wcc_fairsharehousing_005 by ojpreece1

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									The Fair Share
Housing Scheme

A new shared affordable housing
product to support people who make a
big contribution to the local economy
January 2012
Cllr Jonathan Glanz
Cabinet Member for Housing and Corporate Property

Westminster City Council   Westminster City Hall   020 7641 6000
                           64 Victoria Street      westminster.gov.uk
                           London SW1E 6QP
Westminster City Council        The Fair Share Housing Scheme:A new shared affordable housing                  2
                                product to support people who make a big contribution to the local economy

                              One of the central themes of the Coalition Government’s period in office has
                              been localism, devolution and local flexibility. One of the key challenges for
                              local authorities has been in establishing what exactly this means for
                              councils, councillors and local decision-making.

            At Westminster City Council we have embraced these new opportunities, reforming our
            housing allocations policy, commencing a review of community governance and winning our
            joint bid to become a Community Budget pilot area. Increasingly, we are searching for local
            solutions to local challenges. In this new, localist world, we know that answers should not
            come from ministers or Whitehall bureaucrats. This is typified by the innovative Tri-borough
            project. By combining certain functions with our partners in Hammersmith and Fulham and
            the Royal Borough of Kensington and Chelsea, we are able to maintain high quality services
            even in a difficult financial climate. These approaches will not necessarily be adopted
            elsewhere but our focus is on improving the lives and opportunities of our residents.

            The Fair Share Housing pilot is another policy we have designed to deal with a particular
            local issue. Central London is, by any measure, an expensive place to live. Often only
            affordable for the rich or those with heavily subsidised housing via traditional social rents, the
            majority of households in the ‘middle’ fails to qualify for priority in the social rented market but
            are unable to afford private rents. In the private rented sector it is common for individuals to
            live with others whom they may or may not know in a shared house or flat but conventional
            social rented accommodation does not allow for this approach. Meanwhile, some areas of
            cities contain social housing which, despite being large enough, is less inappropriate for
            families. Parts of the West End, we believe, fall into this category.

            Our local solution is to provide a small number of high quality units for shared use by
            individuals which will be affordable to people earning the London Living Wage. Rents will be
            higher than social housing but significantly below the average market rate, which for some
            parts of Westminster is as much as £750 per month for a room in a shared house. Additional
            revenues will then be used to build new affordable homes or improve existing units. Because
            of limited availability and the expected high demand, we propose to prioritise those people
            who make a strong contribution to the area. Traditionally the term ‘key worker’ has been
            confined to public servants but we recognise that there are many more people who work
            hard or volunteer their time to make Westminster a special and economically successful
            place, without whom the city would not function as it does. These are people integral to the
            future of the area and we want to help strengthen their connection with Westminster.

            The Fair Share scheme will not work everywhere. It may not be required anywhere else but it
            will help address a particular local challenge and ensure that Central London remains a
            diverse, culturally rich and economically prosperous. I hope you agree.

            Cllr Jonathan Glanz

            Cabinet Member for Housing and Corporate Property
Westminster City Council   The Fair Share Housing Scheme:A new shared affordable housing                     3
                           product to support people who make a big contribution to the local economy

Summary                                                                                                  4

Major advantages                                                                                         6

Details                                                                                                  7

Case studies                                                                                             9

Key considerations                                                                                      10

Supportive statements                                                                                   11
Westminster City Council        The Fair Share Housing Scheme:A new shared affordable housing                4
                                product to support people who make a big contribution to the local economy

            In the context of reduced public funds and declining affordability for housing
            in Central London, Westminster City Council wants to support low wage
            individuals who make an active contribution to the capital’s economy
            but for whom buying or renting a property in Central London is an unrealistic
            prospect. Because most of these people will not qualify – or will not be
            prioritised – for traditional social housing, a new product is required.

            The Fair Share Housing Scheme will provide high quality sub-market rent accommodation in
            Central London on a shared basis for people who do their fair share for the local economy.
            Rents will be targeted in order to remain affordable to households on the London Living
            Wage and will be around a third cheaper than an equivalent arrangement in the private rented
            sector but the programme will require no government grant. Tenants will be safe in the
            knowledge that the new units will be of a good size, including larger than average double
            bedrooms and that the property will be fully compliant with all affordable home standards.

