Agenda item

The report of the Director for Housing, Regeneration and Planning. To be introduced by the Cabinet Member for House Building, Place - Making and Development.

 

The report and recommendations arise in response to report by the Local Government and Social Care Ombudsman (reference number: 20 006 289)

 

a) Not to acquire 104 Woodside Avenue

b) Not to consider the potential decanting of the tenanted homes belonging to the Council at 102 and 106 to 116 Woodside Avenue

c) To proceed with the development of the proposal for 100 Woodside Avenue as outlined in the planning application HGY/2021/2727 as set out in paragraph 3.2 of the report

d) That a further report will be bought back to  Cabinet for final decision regarding this development in due course.

The Cabinet Member for introduced the report which took forward one of the recommendations from LGO report considered at item 759 and resolution 2 above which was for the Council to reconsider the proposals for the development of the site of the former care home at 100 Woodside Avenue and the terraces at 102 to 108 and 110 to 116 Woodside Avenue.

 

It was noted that prior to the issue of this report, the Council commenced a procurement exercise for a contractor to build out the scheme if planning was successful. This procurement has been put on hold while the reconsideration has been taking place. The Cabinet Member wanted residents to be assured that the Council had considered, in detail, every alternative option for this site as outlined in the report. The Cabinet Member welcomed the opportunity of going through the options for this site from first principles with detailed financial analysis.

 

The Cabinet Member advised that the weight of evidence in favour of the preferred option made it clear that this was the only option , the Council should be taking forward. The preferred option set out performed better financially than all the other options, delivered homes more quickly and minimised disruption to residents.

 

In response to questions from Cllr das Neves, Cllr Dogan, Cllr Diakides, Cllr Chandwani, Cllr Davies, Cllr Brabazon, Cllr Cawley- Harrison and Cllr Ejiofor, the following information was noted.

 

-       Issues with having the previously estimated higher number of homes on the site, identified in the detailed design works were: overshadowing, potential splitting of the site as a mains water way underneath, problems with providing access to amenities , plants, car parking , refuse bay area.

-       Also if the terraced homes were demolished, and taking into account the above, there was only potential to add in three storey buildings, meaning a net additional 6 homes.

-       There had been a calculation of values of the development set out over a 50-year period. It was explained that whilst comparing all different options, it had been assumed that £2.15m paid for the previous home purchased was assumed as neutral in all options and that there would the loss of income for the Council from the 7 existing terraces would be factored in for options 2 and 3. These options had been evaluated on the basis on net present values. Private sale values had been established using an independent valuer.

-       Responding to the questions about assurance on the process for housing schemes going forward, and not repeating issues of this particular scheme, the Cabinet Member explained that the Council took the LGO report seriously and supported by the Leader, as previously set out, there would be an external investigation into the historic decision making process of the Cranwood development .

-       In relation to ensuring that all Council housing schemes were considered in diligent manner, there had been an improvement in the last couple of years in the decision making and review process. There was now an established Housing Development team with a robust process in place. Cabinet noted that a number of housing schemes had now come forwardthrough an established gateway procedure with checks and balances at each stage. This would be as follows:

-       Gateway zero - Cabinet decision to work out the feasibility of the site and no money spent until Cabinet approval.

-       Gateway 1 Council’s Housing Delivery Board – officer board agrees budgets from feasibility through to planning.

-       Gateway 2 – planning decision and this can be a Planning Sub Committee decision or officer delegated decision depending on size and nature of the scheme.

-       Gateway 3 – contract award decision before embarking works on site

-       [Therefore this scheme would come back to Planning and back to Cabinet on the as set out above.

-       Gateway 4 would include practical completion and Gateway 5 referred to the settling of the defect period.

