What are local authorities looking for in housing association partners?

Building Bridges, recently published by CIH, examines the benefits of partnerships between housing associations and local authorities.

Ross Fraser is co-author of Building Bridges and a social housing expert

Ross Fraser is co-author of Building Bridges and a social housing expert

3 October 2017

Our research for Building Bridges: A guide to better partnership working between local authorities and housing associations provides some interesting insights.

As might be expected, meeting housing need and tackling homelessness remain key priorities for local authorities, but increasingly they’re adopting a more commercial approach to development negotiations.  

Authorities increasingly seek to sweat their asset portfolio, for example via long-term joint ventures – where they share risk and reward; lease land rather than sell it; share the benefit of rising land and property values, and generate a revenue stream to compensate for reduced government funding.  

This impacts on housing associations in two ways – first, in councils’ approach to planning and enabling negotiations, and second, in competition for development opportunities from the local housing companies. More than 100 councils have set these up to add to new supply and, in many cases, to secure revenue from new housing. 

However, these objectives are threatened by a lack of capacity and expertise in local authorities. Planning department staff have been cut by 40% in recent years, enabling posts have been deleted in many authorities (particularly district councils) and the skills to negotiate complex multi-party development deals are often lacking. 

Another key insight from Building Bridges is the varying development mix that authorities are looking for in local plans. Whilst most councils have a priority need for new social rented homes, many are equally interested in low-cost home ownership and a high-quality, intermediate rental market.    

Housing associations have the skills and capacity that authorities need, the ability to access resources less available to councils and the financial strength to share risk on major new developments.  

But if they want to leverage these advantages and remain ‘partners of choice’, they need to understand better the varying priorities of their potential authority partners. More precisely – what offer each requires and why many authorities are now working with a broader range of delivery partners. 

Associations need to invest more time –particularly at a senior level – in regular and ongoing discussions with council counterparts and senior local politicians to develop a shared sense of strategy and secure a commitment to future land supply for housing associations.

Associations also need to flex their offer, through joint ventures involving a more equal sharing of risk and reward and (recognising the lack of capacity in authorities) by bringing opportunities to the authority rather than waiting for them to approach. Associations can also empower themselves by sharing resources –  such as offering voids for temporary accommodation; investing in shared housing for under-35s; jointly-funding local authority enabling posts and regional land availability studies, and by sharing their development skills, technology, data and market analysis.

Equally important, however, is that associations engage more effectively with authorities on the affordability of lettings and on allocations. Building Bridges proposes two innovations. First, setting up Local Housing Affordability Frameworks, which – with the right resources and capacity – lead to voluntary agreement on output and housing cost targets for new social and affordable lets and relets, intermediate renting and homeownership. Second, developing digital, jointly owned systems for allocations, to ensure an appropriate stream of applicants across the range of housing association products, not just for social rent.

If this seems a challenging agenda, it is a necessary one. Building Bridges includes detailed case studies on how housing associations are already embracing this challenge.

Building Bridges was published by CIH, sponsored by Vivid Homes and the Association of Retained Council Housing and written by Ross Fraser, John Perry and Gemma Duggan.

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