Questions asked and answered on cost of 'affordable housing'

Monday 14 October 2024

Up to 400 units of new so called 'affordable housing' should be built in Guernsey, once the current funding allocation has been spent, said the States.

Deputy Sasha Kazantseva-Miller submitted a series of Rule 14 Questions to committees involved with housing development in the island, as she tried to find out where the money is being spent.

She asked seven questions in total, four to Policy and Resources, and three to the Committee for Employment and Social Social Security, asking how much has been spent, and could be spent as Guernsey grapples with an ongoing housing crisis.

The questions were submitted at the end of September, with the answers published at gov.gg.

As part of P&Rs Funding and Investment Plan, the States agreed to allocate £40 Million to be spent on developments for the Guernsey Housing Association. 

Questions for P&R

In her first question to P&R, Deputy Kazantseva-Miller sought to find out just how much of that allocation has been spent. 

Pictured: Deputy Sash Kazantseva-Miller has asked the fourth most Rule 14 questions this year (7), after Deputies Queripel (8), St Pier (11), and Le Tessier (14). 

In its response P&R stated that “to date £11m has been paid in cash to GHA and £17.5m in land purchase costs.”

Keen eyes will notice that doesn’t add up to the full £40m, and that’s because it’s been earmarked for “the final amount to be paid upon completion of the development”. 

The second question wants to figure out how many “units of housing” can be built using those funds, based on the current average taxpayer grant of £122,865. 

Policy and Resources response for this one is lengthy.

Essentially it says that costs are ever changing because this project is long-term, and the metric used “is not an accurate metric”, but that with the funds provided Guernsey should see 400 more units of affordable housing built over the coming years. 

Pictured: 54 units of Key Worker housing are earmarked for Domain du Moulin, the site of the old CI Tyres. Increased from the original proposal of 25. 

However that too has a caveated response as it’s swiftly followed with “this figure is indicative only at this stage and subject to planning permissions and viable development proposals being put forward”. 

Deputy Kazantseva-Miller’s third question focused on finding out if the figure highlighted in the States Strategic Housing Indicator will be met, and if more money will be needed to do so. 

This SSHI was approved in March last year and stated that Guernsey needed an extra 721 units of affordable housing, and that’s excluding “key worker” and “specialised housing”.

In its response P&R stated that another round of funding with be sought to help hit this level of funding, an amount Deputy Kazantseva-Miller estimates to be around £88 Million pounds, more than double what was previously allocated. 

P&R explained the rationale, highlighting increasing costs, and a need for further analysis and data examination, meaning we’ll have to wait for more information as the committee says this “will form part of the wider Affordable Housing Development Programme business modelling process”. 

The fourth and final question centred around a successful amendment lodged by Deputies Peter Roffey and Lindsay de Sausmarez, which looked to make find out what progress has been made in finding out if “£150 million could be made available to the GHA or other housing association(s) as repayable debt financing for Affordable Housing development”.

P&R's response states that the Committee has been working closely with the treasury to find out the best time to take out the loan.

If it is taken out too early it could lead to unnecessary expenses in financial charges, but if it is taken out too late it could hamper developments, P&R said.

Questions for ESS

In her first request of Employment and Social Security, Deputy Kazantseva-Miller wanted to know how the grant money has been split between the construction and building costs, and land acquisition. 

In their response, ESS stated that it can’t make these figures public. That’s because although land acquisition costs are made public, costs for building and developing are kept confidential “for reasons of competition and commercial sensitivity”.

It added that: “The Committee wishes to give assurance that the levels of capital grant are continually monitored to ensure its use in delivering Affordable Housing units is maximised wherever possible and delivers value for money.”

Deputy Sasha Kazantseva-Miller’s second question sought to understand how the average capital grant compares for key workers, special assistance and general public need, to other types of Affordable Housing such as partial ownership and social rental. 

ESS confirmed that housing for key workers is interchangeable with general housing, and often will swap between the two depending on tenants needs, but they clarified that “a significant number of off-island recruited key workers live in the private rental sector and their housing requirements are picked up and projected as part of the housing needs”. 

ESS also made it clear that costs for Special Assistance housing are greater, due to the specialised nature of the properties, and the need for communal and office space. This “means that the development costs are higher”. 

Pictured: The GHA's Le Grand Courtil in St.Martins provides Assisted Living Space for islanders with a range of extra needs. 

The third to ESS and final of the seven questions wanted to know any benchmarks ESS use, on how the average capital grant compares with other jurisdictions. 

Employment and Social Security began by referencing the difference in cost for construction, land and housing in Guernsey, plus that the financing/borrowing arrangements are unique to the island also. 

The Committee suggests that Affordable Housing in Guernsey “isn’t comparable” with other jurisdictions, but then goes on to explain how cheap plots in Guernsey have been exhausted, and now they’re left searching at the “Standard Market Rate”.

You can find the full response to the Rule 14 Questions HERE.