-       Considering that the LGO report was only issued 2 months ago, assurance was provided that there was significant work completed on the detail of the attached report and the options and proposal that it contained. It was important to provide a timely response to the LGO recommendations and to provide assurance to tenants and interested parties about the future of the site. The Cabinet Member and officers were confident that they had reviewed the options thoroughly. Given the amount of design work that had taken place on the scheme there had been a range of previous design options available to consider. These had been assessed through a process of elimination, resulting in the attached options presented to Cabinet. These were the most financially viable options that reflected the aspirations of development programme.

-       Tenants were assured that the recommendations put forward meant that there was no longer threat of developing the two terraces and their homes being knocked down.

-       It was clarified that paragraph 3.1b – referred to the former Cranwood site care home and 2 blocks of terraces and the 7 homes owned by the Council were 7 individual houses on the block of terraces which made a total of 8 homes.

-       In relation to the recommendations proposed further disadvantaging Mr X, there was no obligation on the Council to buy people’s properties when there was not a need to buy those properties. The report showed that the purchase of 104 Woodside Avenue would not allow more housing on the site or more funds to be added to the HRA to provide more homes elsewhere. There was no recommendation from the LGO report suggesting purchasing Mr X’s property in the absence of developing the two terraces.

-       There were lessons learned on negotiating with homeowners and leaseholders, including having discussions recorded and documented.

-       The Leader asked officers to ensure there was communication with the tenants and relevant parties setting out the outcome of this decision and that this should go out as soon as possible after the meeting.

-       Regarding the level of detail in the report to enable an informed decision, it was noted that the report included the usual level of detail provided for development schemes. The report had been assessed and commented on by Finance team and was an accurate reflection of financial considerations

-       In relation to 106 Woodside Avenue being passed to the Community Benefit Society and how decisions were made on this entity including the home rather than Council tenants, noted that there was a programme of homes for the HCBS. It was the existing practice for acquiring properties to lease them Community Benefit Society. This was also set out in the Medium-Term Financial Plan as the Council’s recognised approach.

-       The Cabinet Member agreed that the process of decision before Cabinet was robust enough and the decision was the right one to approve.

-       Regarding the level of compensation payments for the inconveniencing of Mr X, this was not a matter for Cabinet to comment on but a matter for the Local Government Ombudsman who compiled the recommendation.

 

 

RESOLVED

 

 

a)    Not to acquire 104 Woodside Avenue

b)    Not to consider the potential decanting of the tenanted homes belonging to the Council at 102 and 106 to 116 Woodside Avenue

c)    To proceed with the development of the proposal for 100 Woodside Avenue as outlined in the planning application HGY/2021/2727 as set out in paragraph 4.2 of this report[ this was incorrectly referred to as paragraph 3.2 in the published report but the planning application is clearly set out at paragraph 4.2]

d)    That a further report will be brought to Cabinet for final decision regarding this development in due course.

 

Reasons for decision

 

Since the decision not to include the terraces on Woodside Avenue in March 2020 in the redevelopment of 100 Woodside Avenue site, the Council has developed plans for a scheme of 41 new homes (32 social rented and 9 outright sale) on the site of the former care home only. This is the scheme set out in planning application HGY/2021/2727. This will also mean the retention of the neighbouring terrace of existing Council homes (see para 3.2 below shaded in light grey – 7 Council/HCBS homes, excluding one private freehold home at 104 Woodside Avenue). This would result, including the existing tenanted homes in the calculation, in a total of 39 Council-owned homes on the whole site.

 

The designs of the proposed site (as per HGY/2021/2727) if preferred option were to be developed out can be seen below:

 

           

 

This iteration of the scheme has been tested and is the most financially advantageous of the proposed options.

 

Progressing with these plans for the site and continuing the process of seeking planning approval for this version of the scheme is the preferred option. It is the most financially advantageous scheme and is at an advanced stage of design development. This scenario would therefore most strongly support continued achievement of Priority 1 of the Borough Plan – a vision of a ‘safe, stable and affordable home for everyone, whatever their circumstances’.

 

The preferred option would mean that the Council does not have to demolish residents’ homes at 102, 106-108, and 110-116 Woodside Avenue. It would also mean the Council had no reason to acquire the freehold property at 104 Woodside Avenue.

