate into secure homes in the Scheme, as well as provide a substantial number of homes for other households on the council’s waiting list who were living off the estate.

 

-           In relation to the continuing viability of the scheme, this had been rigorously assessed very recently by the GLA as part of the recent bid process. This process had shown that the scheme is viable with GLA funding and this is why this Cabinet is seeking acceptance of the funds.  The funding contracts safeguard the funding and ensures it will be spent as set out in the contracts.

 

-           With regards to the impact of the pandemic on how increase in housing density is assessed and considered as suitable living accommodation. The Leader emphasised that people wanted a secure home at Council rents in order to bring up their families, rather than a temporary home, or emergency homes. A key aim of the administration had been to amend this scheme to make it more viable for providing secure Council homes. These type of issues would also be considered as part of the Planning decision process.

 

-           In light of having building control regulations with more conditions and constraint on new developments, the specification for the new homes will take into account of the latest fire regulations. Additionally, the wider issues, related to fire safety, would be picked up in the during the Planning process.

 

-           With regards to businesses receiving comparable right of return as part of the High Road West project as residents, there were different arrangements in place for businesses. The Council had started dialogue with business representatives and this would continue, and the Scheme includes opportunities for existing businesses to relocate into the new commercial space.  There was however a need to consider individual businesses circumstances as some were freeholders that did not want to return as a leaseholder.

 

-           With regards to the question on social tenants seeing a rent increase in new homes by 50% and whether an increase in rents was a requirement of the GLA funding agreement, it was noted that the new homes were calculated using a government set national formula which took into consideration local property values, local incomes and the size of the house. The Council’s vision was to continue to charge fair and equitable Council rents. A sustainable community was part of community wealth building objectives. The Council did not want to be in a position to charge high rents and housing programmes in Haringey were designed to provide reasonable and affordable rents to tenants.  Councillor Cawley – Harrison indicated that a further detailed response to this question was required and would put forward the question in writing to the Cabinet Member for a written response.

 

-           It was noted that social and affordable rents would be set at Haringey level.

 

-           Responding to a query on the quality and security of housing in the development, the homes would be of the highest quality and safe and secure not just for residents but everyone in the community.

 

Further to considering the exempt information at item 24,

 

RESOLVED

 

1.         To note that the funding from the GLA referred to in this report were subject to a successful ballot of the residents on the Love Lane estate favouring the proposed development;

 

2.         To agree to the Council accepting a sum of £70,312,000 in Affordable Housing Grant and entering into a Funding Agreement with the GLA in respect of that sum, based on the heads of terms summarised in Appendix 1 (included in the exempt report) including terms that permit the transfer of that funding into the Scheme as described in paragraphs 6.12-6.14 of the report;

 

3.         To agree to the Council accepting a sum of £21,200,000 from the Mayor’s Land Fund and entering into the Funding Agreement with the GLA in respect of that sum based on the heads of terms summarised in Appendix 2 (included in the exempt report) and described at paragraphs  6.15-6.18 of the report;

 

4.         To give delegated authority to the Director of Housing, Regeneration and Planning, in consultation with the Director of Finance after consultation with the Cabinet Member for Finance and Strategic Regeneration to agree the final Funding Agreements set out in recommendations ‘2’ and ‘3’ above, in order to deliver the scheme including the increased number of social rent homes as set out in recommendation ‘8’ and ‘9’; 

 

5.         To agree to pay the Affordable Housing Grant amount of £70,312,000 received from the GLA to Lendlease (High Road West) Limited in relation to the  development costs relating to the affordable housing, and for the Council to enter into a funding agreement  with Lendlease  based on the terms set out in paragraphs 6.12 and Appendix 3 (included in the exempt report) of the report, and give delegated authority to the Director of Housing, Regeneration and Planning, in consultation with the Director of Finance after consultation with the Cabinet Member for Finance and Strategic Regeneration to agree the final terms and the final agreement with Lendlease; 

 

