Community Housing Fund launched

The government has launched a £163 million fund to support community-led affordable housing. The scheme is being administered by Homes England (the successor to the Homes and Communities Agency) and bids are invited under a 'continuous market engagement' process that will continue until all the money has been allocated or December 2019, whichever comes first.

Crucially, the Prospectus makes it clear that the scheme is available for conversions and refurbishment:

Conversions and refurbishments
20. In addition to new build homes, the Fund will support activities which will lead to the conversion or refurbishment of existing buildings for housing where there is evidence of need for this form of development.

Phase 1 offers 'seedcorn funding' along with funding for enabling works to unlock sites by developing infrastructure such as access routes. It should be noted that there  is no guarantee that an allocation of seedcorn funding will produce a subsequent allocation of capital.

The following might qualify for the seedcorn funding:

  • the costs of forming a corporate body
  • feasibility studies
  • surveys
  • architects fees
  • legal fees
  • training and capacity-building

Funding is paid in tranches (25%, 25%, 40%, 10%) against the achievement of particular milestones, but as far as can be told, there is no requirement to repay grant if the project fails to proceed from one milestone to the next, as might be expected to occur fairly frequently.

Local authorities can bid for the seedcorn revenue alongside community-led groups themselves, but only local authorities can bid for the infrastructure funding. The assumption with local authority bids for seedcorn funding is of course that it gets passed on to relevant local organisations, with an element of further support (apparently a minimum of 10%) from the local authority.

Capital funding for the affordable housing will be part of Phase 2 - not yet open for applications.

The scheme is available outside of London, with the expectation that there will be a parallel scheme in London where the GLA performs the Homes England role.

The rationale behind the scheme is captured by James Brokenshire in his Ministerial Foreword:

The community-led approach to house building galvanises local support and is driven by the commitment and energe of the very individuals and communities that it will benefit. This local support means that this sector is able to deliver locally affordable new homes in places and on sites where commercial speculative house builders cannot. As a result of the close engagement and creativity of local people, the community-led model typically delivers high design quality, high standards of construction and energy efficiency, and uses progressive, innovative building techniques. It supports the smaller house building companies and helps sustain the local economy by providing homes that are affordable at local incomes. For all of these reasons, the Government wishes to see the community-led house building sector grow.

As regards the affordability of housing, this seems to fall within the normal Homes England parameters. But what can be expected to  be different is the process of allocations to the housing, as presumably local authority choice-based letting mechanisms will be by-passed in favour of the community group.

And when it comes to capital allocations in Phase 2, rented housing has to be delivered via a Registered Provider, though the community group may manage the stock. But the Prospectus notes that  'Where an organisation is delivering homes for low-cost homeownership (Shared Ownership), for example, there is no requirement for that organisation to be a registered provider.'  Given that shared ownership includes an element of rent, the full significance of this is not yet entirely clear.

Current community-based providers who do not currently meet the community-led criterion may find it worth their while to reconfigure their modus operandi to achieve compliance. And local authorities would be advised to support them in doing so to achieve strategic objectives around empty homes.

The split of the full £163 million between revenue and capital and the split between seedcorn funding and enabling works within Phase 1 is not stated and presumably this is to allow maximum flexibility in progressing the programme.

The new scheme is described in a press release on the government's website and the Prospectus can also be accessed via our Information Library here.

News type: 
Practice: 

Comments

Here is the selfhelphousing.org briefing on the new fund, verbatim:

MHCLG Community Housing Fund Update  

James Brokenshire MP announced on 3rd July 2018 that the CHF Programme will go ahead.

The £163m Community Housing Fund 

£163m from July 2018 –31st March 2020.

  • Phase 1 – Revenue & Capital Infrastructure Funding   
  • Phase 2- Capital Funding
  • Sector Support Programme

Phase 1 : Revenue  & Capital Infrastructure Programme (Page refs. Relate to the CHF Prospectus )

Access To Funding:

Funding will be accessed via Homes England (& the GLA in London).

Registered Provider Status Is Not A Requirement For Phase 1 Revenue Funding:

Because Phase One does not entail the provision of grant directly towards the construction costs of affordable housing, it is not a requirement for organisations bidding under Phase One to be a registered provider of social housing with Homes England  (however, in order to access Phase 2 Capital Funding,  RP status will be a requirement  - see below). 

Refurbishment Projects Are Eligible:

“In addition to new build homes, the Fund will support activities which will lead to the conversion or refurbishment of existing buildings for housing where there is evidence of need for this form of development” P9.

