74. Birmingham Municipal Housing Trust (BMHT)
74.1. Short description
BCC devised a way of delivering affordable but high-quality new homes that limited financial risk through the formation of BMHT. Properties on BMHT sites were a mixture of council homes and those for outright sale built on council-owned land. An innovative financial model was developed in consultation with contractors that reduced upfront costs and reduced uncertainty over planning permission. Planning consent for each site was gained and paid for by the council before tenders were invited so potential partners could tender risk-free financially. The houses were then built on council-owned land with an agreed number of properties on each site allocated for social housing. Payment for sale property land was delayed until developers sold their homes and then only on a plot-by-plot basis.
The concept of “site clusters” was developed where two or more sites could be treated as one within the council’s social housing policy. This meant a higher proportion of homes could be offered for sale in some areas maximising cross-subsidy funds to build further council homes. Developers were given the responsibility, within their contracts, for creating local apprenticeships in areas where BMHT sites were situated. Wherever possible, electricity-generating photovoltaic panels or air-source pumps were included as features in the new homes to reduce energy bills and help prevent families falling into fuel poverty. A number of homes were adapted for wheelchair use. By 2011, more than 700 properties were in contract under BMHT and more than 150 of these homes had been allocated to council tenants.
74.2. Conceptions and ways of addressing users
The City Council persuaded developers that building new homes in any volume in the current economic climate meant entering into new financial arrangements to minimise risk while providing social housing for the city. The key was to involve developers from the start so potential obstacles could be identified and solutions found at the earliest possible stage.
BMHT homes were allocated to existing secure tenants who had made an application for transfer. There were eight sites across Birmingham at the time of writing. Feedback from council tenants who received new homes through BMHT was good, with objectives to provide green technology to reduce fuel bills, quality design and larger homes for bigger families receiving particular positive comments.
74.3. Internal organisation and modes of working
BMHT was set up in January 2009 and a dedicated team of council officers assigned to the house-building programme. The team secured more than £16.7 million of Homes and Communities Agency grant under the Local Authority New Build and Public Land Initiative programmes from central government. A multi-disciplinary team of planners, architects and design advisors was established to ensure space and quality standards were prioritised. BMHT worked in partnership with developers.
Developers tended to want to build on sites in “more desirable” areas where homes for outright sale would be more likely to sell. BMHT came up with a way of clustering the more and less popular sites in developers’ contracts so all areas with BMHT developments would have a mix of tenures. Developers also often attempted to maximise profits by building to the minimum size and standards possible. The BMHT team prescribed the size, layout and materials of all homes from the outset to prevent this. It also made sure designs were “tenure-blind” with the same specifications for rent or sale homes. As with housing build standards, the level of green technologies was specified during tender and contract negotiations.
To help improve community cohesion, the BMHT team developed “good neighbour agreements” that established ground rules for positive behaviour among the new neighbourhoods at each site. The council asked each tenant to show that they agreed to abide by the agreements by signing and returning them. Unemployment was addressed by adding a requirement to contracts that developments provide on-site apprenticeships for local young people.
74.4. Interaction with the local welfare system
Since new financial freedoms were announced by the Government in 2009, which meant councils could keep rent from the homes they built rather than it being pooled nationally, Birmingham has built, or has plans in place to build, more homes than any other council in the country. The BMHT approach was adopted by the Homes and Communities Agency in its “accelerated disposal” initiative that encouraged local authorities to donate land to developers and recoup costs only when the homes built on it are sold. Interest in how the BMHT mixed-tenure model works has been shown by other local authorities. Developers have also looked to this model as a signpost to the future allowing them to continue in business on a sound financial footing while minimising their upfront and on-going costs.
It is felt that BMHT will have a lasting legacy beyond just providing somewhere for people to live. The renewable technologies that feature in BMHT homes will help to reduce carbon emissions as a whole and also help ensure that social housing tenants can avoid fuel poverty and benefit from the associated higher standards of health and well-being.
In addition, the new developments should be a boost to the local environment and economy with new homes, jobs and training opportunities for the communities surrounding BMHT sites. Providing homes in areas in need of regeneration should have a knock-on effect in improving the housing market in general there and help to create neighbourhoods where both tenants and homeowners choose to live in the future. The development work has protected construction companies from having to reduce their workforce in these areas and some new apprenticeships have been created for young people as part of the employers’ contracts for BMHT.