 

For the purposes of appraising the options, the assumption that has been followed is that the cost of the acquisition of 106 Woodside Avenue is not included in the comparative appraisal as it has already been incurred.

 

Given that 106 Woodside Avenue does not now form part of the preferred option, it would continue to be leased to the Haringey Community Benefit Society (HCBS). The price paid for the property reflected the assessed land assembly value at that time. Subsequent to that, detailed design work on the site has made it clear that the development value of including the terraces on the scheme is lower than previously thought. In the period since, the Council has changed its valuation methodology for acquisitions of this nature.

 

Alternative options considered

 

Alternative Option 1

 

Not to develop the site for housing. The site has a site allocation in Haringey Council’s Development Planning Document, and any alternative use is not likely to gain planning approval. This would mean that the site would continue to be underutilised and not deliver much needed housing in the borough.

 

Alternative Option 2

 

An option has been considered and tested for acquisition of the remaining freehold house (104 Woodside Avenue), decanting of the existing 7 Council/HCBS homes in the terrace, and the re-development of the whole site. Architects indicate this redevelopment would deliver 55 new homes across the whole site.

 

Below are some indicative plans for the re-development of the whole site, producing 55 homes in total:

Testing of this option by our Architects has indicated that it is likely to be undeliverable because of the additional requirements for access roads, parking, refuse storage and amenity space, which do not apply if the existing homes are retained.

 

This option has also been tested financially. In this option, as well as option 3, we have assumed that it would cost us £1.75m to purchase Mr X’s property as this is the most recent offer that he has made us. In our financial modelling, officers began by seeing if the scheme could work financially if 40 of the 55 homes were to be delivered for social rent (i.e., 1 more net Council home than the preferred option). Officers then tested other potential mixes of Council and private housing. Ultimately Officers found that this option is less financially advantageous than the preferred option even if only 32 homes in block A are delivered for social rent and all the remaining 23 new homes are sold. This would continue to be the case even if Mr X was prepared to sell his property to the Council for £850,000. This alternative option would also have a net loss of 7 Council homes compared to the preferred scenario.

 

This option would further require a new consultation process based on a ‘meaningful’ design under s105 of the Housing Act 1985 due to the loss of existing homes and the permanent decanting of existing tenants. If one was to assume the completion of that consultation and a consequential favourable decision that involved the demolition of the existing properties, there would then be a need to assess the existing tenants’ needs and, once identified, decanting them into suitable alternate homes. Officers’ experience indicates this process could take more than a year to achieve.

 

For these reasons, Cabinet is recommended not to consider proceeding further with

Alternative Option 2.

 

Alternative Option 3

 

The Council has considered a third option as a ‘mid-point’ between the preferred option, and alternative option 2. The following image helps demonstrate the option in question:

 

 

In option 3, planning application HGY/2021/2727 would be progressed and approval would be sought. Blocks A1 and A2, which are planned to contain 32 social rented homes, would then be put out to tender for a main build contractor and their development progressed. In the meantime, Blocks B and C, and the existing terrace would be redesigned to facilitate a future re-development. Whilst the re-design was happening, the residents of the terrace would be consulted with and depending on the outcome of that consultation and further decision-making, new homes would be found for them. This option would also necessitate the freehold of 104 Woodside Avenue being acquired. The re-designed Blocks B, C and terrace would then be progressed as a new planning application and brought forward accordingly.

 

The Council’s Architects have indicated that this phased iteration of the scheme would run into many of the same issues as those set out in option 2 because of the additional amenity requirements caused by any increased density.

 

Officers have also tested the financial viability of this option, which performs even more poorly than option 2, even if all homes other than those in Blocks A1 and A2 were built for market sale. This is due to an increase in interest and a later receipt of cross subsidy. Moreover, like option 2, this scenario would see a net loss of seven Council rented properties from the site.

 

For these reasons, Cabinet is recommended not to consider proceeding with Alternative Option 3.