Dawn of the dead

1. Tenant equity stakes

What was it?
One of the many promises in Labour’s 2001 manifesto was to “examine the ways in which tenants can be helped to gain an equity stake in the value of their home”. Like a lot of Labour ideas, the concept of equity stakes was dreamed up by the Institute for Public Policy Research. It asserted that giving tenants a share of the value of their council homes would provide those on lower incomes with financial security and a foot on the bottom rung of the property ladder, while also retaining stock. What happened to it?
The manifesto commitment to examine the idea has certainly been fulfilled – four years on, it’s still under consideration. In November 2002, Derby and Oldham arm’s-length management organisations wrote to the ODPM offering to trial equity stakes for their tenants, but they heard nothing back. In March 2003, the government concluded that the case for it still hadn’t been proven. Baroness Dean’s homeownership taskforce report tried again last November, recommending all tenants be given the “right to shared ownership”. The government responded in May, saying it was exploring in more detail the option for social tenants to purchase their rented home with an equity loan or to buy their home on a shared ownership basis. Is it coming back to life?
As a form of shared ownership, equity stakes are still in vogue. Economist Kate Barker’s report advised a thorough review of the right to buy to stem the flow of housing sales, for which equity stakes are seen as a possible alternative. Meanwhile, the Lib Dems adopted the cause as their own in a September 2003 policy statement.

2. Operation breakthrough

What was it?
Back in the early 1990s, Housing Corporation deputy chairman Sir Norman Wakefield – a former chairman of housebuilder Lovell – enthusiastically launched Operation Breakthrough to bring social housing into line with group procurement and standard house types. The corporation mooted savings of 30% per home between 1990 and 1995; but the sector worried about an invasion of private housebuilders wielding bulk contracts and identikit designs. Eight housing association partnerships across the country got involved, with mixed results. The corporation evaluation in 1996 revealed that costs saved in the first two years were swallowed up by increases in the third, and the average works cost was no different than usual. But the evaluation also said the three-year test period from 1992-5 was too short. What happened to it?
When Wakefield left in 1993, it fizzled out. Wakefield’s startling suggestion that the corporation become the procurement agent for the whole sector probably helped to put off his successors. Is it coming back to life?
In April Neil Hadden, the Housing Corporation’s chief executive for investment and regeneration, hinted that mass procurement was back on the agenda. Value is certainly a driving force in this year’s development partner programme. The approved partners list means bulk buying, while those not on the list hurriedly form consortia – a key criterion of Operation Breakthrough. Last November, the corporation also unveiled standard house layouts.

3. Business expansion scheme

What was it?
In 1984, the Conservatives introduced generous tax breaks for private investors who put their money into housing in an attempt to boost the private rented sector. A number of housing associations – including Peabody, Knightstone and Airways – set up companies to manage the resulting market or sub-market stock, although details of exactly how much money flowed into rented housing or how many homes resulted are patchy. What happened to it?
In 1993, then chancellor Norman Lamont put a stop to the programme – no doubt alarmed by the fact that the Treasury had lost £1.65bn in tax breaks. In a way, the project was a victim of its own success – its generosity did capture the imagination of private investors, but critics also complained that it was open to misuse. Is it coming back to life?
Not a chance: as shadow chancellor, Gordon Brown blasted the scheme as “a tax-avoidance opportunity for top-rate taxpayers and banks”. But the goal of drawing private money to build new housing has resurfaced. There are echoes of the scheme, and its heavily restricted successor housing investment trusts, in the property investment funds (PIFs) outlined in the last Budget. There are also differences – PIFs are aimed at the wallets of large corporate investors rather than individuals, and they’re more likely to be modelled on the successful real estate investment trusts operating in the USA and elsewhere. The main difference is that they are unlikely to be anywhere near as generous.

