Getting it right

During the latter half of the 1990s, in a climate of reduced public sector capital investment on housing, securing private finance has been an essential component of estate regeneration in the most hard pressed areas. The creation of local authority-sponsored local housing companies enabled some of the larger estates in cities such as Liverpool and Manchester to be transferred. However, in the first two rounds of the Estates Renewal Challenge Fund (ERCF) 18 of the 27 proposals to transfer involved registed social landlords (RSLs) either receiving stock directly or through the creation of new subsidiaries. The existing RSLs have therefore made a substantial contribution to the development of a transfer programme for poor quality council housing.

Our research at the Centre for Urban and Regional Studies focused on nine estate-based transfers to existing RSLs which were funded through the first two rounds of the ERCF. All of these proposals achieved successful ballot results and £86.1m of ERCF subsidy eventually levered an additional £149.3 million of private finance to improve 6,000 properties.

The extent of leverage associated with these schemes is particularly impressive when the urban environment is taken into account. Two of the estates were located in Toxteth and Brixton, areas which had witnessed urban disturbances in the 1980s and 1990s. The Kingsmead estate in Hackney had been highly stigmatised for three decades, and in the case of estates in Liverpool and Durham the void rates exceeded 40 per cent - a higher level than any transfer which has so far proceeded to a stand alone local housing company.

From the nine case studies we were able to identify four major motivations behind the transfer of council housing to RSLs:

• A clear well developed housing strategy. This was particularly relevant in Hackney, where the local authority intends to transfer 7,000 properties to a variety of RSLs;

• Opportunities. Some local authorities had failed to secure resources for estate improvement from the Single Regeneration Budget and Capital Challenge;

• Task orientated. In Brent a major motivation behind the transfer of stock was to secure the redevelopment of 750 structurally deficit resiform dwellings;

• Community pressure. In Liverpool the pressure to transfer was generated by local residents who had experienced the partial abandonment of the estate.

The report highlights some of the difficulties experienced by the RSLs in securing the transfers over a two-year period. However it also reveals many of the areas of good practice which have arisen as housing associations have forged partnerships with local authorities, tenants and private sector funders. Some of these issues are listed below:

Securing the vote
In London, both Shaftesbury Housing Association and Ealing Family involved the senior management team in door to door consultation with tenants;

Building relationships
In Hackney, Liverpool and Oldham tenants were heavily involved in selecting the partner RSLs. This appeared to assist the housing associations in gaining legitimacy for their proposals;

Regeneration
The Limehurst Village Trust in Oldham, and the transfer at Pollards Hill in London both included an annual revenue stream to resource local regeneation strategies over the life of the business plan. This revenue stream will be used to lever resources from the national lottery and the SRB in the future;

Home ownership
The transfers at Harlesden in North London and Pollards Hill both made provision for owner occupiers to be represented on the board. Thus recognising that many tenants still aspire to home ownership;

Housing management
Most of the case study areas benefited from more intensive management arrangements following the transfer of the estate. This was particularly evident in the transfers in Oldham and Liverpool where initiatives included strategies to address low demand, anti-social behaviour, support for tenant participation and policies to address anti-social behaviour.

At the same time as highlighting good practice this study has identified issues which RSLs will have to address if transfers are to ensure the long-term success of highly deprived former council estates. Many of the transfers studied in this research occurred in areas where social and economic deprivation is widely distributed, and the local authorities continue to be large landlords. There are, therefore, many competing demands for resources in these localities. There is some evidence that some local authorities have approached the transfer of small- and medium-sized estates in a highly opportunistic manner and, having disposed of the property to an RSL, have moved the focus of their attention to other priorities in the locality. This opportunism was reflected in a weakness in partnership working in some areas, where the local authority does not have a holistic strategy in place for the neighbourhood and where little negotiation has taken place with RSLs relating to the improvement and co-ordination of local authority services. A preoccupation with bricks and mortar issues has not been particularly successful in deprived areas in the past, and this is an issue which RSLs will need to address if they are not to experience difficulties in maintaining the transferred estates in the future.