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older housing vision progress update

28TH September 2009

Purpose of Report

1. The purpose of this report is to provide the Economic Regeneration and Transport Scrutiny Panel with:

i) the main drivers for the strategic approach to older housing; and,

ii) an update on the progress to date of the various projects and initiatives being delivered to achieve the Council’s older housing vision.

BACKGROUND

2. The Council announced its strategy for older housing on 20th July 2005. The strategy set out a 15-year vision for Middlesbrough’s older housing area that includes clearance and transformational redevelopment and a programme of investment across six neighbourhoods. Map 1 shows the Gresham/Middlehaven clearance area and Map 2 shows the wider older housing area.

3. The older housing vision has significant long-term implications for the town. The following section of the report gives an overview of the housing market and other dynamics in the older housing area.

DRIVERS FOR CHANGE

4.The older housing vision was developed in the light of some key facts about the town and specifically the older housing area.

  • Middlesbrough has a declining population with 30,000 less residents in 2005 than in 1961.
  • Middlesbrough residents fill only 51% of jobs in the town.
  • Middlesbrough has a net daily inward migration of more than 8,000 workers who commute for employment purposes. The highest number in the Tees Valley.
  • Low housing demand.
  • Increasing numbers of private rented properties (43% in the proposed clearance area).
  • Historic low house building rate. Between 1991 and 2001 Middlesbrough constructed 75 properties per annum. Over the same period Stockton built 500 properties per annum.
  • High levels of deprivation.
  • Poor perceptions of place.
  • Low levels of business formation.

5.The town’s declining population and inward migration of workers was part of a growing evidence base that suggested much of the town’s housing did not meet modern requirements. The Tees Valley Housing Market Assessment 2004 revealed that although terraced housing formed 43% of the town’s housing stock it is only the housing choice of 11% of those planning to move.

  1. There was an evidenced need to restructure the supply of housing in the town to meet the needs of an increasingly aspirational population which has improved personal finance and increased mobility to choose where it wishes to live. This is called housing market failure; the response to which is called housing market renewal (HMR).
  1. To rebalance supply and demand and bring stability to Middlesbrough’s failing housing market it was apparent that significant demolition would be necessary. However, HMR is not is not purely a clearance issue. A series of initiatives were proposed, which in combination with a supply of attractive, new, high quality, mixed tenure homes would bring supply and demand of older housing back into balance thus restoring investment confidence.
  1. The following sections of this report highlight the progress made on the main older housing projects and complementary schemes developed to address housing market failure and schemes developed to support the older housing areas of the town.

WEST LANE REDEVELOPMENT

  1. In 1999 the West Middlesbrough Neighbourhood Trust considered the future of its older housing areas as one of the main themes of its ten-year New Deal for Communities funded programme. The area contained over 200 terraced properties of mixed tenure, characterised by declining property prices, an increasing number of void properties and associated rise in vandalism and anti-social behaviour. The physical and environmental conditions in the West Lane East area had deteriorated so significantly that intervention was required.
  1. As part of the Middlesbrough Older Housing Visioning Study, and following various phases of extensive consultation with the residents, a redevelopment programme has been agreed. Following a design and bid competition house builder Yuill Homes was appointed, in association with Endeavour Housing Association to deliver the new development of one, two and three bedroom homes for sale, shared ownership and rent.
  1. Phase 1 of the project, has seen 124 properties demolished at a cost of £620,000 (after a successful CPO 2005) leaving a clear site for Yuill Homes and Endeavour to commence a development scheme consisting of 73 new units. Construction in Phase 2 is scheduled to commence in October 2009 following the clearance of the 100 properties and will provide a further 65 new units.

TRINITY CRESCENT (NORTH ORMESBY) REDEVELOPMENT

  1. The Trinity Crescent redevelopment has seen the demolition of 275 mainly former Council-owned flats and maisonettes to make way to build 124 new homes (including 40 at affordable rents) and improvements to the surrounding public realm, particularly the market square. Work has now been completed on a new health village, a neighbourhood nursery and a 42 apartment extra care housing scheme.

13.The purpose of the redevelopment is to achieve a sustainable regeneration of North Ormesby which will deliver a high quality environment, well served by amenities and providing a comprehensive range of well designed types and tenures of housing that meets the needs and aspirations of present and future residents.

GRESHAM/MIDDLEHAVEN REDEVELOPMENT

  1. In July 2005 the Council approved the clearance of 1500 properties in Gresham/Middlehaven and their replacement with a transformational development of 750 new dwellings that would retain the town’s existing residents and attract new people from other areas.
  1. The Council commenced acquisitions in the clearance area in October 2006 and currently owns 305 properties within the clearance area. The Council also hopes to be able to secure the 134 Housing Association properties in the area. The Council therefore already has actual or potential control of 439 properties, 30% of the clearance area total. With the funding already committed, and maintaining the current rate of acquisitions, the Council could effectively control around 530 properties by the end of March 2011 (some 36% of the total). A plan showing the three phases for acquisition is attached as Map 1.

