Le Squez and part of Le Marais Estate, St. Clement - redevelopment

STATES OF JERSEY

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LE SQUEZ AND PART OF LE MARAIS ESTATE, ST. CLEMENT

Lodged au Greffe on 3rd February 2004 by the Housing Committee

STATES GREFFE

PROPOSITION

THE STATES are asked to decide whether they are of opinion

(a ) to authorise the sale to Housing Committee tenants of certain properties at –

(i ) L e S quez Estate, St. Clement within the area identified in hatching on Drawing No. 3; and (i i) L e M  arais Estate, St. Clement within the area identified in hatching on Drawing No. 4;

a t p ri c e s t o b e agreed with the Finance and Economics Committee, and with the resultant income

to be utilised in the redevelopment programme for both estates;

(b )  

(i ) t o a u thorise the Greffier of the States to sign the said drawings on behalf of the States; and

(i i ) to a uthorise the Attorney General and the Greffier of the States to pass on behalf of the

Public any contract it may be necessary to pass in connection with the sale of certain properties referred to in paragraph (a) above.

(c ) to authorise the Treasurer of the States to receive these payments as they become due.

HOUSING COMMITTEE

Note:  The Finance and Economics Committee's comments are to follow.

REPORT

1. I n t roduction

I n 2 002 the States approved the Housing Committee's Strategic Policy Report 2002 – 2006. That

document laid out a number of principal aims which included –

• t o e n sure that a sufficient supply of accommodation is provided to meet the reasonable demands of all residents to obtain secure and affordable homes;

• t o en able housing for those in need to be provided through a range of funding mechanisms, in order to make the most cost effective use of public funds;

• to e nsure the Islands stock of rental housing is properly maintained and where necessary improved;

• t o s u pport the principle of home ownership; and

• t o u t ilise resources effectively to achieve best value.

T h i s proposition is brought forward in support of these agreed objectives. It is the intention of the

Committee to undertake a comprehensive and considered strategy which will over no more than 10 years witness the demolition and replacement of the low/medium rise flats at Le Marais and demolition, refurbishment and replacement of dwellings at Le Squez, St. Clement.

2. B a c kground

1. B o thLe Squez and parts ofLeMaraisestates are now ofanagewhere their physical condition requires that urgent andfundamental action is takento address substantial and increasing problems.Thematerial used in the built fabric ofmostoftheexisting flats andhouseshasnow reached theend of its anticipated lifespan and the poor quality of that physical fabric will continue to require regular and costly attention. The houses and flats are "worn-out". Both estateshave a road dominated layout, a lack of definable private space, poorly defined public amenity spaceand a drab and repetitive institutional appearance.The physical appearance and conditionofboththeseestatesdemandsan innovative and urgent responseto address a wide range of problems associated with the builtenvironment.

W i t h in Le Squez the problems are spread throughout the estate whereas at Le Marais they are restricted to

the low rise blocks currently used for rental. At Le Marais a major refurbishment of the high rise blocks was completed several years ago.

2. T h e Committeeisof the view that a strategy of remodelling andrefurbishment will achieve a number of objectives –

• it w ill address the problems evident within the physical fabric by refurbishment, where appropriate, or demolition and replacement where necessary;

• i t w i ll restore a sense of community and identity;

• i t w i ll embrace tenant involvement;

• i t w ill address landscape enhancement and the provision of clearly defined private and public amenity space;

• i t w i ll ensure energy efficiency and natural supervision to enhance security;

• i t w i ll seek to minimise disruption during refurbishment;

• it w ill be cost effective and represents best use of resources whilst recognising the present budgetary restraints;

• i t w i ll provide the Committee with the opportunity to rebalance their existing housing stock and improve stock management objectives.

O n a broader front, the Committee wish to fully exploit the potential for enhancement of the whole area

through  mixing  tenure.  Selling  a  proportion  of  homes  to  people  on  a  mix  of  incomes  has  been demonstrated by recent schemes in the U.K. to be an important new instrument in rebalancing declining estates, reducing the stigma of living in them, improving property values and decreasing the turnover of tenants. The Committee recognise the importance of raising the quality of life on large social rented estates and the contribution that a mixed tenure of households with differing incomes can make to achieving balanced and substantial communities.