6.         To agree to the Council providing Lendlease (High Road West) Limited with a loan in the sum of £21.2m (in accordance with the drawdown profile and other relevant terms of the Mayor’s Land Fund agreement with the GLA) and based on the terms described in paragraphs and the Loan Terms Sheet 6.15-6.20 and Appendix 4 (included in the exempt report) of this report and give delegated authority to the Director of Finance  in consultation with the Director of Housing, Regeneration and Planning, after consultation with the Cabinet Member for Finance and Strategic Regeneration to agree the final terms of the loan agreement, ‘pass through’ agreement and any other necessary agreements;

 

7.         To give delegated authority to Director of Housing, Regeneration and Planning, in consultation with the Director of Finance and after consultation with the Cabinet Member for Finance and Strategic Regeneration to update the contractual arrangements with Lendlease to give effect to the decisions set out in this report;

 

8.         Following recommendations ‘1’ to ‘4’ above being approved (noting the condition of a positive ballot as a condition of the funding), agree to the Council acquiring for housing purposes the additional 355 social rented homes to be delivered in the High Road West Scheme, for the sum set out in the exempt report (plus associated purchase costs such as stamp duty land tax) and based on the terms set out in paragraphs 6.24 and Appendix 5 (included in the exempt report)  and agree that the payment profile for the 191 replacement  units already agreed to be acquired in the Development Agreement shall be the same as for the additional 355 social rented units ; and

 

9.         To give delegated authority to the Director of Housing, Regeneration and Planning in consultation with the Director of Finance after consultation with the Cabinet Member for Finance and Strategic Regeneration to agree the final terms and the final agreement for the purchase agreement in relation to the Council’s acquisition of the additional homes;  

 

10.      To agree to update the delegated authority given in recommendation 2 of the High Road West Cabinet Report and agreed by Cabinet on 6th March 2018 as follows:

 

To agree the acquisition of all third party land interests within the boundary of the High Road West Blue Line Plan attached to the Cabinet Report of 6 March 2018 (other than any compulsory acquisitions),  be acquired by private treaty by the Council pursuant to the terms of the Compulsory Purchase Order Indemnity Agreement (“CPOIA”) dated 20 December 2017, to facilitate the High Road West Regeneration Scheme and give delegated authority to the Director of Housing, Regeneration and Planning and Director of Finance to agree the final price (including the land price, costs, compensation and fees) to be paid for each third party land interests provided that the total sum to be spent on these acquisitions shall not exceed the sum included in paragraph 6.32 of the report.

 

Reasons for decision

 

Accepting the GLA funding package

 

The GLA funding provides the Council with the means to be able to progress the scheme as proposed in this report, and take this unique opportunity to tackle the entrenched social and economic barriers that residents face in North Tottenham and deliver on the benefits the community have said they want such as good quality affordable homes, jobs and training and new and improved community and leisure facilities. It would represent a significant step forward in progressing the Council’s and the community’s ambition to ensure that north Tottenham is a fairer, healthier place where all our residents can thrive.

 

Acquisition of social rented homes

     

The Council’s Borough Plan Priority 1 “Housing”, is for a “safe, stable and affordable home for everyone, whatever their circumstances” and states that an increasing supply of council housing is one of the most important things the council can do, “because for many people, a council home offers the only real chance of putting roots in Haringey in a stable, good-quality home”.    The Council has established its own council house building programme to support this objective. This programme seeks to secure council owned housing by a range of methods including; acquiring homes, acquiring stalled sites and building council housing. The High Road West Scheme represents an important contribution to the Council priority by delivering 500 social rent homes for acquisition by the Council.

 

The Council had previously agreed to acquire 191 replacement homes to be delivered under the High Road West Scheme (145 social rented units and 46 shared equity units). Acquiring the additional 355 social rented homes and delivering a total of 500 council homes as part of the High Road West Scheme would support the pace of delivery of this objective. It would also deliver much needed council homes in an area where there is great need.

