Supply of Housing - Report - 8 September 2015

CONTENTS

1. Panel Membership, Terms of Reference and Evidence Considered ...................................... 2
2. Executive Summary ............................................................................................................... 4
3. Findings and Recommendations ............................................................................................ 7
4. Introduction .......................................................................................................................... 13
5. The Identification of housing need and Supply ..................................................................... 15

5.1 The Affordable Housing Gateway ...................................................................................... 17

6. The Delivery of Housing ....................................................................................................... 22

1. Current Supply of Housing................................................................................................. 23
2. The role of Social Housing Providers ................................................................................. 26
3. The use of empty properties .............................................................................................. 29

7. The planning System ........................................................................................................... 32

1. Tenure Split ....................................................................................................................... 32
2. Regeneration of St Helier .................................................................................................. 34
3. H3 Policy (Planning Obligations) ....................................................................................... 35
4. Land "hoarding" ................................................................................................................. 37
5. Parking spaces, Lifelong Homes Standards and Density level requirements ..................... 40

8. Access to affordable housing ............................................................................................... 44

1. 90% Market Rental Policy.................................................................................................. 44
2. Preservation of Affordable Housing ................................................................................... 48
3. Supporting entry into homeownership................................................................................ 49
4. Key Worker........................................................................................................................ 53
5. Mortgage Lenders ............................................................................................................. 54

9. Looking Forward .................................................................................................................. 56

1. Involvement from the private sector ................................................................................... 56
2. Delivery of the Housing Strategy ....................................................................................... 57

10. Conclusion ........................................................................................................................... 61
11. Appendix 1 –Report by Ark Housing Consultants ................................................................. 62

1.  PANEL MEMBERSHIP, TERMS OF REFERENCE AND EVIDENCE CONSIDERED

The Environment, Housing and Technical Services Scrutiny Panel comprised the following Members:

Connétable A.S. Crowcroft , Chairman Deputy D. Johnson , Vice-Chairman Deputy J.A. Martin

Deputy M. Tadier

The Panel appointed Mr. P. Mooney from Ark Housing Consultancy as its expert adviser for this review.

The Following Terms of Reference were agreed for the review:

1. To examine the means by which the Council of Ministers measures and monitors housing supply and housing affordability;
2. To consider the factors which affect the supply and affordability of housing in Jersey;
3. To examine the impact of the planning process on the delivery of housing;
4. To consider proposals of the Council of Ministers for the delivery of further housing;
5. To consider proposals of the Council of Ministers, in particular the Ministers for Housing and for Planning and Environment, to improve the affordability of housing for Islanders; and
6. To consider the role played by other housing providers in the delivery of affordable homes.

Evidence Gathered

The following documents were considered by the Panel and its expert adviser during the review:

1. Draft Housing Strategy Framework, June 2015
2. Residential Land Availability at January 2013, States of Jersey
3. Revised 2011 Island Plan, 2014
4. Options for Jersey Housing Policy, Christine Whitehead, June 2014
5. Housing Affordability in Jersey 2013, States of Jersey Statistics Unit
6. Jersey's Housing Assessment 2013-2015, States of Jersey Statistics Unit
7. 2011 Island Plan

The Panel wrote directly to a number of key stakeholders and invited submissions from the public through a call for evidence in the Jersey Evening Post and an advert on Channel 103. The following Submissions were received:

1. The Chairman of the Jersey Homes Trust
2. Le Vaux Housing Trust  
3. Mr. Bewers
4. Christians Together in Jersey Housing Trust
5. Andium Homes  
6. Mr. Ian Syvret
7. Mr. Eves  
8. Mrs. Freda Evens
9. Anonymous
10. Mr and Mrs Cornelissen
11. Mr M. Dun

19th May 2015

29th May 2015

2nd June 2015

 3rd June 2015

 9th June 2015 15th June 2015 16th June 2015 17th June 2015 18th June 2015 18th June 2015

14th July 2015

The Panel received a Briefing from the Strategic Housing Unit on 18th June 2015 on the Housing Strategy Framework.

The Following Public Hearings were held:

19th June 2015   Deputy A. Pryke, Minister for Housing, accompanied by Mr. P. Bradbury,

Director  of  Corporate  Policy,  Mr.  T.   Walker ,  Chief  Officer  of  Home, Community  and  Constitutional  Affairs,  and  Mr  R.  Buchholz,  Principal Planner

9th July 2015   Deputy S.G. Luce , Minister for Planning and Environment, accompanied by

Mr  A.  Scate,  Chief  Executive  Officer,  Mr.  K. Pilley,  Director  of  Policy, Projects  and  the  Historic  Environment,  and  Mr.  R.  Buchholz,  Principal Planner.

9th July 2015  Mr.  M  Jones,  Chairman  of  Andium  Homes,  accompanied  by  Mr.  I

Gallichan, Chief Executive, and Mr. C. Mavity, Commercial Director.

2. EXECUTIVE SUMMARY

In 2013, the requirement figures for new homes set out in the 2011 Island Plan were reviewed, updated and rolled forward as part of the proposed changes to the Housing Chapter of the Plan. The figures showed that an estimated 3,450 new homes would be required over the period 2013- 2020. Of these, 1,000 would be for affordable housing, both for rent and for purchase, and the remainder would be sold in the open market. In 2014, the Island Plan was amended to reflect these updated figures. Whilst the total estimated supply for housing slightly exceeded the estimated demand, it was acknowledged that any delays to key sites within the Island Plan would risk an imbalance between the two, particularly in the case of affordable housing.

The evidence that we have received during our review suggests that, due to re-prioritisation of the States Capital Programme, it is unlikely that the Summerland and Ambulance sites will be ready for development until 2023. As a result, 150 affordable homes will not be delivered in the anticipated timeframe that was set out in the Island Plan. Furthermore, the funds that were originally earmarked for these two sites are no longer available. We have recommended that the Minister for Planning should work closely with the Minister for Treasury and Resources to identify additional finances which would enable Andium Homes to begin development of the sites as soon as they become available.

In addition to the former States-owned sites, we understand that the re-zoned sites are also facing delays in development. Since the approval of the 2014 revision of the 2011 Island Plan, almost 12 months ago, none of the H1 sites have firm development proposals in place. It is therefore unlikely that the 300 new homes, due on the re-zoned sites, will be forthcoming before 2017/2018 at the earliest. We found that, as a result of the untimely development of affordable housing on identified land, there is a strong possibility that the Island Plan target to deliver 1,000 affordable homes by 2020 will not be met. Thus, we recommend that the Minister for Planning and Environment, together with the Minister for Housing, should bring forward a list of additional sites for new homes by December 2015.

One of the biggest problems we face in Jersey is the volatile completion rates for new building despite the identification of feasible sites within the Island Plan. Currently, there is an estimated 2,000 unused planning permissions on the Island. Whilst a range of reasons have been identified for the slow take up of planning permissions, during our review we have been strongly alerted to the issue of land hoarding'. There is a concern among islanders that land owners and developers bank' identified land to maximise profits rather than to ensure a stable flow of new housing. Unfortunately, like other issues surrounding the supply of housing, there is not a one size fits all' solution to the current problems we are facing. A balance must be struck to ensure that any incentives introduced for the purpose of encouraging development do not deter applications from coming forward. The Minister for Planning and Environment should therefore review the list of initiatives that have been proposed by our expert adviser and agree a way forward by March 2016.

The current planning system and a number of the planning policies contained with the Island Plan are acting as a barrier to the provision of housing in Jersey. The Island Plan contains polices which protect Employment Land (Policy E1) and Historic Buildings and Places (Policy E1). Whilst the majority of those we received evidence from during our review supported the principles behind the policies, there was a concern that they often impeded the delivery of affordable housing and the objectives underpinning the regeneration of St Helier. Jersey is currently facing a housing shortage in all categories and it is therefore imperative that the supply of homes remains the top priority of the States. Accordingly, the Minister for Planning and Environment should put in place new supplementary planning guidance for St Helier, which identifies key development zones where the requirements of Policy E1 and HE1 can be relaxed. Furthermore, a review should be undertaken to ensure that the current planning policies that set requirements for parking spaces, density levels and Lifelong Homes standards are fit for purpose' and do not impinge on the delivery of affordable housing.

There is current uncertainty as to the true effects of the 90% market rental policy on affordable housing tenants. The Policy has not been in place long and it is acknowledged that some time is needed before its impact can be assessed. However, the concerns raised during this review provide justification for further monitoring of the Policy to ensure that it does not negatively impact on either the supply or affordability of homes. The Minister for Housing should therefore undertake a review of the impact of the Policy on affordable housing tenants and report back to the States Assembly by March 2016.

A positive approach that has been taken to assist individuals in gaining access to the property ladder is the identification and provision of Category A' homes for purchase. However, at present due to legal loopholes we are unable to retain affordable homes in perpetuity for future generations of first-time buyers. We understand that the Strategic Housing Unit (SHU) has commenced preliminary discussions with Law Draftsman to bring forward amendments to the relevant Legislation but we are unclear as to the extent to which the work has progressed. We recommend that priority should be given to establishing a new legal framework for retaining properties in the affordable housing sector. Furthermore, the framework should be in place before the first house is sold, as stated in the revised 2011 Island Plan.

Housing affordability issues are not just confined to high need households. Moderate income households are also affected by these issues and many face difficulties transitioning from private rental to home ownership. In 2013, almost half of all working households could not afford to service a mortgage affordability on the purchase price of a property at the lower quartile price, a greater proportion than in 2011 and 2012. Currently there is very little housing available locally for purchase on a discounted price, shared equity or shared ownership basis. This makes it difficult for people who do not qualify for affordable housing via the Affordable Housing Gateway and would like to buy, rather than rent privately. The Strategic Housing Unit is currently considering a number of options to assist individuals to gain access onto the property ladder. However, a number of legal changes are required in order to facilitate the introduction of a shared ownership scheme. We recommend that the Minister for Housing must ensure that the required changes to property Legislation are brought to the States for approval by the end of 2015.

The Minister for Housing and the Strategic Housing Unit should be commended for their commitment to address the many issues contained within the draft Housing Strategy Framework. We are pleased to see that many of the issues or shortcomings identified within our expert adviser's report, as well as our own report, are to be addressed by actions set out in the Framework's Delivery Plan. However, we are concerned that the lack of manpower resources available to the SHU may increase the risk of delays in delivering the Housing Strategy objectives. Thus, the Minister for Housing should closely monitor the Delivery Plan to ensure that the objectives are being delivered within the set timeframe. If there any delays to the work being carried out consideration should then be given to acquiring additional, temporary staff.

Finally, we found that in recent years communication between key players within the housing industry has significantly reduced. Going forward it is imperative that an open environment is created where concerns can be voiced and discussed and solutions to Jersey's current housing situation can be found. In order to facilitate such discussion a housing forum or working group consisting of key stakeholders, should be established.

3. FINDINGS AND RECOMMENDATIONS

Key Findings

1. The Strategic Housing Unit's commitment to producing an annual Strategic Housing Market Assessment Report is welcomed. Consistent and effective monitoring of housing supply and demand is essential for identifying shortfalls in delivery and planning correctly for the future. [section
2. At present, there is a significant leakage of the housing component of Income Support into the private rented sector. Currently, it is hard to measure how much of this rent is subsequently reinvested back into the current or future housing stock.
3. The Affordable Housing Gateway does not reflect the true extent of the affordable housing need in Jersey.
4. It is imperative that consideration is given to the type of property that is being sought by individuals on the Affordable Housing Gateway when planning for future supply.
5. A system, equivalent to the Choice Based Lettings System that exists in the UK, would allow individuals on the Affordable Housing Gateway in Jersey to make their own decisions about where they live and to exercise an element of choice. It would also provide a more effective way of utilising the limited housing stock available.
6. One of the biggest problems we currently face in Jersey is the volatile completion rates of new builds.
7. It is unlikely that the Summerland and Ambulance sites will be ready for development until 2023. Consequently, 150 affordable homes will not be delivered in the anticipated timeframe that was set out in the Island Plan.
8. There are currently no funds earmarked for development of the Summerland site and Ambulance site.
9. The Council of Ministers has not provided Andium Homes with a population figure to work to in order to assist in the forward planning of the future supply of affordable homes.

