Innovation in council housebuilding – Camden

In 2011, Camden Council developed its community investment programme (CIP) to support the delivery of funds to improve existing housing stock, invest in schools and community centres and build new housing (both new council housing and housing for sale).


In 2011, Camden Council developed its community investment programme (CIP) to support the delivery of funds to improve existing housing stock, invest in schools and community centres and build new housing (both new council housing and housing for sale). Camden has a large retained housing stock of 33,000 homes of which about 22,500 are tenanted (the rest being leaseholder).

The CIP is a 15-year plan to deliver 3,050 new homes, at least 1,400 of which will be social rent and Camden living rent homes. The council stresses that residents are at the heart of the CIP – ensuring that the homes they live in are safe, warm and genuinely affordable. More than 700 new homes have already been delivered. The CIP is delivered directly by the council: this allows it to work with residents from the start to the end of a scheme – it establishes a relationship early on that helps the council to understand resident priorities for their communities.

Camden uses HRA borrowing to fund new homes, with receipts from homes for sale used to repay the borrowing. The council has a robust model but is exposed to market risk where construction costs rise and/or sales values decrease. Camden is in discussions with the Government around increased funding flexibilities and increased support for the programme to increase speed and volume of completion of new homes.

Context

The council, as part of the CIP, has directly delivered a range of schemes and to date has approved schemes representing over £1 billion of investment. The CIP programme seeks to provide the community infrastructure needed to address inequality in the borough – this includes:

• new council homes – over 267 homes for social rent already built

• homes for sale – 356 homes for sale built to date, marketing them locally first

• Camden living rent homes – intermediate homes for rent for key workers and people on middle incomes. The council has let 65 homes to Camden living rent tenants, the majority of whom earn between £30,000 and £40,000 per year and 60 per cent of whom work in public sector roles

• improved educational environments for over 17,000 children and young people in the borough.

More widely, the council has set strategic objectives to create the conditions for growth, to secure safe, socially mixed and balanced areas (avoiding income polarisation) and to meet the housing needs of current and future residents. It sees its current approach as potentially economically game-changing.

Community engagement

Camden takes pride in its approach to community engagement and co-production in estate-led regeneration. It pledges that residents have a say in every aspect of local regeneration schemes, everything from selecting architects and new community facilities to designing kitchens and bathrooms. As part of a renewed pledge, the council plans to reiterate that it always makes sure it has the support of the majority of residents before a scheme proceeds.

A number of commitments to residents from the outset of CIP have remained the guiding principles for schemes and form the basis of the ‘offer’ to tenants and leaseholders. Some of the key elements of the CIP pledges are:

• There will be no net loss of council homes in Camden – more council homes will be built under the CIP as well as new social rent and Camden living rent homes for key workers and those on low incomes.

• Creation of mixed developments of social housing, Camden living rent and private homes because the council wants to maintain Camden’s unique social mix and ensure the borough remains a place for everyone.

• Camden tenants will not be moved out of the borough during regeneration and will be given priority on new council flats built.

• Leaseholders will be compensated for loss of their property at market value plus 10 per cent. If resident leaseholders wish to buy into the new scheme, where the new property is more expensive than the sale price of their existing home, they can access a shared equity scheme where the council will not charge rent on the uplift.

The council believes its strong investment in building community capacity, and engaging residents throughout the process, allows it to responsibly deliver estate-led regeneration schemes which can (but do not always) involve demolition alongside increasing density and providing returning tenants with a new high-quality home. The council believes it can therefore invest and improve community facilities and the urban environment in a way that almost no other developer in the locality could.

Funding

Only two per cent of funding for Camden’s capital budget is from Government – mainly grants, but where available the council uses retained right-to-buy receipts rather than apply for grant. The HRA borrowing cap limits the council’s ability to prudently borrow and, combined with the rent cap, makes it unattractive for the council to take on significant financial risk. The one per cent rent reduction has significantly limited scope to use the HRA to fund schemes and the move to CPI plus one per cent rent does not provide sufficient flexibility to address this restriction. 

The authority is borrowing at close to its headroom limit of £525 million. It cross-subsidises across the programme to deliver schemes that provide a high level of affordable housing alongside maximising capital receipts that can be utilised to fund additional community benefit elsewhere.

The council is also diversifying its approach to provide additional stability within the programme and address the breadth and scope of the housing crisis – this includes delivering Camden living rent units to support those on middle incomes. The council-owned company, Camden Living, manages the intermediate rent part of the programme. The council’s general fund makes a loan to the company to purchase the properties. The company manages and maintains the homes and repays the loan over 25-30 years.

The council has a number of sites to deliver transformative mixed-use and regeneration schemes in central London that could deliver an additional 2,400 homes. The most significant challenges are around the funding of schemes. The CIP is managed within the context of recent high-profile housing management issues, particularly around fire safety and responding to changes in national Government regulation. Camden has the capacity to deliver more new homes and has forged good relationships with the Greater London Authority and Government. It is asking them to partner the council in delivery as it moves forward and accelerates the scale and pace of delivery.