Eligible Uses Of Grants Include:

Revenue Costs: ( for Community Led Housing Organisations & Local Authorities supporting Community Led Housing Organisations) P8.

  • Community group capacity-building, including seed corn funding to get started.
  • Project-specific professional fees and costs, including feasibility work & design work.
  • Planning applications, business planning and project management.

P11 “Under this route, organisations can apply for revenue funding to support a wide range of activity which will support the preparation and instigation of community-led housing proposals. Appropriate costs may include:

  • the costs of forming a corporate body
  • feasibility studies
  • surveys
  • architects fees
  • legal fees
  • training and capacity-building”

For applications for revenue funding Home England’s  expectation is that groups should contribute at least 10% of the estimated costs of developing the community housing proposal. However, there is no stated limit on how much can be applied for, or in relation to how many different projects can be put forward for funding. 

Payment of grant will be made on the basis of reaching the four milestones, set out on p20 of the Prospectus.

So…. the above means that it will be possible to secure revenue funding, in relation to items of eligible expenditure , on refurbishment projects, even though it may not be possible to subsequently apply for capital funding for the project(s) in question, because you’re not a registered provider – which will be a condition for Phase 2 capital funding.  

Capital Costs for infrastructure (Local Authorities only)

  • Development of associated infrastructure which will support community housing development, which may include: o access roads/roundabouts to open up a site;
  • site remediation or flood attenuation and utilities.

Eligibility:

The definition of what qualifies as “Community Led Housing” appears on P5/6.Remember the definition refers to both  community benefit as well as community engagement (which is loosely defined) and that  the aim of the definition  is partly to exclude conventional housing associations that might want to take advantage of this special funding stream   

Assessment Criteria (p15):

Homes England will assess all bids against the following key criteria:

  • Value for money
  • Deliverability
  • Strategic fit

Bidding:

The fund will run until 31st March 2020 and will remain open to receive new applications until funding is fully committed, or until 31/12/19, whichever occurs first. The Prospectus & Online Bidding Guidance can be found here:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/721611/CHF_prospectus_-_FINAL.pdf

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/721270/Community_Housing_Fund__Online_Guidance.FINAL.pdf

Phase 2 : Capital Funding Programme

This has yet to be announced. It will also be accessed via Homes England

Organisations intending to own completed low-cost rental properties funded by Homes England capital grant through the CHF must be - or intend to be - registered as a provider of social housing with the Social Housing Regulator, before completion of any developments funded through those programmes and any payment of funding.

Support Programme For Developing The CLH Sector

A third element of the CHF Programme is expected to be a Sector Support Programme.

An application is currently with MHCLG for funding  (c£5.5m) for a programme to support the delivery of the CHF by the four sector member  organisations ( Locality, CLT Ass., Cohousing UK & CCH). It covers:

  • Grants to Set up/establish Enabling Organisations/Hubs where none exist ( these therefore  would be in addition to the hubs/enablers funded by Power To Change & Nationwide).
  • Funding for developing  the network of Enabling Organisations/Hubs
  • Funding to resource training & accreditation for CLH advisors
  • Small Grants for new start up Groups
  • Funding for the creation of an on-line  single point of access to CLH
  • Funding For A Joint “Movement Building”Programme                                                                                                       

19/7/18

________________________________________________________________

 Homes England Contacts

If in doubt, contact someone ( see below) from Homes England to discuss what you have in mind.

104. If bidders have any questions about the Fund or how to bid, they are advised to email Homes England at communityhousingfund@homesengland.gov.uk.

Bidders should note that where questions raised may be of general applicability to all prospective bidders, these and our response will be published on the Homes England GOV.uk website.

105. To discuss particular scheme proposals, bidders are invited to contact the Homes England area investment teams. Details of area leads for this Fund are provided in the table below:

 

Homes England Operating Area

 

Contact name

 

Email address

 

Telephone number

Midlands

Sarah Streater

Sarah.Streater@homesengland.gov.uk

0115 852 6905

North East, Yorkshire and the Humber

Helen Fielding

Helen.Fielding@homesengland.gov.uk

0113 394 9393

North West

Ann Seipp

Ann.Seipp@homesengland.gov.uk

0161 200 6136

South East

Becky Ashley

Becky.Ashley@homesengland.gov.uk

0122 337 4001

South West

Matt Dodd

Matthew.Dodd@homesengland.gov.uk

0117 937 7221

NB: The Community Housing Fund in London will run via the GLA and at the time of writing ( 6th July) details have not been published.