            New research has shown that high rents and living costs are increasingly forcing tenants in
            the capital to share homes. Central Government has recognised this in its Housing Benefit
            policy. The average number of people living in each property has increased in London by 33
            per cent in just two years according to HomeLet. Over the same period, London rents have
            increased by 23 per cent while average incomes have risen by just 6 per cent, creating
            enormous pressure on housing in Central London in particular. To compound the situation, as
            oil prices continue to rise and train fares are planned to increase by more than inflation for the
            next three years making it increasingly expensive to work in the capital. The Mayor’s
            impressive housebuilding record and the Government’s housing reforms as well as the
            introduction of Affordable Rent products will help but more can be done.

            The proposed pilot would encompass up to 25 units in Westminster’s central activities area
            which are currently allocated for affordable housing or proposed for affordable housing in
            existing planning applications. These areas often prove unsuitable locations for family
            accommodation due to their proximity to the throbbing heart of London’s night-time
            economy. If the pilot is successful Westminster City Council may look to design appropriate
            future developments with this model in mind or encourage developers to include suitable
            units within its mix.
Westminster City Council     The Fair Share Housing Scheme:A new shared affordable housing                5
                             product to support people who make a big contribution to the local economy

The pilot will:

•	 	 upport	workers	on	the	London	Living	Wage	who	play	a	key	role	in	the	economic	life	of	
   the city;

•	 Satisfy	demand	for	housing	without	the	need	for	further	public	subsidy;

•	 	ncrease	the	rental	streams	from	appropriate	properties	which	can	be	used	by	the	
   landlord to provide and maintain more suitable affordable housing elsewhere in the city
Westminster City Council       The Fair Share Housing Scheme:A new shared affordable housing                6
                               product to support people who make a big contribution to the local economy

            Major Advantages
            •	 Support a diverse local economy: Westminster and, more generally, Central London is
               a popular place to live and work because of the vibrancy and diversity of the area; people
               of different means and from different backgrounds coming together at the heart of the
               most exciting city in the world. This unique facet of London life is threatened by rising
               accommodation, transport and living costs.

            •	 No need for public subsidy: Whilst saving individual tenants around one-third on their
               rent, by charging individual tenants a rent of around £100-120 per week on a three-bed
               property, total receipts per property will be approximately £160 higher than would be the
               case under the Affordable Rent programme in Westminster.

            •	 Counter the exploitation of tenants by some private landlords: The Fair Share
               scheme would be targeted at people who are unlikely to be prioritised in the traditional
               social housing system but, despite working in Central London, struggle to pay full market
               rent for a property in the capital and are unable to save the necessary deposit to get on
               the housing ladder. These people can be left at the mercy of some unscrupulous
               landlords who charge extortionate rents for run-down properties. Our new product will see
               rents around 33 per cent lower than the equivalent in the private sector and also provide
               peace of mind to tenants who will benefit from having a reputable landlord who will
               ensure that rooms are of good size and the property is fully compliant with the standards
               required of affordable homes.

            •	 More stable and productive workforce: Commuting for hours each day on crowded
               public transport or snarled up roads threatens productivity amongst employees and
               makes it more difficult to staff shops and offices in the event of transport shocks caused
               by severe weather, for instance. Having a more local workforce increases flexibility and
               gives employees more leisure time.

            •	 Reduce overcrowding on public transport: Many of the key rail routes in to Central
               London are overcapacity and the line into Paddington is one of the most overcrowded on
               the entire national network with three out of five trains during the morning rush hour
               carrying more passengers than they were designed to. Providing more affordable
               accommodation close to where people work will help ease some of this pressure and
               promote a greener way of life.
Westminster City Council         The Fair Share Housing Scheme:A new shared affordable housing                7
                                 product to support people who make a big contribution to the local economy


We have earmarked a number of sites within Westminster’s Central Activities Zone in and
around the West End which would are suitable for the pilot. This will consist of new build and
conversion of existing stock (pending sign-off from the Homes and Communities Agency)
and comprise of up to 25 units. Soho Housing alone will be supporting affordable sharing
with around 20 properties over the next two years.