3. T h  e Proposals

1. T h e proposedschemeforLe Squez seeksto refurbish approximatelyone third of thedwellings and demolish the remainder to replace them with new homes.Thescheme would progress in four phases spread over a period of between 8 and 10 years,commencing in early 2004. Figure 1 illustrates the potential housingstock and tenureafter the proposed redevelopment.

L e S q uez       F  ig u r e  1    

T h e programme for Le Marais (Low Rise) proposes a redevelopment in three phases over a 5 to 8 year

time scale, commencing in the later part of 2004. The High Rise rented dwellings and Le Petit Marais - in owner occupation are not part of this programme. Figure 2 illustrates the potential change in housing stock and tenure after the proposed redevelopment.

L e M  arais (Low Rise)     F i g u re  2    

Existing Stock Proposed Scheme

For Sale For Rent

4 Bed Houses - 1 –

3 Bed Houses - 54 –

2 Bed Flats 35 – –

1 Bed Flats 28 – 32 Bedsits 21 – – Totals 84 55 32

T h e loss of three bedroom rental stock through sales on both estates will be made up in part by the

development of social rented accommodation on the neighbouring rezoned sites at Hodge Nurseries, Phase II and Field 40, La Rue de Maupertuis, St Clement.

2. I n cluding fees and inflation a sum of about £50 million wouldberequired to meet the Committees aspirations for both estates.TheCommittee had intended to demolish and rebuild Le Squez over a 10 year period, using a voteof capital from the States. However, only £4.68 million has been allocated from the States Capital Vote andthere is no prospect of any additional vote in the foreseeable future. Thiswould mean that themajorityof the residents would beleftformanyyearstocome living in sub-standard accommodation.TheCommittee considers that this would be unacceptable.
3. T h e Committee proposes that the balance of funding required for theredevelopment of both estates should largely be met from thesaleof a numberof refurbished and redeveloped buildings. The proceeds from the sales will then fund the building works through the four phases at LeSquez, and most of the work atLe Marais.
4. A numberof the new one bedroom flats will be retained for rental both atLeMaraisandLeSquez for older tenants who wish to remain in the locality andwhowouldnotbein a position to purchase their accommodation.
5. E x isting residents ofLe Squez will be given first option to purchase those dwellings which are tobesold. Following this offer, ifsome dwellings remainunsold,these will be offered to tenants living elsewherein States' rental accommodation.Thesameapproach will be adopted atLe Marais.
6. F ig ures 1 and 2 above show the proposed proportion ofsales and rented dwellings once both housing schemes have been completed.However, given the extendedtimeframe for both developments, in a changing housing market, the Committee wishestoremain flexible within a range of between 50 and 70 per cent ofcompleteddwellings for sale.
7. T h e salepricesofthenew and refurbished homes have yet to bedeterminedbutwillbe offered at a discount ofabout10 per cent toFirstTime Buyer values. For example, atNovember 2003 prices, the new houses would bepricedat £200,000 andtherefurbished houses atabout £160,000.Alldwellingswillbe restricted toonwardsaletoFirstTimeBuyersonly,and will include the "Belle VueClause" in the contracts of the sale.The clause allows the Public of the Island to recover from the vendor an amountin repaymentshouldthehouse be sold inthe first 10 years. The intention istoprevent profiteering by the vendorwhowillhave purchased hispropertybelowmarketvalue.The formula for reclaiming these moniesisgraduated with the greatestpenaltiesinthe first 2 years.

4. D  ec antPolicy

1. T h e Committee has kept residents informed of its proposalsby a series of meetings andby visits by community housing officers. The Committee isaware that themain concern for mostfamiliesis that they remain in their current schoolcatchments area. Theyalso recognise that many individuals rely upon support from otherfamilieswhohave strong local links and other informal networks.Enhancingand supporting these existing localandcommunitylinksisanimportant part of the Committee'sprogramme.
2. A l l residents will beprovided with details containing further information relating tothese proposals. This will include a detailed overview ofthe phasing of the development. Mostof the tenants in Phase I of the redevelopmenthave been relocated and early in 2004, residents inPhase II will beaskedto complete forms detailing theirhousingrequirements.The residents who will bedecanted from bothLeSquezand

Le Marais will take priority over others currently on the transfer list for alternative accommodation.

3. P re ference for the new and refurbisheddwellings for rent will begiven to estate residents who are unable to purchase.Wherever possible if tenants cannotbere-housedonthe new LeSquez estate or LeMarais estate they will beaccommodated within the locality, if they have expressed that wish.