10. Due to the delay in commencing development on former States sites and the re-zoned sites there is a strong possibility that the Island Plan target to deliver 1,000 affordable homes by 2020 will not be met.
11. In order to facilitate the further delivery of much needed social housing, it is imperative that the role of Housing Trusts is understood and supported by the Minister for Housing, the Council of Ministers and the Strategic Housing Unit.
12. A reduction in Jersey's property vacancy rate by 2% would bring 900 homes back into the market. This would count for over two years' target for supply through development in the Island Plan.
13. The Island Plan policy requirements for an 80:20 tenure split on re-zoned sites may have an adverse effect of discouraging landowners and developers from supplying any form of housing on the land.
14. Current planning policies conflict with the objectives underpinning the regeneration of St Helier and act as a barrier to new urban housing projects.
15. Policy H3 could undermine the delivery of affordable homes if it is too onerous. In order for it to be a workable policy, it must be applied in a sensitive and pragmatic manner.
16. There is not a one size fits all' solution to the current problems we are facing with land hoarding'.
17. The current planning policies that set requirements for parking spaces, density levels and Lifelong Homes standards may hamper the delivery of affordable housing.
18. It is unclear what impact the new 90% market rental policy will have on new and existing tenants and the overall rental housing market.
19. Without the ability of ensuring that affordable homes are maintained as affordable in perpetuity, we are unable to secure these homes for future generations of first time buyers.
20. The Panel has been advised that the Minister for Housing is actively reviewing the possible re-introduction of the deposit loan scheme.
21. Currently there is very little housing available locally for purchase on a discounted price, shared equity or shared ownership basis. This makes it particularly difficult for people who

do not qualify for affordable housing via the Gateway and would like to buy, rather than rent privately.

22. It is important that consideration is given to a wide range of schemes that will support individuals who are trying to gain access onto the property ladder.
23. Extending the Affordable Housing Gateway to Key Workers in order to enable access to affordable housing is considered a positive step forward.
24. An individual's ability to successfully access the property ladder can be significantly affected by the number of participating mortgage lenders on the Island and the available interest rates.
25. Private rental landlords could make a meaningful contribution in providing affordable and secure homes to Jersey residents and assist in reducing the substantial Affordable Housing Gateway waiting list.
26. The Housing Strategy Framework is a useful step forward in setting an agenda and a vision for housing.
27. The lack of manpower resources available to the Strategic Housing Unit may increase the risk of delays in delivering the Housing Strategy objectives.
28. In recent years communication between key players within the housing industry has significantly reduced. It is therefore imperative that an open environment is created where concerns can be voiced and discussed and solutions to Jersey's current housing situation can be found.
29. The Delivery Plan does not provide enough detail to enable close monitoring of the Housing Strategy objectives.

Recommendations

30. The Minister for Housing should undertake an annual review of the qualifying income level for access to the Affordable Housing Gateway to ensure the figure is aligned with current rental costs, property values and affordability criteria.
31. The Minister for Housing should ensure that annual targets for the delivery of affordable housing reflect the needs and requirements of individuals on the Affordable Housing Gateway, in particular the size of properties requested.

32. The Minister for Housing should require a full trial of a choice based system to be operated for advertising and re-letting vacancies in the affordable housing stock. This trial should involve the housing trusts as well as Andium Homes. It should take place before March 2016.
33. The Minister for Planning and Environment should ensure that robust figures for housing starts and completions are collected and reported to the States Assembly on an annual basis to ensure transparency and accountability.
34. The Minister for Planning and Environment should work closely with the Minister for Treasury and Resources to identify additional finances which would enable Andium Homes to begin development of the Summerland and Ambulance sites as soon as they become available.
35. The Minister for Housing must ensure that all other Ministers who are involved in housing the population, as well as all affordable housing providers, are working to an up-to-date population figure. Furthermore, the estimated demand needs to be adjusted to take into account the number of people qualifying every year under the current 10 year rule.
36. The Minister for Planning and Environment should correspond with the Minister for Housing to bring forward a list of additional sites for new homes by December 2015, to ensure that the target for the delivery of 1,000 affordable homes by 2020 is achieved.
37. The Minister for Housing should clearly communicate the role she expects the housing trusts to play in the future delivery and management of affordable housing in Jersey, this clarification to be delivered by October 2015.
38. By January 2016, the Minister for Housing should investigate the possibility of bringing empty homes back into use using a variety of tools including the introduction of a form of empty property tax or charging an annual sum in addition to the current parish rates.
39. By March 2016, the Minister for Planning and Environment should work with the Minister for Housing to review the impact of implementing the 80:20 rule for the delivery of affordable homes on re-zoned sites.
40. The Minister for Planning and Environment should examine how current planning conditions could be relaxed in certain parts of St Helier to encourage and facilitate new housing. This should result in the issuing of new supplementary planning guidance for St Helier by March 2016.

41. The Minister for Planning and Environment should ensure that a meaningful dialogue with landowners and developers takes place before any planning obligations are applied to new builds. It is imperative that all parties work together to achieve the objectives set out in the Island Plan.
42. By March 2016, the Minister for Planning and Environment should work closely with the Minister for Housing and Minister for Treasury and Resources to review the initiatives proposed by our expert adviser and agree a set of incentives for encouraging the timely development of identified land.
43. By March 2016, the Minister for Planning and Environment should ensure that the current planning policies are fit for purpose' and do not conflict with the objectives of the Island Plan and, in particular, the provision of affordable housing in St Helier.
44. The Minister for Housing should closely monitor the impact of the 90% market rental policy on tenants and report to the States Assembly by March 2016. The report should identify any unforeseen or unintended consequences of the affordable rent policy and should propose ways to overcome them.
45. The Minister for Housing must give priority to establishing a new legal framework for retaining properties in the affordable housing sector. The legal framework must be in place prior to the first house being sold, as stated in the 2014 review of the 2011 Island Plan.
46. The Minister for Housing must ensure that the required changes to property Legislation, to enable the introduction of a shared ownership scheme, are brought to the States for approval by the end of 2015.
47. The Minister for Housing should amend action 1.2 of the Delivery Plan to include consideration of additional help to buy schemes such as funds of equity loans and mortgage guarantees.
48. The Minister for Housing should commission research to identify what measures could be taken to increase the number of lenders active in the Jersey mortgage market.
49. The Minister for Housing should ensure that the Housing Strategy addresses the benefits of allowing the private sector access to the Affordable Housing Gateway and identifies the steps necessary to enable this provision.

50. The Minister for Housing should closely monitor the Delivery Plan to ensure that the Housing Strategy objectives are being delivered according to the set timetable. If there are any delays in the commencement of work, consideration should be given to acquiring additional, temporary resources.
51. The Minister for Housing should establish a housing forum or working group, consisting of key stakeholders, by December 2015.
52. The Minister for Housing should amend the Delivery Plan so it includes more specific and measurable targets that reflect the policy objectives of the Island Plan.

4. INTRODUCTION

The Panel agreed to undertake a review of the supply and affordability of housing in Jersey due to its acknowledgment of the importance of the matter to the Island and general public alike. The Jersey Annual Social Survey (JASS) reported that 27% of respondents stated that "ensuring the availability and quality of housing" should be a "very high priority" of the Government, with a further 42% of respondents saying it should be a "high priority". In the same survey, respondents were also asked "if there was one thing you could change about life in Jersey, what would it be?" Controlling the population was the top answer but ensuring the affordability of housing was one of the second most frequently identified topics. In the 2012 JASS, 42% of respondents had said that making property more affordable should be a priority for the Island's Government.

Within the 2015-2018 States Strategic Plan, Housing has not been detailed as a main objective of the Council of Ministers. However, within the plan there is a commitment to bring forward a housing strategy to "deliver increased housing and supply for rent and purchase, to increase standards and quality, with reviewed and appropriate criteria of density, and to support good quality neighbourhoods and communities for St Helier, and elsewhere in Jersey."

The Strategic Housing Unit (SHU) has been tasked with the responsibility of developing the future Housing Strategy with co-ordination from other States Departments and supported Ministers. According to the report accompanying The Reform of Social Housing (P.33/2013), the Strategic Housing Unit will be responsible for developing a Cross-Tenure Housing Strategy which, amongst other things, will describe the prevailing housing market in terms of affordability; will set out current supply projections; and will recommend methods of increasing home ownership or increasing affordability. The Strategic Housing Unit is due to produce a strategy later this year and it is understood that the Policy will not be lodged for debate but will be presented as a report to the States Assembly.

The Panel was provided with a copy of the Draft Housing Strategy Framework and received a briefing from SHU in June. The Framework was due to go out for consultation earlier this year but has now been delayed until after the States summer recess in September. The Strategies overarching vision is for "all islanders to live in secure, high quality homes they can afford". The SHU identified a number of challenges which would need to be overcome in order to meet this vision, two of which were; the need to increase housing supply to meet the needs of the Island; and improving affordability. Accordingly the first key objective was to "ensure the supply of decent affordable homes meets the identified needs of the Island".

The Panel agreed to undertake a review into the supply of housing irrespective of the Strategic Housing Unit's commitment to bring forward a Housing Strategy to the States. Nevertheless, the production of the Strategy Framework has given the Panel an insight into the potential content of the Housing Strategy and the future aims and objectives of the Housing Department. The scope of our review was large and as a result we have focused on what we believe to be the most crucial issues. We have not considered all of the proposals contained within the Housing Strategy Framework nor have we addressed all the factors that impact upon the supply and affordability of housing in Jersey.

In undertaking this work, we were assisted by our expert advisor, Mr. P. Mooney of Ark Housing Consultants, to whom we are very grateful. A copy of his report is appended to our own.

We sought written testimonies from stakeholders and the public and held Public Hearings with the Minister for Housing, Minister for Planning and Environment and Andium Homes. The testimonies we have considered are available to read on the Scrutiny website. We are grateful to those who have contributed to our work and to the Ministers and their Departments for their assistance during the review.

This report begins by examining the means by which housing need and supply is measured and monitored in Jersey. It then moves on to consider the current supply of homes against the targets set within the revised Island Plan. The report then considers the impact planning policies have on the supply of housing. The next chapter reflects on the measures that are being taken, or are proposed, by the Strategic Housing Unit to address the affordability of housing. Finally, it shall consider possible improvements of the Housing Strategy Framework and its delivery.

5. THE IDENTIFICATION OF HOUSING NEED AND SUPPLY

In order to address issues surrounding the supply and affordability of housing and potential ways of overcoming these issues, it is important to first consider how housing need and supply is measured.

The importance of new build of both market and affordable housing is at the heart of States' housing strategy. In the introduction to the 2013 Housing Business Plan, the previous Minister for Housing stated that:

"The use of existing States owned land will also be key in delivering new homes, however, there is still a role for new homes to be delivered through the normal planning process and I am keen to support the Planning and Environment Minister in his endeavours to deliver homes for all tenures, concentrating development on States owned land and existing brown field sites. My mantra for the foreseeable future will be Supply, Supply, and Supply."[1]

The requirement figures for new homes set out in the 2011 Island Plan were reviewed, updated and rolled forward in 2013 as part of the proposed changes to the Housing Chapter of the Plan. The figures show that an estimated 3,450 new homes would be required over the period 2013- 2020. Of these 1,000 would be Category A (i.e. affordable homes, lifetime homes, First Time Buyers homes and shared ownership) and the remainder would be market homes for sale or rent.

The more immediate requirements for 500 affordable homes up to the end of 2015 reflect housing aspirations expressed in the 2012 Housing Needs Survey, which have been moderated by considerations of realistic affordability. The demand includes 400 social rented homes and 100 affordable homes for purchase.[2]

The estimates for the demand of housing within the revised 2011 Island Plan were based on the population and household modelling using the 2011 Census results; the findings of the 2012 Housing Needs survey; evidence from the Affordable Housing Gateway; and records of recent housing completions. According to Strategic Housing Unit (SHU) the future demand of housing in Jersey will be affected by levels of net migration, ageing population and size of average households.

