In these fraught times where people can’t sit around a table without fear of making each other unwell, it’s hard to get professionals together to talk shop without risking enduring an interminable series of Zoom meetings. We just have to do our best in this brave new world we live in.
Last week, Northern Housing replaced its usual working lunch with a virtual roundtable, featuring seven big hitters from the housing sector. The result was a wide-ranging discussion about the growing need for space in developments, the net zero agenda, and how housing providers will be crucial if we want to hit the government’s 300,000 homes a year housing target.
The conversation, held over Microsoft Teams, starts with a discussion about COVID-19 and how it has changed our guests’ future pipelines – after all, the coronavirus is already having numerous impacts on housing schemes, affecting decisions on design, location, and providers’ net zero ambitions.
Sandy Livingstone, executive director of property at Onward, said that Onward is not ‘radically changing’ its pipeline as it has already decided to build in areas with connectivity, giving residents access to public transport and cycling routes. Chris Bowen, managing director of Torus Developments, agreed with this approach, admitting that Torus has ‘rethought’ after COVID-19’s emergence.
“We think the balance is right in terms of what we offer and, if anything, there’ll probably be more demand than less,” Bowen said. “We don’t rely on cross-subsidy models, particularly in the North, for making schemes work. Adding to what Sandy said, it’s thinking more about what we build and the places we’re trying to create.”
Charlotte Carpenter, Karbon Homes’ executive director of growth and business development, highlighted how COVID-19 has led to greater demand for space to work from home, while Kate Howe, development manager at Public Sector PLC, raised the issue of access to green space and outdoor spaces. Livingstone stressed that such space has to be built into developments at the start.
“If we’re going to be there longer-term we probably have to provide that space from the beginning; you can’t retro-fit it,” Livingstone said.
Our guests raised several issues that are giving them sleepless nights this summer: the need to cut carbon emissions, contractors going under, and, of course, Brexit. Carpenter raised the concern about the future of section 106 agreements, in the context of the government’s planning reforms announced last week.
Carpenter called replacing section 106 agreements with a national infrastructure levy a ‘retrograde step’, warning that it risked creating more ‘monoculture’ communities. Bowen agreed, explaing how the agreements helped Torus build affordable housing in areas where it wouldn’t have otherwise.
“The problem with section 106 development is that I’m not sure it necessarily adds net housebuilding numbers, but I believe it does add numbers of affordable units,” Carpenter said. “I am concerned about the impact on the supply of affordable housing in some locations going forward.”
Our guests also raised fears about construction as Bowen expressed concern about risks to the construction market, given the 40 schemes that Torus currently has on site. Gentoo’s development director Joanne Gordon, chairing the session, said she wasn’t just concerned about construction cost but capacity too.
“At the minute, we find that on our tenders for principal contractors we don’t get a huge response. We get a similar group of contractors responding time after time,” Gordon said. “If we got into an insolvency situation the risk of that might be heightened.”
Coming from the contracting sector, Siobhan Ryder, head of partnerships at Great Places, brought a unique insight to the discussion as she called for greater partnership between housing providers and housebuilders. She stressed that ‘much more’ partnership work, including early engagement rather than single-stage tendering, will be needed to save regional contractors.
Howe wondered whether the issue would lead to more housing associations setting up their own contracting arms, while Ryder pointed out that a few represented at the roundtable already are. Livingstone agreed with Ryder’s call for collaboration to support contractors.
“We’ll end up with lots of houses to build but not necessarily people who can build them unless we look after them a bit better,” he said.
When it comes to the net zero agenda, our guests were in no doubt that creating zero-carbon homes is necessary but expressed concern about how expensive it will be. Adam Cunnington, CEO of Public Sector PLC, said there are immediate challenges, while Carpenter identified the key tension as being between short term investment versus long term benefit, especially in the North where homes are of lower value.
Gordon and Bowen raised the housing industry’s issues of sourcing MMC and its understanding of these new methods, while Howe suggested that Homes England needs to do more to back the industry’s move towards lower carbon homes.
“There’s no question at the moment that the world doesn’t place a premium yet on zero carbon, so any investment you put in, it’s very hard to see what can get out,” Cunnington said. “If you put a premium on the rent, people don’t necessarily realise they might be saving on their bills.”
Hearteningly, several of the associations represented at our roundtable are already delivering MMC housing developments. Carpenter estimated that around 12% of Karbon’s new developments are using MMC, while Onward is aiming for 20% in five years’ time, Livingstone said.
However, until housing associations are building using MMC at volume, they won’t see the price go down, Ryder warned. Cunnington suggested looking at the specifications of MMC, asking whether a more common specification could produce savings and still reflect local character. Housing should think differently about procurement, he said – after all, MMC manufacturers aren’t contractors.
“[Asking MMC manufacturers to build homes] is like asking Volkswagen to build roads – it’s best to [let them] focus on what they’re good at and let someone else handle the infrastructure elements,” Cunnington said.
Despite everyone’s concerns about how it will work in the short-term, everyone at the roundtable appeared to see the value in MMC and its potential to attract a more vibrant, younger workforce that would shy away from working on traditional construction sites.
Our guests welcomed the idea of aggregating demand to support new entrants to the MMC sector, while recognising the prohibitive set-up costs such new entrants face. Bowen stressed that housing associations should support MMC in a more strategic way, while Cunnington hinted that bringing councils on board will be crucial to hit the government’s 300,000-home annual target.
“There’s no question to my mind that to drive up output we have to involve local authorities as well as RPs [registered providers], and the only way to get that capacity and delivery is to go outside the current framework of housebuilders and major contractors who do that,” Cunnington said.
“There’s a great opportunity to reskill and to provide jobs that are slightly less grim than being out in a muddy field in the depths of winter… I think it’s absolutely key to driving up housing output to move into a different direction.”
With her final question, Gordon asked whether the RP sector has enough capacity to increase its delivery in order to meet the annual housing target. Livingstone and Bowen were both confident there absolutely is – as Bowen said, social housing providers are already looking to build one in three homes in the Liverpool City Region in the next three years. However, the environment must be right.
With talent concentrated at the top and bottom of the sector, Cunnington and Carpenter spoke about providers sharing their skills and capacity, as Karbon is developing on behalf of several smaller RPs. They also stressed a focus on growing homegrown talent. Here, Ryder agreed that housing providers should fill that skills gap in the centre, with a generation of surveyors and professionals lost due to the 2008 financial crash.
“[Great Places] have a comprehensive training regime in place and when people do join us they understand what it’s like to acquire a site and see that site through… That’s kind of how our training works in house,” Ryder said.
“There are other organisations that offer that, but growing your own talent, as Charlotte said, is one of the ways we can ensure that we are in a position to deliver the government numbers that are needed.”
It seems a positive way to end the discussion, with housing providers focused on promoting homegrown talent and developing the housing leaders of the future. With COVID-19 unfortunately set to stick with us for a while yet, it gives us hope that our RPs have a role to play in delivering the more resilient communities we need.
Image (from top to bottom): Kate Howe, development manager, Public Sector PLC; Adam Cunnington, CEO, Public Sector PLC; Chris Bowen, managing director, Torus Developments; Sandy Livingstone, executive director of property, Onward; Charlotte Carpenter, executive director of growth and business development, Karbon Homes; Siobhan Ryder, head of partnerships, Great Places Housing Group; Joanne Gordon, development director, Gentoo.