Legal status of tenancies
The properties would be let on assured shorthold basis, with all sharing tenants either jointly
signing a single tenancy or each individual tenant signing their own agreement with the
landlord. Tenants will be responsible for payment of their own rent and a contribution to
shared costs.

Tenure length
Flexibility will be one of the major advantages of this new scheme but a balance will need to
be struck so that tenancies do not turn over too regularly otherwise there is a risk that
additional costs will be incurred in regularly re-letting. To achieve this, standard notice periods
of 1-2 months would need to be strictly enforced.

The Fair Share scheme will be specifically targeted at those who make an active contribution
to the local economy by working in the City of Westminster or, where appropriate other
Central London boroughs for a period of 12 months or more. Others who can demonstrate a
newer but permanent connection will also qualify.

Eligibility would depend on a maximum income which would be subject to market testing and
consultation. It is likely that an income of at least £17,264 before tax would be required which
would reflect the London Living Wage minimum hourly rate of £8.30 per hour for a forty hour
week. A maximum income to access the scheme would be proposed in order to target the
opportunity at those single adults that have less affordability to exercise other housing
choices in central London. This might be set at around £30,000 before tax.

Precise detail on work eligibility will be subject to further discussion but it is likely that the
following sectors or professions will be prioritised:

•	 Nurses

•	 Special	Constables

•	 Teachers	in	the	first	three	years	of	career

•	 Hospitality	sector	workers
Westminster City Council        The Fair Share Housing Scheme:A new shared affordable housing                 8
                                product to support people who make a big contribution to the local economy

            •	 Performing	artists

            •	 Market	traders

            •	 Frontline	transport	workers

            •	 Those	who	can	prove	a	regular	commitment	to	work	unsociable	hours	in	Central	London	

            It is envisaged that the average rent levels although below median private rents for the city
            will be higher than those charged under the council’s affordable rent policy as stated in the
            Affordable Rent Statement of September 2011. In W1, for instance, the median rent paid by
            an individual renting a room is just under £190 per week, and the GLA median weekly shared
            room rate for all of Westminster is £144. If a 20% discount on the latter figure was used as
            part of the Fair Share scheme, a reasonable rent for each sharer might be around £100-120
            per week.

            Type of accommodation
            The most suitable accommodation type for this tenure would likely be 3 bedroom units. Living
            space and kitchen would be shared amongst all three housemates.

            The arrangement would require enough flexibility so that the accommodation could revert
            back into conventional use at the end of the pilot period. For this reason we are not
            proposing that en suite facilities or individual basins be provided in the bedrooms as would
            be in a traditional hostel type accommodation and licensed Homes in Multiple Occupation.

            Potential sites for pilot
            To test the market effectively for demand for shared housing arrangements that operate
            outside of private market and to be in a position to draw adequate conclusions about the
            ongoing viability of the scheme, we propose running small pilots in two or three separate
            locations – comprising of around 25 units within the West End. It is not possible at this stage
            to discuss externally the locations or the providers for the schemes owing to the initial stage
            of agreement reached for each of the sites and because consultation is still to be
            successfully concluded and permission obtained from the Homes and Communities Agency
            relating to a use change to around 10 units.
Westminster City Council      The Fair Share Housing Scheme:A new shared affordable housing                9
                              product to support people who make a big contribution to the local economy

  Case Study

  André Dique

  André Dique is a volunteer Special Constable in the Metropolitan Police. He lives in
  Leighton Buzzard in Bedfordshire and until recently patrolled out of West End Central Police
  Station. He now patrols out of Paddington Green Police Station in Westminster.

  In his day job as a Build and Release Software Manager based in Fulham, Andre would still
  struggle to afford to live in Central London and therefore still commutes for around an hour
  each way from Bedfordshire.

  When on the Response Team, duties commence at 7am which requires Andre to catch the
  4.42am train from Leighton Buzzard. Living closer to Central London would make it easier
  to carry out late night or early morning patrols and be available for emergency cover.