The Population model used to help determine the demand for housing was based on the agreed interim population target of an additional +150 households per year (325 people). In the past the States has failed to control the level of inward migration and meet targets set within past population polices. However, it is hoped that the Control of Housing and Work Law, which was adopted in 2014, along with the introduction of a Population Register will provide the Population Office with improved statistics and, as a result, a greater understanding of the housing market in Jersey. The Chairman of Le Vaux Housing Trust acknowledged the difficult task of determining demand in light of Jersey's inward migration position:

"We understand that there have been attempts to determine the demand for housing, both for rental and purchase, but predicted numbers have always been overtaken by increased inward migration. It follows therefore that the biggest challenge is to accurately determine demand both now and say in fifteen years' time."[3]

The most recent report by the Department of the Environment in respect of the housing supply was Residential Land Availability at January 2013 (R.115/2013). The report stated that  "the evidence available on housing supply suggests that the Island will be in a good position to meet identified overall demand for new homes during the next five years."[4] Nevertheless, the report also said that there was no room for complacency.

Within the draft Housing Strategy Framework, the Strategic Housing Unit acknowledges that the estimated future demand and supply of housing is based on assumptions about demography and viability which have not taken into account economic and other behavioural factors.[5] For instance, Christian Whitehead, who was commissioned to undertake work for the States, referred to the likelihood that household numbers may have  been underestimated if the economy were to improve. It is for these reasons that it is imperative that the housing market and, in particular, any challenges concerning the demand and supply of housing are monitored.

The supply and demand of homes is monitored by the Planning Department from evidence generated from the Affordable Housing Gateway, Housing Needs Surveys and Census data produced by the Statistics Unit. During the interim years of an Island Plan, the States are accustomed to receiving a Residential Land Availability' report which is essential for assessing the performance of agreed policy aims and objectives. In 2014 and thus far in 2015 however, no such report has been submitted to the States. According to Andium Homes "the absence of the data routinely reported in the Residential Land availability report has made the monitoring of supply and demand for housing more challenging."[6]

Within the draft Housing Strategy Framework, the Strategic Housing Unit has committed to publicising an annual Strategic Housing Market Assessment Report. It has been advised that the report will provide evidence on the current and future number of households in need across all housing  tenures,  matched  against  the  anticipated  supply,  together  with  specific  housing requirements.

The Panel is fully supportive of the introduction of a new monitoring mechanism which will hopefully provide greater transparency and accountability and in turn will allow prompt action to be taken to avert any crisis from occurring. In order for this to happen it is imperative that the reporting of targets and actual performance is backed up by any shortfalls in delivery or advice on expected future problems. Our expert adviser concludes:

"Getting a clear, concise and up to date position statement on housing supply (recent past, present and future) showing actual performance against what is planned and the level of need  has  been  difficult.  The  production  of  a new  Housing  Strategy document should change this, particularly with a focus on producing annual updates on delivery against forecasts and plans."

KEY FINDING: The Strategic Housing Unit's commitment to producing an annual Strategic Housing Market Assessment Report is welcomed. Consistent and effective monitoring of housing supply and demand is essential for identifying shortfalls in delivery and planning correctly for the future.

5.1 The Affordable Housing Gateway

The Affordable Housing Gateway deals with all social housing in Jersey and is overseen by the Strategic Housing Unit. It provides a single waiting list that covers all social housing providers. Each provider will then allocate their empty homes according to the greatest needs and waiting time.

To qualify for social housing you must have a demonstrable need. For instance, you must be on a relatively low income and; have medical physical or mental disabilities and are in need of special types of housing; have a family with young children; or be over 50 years of age. In addition to the above, in order to qualify you must:

• have housing qualifications;
• have been in Jersey as your main place of residence for at least six months;

• be over 18 years old; and
• have a joint income of less than £40,000 per year.

The Affordable Housing Gateway has played an important role in measuring acute housing need in Jersey. However, concerns have been raised as to whether the Gateway really reflects the true picture of the affordable housing need on the Island. Both Andium Homes and Mr. Van Neste, the Chairman of The Jersey Homes Trust, have expressed concerns in regards to the current criteria that is used to determine access onto the Gateway waiting list. For instance, Mr. Van Neste advised us:

"It must be understood that the criteria for acceptance onto the Gateway waiting list are severe. Generally speaking, criteria in the UK are more flexible/generous. This has been recognised from time to time (see the Whitehouse Report; The States White Paper on Housing Reform.) The effect of this is to conceal the true extent of the housing need."[7]

Similarly, Andium Homes spoke of the importance for the States to consider the extent of hidden housing need from concealed households and from groups who do not qualify for affordable housing such as childless single people, people under 50, Key Workers, and those awaiting housing qualifications. In its testimony to the Panel, Andium Homes suggested extending access to Affordable Housing to those who are not currently permitted access in order to minimise the leakage of Income Support benefit into the private rented sector.[8] It is worth noting that as of 31 December 2013, 1,984 households who were renting in the private rental sector were claiming income support.[9] Furthermore, it is hard to measure how much of this rent (funded through income support) is subsequently reinvested back into the current or future housing stock.

KEY FINDING: At present, there is a significant leakage of the housing component of Income Support into the private rented sector. It is unclear to the extent in which the rent, funded through income support, is reinvested back into the current or future housing stock.

The Delivery Plan, contained within the draft Housing Strategy Framework, confirms that a revision  to  the  Housing  Gateway  criteria  and  allocation  policy  is  underway  and  due  to  be completed by quarter three in 2015. It is envisaged by the SHU that any amendments made to the Housing Gateway will make the process of entry more equitable and will closer match the

demand of affordable housing with supply.[10] We recognise however, that in order to amend the criteria of the Gateway, greater supply of affordable housing must be forthcoming.

In order to successfully achieve this objective, our expert adviser has recommended that an annual review is undertaken of the income level that is used as a marker to access individual's eligibility for the Affordable Housing Gateway, so that it is updated in line with rental costs, property values and affordability criteria.

KEY FINDING: The Affordable Housing Gateway does not reflect the true extent of the affordable housing need in Jersey.

RECOMMENDATION:  The  Minister  for  Housing  should  undertake  an  annual  review  of  the qualifying income level for access to the Affordable Housing Gateway to ensure the figure is aligned with rental costs, property values and affordability criteria.

As previously mentioned, the revised Island Plan identified the need for 1,000 affordable homes (rental and purchase) to be provided before 2020. The estimated supply for the same period, according to the Plan, is 1,060. Although the Strategic Housing Unit acknowledged the risk of an imbalance  if  identified  sites  are  not  developed,  there  has  been  no  mention  regarding  the increasing waiting list numbers for the Affordable Housing Gateway. As of June 2015, the waiting list for social rented housing had exceeded 1,200 people (including affordable purchase in Band 5). Of these, 210 households are in Band 1 which is the highest priority and refers to applicants who are homeless, under eviction notice, who have urgent medical issues, or are staying with family or friends.[11] According to Andium Homes, the supply of new homes in recent years has been insufficient to meet the growing demand of the Affordable Housing Gateway. Its Strategic Business Plan further states "after delivering the additional 472 net new units committed to, there will still be unmet demand for affordable homes. Further growth is therefore required."[12]

When considering the increasing demand for affordable homes and the need for growth, it is important to examine the type of property which is being sought in order to provide what is essentially needed. The overwhelming majority of applicants on the Affordable Housing Gateway waiting list are seeking smaller sized accommodation with over 80% of households waiting for

one or two bedroom properties. As suggested by our adviser, "this provides a strong steer to where the majority of new house building efforts should be directed."[13]

With regard to the above, our expert advisor has recommended that the annual targets for the delivery  of  different  sized  affordable  properties  are  adjusted  to  reflect  the  demands  and requirements of individuals on the Affordable Housing Gateway waiting list.

KEY FINDING: As of June 2015 the Affordable Housing Gateway waiting list had exceeded 1,200 people.

KEY FINDING: It is imperative that consideration is given to the type of property that is being sought by individuals on the Affordable Housing Gateway when planning for future supply.

RECOMMENDATION:  The  Minister  for  Housing  should  ensure  that  annual  targets  for  the delivery of affordable housing reflect the needs and requirements of individuals on the Affordable Housing Gateway, in particular the size of properties requested.

In 2001, the UK government changed the way that social housing is allocated. In the majority of areas, the old points based allocation systems have been replaced by a Choice Based Lettings (CBL) System. The change was initially introduced as a result of widespread concerns among housing providers, councils and tenants about unfair, bureaucratic allocation of social housing.[14] Under CBL, vacant properties are advertised' and applicants on the waiting list decide which ones to apply for. The new system therefore provides more choice and involvement in selecting a new home.

The Affordable Housing Gateway is not currently run as a Choice Based Lettings System. It is our understanding that individuals are simply allocated a property according to their need and those within the highest priority band are housed first. Andium Homes however has recently been trialling a CBL with a number of gateway applicants and, to date, the feedback has been really positive.  Andium  believe  that  with  this  new  system  "clients  will  be  able  to  look  at  wider geographical areas to choose where they want to live while also demonstrating a more effective use of the limited housing stock available."[15]

Currently, the scheme is only being run by Andium Homes. Other affordable housing providers continue to allocate their homes directly to those registered with the Affordable Housing Gateway. In light of the benefits that tenants seem to gain from CBL, our expert adviser has recommended that a full trial of the system should be run by the Housing Trusts, as well as Andium Homes, for advertising and re-letting vacancies in the affordable housing stock.[16]

KEY FINDING: A Choice Based Lettings System would allow individuals on the Affordable Housing Gateway to make their own decisions about where they live and to exercise an element of choice. It would also provide a more effective way of utilising the limited housing stock available.

RECOMMENDATION: The Minister for Housing should require a full trial of a choice based system to be operated for advertising and re-letting vacancies in the social housing stock. This trial should involve the housing trusts as well as Andium Homes. It should take place before March 2016.

6. THE DELIVERY OF HOUSING

The development of 1,060 affordable units is expected by 2020 from the development of States- owned site; re-zoned sites; Andium Homes sites; and the redevelopment of existing Housing Trust sites. As we mentioned earlier, the evidence available to date suggests that the Island is able to meet the identified demand for new homes up to 2020. However, the same evidence strongly advisers that in order to meet housing demand the Strategic Housing Unit must ensure consistent high levels of output. For instance, Christine Whitehead found:

"The  fundamentals  in  Jersey  certainly  suggest  that  supply  is  being  constrained  and particularly that output levels are extremely volatile in the face of a clearly specified Island Plan that helps ensure an apparently adequate identified land supply."[17]

The Strategic Housing Unit itself acknowledges the volatile nature of completion rates for new builds and confirms that there are large numbers of approved planning permissions for housing across the Island that have not yet resulted in development. The supply of new housing, as measured by completion rates, has varied significantly over the previous 10 years – from a high of 720 units in 2006 to a low of 171 units just two years later in 2008 when the financial crisis hit the housing market. Figures have not been released for the last two years, which makes the task of tracking trends, identifying possible shortfalls and on-going monitoring impossible.[18]

KEY FINDING: One of the biggest problems we currently face in Jersey is the volatile completion rates of new builds.

RECOMMENDATION: The Minister for Planning and Environment should ensure that robust figures for housing starts and completions are collected and reported to the States Assembly on an annual basis to ensure transparency and accountability.

A number of explanations were provided by SHU for the slow take up of planning permissions: financial viability, additional requirements, access to sites, sequencing arrangements and land banking' by landowners and developers[19]. Some of these issues will be addressed in our next chapter where we will be examining, in greater detail, the impact of the current planning system on the delivery of housing. For now however we will consider the current development on identified land and the consequences of untimely delivery.

1. Current Supply of Housing

In its written submission to the Panel, Andium Homes advised us that all but the Ambulance and Summerland sites (identified in the Island Plan), which were identified within Andium's Strategic Business Plan, are already in their ownership and they were strongly confident that the new supply would emerge within the suggested timescale, with the exception of these two sites.[20]

It was envisaged that the Summerland and Ambulance Station sites would have been vacant by 2018/19 at the latest. However, re-prioritisation of the States Capital Programme meant that the move of the Ambulance HQ would be delayed and therefore the two sites will not be available for development now until at least 2023. The significant delay in obtaining this land means that 152 new affordable homes will not be provided within the anticipated timeframe. Back in 2014, Mr C. Shepley, who undertook a review of the revised 2011 Island Plan proposals, expressed uncertainty as to whether the two sites would be vacant within the time specified in the Plan. Accordingly, he commented:

We visited this site and saw the very active uses which exist there. The Minister sees this as coming towards the end of the Plan period (between 2016 and 2020). A number of participants expressed doubts about this; and we share them, based on the past record to which we have referred. Since it is not proposed for development imminently, we do not see the need to replace it at present; but should there be no substantial progress within two years from the EiP (beginning of 2016) we recommend that other sites are brought forward in its stead."[21]

During a Public Hearing, the Minister for Planning and Environment confirmed that it would now be a challenge to deliver the Summerland site in the time anticipated. It is now looking unlikely that that site will be developed during the second Medium Term Financial Plan, albeit it was originally intended to be delivered during the first Medium Term Financial Plan. When we queried the Minister as to whether he should be proactively looking at alternative sites in order to ensure the delivery of 1,000 affordable homes by 2020, he commented:

"Well, it is certainly a possibility. I have already alerted my officers to my own personal view, which would be exactly yours, I think, which is if it does not look like the sites are going to deliver what we have aspired to when the plan came into force that we need to look at alternatives."