16.Of the 134 properties owned by Housing Associations, Fabrick Housing Group (Erimus) owns 97 and North Star Housing Group (Endeavour) owns 37. It is estimated that the 134 would cost the Council approximately £9 million to acquire. As it stands, the cost of acquiring these properties would need to be met by the Council. Detailed discussions have been held with both of these Housing Associations. It is anticipated that these will be acquired at nil value on the basis that the Housing Associations will respectively take ownership of the affordable properties developed at Hemlington Grange and in Gresham/Middlehaven.

  1. The Housing Service has regularly reported to Scrutiny Panel the position with regards compensation packages. This is provided at Appendix 1.

COMPLEMENTARY ASSISTANCE SCHEMES

Business Assistance Scheme

  1. The aim of the Business Assistance Scheme is to support local businesses in the Gresham/Middlehaven area. In the streets adjacent to the redevelopment area there are upwards of 75 local businesses covering a wide range of activities from local convenience stores, dependent on the local catchment area for their custom, to specialist retail service businesses, where location is not a key factor.
  1. The scheme began in 2006 when a range of measures were adopted to support businesses in Gresham/Middlehaven. Most work in the area has been directed towards improving local businesses through the Commercial Property Improvement Fund and the Business Assistance Package.
  1. The Commercial Property Improvement Fund provides grants of up to £7,000 to cover 70% of the total cost of approved work for improvements to the front elevations of buildings including upper storeys. Such work includes upgrading fascias, signs and shop fronts, the introduction or improvement of lighting features and the provision of canopies and external features.
  1. The Business Assistance Package provides grants of up to £2,000. The aim of the grant is to provide assistance to help develop and improve businesses. This may include publicity and marketing, minor property improvements, and the provision of specialist equipment or software for existing PC and laptops.
  1. In 2006, a successful bid for resources was made through the Neighbourhood Renewal Fund and a sum of £186,500 was secured for two financial years 2006-2008. In October 2008 an additional £600,000 was secured from the Working Neighbourhood Fund to provide assistance to businesses throughout the whole of Middlesbrough over the period from 2008-2011.
  1. Since April 2007, £50,337 has been spent on Business Assistance Packages with 33 businesses accessing the grant. Over the same period £137,445 has been spent on Commercial Property Improvements with 25 businesses benefiting. The business assistance scheme has had a positive impact on local businesses and has improved the overall image of areas where grants have been distributed.

Housing Facelift Improvement Schemes

  1. The Facelift programme has been developed to improve the external appearance of properties within the older housing area. Works include brick cleaning, re-pointing, replacement of boundary walls to the front of the property, replacement canopies and new UPVC doors and windows.
  1. The Council has invested approximately £3,300,000 in the facelift program in Gresham and the surrounding areas in recent years improving over 875 properties.
  • In 2005/2006, 134 properties on Laurel Street, Maple Street and Palmer and 103 properties on Abingdon Road were improved at a cost of £300,000.
  • In 2006/2007, 54 properties on Princes Road, 169 properties on Ayresome Street and 48 properties on Woodlands Road were improved at a cost of £1,300,000.
  • In 2007/2008, 28 properties on Crescent Road, 45 properties on Gresham Road and 120 properties in the streets surrounding MIMA were improved at a cost of £900,000.
  • In 2008/2009, 55 properties on Gresham Road and 119 properties on Parliament Road were improved at a cost of £800,000.

26.Map 3 shows the location of previous facelift schemes.

Home Assistance/Priority Area Assistance

27. On 1st April 2009 a new financial assistance policy for housing repairs and improvements was implemented. Two loan-based schemes, Home Assistance and Priority Area Assistance were introduced, replacing the previous grant based system.

28. Both schemes offer a maximum of £20,000 for works to bring properties up to the Government’s Decent Homes Standard. The assistance is available as a secured, interest free repayment loan or as an equity share loan. Equity share involves the loan amount being calculated as a percentage of the property value. When the property is sold or transferred an equivalent percentage is reclaimed. Some grant assistance is still available where there is insufficient equity against which a loan can be secured, or where there is some equity available, but this would not cover the full cost of the works required. Due to the relatively high set up cost of loans, grant assistance is also available when the total value of the works required is less than £1,500.

29. Priority Area Assistance is available to households living within the University Ward and eligibility is not related to income. Home Assistance is available to any household throughout the town who would be classified as vulnerable by the Decent Homes Standard. Assistance is dependent on a test of resources, which is carried out by an Independent Financial Adviser and which identifies whether the applicant would be able to access commercial lending.

Match Incentive Scheme

  1. The Match Incentive Scheme is a financial assistance policy developed to help owner-occupiers to invest in the upkeep and improvement of their homes. The scheme is designed to complement other housing improvement schemes in the older housing area. Residents living in North Ormesby and the Parliament Road area have been able to access up to £2,500 towards the cost of home improvements on the basis that the owner occupier will match the funding offered by the Council for the works. This scheme includes roof works, electrical works, damp proof works and replacement windows.
  1. Up until April 2009 the Council has provided £264,301 of funding to improve 90 properties in the older housing area through the Match Incentive Scheme. This figure has been matched by owner-occupiers meaning that over £528,000 has been invested in improving the homes of owner-occupiers in the older housing area.

