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The deputies with responsibility for social housing want the power to borrow up to £150m over four decades to be given to Policy & Resources, providing the cash is used to fund the development of ‘affordable’ housing units which provide a “safe income stream”.
Deputies Peter Roffey and Lindsay de Sausmarez, President and Vice-President of Employment & Social Security respectively, will appeal to the States next week through an amendment during the mammoth Funding & Investment Plan debate.
The borrowed cash, which would be on terms deemed appropriate by P&R, could be lent to the Guernsey Housing Association, or to some other provider of social renter and partial ownership housing up to the 2060s.
P&R is said to have been consulted on this and agrees in principle with lending to housing providers as this “provides the [GHA] with the lowest cost option and access to a long-term fixed rate”.
The housing provider would be asked to repay the debt over the life of the borrowing to ensure government incurs no “residual costs”. This is more attractive than borrowing for other projects as the developed housing units will generate rental income that will be used to service and repay the loan, the deputies added.
“Funding from the government is a key enabler of the [affordable housing] both in terms of capital grants provided and through supporting and/or enabling longer term borrowing arrangements to the provider,” the explanatory note with the amendment states.
“This amendment focuses solely on the latter - earmarking borrowing to support the chosen developer in progressing the Affordable Housing Development Programme.”
Pictured: The GHA most recently purchased the Braye Lodge Hotel, to be used for healthcare staff close to the hospital.
GHA housing to date has been delivered through capital grants and long-term borrowing from the States’ bond, with repayments made through the secure income stream of tenancies.
The States agreed this year that 721 affordable housing units – as in those provided by the GHA through the public development programme – are needed by 2027.
But it’s estimated that around 1,000 social homes need to be provided within the next five years to meet the needs of the public, key workers, and specialised housing – such as for those with permanent medical conditions.
P&R admitted in its Funding & Investment Plan that around £100m would likely need to be borrowed to continue funding GHA projects but did not propose specific action relating to this.
Deputies Roffey and de Sausmarez are therefore seeking targeted authorisation for these projects to continue “while also giving security to the States that this borrowing will be repaid through a safe income stream”.
Deputy Roffey had previously warned that putting the brakes on the affordable housing programme would be an “unmitigated disaster” given the pressing need for housing, the States’ ambition to grow the population by a net 300 extra people per year, and the current high cost of construction.
“This is a massive task and to come anywhere close to delivering on this target the whole States will need to be fully committed both to providing the funding and the land required to create this housing,” he said at the time.
“This is definitely a time when the affordable housing programme should be stepping up a gear or two, not being scaled back in any way.”
Pictured (top): Deputies Peter Roffey and Lindsay de Sausmarez.
Around 1,500 additional homes by 2027 to meet needs
Extra staff needed to deliver required housing
3,000+ new housing units needed if deputies back population growth
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