As a means of speeding up the delivery of homes, Andium Homes has proposed to develop the two sites separately; this would also be more financially viable than building the sites at the same time. The development of the Summerland site alone could produce up to 87 units of residential accommodation. However, the finances that were originally earmarked for this site from the £250 million bond that Andium received are now reserved for the development of another housing site – Ann Court. At a Public Hearing, the Chairman of Andium Homes advised:

"That money [the Housing Bond] is all earmarked for sites and we have substituted the Ann Court site for ambulance and Summerland because that is available today, ambulance and Summerland is not. So we will be spending all that money. It will not be sitting doing nothing."[22]

In the absence of available funds, development on the Ambulance site and Summerland site will be delayed even further. Andium Homes has informed us that a proposal has already been made to Treasury and Resources Minister for additional funds beyond the £250 million Bond. The funds would allow Andium to develop any future development opportunities that arise.

KEY  FINDING:  It  is  unlikely  that  the  Summerland  and  Ambulance  sites  will  be  ready  for development  until  2023.  Consequently,  150  affordable  homes  will  not  be  delivered  in  the anticipated timeframe that was set out in the Island Plan.

KEY FINDING: There are currently no funds earmarked for development of the Summerland site and Ambulance site.

RECOMMENDATION: The Minister for Planning and Environment should work closely with the Minister for Treasury and Resources to identify additional finances which would enable Andium Homes to begin development of the Summerland and Ambulance sites as soon as they become available.

In 2014 the States approved the rezoning of Samares Nurseries, De la Mare Nurseries and Field 785. According to Andium Homes "the development briefs, essential to commence the design process, have not been available until very recently. Indeed the development brief for Field 785 is still not available and may not be available for some time." As a result of this delay it is unlikely that around 300 new homes will be forthcoming before 2017/2018, at the earliest.[23] It is worth noting here that since the approval of the 2014 Revision of the 2011 Island Plan almost 12 months ago, none of the H1 sites have firm development proposals in place.

We have been advised by the Director of Policy, Projects and the Historic Environment that a report is due to be produced later this year which will examine the performance of the Island Plan against the housing targets. It is hoped that the report with give the Department a clearer indication of whether they are on target for 2020[24]. However, many of the written submissions that we have received express concern that, notwithstanding the delays in agreed supply, an unmet demand for housing remains prominent. We have been advised that "based on recent application rates and turnover, an annual supply of at least 150 new affordable homes will be needed to maintain the Gateway list."[25] Furthermore, the delays that have been experienced on the Summerland and Ambulance sites demonstrate how difficult it can be to deliver on what is originally believed to be achievable. For this reason, it is imperative that the Council of Ministers do not become complacent, regardless of the results of the Departments report later this year.

It is notable that although we were advised by an Officer of the Strategic Housing Unit that consideration was given to population numbers and qualifying periods when setting targets for the supply of houses, Andium Homes confirmed that it had not been given a population figure to work to. The Chairman of Andium made it clear however that given the current state of the Gateway waiting list and the failure to effectively house those already living on the Island, there was essentially no need to consider those numbers.[26] Nevertheless, we believe that it is crucial that both the Minister for Planning and Environment and the Minister for Housing, as well as all affordable housing providers, are working to an up-to-date population figure. Furthermore, the estimated numbers for demand need to be adjusted according to the number of people who qualify each year under the current 10 year rule for gaining Jersey qualifications. If these figures are not updated on a regular basis it is likely that demand will continue to outweigh supply for many more years to come.

KEY FINDING: The Council of Ministers has not provided Andium Homes with a population figure to work to in order to assist in the forward planning of the future supply of affordable homes.

RECOMMENDATION: The Minister for Housing must ensure that all other Ministers who are involved in housing the population, as well as all affordable housing providers, are working to an up-to-date population figure. Furthermore, the estimated demand needs to be adjusted to take into account the number of people qualifying every year under the current 10 year rule.

Our adviser has made reference to the findings above within his own report and equally shares the concerns raised by the Stakeholders in their testimonies to the Panel. The Minister for Planning and Environment inferred that he may need to come back to the States Assembly nearer the end of the Island Plan period to examine whether any further zoning of land was necessary[27]. However, as our adviser has stated, the timeframe between the granting of planning consent and the completion of new homes takes on average between 18 months and 3 years. Consequently, the adviser has recommended that a list of additional sites for developing new housing on should be brought to the States by no later than December 2015. It is hoped that the list "will make up for the shortfalls in the delivery of new homes by 2020 caused by delays in making starts on site at the former States-owned sites and/or re-zoned sites."[28]

KEY FINDING: Due to the delay in commencing development on former States sites and the re- zoned sites there is a strong possibility that the Island Plan target to deliver 1,000 affordable homes by 2020 will not be met.

RECOMMENDATION: The Minister for Planning and Environment should correspond with the Minister for Housing to bring forward a list of additional sites for new homes by December 2015, to ensure that the target for the delivery of 1,000 affordable homes by 2020 is achieved.

2. The role of Social Housing Providers

Andium Homes has set out initial objectives in its Strategic Business Plan to deliver a net gain of 472 new affordable homes. The 472 new homes will be funded through the Public Bond issue that was established by the States of Jersey.

When Andium Homes (Jersey) Limited was created a £250 million bond was made available to fund the refurbishment of the existing social housing stock and develop more units. The majority of the bond (£207 million) is being used to bring the Andium owned homes up to Decent Homes Standards and re-develop existing sites to increase supply, and the remaining money is being used for the development of new sites (including re-zoned sites from the Island Plan).

As a result of the increasing numbers of individuals on the Affordable Housing Gateway waiting list and Andium Homes' ensuing concern of unmet demand, the Company has set its own target of delivering an average of 100 new unit starts a year from 2015. Furthermore, we were advised that Andium was also pursuing the potential development of other sites as well as the development of 30 new homes at Langtry Gardens. In its submission to the Panel, Andium informed us that these additional projects would not be funded from the Bond issue and would require a new funding mechanism. In December 2014, a Funding Report' was submitted to the Treasury and Resources Department setting out  "the scale of possible future development opportunities and the options for funding." It is worth noting here that, whilst the additional sites that have been identified by Andium Homes would produce a substantial number of homes in the town areas, it is unlikely that they would be developed before 2020.[29]

Unlike Andium Homes however, other providers of social housing such as the Housing Trusts do not currently receive any financial support from the States for their delivery of affordable housing. The evidence we have received during our review suggests an overwhelming desire among housing providers for greater assistance from the States of Jersey in order to meet the demand for Category A' housing.

The Christians Together in Jersey Housing Trust presently own a total of 143 social-rented properties. For the past 12 months the Trust has been actively seeking new developments to meet its Strategic Plan objectives for future growth but has been unable to secure suitable sites. Whilst the Trust acknowledges that in the absence of a specific project it is unlikely that the States of Jersey will provide funding, it hopes to reapply for financial assistance once a site has been identified and purchased. It is the CTJ Housing Trust's view that it would be far better for all concerned if its funding could come from the Sates. In its testimony to the Panel, the Housing Trust advised that it strongly felt that the States of Jersey should:

• "Deliver on its promise to work in partnership with the third sector and be supportive of the Trust in its activities and initiatives to provide good quality housing for the marginalised in our society;
• Be willing to help the Trust acquire and re-develop redundant office space in St Helier and in accordance with its strategic priorities;
• Prioritise the re-zoning of suitable sites for social housing via the Planning system and to offer incentives to developers to develop these sites."[30]

The Jersey Homes Trust (JHT) was set up in 1995 as a non-profit organisation to provide social rented homes for Island residents. Since then the Trust has either developed or acquired over 740 new homes, spread over 20 private-sector developments, with funds borrowed from local banks (over £100 million was borrowed in total). The Jersey Homes Trust is committed in principle to develop some "further badly needed" rental units in the next few years from its own resources.

The Chairman of The Jersey Housing Trust has expressed a similar view and within his testimony has also spoken about his wish for further support from the States of Jersey. The Chairman, Mr. Van Neste, feels that "the States can have a hands-on' role in the delivery of affordable rental accommodation  by  understanding  and  supporting  the  role  of  affordable  housing  providers (Andium Homes and housing trusts). Jurisdictions in developed countries (UK and Europe) recognise the responsibility and invest substantial resources accordingly."

According to the Chairman, there has been very little development of Category A' rental homes in Jersey over the last six years which has resulted entirely from the withdrawal of States' support for further development over that period. It is suggested that the lack of financial assistance has contributed to a big increase in acute housing shortage and increased poverty. Whilst Mr. Van Neste recognises that the establishment of Andium Homes may improve the situation, he is mindful that in order for this to happen, Andium must receive the further support it requires from the States of Jersey.[31] Our adviser spoke of the role of the housing trusts within his own report and expressed concern regarding their potential alienation:

"All of the States funding (a residual sum of approximately £40 million for the housing bond) has been earmarked for Andium Homes' projects. This has the risk of alienating the housing trusts and severely limiting the contributions which they can make now and in the near future. At least 3 of the housing trust have stated their willingness and desire to undertake new housing developments – this includes providing housing for vulnerable groups like ex-offenders."

The Panel received a copy of the draft Housing Strategy Framework in its draft format before it had gone out for consultation. We found it notable that, within the document, there was no mention of the role played by the Housing Trusts in the provision of affordable homes. During the Hearing with the Minister for Housing we were, however, advised that the Trusts would be consulted on the draft Housing Strategy.  

KEY FINDING: The activities of housing providers need support, encouragement, direction and coordination.

KEY FINDING: In order to facilitate the further delivery of much needed social housing, it is imperative that the role of Housing Trusts is understood and supported by the Minister for Housing, the Council of Ministers and the Strategic Housing Unit.

RECOMMENDATION: The Minister for Housing should clearly communicate the role she expects the housing trusts to play in the future delivery and management of affordable housing in Jersey by October 2015.  

3. The use of empty properties

As a means of identifying much needed affordable housing from existing housing stock, the SHU has proposed to review measures to bring long-term vacant homes back onto the market. The extent to which properties in Jersey are left vacant was revealed in the latest Census. For example, in 2011 one in fourteen (7%) of all private dwellings were vacant on census day, which equates to total of 3,103 dwellings. Of these, 63% were flats and 37% were houses and, as you might expect, the majority of vacant dwellings were found in St Helier[32]. A variety of reasons were stated for vacancy within the 2011 Census and these are shown in the table below:

Source: Table 3.4: 2011 Census Report

It is clear from the available evidence that a reduction in the vacancy rate from 7% to 5% could have a significant impact on the supply of housing, as it would mean that nearly 900 homes would be back into use. To put it into perspective, 900 houses would count for over two years' target for supply through development in the Island Plan.[33] Given Jersey's current housing shortage, we feel that greater effort should be made by the Strategic Housing Unit to identify the length of period homes are left vacant.

The correspondent of one written submission we received acknowledged the benefit of bringing vacant properties back into use:

"Properties lying in dormant unkempt state for more than five years should be investigated. If the property is unused by the owner, maybe they could be encouraged to sell or renovate to assist with the housing shortage. Offer grants if they need them to renovate and let the grant be repaid when the property is sold." (PW submission)

In the UK there is now the option to charge higher council tax on properties that have been vacant for longer periods. For example, according to our adviser "English councils can charge premiums of up to an additional 50% in council tax on dwellings empty for 2 or more years." However, to date there is little evidence on how successful this approach is in reducing vacancy.