OTHER INITIATIVES

Kickstart Housing Delivery

  1. The Kickstart Housing Delivery programme (KHD) is to address the difficulties facing stalled sites which are ready to develop (with planning permission in place). The Kickstart investment support is intended to address shortfalls in development finance due to the present poor market conditions.
  1. Following the HCA’s assessment of submitted bids, an announcement of short listed schemes was made by the Homes and Communities Agency on the 28th July. Nationally, more than 650 schemes applied for aid, which was short-listed down to 270. Regionally, 26 schemes were short listed, seeking a combined investment of £82,006,000 and providing 1,721 homes.

34. Of the five sites submitted in Middlesbrough, Trinity Crecent and West Lane have been shortlisted for the first wave of Kickstart funding. Funding sought for the two sites equates to £3,603,000 and would see the completion of 183 new homes this year and next.

Neighbourhood Management

  1. The Community Regeneration Service of Middlesbrough Council has recently undergone a review that has resulted in it focusing its services more acutely on the areas of need within the Town. The Service has recently expanded its provision to include Middlehaven, University and North Ormesby wards.
  1. Within these wards the Service provides a number of functions to support local communities. These include:
  • Neighbourhood Management - Engaging services through partnership working, improving outcomes for residents and services;
  • Community Development - Engaging with residents to develop individual, group and community potential, aspirations and responsibility;
  • Provision of Community facilities in the International Centre and Newport Community Centre; and,
  • Support to Community Councils with promotion, training and support to elected officers.

Selective Licensing

  1. Selective Licensing is managed by the Community Protection Service. Middlesbrough Council was confirmed by the Department of Communities and Local Government as a Designated Authority for Selective Licensing in exercise of its powers under Section 82 of the Housing Act 2004, on the 6th March 2007. Selective Licensing came into effect on the 5th June 2007 and will remain in force for a period of five years. To date 222 licenses have been issued covering 15 streets. It will take five years to licence all private rented properties in Gresham.
  1. Community Protection undertook a review of the impact of scheme had on crime and anti social behaviour in the first year. This review showed that there was a 26% reduction in crime and anti social behaviour in the Gresham ward, compared to the period before the scheme was implemented. Whilst selective licensing cannot take the full credit for this significant reduction, it has been acknowledged it played a crucial part to the drop in crime and anti social behaviour.
  1. The Selective Licensing Next Steps steering group is currently analysing crime and anti social behaviour data within Gresham covering the last two years. The findings will provide the basis for the potential to extend selective licensing into another single ward.

40. The Police and Problem Solving Group 2 have asked for North Ormesby to be given priority. This request has been factored into the review. However, any submission for designation must meet very strict government guidelines. The application process is very thorough and must have the necessary supporting evidence and resource costs in place to both develop and administer the scheme.

Private rented sector

  1. The private rented housing sector offers choice to those who cannot, or choose not to buy. Private rents have risen by 15% in the period 1997-2007 in comparison to house prices, which have doubled, leaving home ownership beyond the reach of a significant number of individuals. For these reasons the sector continues to play an important role in the housing offer with pressure also on social rented waiting lists, the importance of developing links with the sector is reinforced. In the older housing area the private rented sector is particularly important, illustrated by the fact that 43% of homes in the proposed Gresham clearance for instance. This sector is also receiving national attention through recent policy. The following section explores this further.

The Rugg Review

  1. The Government commissioned Julie Rugg and David Rhodes to undertake an independent review of the private rented sector, the findings of which were reported on 23rd October 2008. On 13th May 2009 the Government published their response to the review and entered into a period of consultation with stakeholders.
  1. In response to the Rugg Review the Government has made a raft of recommendations that are listed below:
  • the development of a national register for private sector landlords;
  • assessment of existing licensing schemes;
  • the introduction of mandatory written tenancy agreements;
  • ensuring the right coverage for the legislative framework;
  • regulation of private sector letting and management agents;
  • development of Private Rented Sector Investment (PRSI) fund;
  • safeguarding mortgages in the PRS;
  • improving the evidence base;
  • improving understanding of the PRS by the voluntary sector;
  • constructive engagement between local authorities and the private sector landlords within their area;
  • development of local letting agencies; and,
  • improved coverage for landlord accreditation schemes.
  1. In light of the recommendations of the Rugg Review and the Government’s response, further consideration needs to be given to the current powers available to the Council and other activities which it undertakes and how these can be developed in the context of national guidance and best practice. An initial meeting was held with local private landlords and letting agents on the 25th August 2009 and further joint working is planned for the future. This is a key policy area for the Council given the increasing emergence of this influential sector.
  1. This also forms a key element of the Housing Forum’s work programme, which is a sub-group of the Local Strategic Partnership’s Enhancing the Local Economy theme group. The Strategic Housing Service and Community Protection Service will be working closely to discover the scope of current services, plans and emerging key areas from consultation, good practice and policy guidance.

Private Rented Housing Strategy