The council’s own development company will fill a vital need in the borough by providing 50 per cent affordable housing for local people according to the chief executive of Brick by Brick.
First planning permissions have been submitted on a scheme which will deliver around 1,000 residential units on 50 sites across the borough.
Colm Lacey, director of development at Croydon Council, told the Develop Croydon Conference that Brick by Brick was necessary to fill a gap in the market with affordable housing quotas achieved at the borough through traditional planning consents over the past decade standing at just over 15 per cent . In addition the local authority, as sole shareholder, will make money for the council from development activity.
It is doing this by developing a number of smaller infill sites throughout the borough and Mr Lacey pledged both the affordable homes and Mr Lacey stressed that both the affordable and private sale products were aimed at Croydon people rather than as investment properties.
“Typically, these sites aren’t sites that developers would traditionally take on,” he said.
“They are tough little sites that need really intricate work to be able to get them to work either in terms of costs or values. “
“We have a local sales and letting policy so this is first and foremost a owner occupier private sales product and a local affordable housing product – so this isn’t to provide off-plan investor sales; this is very much to sell to occupiers.
“The council gets first option over all of the affordable housing that’s created or the affordable rent, so that stays within the borough and feeds into our allocations policy. The intention is to provide for the areas in which we develop.
“We retain an interest as time goes on so Brick by Brick will own and manage the shared ownership and the council will own and manage the affordable rent product.
“There’s a real focus on good design. This is crucial because we made mistakes in the past – a lot of those mistakes are down to bad design.
“n terms of answering the housing crisis problem it’s that urban intensification that is really important. It’s much more likely that you will be able to deliver scale by delivering smaller numbers of units on many many sites rather than building very very large regeneration schemes.”
The council is looking to take advantage of rapid house growth growth in Croydon – over 18 per cent in the past year – with Mr Lacey still believing it has some way to go.
“Over the last decade in Croydon it is 35 per cent; the rest of Outer London 51 per cent and in London 67 per cent so although things have changed quite drastically in London over the last few years it seems there’s a lot further to go.
“In that context, this is about how can the council invest, capitalise, adapt in that infrastructure capital market to take advantage of that. That is the context in which Brick by Brick has been set up.
“The overall concept is to realise value for the council from each major component of the development process so to get some value from funding, where previously that value would go to a bank in the form of an interest rate; to extract value from the development, to release value from council land that would previously go to a developer; and extract value from the from the build.
“And the most important thing the council receives 100 per cent of the development profit as sole shareholder. Any money that this company makes comes back in.”