At a Public Hearing, the Minister for Planning and Environment agreed that the matter of vacant properties needed further consideration. He told the Panel:

"We do not want to build more than we have to and it stands to reason that if you have 100 properties on the Island which are empty for no good reason and you could have 100 families living in these properties, government should do all it can to make sure those properties are best used."[34]

In  light  of  the  evidence,  our  adviser  has  suggested  that  the  Minister  for  Housing  "should investigate the possibility of bringing between 20 and 30 empty homes a year back into use, using a variety of tools including the introduction of an empty property tax or charging an annual sum in addition to the current parish rates. Any proposals should be ready for consideration by no later than January 2016, for inclusion in the budget and programme of work in 2016/17."[35]

KEY FINDING: A reduction in Jersey's property vacancy rate by 2% would bring 900 homes back into the market. This would count for over two years' target for supply through development in the Island Plan.

RECOMMENDATION:  By  January  2016,  the  Minister  for  Housing  should  investigate  the possibility  of  bringing  empty  homes  back  into  use  using  a  variety  of  tools  including  the introduction of a form of empty property tax or charging an annual sum in addition to the current parish rates.

7. THE PLANNING SYSTEM

Within her report of the housing situation in Jersey, Christine Whitehead advised that the volatile outcome levels of development on identified land suggested a case for "further re-examination of the planning mechanisms to increase and stabilise delivery"[36]. The evidence gathered during our review from various Stakeholders and members of the public infers a serious concern that particular planning policies are putting a constraint on the supply of housing in Jersey. Furthermore, others have suggested the need for the re-introduction of certain planning polices to ensure the timely delivery of affordable housing. We will consider these concerns in turn.

1. Tenure Split

Within the revised 2011 Island Plan the States adopted a policy which set out a requirement for the delivery of 80% Category A' affordable housing for rent and 20% Category A' affordable housing for purchase, on the newly re-zoned sites. Access to these properties would be controlled and managed through the States of Jersey Affordable Housing Gateway. According to the previous Planning and Environment Minister, the exact figures proposed for the tenure split were based on evidence, provided by the States Statistic Unit, to meet the current demand of housing. The issue was scrutinised at the Examination in Public, and the Planning Inspectors found no evidence or convincing argument to suggest a change to the proposal. The objective of the tenure split was to ensure that new homes met the Island's specific housing needs.[37]

During our review we received evidence to suggest that the agreed policy on tenure split was having an adverse effect of discouraging land owners in offering their land for the development of affordable housing. Furthermore, we were advised that such requirements for re-zoned sites could lead to landowners and developers sitting on their land until the housing shortage became greater, in the hope that the imposed restrictions would be removed by the States. It is worth noting that, in this particular case, the landowners were willing to donate 40% of plots for social rented accommodation and 60% of land for first time buyer properties. Unfortunately, due to the requirements of the Policy, the landowners were discouraged from continuing and the field remains empty. The Panel was advised:

"The States are being, or have been, somewhat neglectful in providing social rented accommodation, and they are now trying to correct the situation by penalising developers

and the construction Industry, all of which is encouraging people not to offer land cheaply for development."[38]

Within P.37/2014 (the Revised Draft Revision of the 2011 Island Plan) it stated that the Minister for Housing (previous Minister) would be happy to operate the Affordable Housing Gateway in a flexible way to support parish objectives and to meet local needs, whether that be for prospective occupants/purchasers with Parish links and/or age related requirement, i.e. for people aged over

55.[39] Despite this, and despite the landowners (referred to above) wish for their dwellings to be occupied by families within, or having a credible association to, the Parish, they were advised that families all over the island would be chosen from the Gateway waiting list and no priority would be given to people living with parish connections.

The provision of affordable housing is considered the highest priority to the Panel and indeed the States as a whole. It is therefore imperative that some flexibility is built into this particular Policy in order to encourage the timely development of re-zoned sites and so as not to deter the delivery of affordable housing, albeit it may be less than anticipated. This finding is supported by our adviser who believes that the Policy "needs to be capable of revision and changed where a case can be made for this to happen."

We raised this particular issue at a Public Hearing with the Minister for Housing in June. The Principal Planner of the Strategic Housing Unit agreed that more flexibility was needed for future developments on re-zoned sites:

"Absolutely. That was a short term supply that was given because of a review of the Island Plan that happened last year and obviously any future sites that may get re-zoned or be allocated for affordable housing will be given a split or a tenure type that is evidenced at the time."[40]

Our advisor has recommended that the Minister for Planning and Environment, in conjunction with the Minister for Housing, should review the impact of implementing the 80:20 rule for delivering new affordable housing on the identified re-zoned sites by March 2016. The adviser has also recommended that consideration is given to allowing affordable housing on additional sites to be developed at different ratios i.e. 100% for rent or including shared ownership homes in the definition of housing for sale.

KEY FINDING: The Island Plan policy requirements for an 80:20 tenure split on re-zoned sites may have an adverse effect of discouraging landowners and developers from supplying any form of housing on the land.

RECOMMENDATION: By March 2016, the Minister for Planning and Environment should work with the Minister for Housing to review the impact of implementing the 80:20 rule for the delivery of affordable homes on re-zoned sites.  

2. Regeneration of St Helier

The 2011 Island Plan contains policies which protect employment land (Policy E1) and Historic Buildings and Places (Policy HE1). Whilst the majority of those from whom we received evidence from during this review supported the principle of these policies, there was a concern that they often  impeded  the  delivery  of  affordable  housing  and  the  objectives  underpinning  the regeneration of St Helier. Andium Homes commented on this particular issue within its testimony to the Panel:

"These policies [E1 and HE1] have laudable principles but can act as a disincentive or barrier to urban regeneration projects which will already be relatively complex projects with land often owned by a large number of individuals and entities."[41]

The Chairman of The Jersey Homes Trust provided a similar viewpoint:

"There is far too much protection for old and redundant buildings in St Helier. There is an unnecessary disincentive and obstacle for residential development. It is very detrimental to the orderly re-development of the Island's infrastructure. It is also, ultimately, unsustainable and damaging to the very concept of protection. When common sense prevails great harm will have been done to St Helier."[42]

The Minister for Housing also recognised the need for flexibility with regard to the two policies:

"my thoughts are that buildings need to evolve, they need to be lived in and if you need to relax one policy going to another policy then I think you need to do it to get the best out of it for the community."[43]

The Island Plan recognises the likelihood that a significant number of commercial occupants of the new financial and business centre (Esplanade Quarter) will have to be re-located from other

premises in St Helier. The Strategic Housing Unit acknowledges the potential opportunity of reclaiming some of this commercial stock for other uses, such as residential properties[44]. In order to minimise the risk of Policy E1 acting as a barrier to regeneration in urban areas, Andium Homes  has  suggested  that  the  Minister  develops  an  additional  Supplementary  Planning Guidance, in the form of a Master Plan for St Helier. It is envisaged that the Plan would identify key redevelopment zones where the requirements of Policies HE1 and E1 could be relaxed.[45]

In  the  view  of  our  expert  adviser,  the  use  of  redundant  office  space  for  future  residential properties is an option that should be given serious consideration. It is however acknowledged that such projects would "need considerable spending and careful, sympathetic design to make them suitable for residential purposes."

KEY  FINDING:  Current  planning  policies  conflict  with  the  objectives  underpinning  the regeneration of St Helier and act as a barrier to new urban housing projects.

RECOMMENDATION: The Minister for Planning and Environment should examine how Policies E1 and HE1 could be relaxed in certain parts of St Helier to encourage and facilitate new housing. This should result in the issuing of new supplementary planning guidance for St Helier by March 2016.  

3. H3 Policy (Planning Obligations)

A specific form of Planning Obligations Agreement (Policy H3) was intended to be introduced under the 2011 Island Plan which would require developers to provide a certain amount of affordable housing and/or financial contribution in order to boost affordable housing supply. However, the policy mechanism requiring a proportion of affordable homes as part of private housing development was never implemented. The development industry has always expressed concern that this policy was not viable, and that its implementation would risk land not being brought forward for residential development, thus further undermining the supply of homes. As a result, the revised 2011 Island Plan resulted in the withdrawal of this policy mechanism and stated that other ways of capturing development value would be explored. It is however unclear to the Panel whether this consideration has indeed taken place and, if so, its outcome.

Within his testimony to the Panel, the Chairman of The Jersey Homes Trust advised that "attaching Planning Obligations for Category A' housing to planning consents is an excellent means of achieving delivery of affordable housing."[46]

Andium Homes was also supportive of the reinstatement of Policy H3 and the use of planning obligations for securing much needed affordable housing. Policy H3 faced significant industry opposition due to the wider economic conditions of that time. However, it has been argued that, in today's economic climate, "there should be no reason why such a policy should not be affordable now." According to Andium, since the draft Policy H3 was abandoned significant private Category B sites have been brought forward for development which would have, had Policy H3 been in place, delivered almost 60 new affordable homes. Thus, the Company is of the view that priority needs to be given to:

"A revision of the Island Plan to introduce a policy which requires private landowners to provide a proportion of affordable housing in Category B private development sites or a commuted sum ring fenced for use in the development of affordable housing. It should be recognised that the use of commuted sums should be the exception rather than the norm as on its own a commuted sum will not provide any additional housing unless there is land on which to invest in development."[47]

The Strategic Housing Unit has committed to undertaking a further review into the issue of Planning Obligations Agreements and will be working with the Treasury and Environment Departments to review the policy options for increasing affordable housing supply through such arrangements (on-site policy or levy policy).

The Minister for Planning and Environment has however recognised the need to tread carefully as there is a concern that the reintroduction of Policy H3 could stop any economic regeneration or any supply of housing. The Minister advised:

"I think we have to be seen to be working with the industry. It does not mean to say that we have to be, you know, in each other's' pockets and what have you, but, I mean, the one thing we can see from policy H3 is that when this was produced the industry and the land owners and developers said this is not going to work and it did not work."[48]

Our adviser is broadly in favour of the use of planning obligations. However, he also recognises that in order for such a policy to work it needs to be sensitive to local circumstances and guided by  pragmatism.  For  instance,  it  is  advised  that  "an  inflexible  policy  which  prevents  new developments from proceeding and achieves very little or no new affordable housing can prove to be counter-productive." It was further advised that in order for a working policy to be put in place, a meaningful dialogue would need to take place first with landowners and developers, with all sides willing to compromise. Consequently, our adviser has recommended that:

The Ministers for Housing and Planning and Environment should enter into a dialogue with representatives of landowners and developers to see if there is a way out of the current impasse. The dialogue should be wide in its scope and flexible in its nature, to see if a deal can be struck based on compromise all around. The ultimate aim should be to ensure the 1,000 new affordable homes by 2020 can be met." [49]

KEY FINDING: Policy H3 could undermine the delivery of affordable homes if it is too onerous. In order for it to be a workable policy, it must be applied in a sensitive and pragmatic manner.  

RECOMMENDATION:  The  Minister  for  Planning  and  Environment  should  ensure  that  a meaningful dialogue with landowners and developers takes place before any planning obligations are applied to new builds. It is imperative that all parties work together to achieve the objectives set out in the Island Plan.  

4. Land "hoarding"

As we have previously mentioned, one of the most pressing concerns in Jersey is around volatile completion rates for new builds, despite additional land having been identified within the revised 2011 Island Plan. Among other things, there is a concern that land owners and developers bank' identified land to maximise the profits rather than to ensure a stable flow of new build housing.

