This is the second post on the housing proposals in a report being considered by the Welsh Assembly. This time it is all about the numbers, which is the acid test of whether aspiration can become reality. All too often politicians promises fall at this hurdle.
The report starts at the outset, with a bold statement of intent that the aim is to build 20,000 affordable new homes for older people. Certainly an aspiration worthy of the scale of the problem. If delivered, it would make a transformational difference to retirement housing in Wales. So the key question has to be how realistic is it ?
- The first thing is the date by which it will be achieved. Dates always slip back and planning delays go with the territory. Perhaps that is why I can’t find an end date.
- the next key word is ” affordable “. This makes the target even more challenging, because in total you would then have to build 40,00 new homes if optimistically you assume 50% of them could be affordable and all for older people.
- The current rate of house building in Wales is around 6,000 new homes a year for all tenures and most of these are for family housing. At that rate it would take 7 years to build 40,000 houses.
In your wildest dreams, let’s imagine for a minute that the 20,000 new homes for older people were to happen. What would it mean on the ground ?
- To reach the total of 20,000 you would have to build a big public and private programme of retirement housing. The magnitude is unprecedented —- 20 retirement villages in the larger conurbations around Wales in for example :- 4 in Cardiff, 4 in the Swansea area, say 2 in Newport, a few in some of the valleys and some seaside towns like Llandudno. ( It is hard to get to 20 ). 20 villages of 250 units each = 5,000 homes.
- Then you need to add 500 smaller schemes of say 30 units each in almost every remaining urban area.
- Now all you need is the land —- say 6 acres for each village, that’s 120 acres, plus an acre and a half for each small scheme that’s another 750 acres. In total not far off 1,000 acres !
- Oh! And the money. Say at £200,000 per unit for 20,000 homes that’s a capital cost of £4,000,000,000. Yep £4 billion !
I am not claiming my fag packet assumptions are correct, but they are as likely to be as accurate as the pie in the sky figure of 20,000 new homes. I would love for someone from the Welsh Government to explain how they got to that figure.
I want to be positive about these proposals, because they are laudably ambitious, which is essential, faced with the growing numbers of older people and their increasing age and frailty profile.
BUT the devil is in the detail and here are some of the barriers you first have to overcome :-
- Planners would need to accept that financial viability of affordable retirement housing is difficult. They are expensive to construct if they have substantial communal spaces. Then additional section 106 requirements for 50% affordability and CIL payments make it almost impossible without substantial housing grants. That is why so little affordable retirement housing is being built anywhere in the U.K. These schemes need a fair wind and planning requirements need to be relaxed.
- Revenue viability is also a challenge, made worse by the current squeeze on housing benefit and supported housing funds.
- The old financial models depended on high capital grant levels and high service charges supported by housing benefit. That money is not coming back in these times of austerity, but there is still a huge asset locked up in Older People’s own homes. The report highlights the high level of home ownership and calls for new ways to use these assets.
Therein lies the key to developing a big housing programme which doesn’t require substantial public funds, but it is an answer that requires a sophisticated understanding of housing finance and very careful marketing to older people themselves.
I will collect all these thoughts into a positive and innovative proposal in my final post on this report next Sunday.