 

North Tottenham is home to a large proportion of families with children; making up 51% of households in the area, compared to 35% borough wide; and with 32.0% of children living in poverty, more than 50% higher than the London average.   But there is a deficit of family housing, with fewer than 14% of council owned properties in Haringey providing three or more bedrooms. Overcrowding is particularly acute in Tottenham, with the Children’s Commissioner and Public Health England both highlighting the negative impacts this has on physical and mental health, particularly for children and young people, an issue that has been exacerbated during the Covid crisis.

 

The delivery of 500 new council owned social rented homes through the Scheme, offers a chance to address this by increasing the number of council owned social rented homes in the area and ensuring the mix of the new homes reflects the needs of residents who will be moving into them. Eligible residents living on the Love Lane Estate will be offered a council home which meets their needs. Residents on the Housing register, who are waiting for a new home, can be offered one of the c.200-250 homes available beyond those committed to residents on the Love Lane Estate, which also meets the needs of the wider community in the area, part of the council’s commitment to deliver a new generation of council homes for local people. For many residents, the offer of a secure council tenancy in a home has been long awaited and will offer them much needed stability, that will help them to take better advantage of their opportunities in their careers, family and community activities.

 

The homes will be delivered as part of a healthy and sustainable neighbourhood which recognises the need for these to be part of a mix of employment, community and leisure activities, responding to the identified needs of the local community regarding issues such as health, financial security, community cohesion and personal safety and in particular, a step change improvement in the quality of homes for local residents.  Alongside a £500k package to support for existing local businesses and funding to support new local business start-ups, a variety of commercial uses and employment activities will be delivered including retail, business and leisure space, which will help to support the town centre and support good business growth in the area.  A range of types and levels of employment will be created which will include requirements for targets to be met in relation to employment of local people and people from ‘protected characteristic’ groups. This will be complemented by a focussed training programme, funded as part of the £10m socio-economic programme, that will help local people to access higher paid jobs in the local and wider London area and develop a sustainable career path, supporting existing successful programmes in the area and optimising the new opportunities provided, such as through the new Library and Learning Centre and community hub at the Grange.

 

Contractual arrangements

 

It was always envisaged that the Scheme would require public funding.  The funding package that has been secured from the GLA, totalling £91,512,000, which has faced extensive competition from other similar schemes across London, and will replace the Housing Zone funding.

 

The Affordable Housing Grant and the Mayor’s Land Fund will provide the necessary public funding required to kick-start the delivery of the High Road West Scheme and provide certainty over the delivery of the 500 social rented homes. Whilst this funding is conditional on a successful ballot outcome, the council needs to ensure that the necessary contractual and financial arrangements are in place to receive this funding, and that these are aligned with the contractual arrangements with Lendlease to deliver the Scheme.

 

Alternative options considered

 

Receipt of Funding

           

An alternative option would be not to accept the funding. This option was not considered as it would not deliver on the benefit of the additional social rent homes that would meet the ambitions of the council and the clear objectives of the Borough Plan.  The Scheme offers a unique opportunity for the Council to secure the largest number of council homes built through one scheme in the borough for decades and to opt not to do so would be a substantial lost opportunity. 

           

Do not acquire the additional social housing units

 

The Council has considered not acquiring the additional social rented homes and allowing an alternative Registered Provider to do so. This option would mean that the Council would not need to acquire the additional units.

 

However, this option would mean that the rents may not be set at council rents or target rents, which could mean an increase in rents for our residents. It also does not support the Council’s Borough Plan objectives of increasing the number of Council owned homes in the borough, at council rents. It would mean a loss of the opportunity to diversify its stock and ensure that more homes of family size are delivered to meet the needs of residents in North Tottenham, as set out in paragraph 4.5 above.

 

It has been clear through previous consultation and engagement on the Love Lane Estate that there is a very strong preference for the Council to continue to be the landlord of the new social rented homes delivered through the High Road West Scheme. Not acquiring these units, would mean we would not be able to meet residents’ clear aspirations.