In some countries these issues of land hoarding are addressed in part by tax arrangements to increase the costs of holding land off the market. Last year the Labour Party proposed a use it or lose  it'  approach  to  delays  in  development.  However,  the  evidence  suggests  that  effective incentives are hard to determine and to implement because of the many reasons for delay other than hoarding' land. Nevertheless, Christine Whitehead advised the housing Department that there  was  a  "case  for  looking  at  possible  approaches  in  the  Jersey  context,  especially  if transparency around contracts and development decisions could be increased. An alternative is to look at greater use of Compulsory Purchase Orders (CPO) powers."[50]

There is currently provision with the Island Plan to use a CPO in the event that re-zoned sites do not come forward for development. This provision was proposed by the previous Minister for Planning and Environment in the revision to the Island Plan in order "to reinforce the intent to deliver much-needed homes by direct government intervention, if necessary."[51]

The current Minister for Planning and Environment has recently expressed annoyance about developers playing' the planning system by making several repeat applications with minor amendments or having plans approved but leaving sites dormant for years. There are currently an estimated 2,000 unused planning permissions on the Island. In order to deter would-be developers from land banking, the Minister has suggested reducing the current five-year time- limit before a permission lapses and/or adding a charge for planning permission extensions[52]. Furthermore, the draft Housing Strategy Framework suggests that consideration may also be given to allowing parishes to levy a charge equivalent to rateable value if land allocated in a plan with or without planning permission is not brought forward within a certain timeframe.[53]

Andium Homes spoke of this issue extensively within its written testimony to the Panel. The majority of concern expressed by the Company was in fact to do with the landowners of re-zoned sites holding out for the best price in the knowledge that the demand for their land would increase with time. For instance, they advised:

"Rezoning appears to be an unconditional and irreversible step which hands the land owners a significant uplift in land value for absolutely no effort but then leaves it to the land owner to decide when to have their site developed."

In 2014, during the debate of the Revised 2011 Island Plan, the States did not approve 3 of the original 7 sites that had been proposed by the then Planning and Environment Minister for Affordable Housing development in Polices H1 and H5. Since then no proposals have been made by the Minister to address the shortfall in supply or identify additional sites. It is Andium Homes' view that this decision, taken by the States in 2014, has contributed to the issues currently faced in regards to delayed development:

"There are inherent risks in having an Island Plan Policy which rezones the absolute minimum amount of former agricultural land necessary; or even less than is required, as was the case in 2014. This makes the approved sites so valuable in terms of supply that the land owners and developers are presented with an incentive to hold out for best price and there are no additional policy levers to create an incentive for early development. This leads to inevitable delays in the delivery of homes. Whilst the Island Plan makes provision for compulsory purchase where land owners do not come forward with development proposals in a timely manner, there would appear to be little appetite for this degree of intervention."[54]

Whilst it is acknowledged by our adviser that a reduction in the expiry period of a planning permission may work in some instances where decisions are finely balanced, he does not feel that this proposal will "have a significant impact on decisions by landowners and developersas the fees comprise a small part of the total development cost."[55]

As with other issues discussed within our report, there does not seem to be a one size fits all' solution to the current problems we are facing with undeveloped land. When considering the introduction of any incentives to encourage those with planning permission to build there is a danger that developers may delay bringing applications forward to begin with until there is greater certainty of a development going ahead. Therefore, a balance must be struck in order to facilitate the timely provision of affordable housing.

During our Public Hearing with the Planning and Environment Minister, he advised that he was "looking at ways to encourage people to actually build what they apply for."[56] In order to encourage development, our adviser has suggested that the Minister for Planning and Environment could ease the obligations or conditions on developments to make them more attractive or provide incentives. The following options have been recommended for consideration:

• Parish rates could be levied annually on undeveloped sites with planning permission for new homes, equivalent to the sum of the rates to be charged on the number of new homes with consent;
• "The States could establish its own housebuilding company;
• Andium Homes should be encouraged to build housing for sale (perhaps to cross subsidise the construction of affordable housing) on land transferred to it;
• A joint venture company could be established with an existing house builder to build housing on land already owned by the States, or acquired for this purpose;
• Land could be acquired by the States (possibly using CPO powers) and disposed of to developers and/or affordable housing providers, with payments deferred until the new houses are sold or let (and any profits shared with the States?); or

• Subsidised  development  land  could  be  provided  to  those  willing  to  build  affordable housing."[57]

KEY FINDING: There is not a one size fits all' solution to the current problems we are facing with land hoarding'.

RECOMMENDATION: By March 2016, the Minister for Planning and Environment should work closely with the Minister for Housing and Minister for Treasury and Resources to review the initiatives proposed by our expert adviser and agree a set of incentives for encouraging the timely development of identified land.

5. Parking spaces, Lifelong Homes Standards and Density level requirements

The current policy for new housing is to focus development on the urban area of St Helier and, to a limited degree, on a number of former greenfield re-zoned on the edge of the built-up area. This overarching policy is supported by a number of supplementary policies that impose requirements on areas such as; density levels, the provision of car parking spaces and building all new homes to Lifelong Homes Standards.

During the Public Hearing with the Minister for Housing we were advised that the planning guidance currently in place proposed a parking standard of one space per unit. The guidelines themselves state "the standards are set down for guidance only and it is not the intention to produce a set of inflexible rules which are not unnecessarily restrictive."[58] Andium Homes has for example developed a number of its own sites to a parking specification of 0.7 spaces per unit. It is however unclear as to exactly how flexible the current guidelines are and what the minimum requirement would be for residential parking.

Our  expert  adviser  expressed  concern  that  the  current  parking  space  requirements  were adversely impacting on the supply and affordability of housing:

"In the urban areas it is mainly flats that are being built, but it is becoming increasingly difficult to find the land at ground floor levels to comply with the requirements for car parking spaces (0.7 to 1 parking space per unit of accommodation), while building underground car spaces are very expensive. We heard of several instances where underground parking was being provided at extremely high cost – in one example, each parking space was costing

the equivalent of £50,000 which is an extraordinarily high on-cost to place on a housing scheme, damaging its financial viability and forcing sales prices up."[59]

We asked an officer of the Strategic Housing Unit whether flexibility is required if the idea of converting redundant offices into homes was going to work and he advised:

"Certainly, absolutelyquite often if you put on too much of a requirement for parking on a tight site then it just will not happen. You will not get the residential development coming out of that site. There is clearly a policy in the Island Plan that expects that old, worn out office stock is to be replaced with residential stock going forward in times as the office area moves south towards the waterfront. So that is something that would probably be restricted if there was too much of an onerous parking requirement on some of these tighter sights."[60]

Technical Guidance Document Part 8 Access & Use of Buildings' issued by the Minister for Planning and Environment under The Building Bye-laws (Jersey) 2007 imposes minimum requirements for all new homes to be built to Lifetime Homes standards (accessible and adaptable). One of the many objectives of the changes to the Bye-laws is to make the dwelling adaptable to the occupier's long-term needs and to incorporate features that will enable occupants to cope better with reducing mobility and to stay put' longer in their own homes. Andium Homes advised that these requirements are "laudable and clearly provide opportunities for occupants to continue to live independently as their needs change over time."[61] The Chief Executive Officer of the Planning Department also spoke about the positives of these requirements:

"I think the lifetime cost of a home, if we can keep people in their homes, in their community, being cared for in their homes for a longer period of time, because of the standard of their housing, it will help our costs elsewhere within the government system, so we are not moving people out of a tiny, confined home into a residential care setting, or forcing a move when people do not need to do it."[62]

Whilst we support the principle behind the requirements and acknowledge the importance of accommodating our ageing population, we are unsure of the necessity to build every home to this standard. During the evidence gathering stage of our review, our adviser was informed by a developer that the requirement to build houses to Lifelong Homes standards added 15% to the overall construction cost and thus to the sale price of properties. To the contrary, the Officers at the Planning Department advised us that the cost of building to these requirements was far less. For us, however, the important issue to consider is whether the requirement for Lifelong Homes standards should impact on the affordability of houses for those who may not require such accessibility or adaptability. For instance, our adviser has questioned whether there is a need for all starter homes, designed and built for First Time Buyers, who tend to be younger and fitter than other residents and remain at a property for a shorter period of time, to be built to these standards.

The  actual  number  and  size  of  homes  built  on  Category  A'  Affordable  Housing  sites  is determined through the planning process, involving the preparation of a housing development brief for each site, to be approved by the Minister for Planning and Environment and issued as supplementary planning guidance. The development briefs will guide the delivery of homes on these sites and, among other things, will address design matters such as density.

The supplementary planning guidance that was issued alongside the Island Plan states that a tall building should not be higher than its immediate neighbours – this does not necessarily mean in comparison with adjacent buildings but rather buildings within its neighbouring character area.[63] The revised Island Plan is very explicit in that unless higher, more land-efficient densities are realised on all development sites, it will not be possible to meet all of the identified needs for housing  without  re-zoning  additional  housing  sites.[64]  Despite  this,  it  does  not  appear  that developers have been permitted to build higher blocks of accommodation in St Helier.

With  regard  to  this  matter,  the  Minister  for  Planning  and  Environment  advised  that  the Department was "slowly developing a policy which is going to allow us to build higher because we are going to have toif we are going to build 2 or 3 storey buildings in Jersey, we will end up covering the whole Island. What we need to do is, you know, we have a green and pleasant land and we will have to build more in town. Build higher in town."[65]

In order to ensure that none of the existing planning policies are creating unnecessary obstacles for providing new housing schemes in St Helier, our adviser has proposed that the Minister for Planning  and  Environment  should  undertake  a  review  to  assess  whether  they  are  Fit  For Purpose' and delivering the required outcomes, by March 2016.

KEY FINDING: The current planning policies that set requirements for parking spaces, density levels and Lifelong Homes standards may hamper the delivery of affordable housing. RECOMMENDATION: By March 2016, the Minister for Planning and Environment should ensure that the current planning policies are fit for purpose' and do not conflict with the objectives of the Island Plan and, in particular, the provision of affordable housing in St Helier.  

8. ACCESS TO AFFORDABLE HOUSING

By separating supply of housing and affordability of housing into different chapters we are not ignoring the inherent link between the two. We acknowledge that without consistent supply of homes house prices will increase – helping established owners but making it even harder for new entrants to gain access to the housing market. It has been evidenced that the "affordability of housing, whether rented or brought, will itself vary with the balance of demand against supply. Affordability will in turn be determined by the state of the economy, employment, incomes, the price and availability of credit and expectations."

Access to affordable housing is managed through the Affordable Housing Gateway, which is used by all of the affordable housing providers, except the Parishes. According to the Strategic Housing Unit, the majority of applicants of the Gateway are seeking rental accommodation.[66] The rent levels in the social rented sector have not long returned to 90% equivalent of the open market rent levels for new tenancies. During our review we have received written testimonies expressing concern about the implications of the recent increase. We will consider these next.

1. 90% Market Rental Policy

In 2013, the States agreed a Proposition (P.33/2013) that was brought to the States by the Council of Ministers which proposed a return to the former States policy of near market rents for social housing. The Housing Strategy for the 1990s (P.142/1991) made clear that fair rent' levels should be set to near market equivalents and for many years this has, in practice, been taken to mean that a fair rent' should be set at 90% of the open rent price. However, previous political decisions to limit increases in fair rents' have had the inverse effect of widening the gap between those and comparable open market rents. As a result, the average rent of a home in the social rented market decreased to around 70% of its market equivalent.

It was the view of the Council of Ministers that the 90% near market rent policy would enable social housing providers to provide homes on a sustainable basis that would track market prices, but not drive inflation in the wider property market. Furthermore, it was also envisaged that the increase in social housing rents would help to support both development costs and land acquisition in respect of affordable housing sites that were identified in the 2011 Island Plan. [67] The increase in rental levels to 90% of the market price only impacts those tenants moving to new rental accommodation. Additionally, those tenants in receipt of the full housing component of Income Support continue to have the full amount of their rent paid for and therefore will not be financially impacted by the re-introduction of this policy. The Strategic Housing Unit has advised that 64% of Andium Homes' tenants receive Income Support and are therefore supported with the additional rental cost through Government funding. The other 30% will meet the costs directly.[68]

It is our understanding that all of the Housing Trusts, apart from Les Vaux Housing Trust, have signed up to the new 90% market rent policy. In its testimony to the Panel, Christians Together in Jersey Housing Trust (CTJ) expressed concern that the policy will in the future affect both the affordability and supply of homes:

"Currently there are a number of our existing tenants registered with the Affordable Housing Gateway looking to downsize from their current accommodation. The two largest social housing providers apply the new rent policy to all new tenancies, including tenancies created when an existing social housing tenant downsizes to smaller accommodation. This creates a disincentive for tenants to downsize if their rent is either likely to increase or remain around the same level. Whilst this will not affect those in receipt of income support, it will inevitably lead to an increase in under-occupation for those who are not. Our Trust has taken the view to exercise discretion by allowing existing tenants to downsize without increasing their rents to 90% of market rent, in order that we make the best use of our housing stock. This is an area that requires further thought across the whole social housing sector, so that we do not see a reduction in the number of 3-4 bed homes being made available due to those currently under-occupying choosing to remain in their current accommodation."[69]

One written submission we received from a member of the public highlighted the risk that the 90% market rental policy would encourage more people to rent in the private sector and/or encourage private landlords to increase their rents to reflect the difference in the two sectors. It was noted that the rationale for social housing is to accommodate those unable to afford the rent in the private sector. We were advised:

"With such exorbitant rents being charged you will not have to worry about the supply of homes because few people will be able to afford them and, those that can will probably rent in the private sector."[70]

The private rental sector is not governed by any controls. Rent levels are only subject to market forces and the discretion of landlords. Therefore, if the cost of private sector rents were to rise at a fast rate, affordable rentals would raise with them. In all instances, this outcome would be undesirable as the rent levels would move further away from affordable criteria.