4. Housing stock swap shop

What was it?
In the late 1990s, Harvest Housing Group’s chief executive Ian Perry proposed a bold plan to rationalise the heavily fragmented stock of more than 130 associations in the North-west. He called for the creation of a database of who owned what and where. Associations that owned properties cut off from most of their stock – making it harder for them to be included in community services – could then swap them for others closer by with another association. What happened?
Not much. The Housing Corporation didn’t get behind the idea, so there was little incentive for associations to sign up. Is it coming back to life?
The idea of stock rationalisation is very much here to stay. And last May, Manchester council, the corporation and the National Housing Federation launched the Rational Approach to Neighbourhoods project along very similar lines, sparking fears among smaller associations that they would be swallowed up by the big fish. Little has been heard since but an announcement is said to be pending. In Liverpool, 13 associations have struck a deal to share out stock in the market renewal area more sensibly, through the LIFE (“lead, influence, follow or exit”) model – which Perry claims also originated at Harvest. But most ominously for reluctant rationalisers, corporation supremo in the North, John Carleton, raised the spectre of forced mergers and said the corporation would step in to enforce stock rationalisation. Whether chief executive Jon Rouse will have the stomach for it remains to be seen.

5. Millennium communities

What were they?
The Millennium Communities vision was unleashed by English Partnerships in 1997. EP was to select sites around the country and build between 5000 and 6000 homes over a seven to 10-year period. The vision was packed with lofty ideals – the developments would use minimal electricity, they would boast high-quality design and construction, revitalise local economies and promote social inclusion. And deputy prime minister John Prescott said they would be a “showcase to the world”. The first site was in Greenwich and, by July 2002 plans for Allerton Bywater, New Islington, South Lynn, East Ketley, Oakgrove and Hastings had followed. What happened to it?
While it would be unfair to say Millennium Communities had gone away, outside of Greenwich the initiative has been very quiet. Last week, EP published an update on its website, which revealed that seven years into the project, of the 6915 homes planned just 668 have been completed or are under construction in Greenwich, south-east London. At three sites, work has yet to commence. East Ketley in Telford and Hastings in East Sussex are predicted to be the last to finish in 2012 – 15 years after the initial announcement. Is it coming back to life?
Well, EP’s update is a sign that something is stirring in the towns earmarked for the project. Although the Millennium Communities’ inauguration preceded the Communities Plan by six years, the government’s housing ideals and rhetoric for sustainability appear to have changed little. As work progresses, the successes of EP’s rediscovered pet projects will no doubt be held up as examples for the rest of the sector to emulate – however long they take to get there.

Could these ideas rise again?

SkyZED
This was to be the futuristic follow-up to the Peabody Trust’s environment-friendly but costly BedZED development. Bill Dunster Architects intended to incorporate green fuel generation and water recycling in the ultimate high-density, low-footprint structure. The practice was bent on proving that high-rise homes can make for sustainable communities. But the project ran aground when the London borough of Wandsworth refused to make all the land available. Dunster says the tower could yet be built – in a slightly stunted form – elsewhere in the capital. Zero-energy development lives on: last week the ZED team announced a joint venture with PRP architects on a £1.5m, 12-flat key-worker development in Lambeth, south London. Leasehold transfers
The government continues to say no to councils clamouring for a “fourth way” of investing in housing beyond stock transfer, arm’s-length management and the private finance initiative, but it’s not for want of alternatives. One suggestion was leasehold transfers, whose development was led by Ian Doolittle at lawyer Trowers & Hamlin for, among others, Bolton council. The council would lease its homes to a “community renewal trust” – a registered social landlord – to be upgraded and managed for a period of at least 50 years in Bolton’s case and retain the right to recover them thereafter with government approval. It would thereby combine elements of the PFI with the ALMO’s selling point of continued council ownership. Doolittle says the idea met with a muted response when he spoke to ODPM officials 18 months ago. Keith Hill insisted there was “no fourth way” in this magazine last week (page 20), but with councils like Camden unable to meet the decent homes standard, maybe there’s a chance this will change … Long-term development contracts
The Housing Corporation’s new development partner programme may signal a very different approach, but for some it’s not different enough. Every time development policy has been redrawn over the past 15 years, the G15 group of London’s biggest housing associations has argued that, rather than choosing projects it wishes to fund, the corporation would get more for its money by entering into long-term contracts with associations for a set amount and an agreed number of homes. The corporation has never taken this particular plunge. Until now – Neil Hadden, the corporation’s assistant chief executive for investment and regeneration, says: “We do want to develop longer-term programmes with the best RSL developers. The 2004-06 ADP is a step in that direction.”