New pilot scheme to kick start stalled sites
Telford & Wrekin Council is looking at ways to speed up regeneration by piloting a ground-breaking scheme to help private companies complete housing developments delayed by the economic recession.
There are a number of housing schemes that either have not been completed or were never started because the financial crash resulted in falling land values – meaning the schemes were not viable for private developers to complete.
Known as "stalled sites", these are almost exclusively on brownfield land and are mainly located in Telford’s borough towns.
It is unlikely that work will resume on these sites for a considerable amount of time. These unfinished developments affect the economic and social wellbeing of Telford’s local centres because they are eyesores and hot spots for anti social behaviour, meaning that council intervention is even more vital.
Although the housing market has improved considerably in the last 18 months, this has largely been due to the volumes of new homes rather than a rise in property values.
The council’s cabinet is therefore being asked to approve a pilot scheme which will see capital funding of up to £156,000 and/or a loan being made available to a developer to help them complete their stalled development site.
Developers will be invited to bid for financial support with the chosen pilot project needing to deliver more than 10 homes. They must also be able to show they have exhausted all other funding routes. Bids will be evaluated against detailed criteria which will be published via the Council’s online procurement website.
Telford & Wrekin Council is proposing to borrow £2m in the short term to fund the scheme. This money will be recovered through a combination of the New Homes Bonus, additional council tax income payable on the new properties and developers repaying the loans.
To be eligible for the funding, developments must have achieved planning consent before 1 January 2014.
Telford & Wrekin Council has previously managed similar schemes on behalf of the Homes & Communities Agency which have been a resounding success.
In an additional strand to this pilot scheme, a similar plan is being put to cabinet which would give financial support to landlords and owners to bring accommodation above retail premises into use for residential purposes.
The scheme will support the regeneration of Telford’s borough towns and also provide valuable one and two bedroom accommodation which is in short supply.
This pilot will initially focus on Dawley and Wellington High Street as part of forthcoming regeneration plans for both areas.
The pilot will be used to gauge the level of interest from landlords and property owners and ascertain the most appropriate package of support needed to convert shops into residential properties.
As with the funding for stalled sites, any investment made by the council will be offset by future income from New Homes Bonus and council tax as a result of the properties being converted and occupied.
It is anticipated that the pilot scheme will help to establish the scale of the opportunity and the resources required to manage it on a borough-wide basis.
Both schemes will have strict eligibility criteria to ensure the new homes are viable including the need for a business case for each investment.
Councillor Charles Smith, Telford & Wrekin Council’s cabinet member for Housing, Development and Borough Towns, said: "The economic downturn in many ways has left councils with a unique set of circumstances to resolve and this is a proactive way of tackling the problem.
"By putting a fund in place to help developers to start building homes due to problems accessing finance, we will create a situation where everyone wins.
"It will mean housing schemes which have stalled are completed, more homes built and jobs created and it will all help to lift the local economy.
"We are a business supporting and business winning council. This demonstrates our commitment to creating the conditions that will enable the borough to continue to thrive.
"Unfinished and unoccupied sites have a detrimental social and environmental impact on adjacent communities, represent a financial loss to the council in terms of income from council tax and are a missed opportunity for employment and meeting our housing need."
Telford & Wrekin Council’s cabinet meeting on January 29 is being asked to give the two pilot schemes the go ahead and to approve the required initial borrowing for the stalled sites scheme.