  Case Study

  Adrian Stones
  Adrian Stones is a tenant in one of the existing pilot schemes in Soho. The property is
  owned and managed by Soho Housing Association. He recently left his job as a civil
  servant to take up a position at a homelessness charity. He shares the two bedroom home
  with a professional ballet dancer.

  The proximity to their respective workplaces and the extra time afforded to them means that
  they have both also started volunteering locally in the evenings and at weekends and have
  become involved in local events and organisations. As well as the significantly lower living
  costs, Adrian considers a major advantage of this arrangement to be the chance to meet
  new people through his flatmate.
Westminster City Council         The Fair Share Housing Scheme:A new shared affordable housing                   10
                                 product to support people who make a big contribution to the local economy

            Key Considerations
            •	 Tenant behaviour: Although one individual tenant will be responsible for the tenancy,
               with little or no input into the selection process for fellow tenants, it will be difficult to hold
               them accountable for negative actions or poor behaviour by their housemates. Each
               tenant should be included in the tenancy or have their own individual agreement with the
               landlord to negate problems finding a Peer Tenant to take full responsibility.

            •	 Allocation of tenants and sub-tenants: Sharing arrangements in the private housing
               market may have other features that prove more attractive than affordability of the sub-
               market scheme. The main one is likely to be choice and control over whom to share the
               property with. It is unknown how a scheme whereby sharers have no input into whom else
               they share their home with will be viewed by potential applicants.

            •	 Competition from the private housing market: Sub-market housing schemes normally
               have a client group for which market housing is not easily accessible. But the sub-market
               shared housing scheme will be competing with shared housing arrangements in the
               private market. It is anticipated that three bedroom+ family size homes in central London
               that have been rented by families are likely to be rented by sharers once the Local
               Housing Allowance caps come into force for existing claimants in April 2012 meaning that
               there may be an increase in private landlord properties for sharers.

            •	 Costs: higher turnover of tenancies may mean a small increase in administration costs
               while the prioritisation of single-person households would, in theory, mean that some
               families who would otherwise have been eligible for those properties will remain in
               temporary accommodation for longer periods.
Westminster City Council      The Fair Share Housing Scheme:A new shared affordable housing                11
                              product to support people who make a big contribution to the local economy

Supportive Statements
“London’s economy will only continue to grow if working people are not priced out of the
rental market. I welcome Westminster’s innovative thinking and hope that other councils will
use the greater freedoms we’re giving them to think about how to help local workers live
close to their work.”

Rt Hon Grant Shapps MP Minister of State for Housing and Local Government

“As the only affordable housing provider based and operation exclusively in central London
we understand the housing market in Westminster and find there is significant need among
younger people with work in central London but no chance of affording to live here nor
eligible for traditional affordable housing. Intermediate or market rented homes work perfectly
in Soho and Covent Garden and we intend to provide more to support this innovative and
sustainable approach.”

Joe Chambers, Chief Executive, Soho Housing Association

“Barratt London supports this initiative to increase the availability of accommodation for
affordable rent for local workers and believes that The Fair Share Housing Scheme provides
an innovative approach to allowing individuals to access accommodation in Central London.”

Alastair Baird, Regional Managing Director, Barratt London

“It is hugely important that people on the London Living Wage who make an active
contribution to their local economy are supported by housing schemes such as this. Dolphin
Square Foundation continue to work with the City of Westminster to understand the housing
demands in central London and the Fair Share Housing Scheme is a great example of the
good progress being made in meeting these demands.

“By providing these high-quality and affordable shared homes, important steps are being
taken to support those looking to live and work in Westminster whilst also helping to
contribute to the capital’s housing needs. We are delighted to be looking to support one of
these pilot schemes”.

Brian Ham, Chief Executive, Dolphin Square Foundation
Westminster City Council        The Fair Share Housing Scheme:A new shared affordable housing
                                Westminster City Hall            020 7641 6000                               12
                                product to support people who make a big contribution to the local economy
                                64 Victoria Street               westminster.gov.uk
                                London SW1E 6QP

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