The Levelling Up and Regeneration Bill has potential risks that will negatively impact the number of new genuinely affordable homes. We’ve joined three other funders to ask that the Secretary of State for Levelling Up, Housing & Communities acts now to prevent this and works to tackle the housing crisis. Read the letter below.
Dear Secretary of State,
A secure, decent place to call home is the foundation for good health and communities that thrive. We are four charitable funders that, collectively, invested over £20 million over the last three years to tackle the housing crisis. We focus our support on people on low incomes, often working or caring for dependents, who are at greatest risk of being made homeless.
At the 2019 election, the Government promised to build “hundreds of thousands of affordable homes”. It expresses a desire for a lasting legacy of “the right homes in the right places… to create thriving communities”. At present, nearly half 44% of all such ‘affordable’ homes are funded by developers’ contributions when building new sites. The Levelling Up and Regeneration Bill, currently in Parliament, and planned reforms to move Section 106 to a National Infrastructure Levy, has potential risks that will severely, negatively and lastingly impact the number of genuinely affordable homes delivered each year. This is because, without a ringfence, Levy revenues may be irretrievably diverted to top up day-to-day local government spending. The new Levy may also undermine levelling up, by raising revenue in areas with high land values that then leads to either better infrastructure there, or more affordable housing in areas which already have higher concentrations of it.
The number of affordable homes built is already significantly below the number of homes needed to support thriving communities. In 2020/21, 52,100 new affordable homes were completed, a little over 1/3 of the estimated need. We and others are worried that, without urgent action to ensure that the number of affordable homes delivered each year is not negatively impacted, the proposed changes could make the housing crisis worse.
We therefore ask the Government to set out clearly its requirements on developers to contribute to on-site, genuinely affordable housing within the Levelling Up and Regeneration Bill. We also ask government to set out clear guidance on what is meant by ‘affordable’ by ensuring rents can be linked to local incomes rather than market prices.
The Government must match the legislation around levelling up with immediate action. It should invest now to build affordable housing during the recession. This investment will generate long-term savings in benefits and health and social care spending, and in people’s lives over generations.
We will be monitoring the Levelling Up and Regeneration Bill and accompanying legislation as it passes through Parliament, into law and out into the community. We call on the Government to make the above changes now, to build a future we can all be proud of.
Yours,
Samantha Stewart, Acting CEO, Nationwide Foundation
Manny Hothi, CEO, Trust for London
Felicity Mallam, Director, Wates Family Enterprise Trust
Barbara Reichwein, Programme Director, Impact on Urban Health