5. S t o ckManagement

T h e C  ommittee currently operates a policy of full occupation of existing stock. Whilst this maximises the

use of its stock it requires a very high level of tenant movement. A change in a tenant's circumstances has usually meant that a move is inevitable. In recent times up to one in five of the Committee's tenants have moved  each  year.  Thus  every  5  years  there  can  be  the  equivalent  of  a  complete  turnover  of  the Committee's tenants. This militates against being able to create a sense of community within some of the estates. It is difficult for tenants to give a long term commitment to where they live when relocation regularly forms part of the housing stock management policy.

T h e prospect of being able to reduce the requirement for relocation by addressing the shortages in the

larger three and four bed units will address some of the social problems afflicting existing estates by supporting and enhancing the tenants' sense of community. The redevelopment of the two estates and the rebalancing of the stock in favour of larger units of accommodation will allow more flexibility in the Committee's letting strategy. It will also provide the opportunity to develop the life time home concept with the consequent advantages of allowing the potential for communities and tenant ownership' of an area to be created.

6. T e n ant Consultation

In O c tober 2002 the Committee held a meeting at Le Squez School for the residents of the estate in order

to explain their plans. Shortly after that meeting each resident within Phase 1 of the Le Squez scheme was visited by an officer from the Housing Department with a view to more fully addressing any concerns individual tenants might have and to gather further information. Further tenant consultation exercises and visits by officers are planned in early 2004 for the remainder of Le Squez, and for Le Marais to explain the proposals and respond to the concerns of the residents.

7. F i n ance

7.1 L e Squez

T h e capital vote of £4.68 million will be used to commence Le Squez Phase1 with short term bridging

finance required to fully fund this phase. The bridging finance will be repaid from the sale of both new and refurbished houses. The proceeds of the sales will then be used to fund the scheme over the full four phases. Further bridging finance will be required during the construction period but the scheme will overall be self financing after the initial capital allocation, as set out below –

Finance Le Squez (October 2003)

Phase 2 9,010,000 11,620,000 2,610,000 Phase 3 10,649,000 10,140,000 (509,000) Phase 4 2,944,000 1,540,000 (1,404,000) Total 34,103,000 29,520,000

T o ta l cost 3 4 ,1 03,000 T o ta l sale 2 9 ,5 20,000 N e t c ost 4 ,5 8 3 ,000.

S u b j ect to sufficient funding being available (from sales) and consultation with other agencies it is

proposed to include within either Phases 3 or 4 a residential group home and additional youth/recreation facilities.

L e M  arais

T h is sales and re-investment strategy is also proposed for the redevelopment of part of Le Marais Estate.

In t h is case as there has been no capital vote of credit at all, bridging finance will be required before the

project  can  start.  The  amount  of  funding  required  from  the  Housing  Development  Fund  will  be determined by actual costs and sale prices. It may be less that the quoted figure in the table below.

Le Marais (May 2003)

8. M  a npower Implications N e u tr al
9. F i n ancial Implications

T h e financial implications are as described in the relevant sections above. The Le Squez proposals will

have a positive effect in terms of the anticipated reduced expenditure on maintenance over the first 10 years after completion, as well as additional rental income, less subsidy payment. The Le Marais position is slightly different in that any borrowings from the Housing Development Fund will need to be repaid. However as only part of the rental development will need to be funded through the Fund any negative impact will not be significant.

10. A p  provals

F o r e ach of the individual phases of the redevelopment programme for Le Squez and Le Marais, a specific

detailed report and proposition, with drawings, will be brought to the States for their prior approval.

11. C o nclusion

T h e C ommittee believes that the approach proposed for the redevelopment of Le Squez and Le Marais has

significant advantages. The estates will be redeveloped with only a relatively small amount of new States capital expenditure. A significant number of existing States tenants will be given the opportunity to become home owners and achieve independence in meeting their housing needs. Without the discounted prices many would remain States tenants for life.

T h e m ix of tenure on the completed developments will bring greater stability and sense of responsibility to

the community.

B y a dopting this proposition, the States will be supporting the redevelopment of these two worn out

estates, which have a history of social and economic problems, by recreating new accommodation and encouraging the development of vibrant communities.

T h e S tates are asked to support the Housing Committee in its endeavour.