CoCo, DevCo, WOC, WOS, HDV, LHC, whatever you call them council-owned housing companies are on the rise!
There has been rapid growth in the number of local authorities setting up housing companies. Generally called local housing companies (LHCs), this wave of municipal entrepreneurship has huge potential.
From our knowledge and experience of the sector, more than a third of councils in England have now set up, or are considering setting up, LHCs. This was confirmed in recent research conducted by Inside Housing.
We’ve been involved in a number, including Red Door Ventures in Newham; Meridian Home Start Limited in Greenwich; and an ALMO SPV in Nottingham. One of the most striking observations is the sheer variety in their purpose, operating structure and funding models. The variety of legal, operational and governance structures, not to mention funding arrangements, is just as wide. Whilst many councils favour wholly owning their housing companies, a significant number are creating joint ventures with a range of partners including housing associations, private developers and institutional investors. Some LHCs are fully staffed with dedicated employees whilst others are largely staffed by council officers. Governance arrangements for LHCs are similarly diverse.
Largely a reaction by councils to housing shortages and rising homelessness in the face of government cuts and borrowing restrictions, LHCs are also being used to address more specific local issues. LHCs have been established to raise the standard of the local private rented sector (Newham), help ALMOs access grant for new homes (Nottingham), build intermediate rented housing (Cambridge), develop new sites (Sheffield and Barking & Dagenham) and finance mixed-tenure estate regeneration (Ealing and Lambeth), to name just a few.
Both a combination of government initiatives and devolution will accelerate the pace of development of LHCs. The variety in form and function will be predominantly due to the equally diverse range of local opportunities and challenges now faced by councils, as well as the skills and experience within the authority. Whilst most LHCs have fairly modest development pipelines, we are currently working with some councils who are becoming increasingly interested in pushing the boundaries of what LHCs can achieve both in terms of volume and range of provision. As we often say on Twitter, this is #onetowatch.
From management options, through to business planning, RP registration and advice on organisational structures and delivery, Altair has been involved in the creation, development and support of local authority owned housing companies from some of the earliest pioneers to a number in the current pipeline.
If your organisation is considering establishing a LHC or would like strategic or operational support in developing your LHC further, please get in touch with Chris Wood, Steve Douglas or Matt McCormack Evans.
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