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HBF Member Briefing: Government invites councils to team up with developers to bid for £200m fund to create Brownfield Housing Zones

Date: 13/08/14

Government invites councils to team up with developers to bid for £200m fund to create Brownfield Housing Zones

Housing Minister, Brandon Lewis has today published the bidding criteria for a share of £200 million in recoverable investment funding to help create 10 new Housing Zones on Brownfield land. Bidding will formally open on 22nd August, with submissions from councils and private sector partners invited by noon on 3rd October.

The prospectus asks for local authorities and developers to come forward in partnership with councils invited to submit an expression of interest in designating a Housing Zone and include a bid for funding from a private developer or a number of private developers. Access to recoverable funding and other benefits will be dependent on meeting the eligibility criteria, including setting out how the planning process within the zone will be streamlined to unlock or accelerate delivery of new homes.

Successful bidders will benefit from:

  • Access to recoverable investment loan funding of £200m to enable delivery of infrastructure, including demolition and land remediation work or funding for other facilities or infrastructure that could directly unlock house building e.g. energy infrastructure, schools, community facilities
  • Priority access to ATLAS planning and technical support
  • Increased priority for bids to the Local Development Order Incentive Fund announced last week
  • Dedicated brokerage support from central government in attempting to remove existing barriers to development
  • Local authority access to cheaper borrowing through the Public Works Loan Board

In order for a Housing Zone to be eligible, the bids:

  • Can include one or multiple sites within a designated area
  • Should be for the designation of Zones which are majority Brownfield
  • Will help to deliver a minimum of 750 units (while there is no firm upper limit, the prospectus sets out that it is expected that each zone be capable of delivering 750-2,000 units)
  • Can include one or multiple sites within a designated area
  • Will provide details of how the planning requirements for the Housing Zone will be implemented in order to speed up the development. This may be through, for example, outline permissions being in place, pursuit of an LDO or planning performance agreements
  • Should propose an accelerated build out rate
  • Include either (i) a bid for investment funding from one or more private sector partners, or (b) confirm that the local authority only wishes to apply for a Housing Zone designation which will not be eligible for government investment
  • Demonstrate local support

Access to the £200m recoverable funding will be dependent on:

  • Confirmation from the private developer that the project is fundamentally viable
  • Total public funding to be below 50% of total project costs
  • A clear link between the works to be funded and the acceleration of the development
  • The funding being for capital expenditure
  • Appropriate security being in place
  • State-aid compliance
  • Demonstration that the developer has the capacity to deliver each scheme

Funding will be made over three years starting in 2015/16 and bids are being encouraged from partnerships that seek to explore ‘innovative building and delivery techniques’ such as custom build and off-site construction.

Final bids will be assessed against criteria including the clarity of the link between investment and delivery, greatest early delivery and acceleration of delivery and investment recovery prospects

The Expression of Interest stage formally begins on 22nd August with bids for Housing Zone designation and capital loan finance invited before noon on 3rd October. More information is available in the Housing Zones Prospectus.

This process is separate to that which is currently being run in London. The Government and the Mayor of London have jointly provided a £400m fund to establish 20 housing zones in the capital.

David O'Leary
Deputy Director of External Affairs.