Our expert adviser addressed this matter, and some of the concerns that arose during the review, extensively within his own report. He commented:

"The new housing strategy framework document acknowledges the high cost of private sector rents and the financial stress these cause to those on average and below average incomes. The difference between 100% and 90% of a market rent is possibly not sufficient to make the latter affordable' for those who are unable to buy their own home. There is a danger that the higher rents could result in the following sorts of outcomes:

• tenants on income support are discouraged from seeking paid employment and earning above income support levels;
• tenants who under-occupy their current home are discouraged from transferring to smaller accommodation; and
• new tenants who earn just over the threshold for receiving benefits have to pay the full rent, and do not enjoy any means tested discount based on a taper."[71]

In view of the concerns raised there is justification for further monitoring of the Policy to ensure there are no unintended consequences. However, it is acknowledged that the Policy has not been long in place and some time is needed before you can assess the true effects of the rental increase – positive and negative. Our adviser has recommended that  "the Housing Minister should review the impact of the new affordable rents on existing and potential tenants and identify any unforeseen or unwanted consequences, brought about by the changes to the affordable rent policy and its future operation. The review should be completed by March 2016 and should identify any corrections of unintended and unwanted outcomes."[72]

KEY FINDING: It is unclear what impact the new 90% market rental policy will have on new and existing tenants and the overall rental housing market.

RECOMMENDATION: The Minister for Housing should closely monitor the impact of the 90% market rental policy on tenants and report to the States Assembly by March 2016. The report should identify any unforeseen or unintended consequences of the affordable rent policy and should propose ways to overcome them.

Before we move on to consider another issue, it is worth noting here that none of the above areas of discussion are applicable to those who do not hold housing qualifications in Jersey. Individuals who have been in the Island less than ten years are unable to purchase property and have limited access to rental accommodation. Furthermore, individuals that have been in the island less than 5 years are not eligible for social security benefits so must pay rents from their own resources. Such households will often have higher rental costs than average and live in poorer housing conditions. One respondent, from whom we received a written submission from, has voiced concerns regarding our current housing system and argues that it strongly discriminates against new, Jersey residents:

"more than 10,000 working adult residents in Jersey without qualifications are unable to rent or buy  proper  living  accommodation  –  although  they  contribute  local  tax  and  social  security payments and contribute a substantial amount in "rents" to lodging house owners and others. The [housing] laws don't actually prevent immigration but just make it difficult for most "newcomers" to enjoy proper housing accommodation on an equitable basis."[73]

We have been advised that as part of the Housing Strategy, the Strategic Housing Unit has committed to reviewing the arrangements for residents in the unqualified sector "to see if a more equitable system can be developed."[74] It is noted however that the Strategy will not seek to review the regulations related to purchasing property, only rental.

KEY FINDING: The Strategic Housing Unit has committed to reviewing the current housing arrangements  for  unqualified  residents.  The  Panel  will  await  the  results  of  this  review  to determine whether any further Scrutiny work needs to be undertaken.

2. Preservation of Affordable Housing

A  positive  approach  which  has  been  taken  to  assist  entry  into  owner-occupation  is  the identification and provision of Category A' homes for purchase. Although we have previously spoken about the current shortage of affording homes and delays in development of identified land, recognising the need for further land in the revised 2011 Island Plan was a step in the right direction. However, without the ability of ensuring that affordable homes are maintained as affordable in perpetuity, we are unable to secure these homes for future generations of first time buyers.

The 2014 review of the 2011 Island Plan stated that all affordable rental and homes for purchase developed on H1 and H5 sites[75] would be retained as affordable homes in perpetuity through a planning obligation agreement which would require all occupiers to be allocated through the Affordable Housing Gateway. Despite this the review went on to say:

"A new legal framework is being developed to ensure that the affordable housing unit is occupied by those whose eligibility is assessed through the Housing Gateway. This work is underway and running in parallel to this interim review of the 2011 Island Plan so that it is in place when the first home is sold."[76]

The extent to which this new legal framework has been developed is, however, unclear. The draft Housing Strategy Framework advises that "the SHU have commenced preliminary discussions with  the  Law  officers  Department  in  bringing  forward  amendments  to  the  relevant  law(s)." Nevertheless, no indication has been provided as to whether the law changes will be in place in time for the sale of the first property. In its testimony to the Panel, Andium Homes advised:

"There  is  a  need  to  ensure  that  all  new  affordable  homes  created, particularly  those developed on H1 and H5 sites are preserved as affordable homes in perpetuity and priority needs  to  be  given  to  establishing  an  appropriate  legal  mechanism  which  must  be established prior to the first home being available for sale."[77]

KEY FINDING: Without the ability of ensuring that affordable homes are maintained as affordable in perpetuity, we are unable to secure these homes for future generations of first time buyers.

RECOMMENDATION: The Minister for Housing must give priority to establishing a new legal framework for retaining properties in the affordable housing sector. The legal framework must in place prior to the first house being sold, as stated in the 2014 review of the 2011 Island Plan.  

3. Supporting entry into homeownership

It  is  important  to  note  that  housing  affordability  issues  are  not  just  confined  to  high  need households, who are in receipt of income support payments. Moderate income households are also affected by these issues and many face difficulties transitioning from private rental to home ownership. Hence, a fundamental concern that is in need of consideration is the extent to which households in different income groups have problems accessing home ownership. The States of Jersey Statistic Unit are responsible for reporting on the affordability of housing. The most recent report available is the Jersey Housing Affordability Report 2013. A number of the findings from this report are summarised below:

• In 2013, almost half of all working households could not afford to service a mortgage affordability on the purchase price of a property at the lower quartile price, a greater proportion than in 2011 and 2012.
• The average price of a three-bedroom house is seven times the average household income.
• A two bedroom flat is five times average household income.
• Single  owner  households  are  very  constrained,  particularly  so  for  couples  and  for households with children. On less than median earnings, only those with substantial deposits could hope to buy anything other than a one bedroom flat.
• Early entry to owner occupation would appear to be necessary if a home owner is to progress from a one or two bedroom flat to a three bedroom house, unless they have access to a substantial deposit from non-housing sources.
• In the current housing market in Jersey, a couple with children trying to move from the private rented sector to become home owners would struggle to afford a 3 bedroom property.
• In 2013 housing affordability in Jersey worsened marginally compared to 2011 and 2012 due to increases in the overall median selling price and mean mortgage interest rate.

The following submission highlights the challenges faced by many islanders who are trying to access the homeownership sector:

"Rental properties also have an impact on the property market. Paying extortionate rents and trying to save for a deposit is a daunting and almost impossible task so that some individuals give up hope completely of ever owning a home and resign themselves to a life in expensive rental accommodation because there is no other way forward."[78]

This point is elucidated by the fact that in 2013 more than half (56%) of lower income households living in private rental or non-qualified rental accommodation were considered as being in housing stress', the highest proportion of all tenure categories; (spending more than 30% of their income on rent).[79]

It is clear that the fundamental problem for those trying to enter owner-occupation is that house prices are out of line with incomes, giving rise to a major affordability problem for those without significant deposits or family support. Furthermore, people paying significantly high rents are obviously unable to utilise these funds towards the purchase of their own properties. In many cases, the rental payments are higher than that of a mortgage.

The majority of those from whom we received evidence from during this review made reference to, and stressed the need for, housing schemes which supported those individuals trying to get onto the property ladder but unable to do so due to financial restrictions and a lack of meaningful States organised schemes. In order to highlight the scale of the potential first time buyer market; in 2011 1,150 concealed households expressed a desire to be First-Time Buyers (FTBs). Approximately 90% of such potential FTB households, corresponding to a total of some 1,000, expressed a desire to purchase property at less than £350,000.

In the past, a number of schemes have been run by the States of Jersey which have provided some assistance in this area. The Deposit Loan Scheme, for instance, helped lower income households find the required deposit. The aim of the scheme was to help first time buyers who couldn't afford to make monthly mortgage repayments but had saved at least a 5% deposit, by lending up to a further 15% as an interest free deposit loan. The scheme was successful in making homeownership a reality for 54 families who would not have been able to afford to buy a home without assistance. Unfortunately, the scheme did not have the funds to support it and was not continued past its trial stage; in total the scheme cost the government £3million.

In her election speech in 2014, the present Minister for Housing advised that she would like to work closely with the Chief Minister and the Minister for Treasury and Resources to introduce a similar scheme. Furthermore, in a Public Hearing with the Minister in June we were told:

"Going back to the deposit loan scheme, I think that was done a couple of years ago and that was very successful. I would like similar or, as I said, other products going forward but we need to find money for that and as we are in this financial climate it is not going to be easy and I think the next couple of months we need to sit down with Treasury to see if we can think of ways of having some money available for that instance."[80]

KEY FINDING: The Panel was advised that the Minister for Housing is actively reviewing the possible re-introduction of the deposit loan scheme.

Another scheme that was run in the past, which many think was successful, was the Jersey Homebuy  programme.  The  programme  allowed  lower  income  households  to  purchase  a proportion of their home through a traditional mortgage (65%) and the rest through an equity share provided by the government (35%). This form of immediate housing offered an opportunity for those individuals who could not afford to purchase a First Time Buyer home in the open market are were also not eligible for social rented housing. It is our understanding that, due to limitations in Jersey's property Law, the scheme was unable to continue running.

Many  of  those  from  whom  we  heard  from  during  the  review  were  fully  supportive  of  the resumption of a type of shared ownership scheme. The Chairman of the Jersey Homes Trust advised us that "very few schemes for shared ownership have occurred. Jersey property law is not helpful. The States should pass enabling legislation to bring us into the 21st Century."

Similarly, the Chairman of Les Vaux Housing Trust advised us:

"Shared ownership schemes offered by the States of Jersey to first time buyers have been successful in the past and need to be re-introduced, provided that any legal loopholes arising from previous schemes have been resolved."

One key element of the Christians Together in Jersey Housing Trust's (CJT) strategic vision is to provide homes to young people on a shared equity basis. Thus, the Trust is keen to see any required changes in Jersey's property Law to be completed this year.[81] Furthermore, in order to help facilitate the running of a shared equity scheme, CTJ suggested that "further research could be  undertaken  by  the  States  to  ascertain  the  proportion  of  different  bed  size/type  of accommodation which has the strongest appeal for shared equity schemes and co-ordinate this information with the development of future sites."

Interestingly,  Jersey's  Housing  Assessment  2013-2015  revealed  that  two-thirds  of  the  total demand amongst first time buyers is for houses, particularly two- and three-bedroom houses. One third of the demand from first-time buyers is for flats.

During a Public Hearing, the Minister for Housing indicated that it was likely that the changes to the property Law would be completed by the end of the year. Moreover, the Minister stressed the importance of ensuring that any house that is sold as part of a shared equity scheme remains in the scheme in perpetuity.[82]

With regard to the evidence received, our adviser has recommended that  "the Minister for Housing  should  press  for  an  early  resolution  of  the  legal  issues  which  are  preventing  the introduction of shared ownership and to require conditions in the leases to be used which retain the properties in the affordable housing sector."

KEY FINDING: Currently there is very little housing available locally for purchase on a discounted price, shared equity or shared ownership basis. This makes it particularly difficult for people who do not qualify for affordable housing via the Gateway and would like to buy, rather than rent privately.

RECOMMENDATION:  The  Minister  for  Housing  must  ensure  that  the  required  changes  to property Legislation, to enable the introduction of a shared ownership scheme, are brought to the States for approval by the end of 2015.  

