WYCA strives to maximise brownfield spend
With its £89m Brownfield Housing Fund now in year four of five, the West Yorkshire Combined Authority is pushing on all fronts to make sure it gets full value from the government programme.
The Combined Authority was set the target by government of enabling the start on site of 5,400 to 7,855 new homes over the five-year period of the fund, with a start on site required by March 2025 to qualify.
As a report to the WYCA meeting to be held on 7 December details, the programme was set up in September 2020, since when “significant progress has been made”.
At the time of the report’s compilation, said the report:
- The Wakefield District Housing scheme on the site of the former Pontefract fire station completed earlier this year, providing 37 affordable homes
- Nine schemes are currently in contract and on site
- A further six projects have received full business case approval and are finalising due diligence checks.
Together, said the report, these 16 projects equate to more than 3,500 new homes, including more than 1,100 affordable homes.
In addition to this, seven projects submitted full business cases for appraisal in November 2023, and two more could be signed off at the 7 December meeting.
These are a £26m, 88-home affordable rent scheme across five plots in Gipton and Seacroft, Leeds for which £1.7m of BHF support is requested; and another Leeds scheme, this one being a fully affordable rent 200-home £41m scheme in Saxton Lane, seeking £1.2m.
These nine pipeline projects equate to a further 1,200 new homes, including 477 affordable homes.
Is WYCA on track?
The £89m allocation of funding from government was intended to encourage new housing developments on brownfield sites, where a market failure has prevented development from taking place.
Identification of projects suitable for the fund has been facilitated through two calls for projects, said WYCA, and the approval of individual projects is subject to their successful progression through an assurance framework and related legal and commercial due diligence.
The key criteria as set by the government are that projects must be ‘Green Book compliant’ with a benefit cost ratio floor of 1; and they must have evidenced market failure and demonstrate that they cannot proceed without public sector financial support.
In addition, and in recognition of mayor Tracy Brabin’s wider housing and climate aspirations for the region, projects which include affordable housing and/or building designs with low carbon characteristics have been prioritised where possible.
This aligns with the approach taken to identify projects across West Yorkshire’s wider strategic housing pipeline and the focus areas of its strategic place partnership with Homes England.
As the report outlines, while the programme team has identified sufficient projects to achieve the government’s housing output and spend targets by the March 2025 deadline, there is a definite risk this will not be achieved, due to being reliant on third parties to meet delivery dates.
The factors impacting those third party organisations and developers are familiar enough: annual spend targets; low land values impacting benefit cost ratio calculations; capacity constraints; and challenging market conditions.
As such a number of projects have either withdrawn from the programme, or paused development of business cases whilst developers review the continued uncertainty and volatility in the market – leading to fluctuations in the pipeline.
Officers, keenly aware of the looming deadline, have reviewed mitigation options with WYCA’s place, regeneration and housing committee and partner councils to ensure that the region maximises opportunities to deliver.
The 7 December meeting will also be asked to approve the extension of delivery timescales for four approved projects, including Citylife’s Sky Gardens. Support was agreed for this scheme in September.
Is there any wiggle room?
What might help here is a more flexible approach from government – however, to date WYCA has struggled to get Whitehall to listen.
As the report outlines: “The Combined Authority also continues to work with and raise the challenges with Government officials and Ministers regarding programme delivery, highlighting that increased flexibility devolved locally would allow the programme to boost delivery across the region.
“As the Combined Authority will also recall from a previous meeting, the Mayor wrote to the Secretary of State for the Department for Levelling-Up, Housing and Communities, specifically flagging that the criteria has meant the fund has supported more viable schemes in Leeds. At the time to writing, no reply has been received.”
Delegating authority to the chief executive to speed up project approvals in the last year of the programme will be requested at the next update in early 2024.