The  Strategic  Housing  Unit  has  recognised  that,  to  date,  there  has  been  an  inconsistent approach in developing housing schemes in terms of the eligibility/access and levels of supply. Accordingly,  the  SHU  is  keen for  the  Strategy  to  establish  a  more  consistent  approach  in addressing this particular sector of the housing market. The draft Housing Strategy Framework advises that the Strategy will deliver a wide range of housing products and that work has already begun to examine how these could be achieved. We are pleased to hear that consideration has been given to a number of different schemes because, as the Minister advised, "you need to be a bit more flexible. It is not one scheme that will fit everyone's needs."[83]

The Delivery Plan specifically identifies shared equity/ownership and deposit loan schemes as initiatives to be explored. With regard to the Delivery Plan, our adviser has suggested that action point 1.2 is extended to refer to other help to buy schemes, including funds for equity loans and mortgage guarantees, aimed at first time buyers on a means tested basis.[84]

KEY FINDING: It is important that consideration is given to a wide range of schemes that will support individuals who are trying to gain access onto the property ladder.  

RECOMMENDATION: The Minister for Housing should amend action 1.2 of the Delivery Plan to include consideration of additional help to buy schemes such as funds of equity loans and mortgage guarantees.  

4. Key Worker

Key Workers in the Island are also severely  affected by affordability issues and often find themselves unable to afford to rent or purchase property. According to the Jersey Housing Affordability Report, in 2013 the individual earnings for any of the key workers considered were not sufficient to service a mortgage affordably on the purchase of a property at the lower quartile price in Jersey. Of the three types of key worker considered in the analysis (police, nurses and teachers), affordability issues were most severe for teachers and nurses. The earnings of a nurse or teacher amounted to less than three-quarters of the income required to service a mortgage affordability on the purchase of a dwelling at the lower quartile price.[85] It is worth noting here that affordability is just one of a number of wider issues (such as the condition of existing stock) that needs to be considered to help improve the housing situation for key workers.

Andium Homes has recognised the vulnerability of Key Workers in Jersey and the difficulties many of them face in accessing affordable housing. As a result, Andium has suggested changing the accommodation that is currently available to Key Workers, and in particular new migrant Key Workers, by offering them access to affordable rental homes and the opportunity of purchasing on its Deferred Payment Scheme. It has further been suggested that this change could form part of a new Key Worker recruitment and retention strategy.

Currently, Andium Homes offers some properties for sale through a deferred payment scheme. The deferred payment scheme currently identifies States properties which may be sold to anyone registered with the Affordable Housing Gateway in Band 5. The scheme offers those registered in

Band 5 the opportunity to purchase a property from the Department for as little as 75% of the first time buyer market price, subject to means testing. [86] The Company has recently completed its 100th Deferred Payment sale and has "made a commitment in its business plan to sell an average of 15 homes a year on this scheme." In order to help bridge the affordability gap for buyers, Anidum Homes would also be keen to introduce, alongside the deferred payment scheme, a Top-up, Deposit Loan'. The Deposit loan would offer a maximum of 10% of the property value to be repaid at a fixed interest rate over a 10 year period.

It has however been recognised that in order for the scheme to be extended to Key Workers an adequate supply of new affordable housing must be forthcoming. Andium Homes has also stated that these changes would be subject to there being a clear definition of Key Worker and an established Key Worker Strategy. [87]

We have been advised by the SHU that the intention is for the Housing Strategy to set out a definition of Key Workers together with the development of an associated housing policy. It is our understanding that consideration will also be given to extending access to the Affordable Housing Gateway to Key Workers by creating their own separate Band. We feel that this would be a positive step forward in supporting individuals, who play an essential role within our community, in accessing affordable housing.

KEY FINDING: Extending the Affordable Housing Gateway to Key Workers, in order to enable access to affordable housing, is considered a positive step forward.  

5. Mortgage Lenders

An individual's ability to gain access to the property ladder is often effected by the available mortgage market and factors such as interest rates can contribute hugely to the overall cost of home ownership. In Jersey there is a limited choice of active lenders, particularly for those seeking a first time buyer's mortgage, and the rates are far less attractive than those offered on the mainland UK. For instance, the lowest interest rate for a 2 year fixed rate with a 10% deposit in Jersey is 3.29% (HSBC)[88]. By contrast, Andium Homes found that  "comparison websites looking at available mortgages in the UK suggest that there are a plethora of 2 years fixed rate mortgages available from 1.08%."  The latest figures we have available suggest that in 2013

housing affordability in Jersey worsened marginally compared to 2011 and 2012 due to increases in the overall median selling price and mean mortgage interest rate.[89]

It is our understanding that since the introduction of the Mortgage Market Review in the UK last year, the markets in Jersey have changed significantly. For example, Barclays Bank, who was originally the second largest lender in Jersey, has dropped out of the picture almost completely, and HSBC have significantly reduced their criteria. As a result, the Managing Director of the Mortgage Shop told us that "it is a real struggle to get a mortgage at the moment and this will obviously impact on the local housing market, especially in respect of keeping prices steady."

Similarly, our expert adviser spoke about the consequences of having relatively few mortgage lenders in Jersey:

"Being dependant on a small number of lenders is not good and if any of them decide to pull out this could lead to significant problems. The supply of mortgage finance is a key pillar of any well-functioning housing market."[90]

Within its testimony to the Panel, Andium Homes suggested that a review should be undertaken into  the  benefits  of  encouraging  additional  lenders  to  become  active  in  Jersey's  mortgage market[91]. However, we wonder whether such a review is necessary to establish the potential benefits.  Providing  more  choice  to  would-be  borrowers  and  increasing  competition  among lenders would allow greater access to the homeownership market and reduce overall costs to the borrowers. As an alternative, our adviser has therefore suggested that the Minister for Housing should commission research to identify what measures could be taken to increase the number of lenders active in the Jersey mortgage market.[92]

KEY  FINDING:  An  individual's  ability  to  successfully  access  the  property  ladder  can  be significantly affected by the number of participating mortgage lenders on the Island and the available interest rates.

RECOMMENDATION: The Minister for Housing should commission research to identify what measures could be taken to increase the number of lenders active in the Jersey mortgage market.

9. LOOKING FORWARD

The draft Housing Strategy Framework was originally due to go out for public consultation earlier this year but we have been recently been advised that it will not now be released for consultation until after the summer recess in September.

Among other things, we are pleased to see that the improvement of housing standards, and in particular the Regulation of the affordable housing sector, features so predominately within the Framework. It is also notable that a number of initiatives are currently being developed by the SHU, together with other Departments, to secure and embed improvements in the condition of private rental accommodation. This step is crucial given that approximately 20% of households in the rental sector are unsatisfied with the state of repair of their home[93].

The introduction of the draft Public Health and Safety (Rented Dwellings) Law to monitor and enforce minimum health and safety standards for residential rental accommodation is welcomed, as is the accreditation scheme for private landlords. At the moment, however, this scheme is being proposed on a voluntary basis. Although this is considered to be a step in the right direction, in time we would hope to see the accreditation scheme introduced as a mandatory registration for private landlords. During our review a proposed policy direction for the rental sector (R.87/2015) was presented to the States by the Minister for Housing. The report confirmed that "a compulsory landlord registration scheme is not proposed at this stage, though it may have a role to play in the future."[94]

1. Involvement from the private sector

The private rented sector provides homes to a range of different people, many of whom would be unable to access other forms of tenure for the reasons raised earlier. The sector accounts for almost 20% of all housing on Jersey and is almost 50% bigger than the social housing sector. Given the current shortage of affordable homes and the fact that demand significantly outweighs supply, it is important to consider whether any of this demand can be met by private sector landlords. In our adviser's opinion "the private sector is a largely untapped resource for helping to tackle some of the housing challenges facing Jersey."[95]

We recognise that in order for private landlords to assist in the provision of affordable homes, it is imperative that they sign up to similar, or the same standards, as the social housing sector. We accept that little consideration will be given to this proposal until support and safeguards are put in place to protect Gateway tenants. However, in light of the current housing situation we feel that a commitment should be given by the Strategic Housing Unit to examine the steps necessary to allow private landlord's access to the Affordable Housing Gateway. When we questioned the Director of Corporate Policy about this matter at a Public Hearing he advised:

"Private landlords can offer tenants properties and then suitable tenants can access income support in the same way as a social housing provider. The prerequisite is regulation and that is what we are working on. So a regulatory framework for social housing providers so you regulate the providers who take people off the Gateway. Once you have got the regulation in place can you permit other entities to become housing providers? Well, I think that is then an open question."[96]

KEY  FINDING:  Private  rental  landlords  could  make  a  meaningful  contribution  in  providing affordable and secure homes to Jersey residents and assist in reducing the substantial Affordable Housing Gateway waiting list.

RECOMMENDATION:  The  Minister  for  Housing  should  ensure  that  the  Housing  Strategy addresses the benefits of allowing the private sector access to the Affordable Housing Gateway and identifies the steps necessary to enable this provision.  

2. Delivery of the Housing Strategy

We applaud the Minister for Housing and the Strategic Housing Unit for their commitment to address the many issues contained within the draft Housing Strategy Framework. Our adviser was equally pleased to see that many of the issues or shortcomings identified within his own review are to be addressed by actions set out in the Framework's Delivery Plan:

"The new framework document provides a comprehensive overview of the current housing market on Jersey, the set of challenges it is facing and a series of measures to improve the supply of all types of housing, while at the same time alleviating residents' housing needs

and tackling concerns over affordability. This is a welcome step forward and the SHU are to be congratulated on their work to date."[97]

KEY FINDING: The Housing Strategy Framework is a useful step forward in setting an agenda and a vision for housing.  

The list of actions, included within the Delivery Plan, is scheduled for completion during the next 12 to 18 months. Whilst we are pleased that the Strategic Housing Unit plans to address the issues in a timely fashion, we are concerned that a lack of resources (manpower and financial) may increase the risk of delays in completion. The SHU currently has 1.5 FTE working within the Department. The timetable set out within the Housing Strategy Framework is ambitious and, in addition, our review has identified a number of further actions we feel need to be addressed by the Strategic Housing Unit. Thus our expert adviser has suggested that in in order to avoid the risk of delays and to emphasise the importance of meeting targets, "it may be that the SHU needs additional, temporary resources to assist them with their work on a number of activities and the overall delivery – turning the framework in to reality." [98]

During a Public Hearing we asked the Minister for Housing whether she was planning to increase manpower resources within the Strategic Housing Unit. We were advised that given the current economic climate it was unlikely a request would be made for additional staff. However, she felt that the joined-up approach with other States Departments in delivering the targets would help alleviate the pressure on the SHU[99]. In this respect, we are happy to see that the Council of Ministers and their Departments will be involved in addressing Housing matters. However, we are still unsure as to whether the SHU will meet its targets given the limited resources available.

KEY FINDING: The lack of manpower resources available to the Strategic Housing Unit may increase the risk of delays in delivering the Housing Strategy objectives.

RECOMMENDATION:  The Minister for Housing should closely monitor the Delivery Plan to ensure that the Housing Strategy objectives are being delivered according to the set timetable. If there are any delays in the commencement of work, consideration should be given to acquiring additional, temporary resources.  

As part of the evidence gathering stage of this review, our adviser conducted a number of meetings with key stakeholders from the housing industry; housing developers, construction representatives, and affordable housing providers. It became clear from the meetings that, in recent years, communication between these parties had reduced considerably and important discussions about housing issues were no longer taking place on a regular basis. According to our expert adviser "this had led  to something of an impasse, with different parties not fully understanding what others want, guessing what they think the others might want and possibly fuelling suspicions about motives etc. This in turn can lead to a lack of trust." [100]

Given  the  current  housing  situation  and  the  increasing  need  for  affordable  housing,  it  is imperative  that  we  create  a  more  open  environment  where  concerns  can  be  voiced  and discussed in order to facilitate a more joined-up approach to finding solutions. The Minister for Housing was supportive of the suggestion of the introduction of a housing forum and remarked that "any way that we can encourage the community to be more engaged can be nothing but a good thing."[101]

KEY FINDING: In recent years communication between key players within the housing industry has significantly reduced. It is therefore imperative that an open environment is created where concerns can be voiced and discussed and solutions to Jersey's current housing situation can be found.