Submission - Affordable housing - supply and delivery review - JeCC response to written questions -

Affordable Housing: Supply and Delivery

Response to further questions presented by the Environment Housing and Infrastructure (EHI) Scrutiny Panel on the submission by the JeCC into the review by the Panel on affordable housing in the Island.

6 August 2021

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1. The JeCC does not consider it appropriate to decide the Island's present and future affordable housing requirements. Our members will of course respond to the challenge of meeting any demand for more affordable housing, but the decision on how much housing is needed within the Island is for others to resolve and agree. The JeCC does note the following however:

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ns 1n.eTehdeerde,iws presentlyhen it is nnoot pceonstsriabll,eptuobsliacylywaitchcecertaintyssible onlwinheartegisisatlerreoafdpyrhoepreert,yisapseserhtsap(inscalucdhianlglehnogues.ing) on the island. Therefore, assessing what is

ng 2. There is presently no agreed assessment of the quantity of affordable homes that the Island presently needs to meet the current demand. The

bility Housing Section of the Draft Bridging Island Plan (the "BIP") quotes Statistics Jersey's (SJ) estimate of a current shortfall of 1,800 homes. However,

need the Government's Housing Needs Survey identifies the current shortfall is 2,750 homes.

nce 3g.roTwhetrheoisfn8o00agpreeresmonesntpoenr atnhneuemsti,mwahtiecdhl(eovveelsr aoftennetymeaigrrpaetiroiondt)hcaatltchuelaItselasnadsw6,i1ll0e0xpneerwienhcoemoevsenr teheedneedx.tEtlesenwyehaerrse.TinhtehBeIPBIaPs,siutmnoetseas mpoigprualatitoionnin and the 10 years to 2019 averaged approximately 1,000 persons per annum, which would equate to 7,625 homes as a shortfall over a future 10 year

ddo period. When added to the existing shortfalls identified in the BIP and by SJ, the range of potential housing needs over the next ten years is as little nkthe aadditionals 7,900 anudnaitssmwiullcbhearse1q0u,i3re7d5bhyom20e3s0(iofrinaw3a1r%d dneiftfemreignrcaeti)o.nThreemHaoinussiantg+Policy1,000 pDeervaenlonpumm"e,nwt Bhiocahrids(aHlPowDBer)ensottiemdaitneAthparitlb2o0t2h1tthheatB"I7P,0a0n0d the SJ

forboth numbers.

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gwithin recommended that "that GoJ should seek to support GoJ delivery agents and housing trusts in the development of up to 5,000 units, including an

ft estimated 1,740 open market units and 3,260 affordable units by 2030."

Planare The JeCC believe that the question of how much affordable housing is needed by the Island should be decided with reference to:

high an agreed assessment of both: a) the number of existing homes, and b) any present shortfall on existing requirements;

level?." athneaIgsrlaeneddnaneeddims;palnedmentable population and migration policy, which should include limits on the number of persons and households that

an agreed and implementable landuse policy (i.e., the Island Plan) that shows how the population's housing needs, both in its totality and in the separate demographic groupings, can be accommodated.

2. The JeCC does not have direct evidence of our member's staff and management rates, or their ability to afford to purchase housing or otherwise.

However, the JeCC notes the UK's Independent Affordable Housing Commission defines affordability' in the context of income, noting that "our ivethe analysis also suggests that when rents or purchase costs exceed a third of the net household income, housing costs can lead to financial difficulties, arrears, debts and consequent personal problems. And the position gets much worse if that percentage of income is a lot higher: we have taken the 40% of income

that figure as signalling a very serious affordability issue."1;

orkingin As previously noted, the average weekly earning in the construction industry in Jersey is £820.00 (£42,640.00 per annum). After income tax and Social

truction Security, the net income equates to £31,554.00 per annum, or £2,629.00 per month. Applying the Affordable Housing Commission definition to this are gives a threshold' of £867.60 per month, above which housing costs can lead to difficulties.

an The table on the next slide shows:

wage. the average monthly mortgage and rental payments for several types of accommodation, using average prices from the Government's House Price have Statistics2;

of the comparisons for both singleincome and twoincome households, using the average sector wage described above; and

eswith where this is or is not affordable' (i.e., less than one third of net household income) in line with the definition and standard described by the

ilityof Affordable Housing Commission.

directly The JeCC notes the following conclusions from these examples:

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sin Ninocosmingeleoninhcooumseinhgo.usehold is able to live affordably' in any of the dwelling types shown and will all have to spend more than onethird of their net

A singleincome household will be required to spend between 46% and 60% of net income on a one or twobedroom apartment. If that singleincome

entand household has dependents or children, and they require more than twobedrooms, over 90% of net income will need to be allocated to housing nofthose BEFORE food, bills, etc.

dinthe To live affordably' in a 3bedroom house, a singleincome household will need to be paid almost 200% of the average construction sector wage.

?." A twoincome household can afford a 1 or 2bedroom flat. However, should a twoincome household have dependents and / or require 3 or 4

bedroom house, both earners in a twoincome household will require between 38% and 100% more than the average construction sector wage to meet the definition of affordable.

1-bedroom Flat  2-bedroom Flat  3-bedroom House  4-bedroom House  

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nofthose Two-income: % of average wage required to pay for housing  23%  30%  46%  67%  

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?." Two-income household, Affordable' or Not affordable'?  Affordable  Affordable  Not affordable  Not affordable  

Two-income: % extra to average wage to be "affordable"  N/A  N/A  38%  100%  

3a. Government of Jersey incentives:

atmore The Government could offer several incentives to encourage landowners and developers to develop their vacant sites. Some examples of this

include:

mentdo Accelerated planning approval process for sites that meet designation (say 70% affordable or firsttime buyer homes).

iviseand Waiving Planning Consent fees for developments that meet a minimum requirement of (say) 75% affordable housing and are developed (on more site) within a time period of permission being provided.

yfor An exemption on any Stamp Duty or LandTransferTax for affordable housing.

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es An exemption on any impot duties or levies on materials identified for affordable housing.

for Remove any Planning ObligationAgreements, Community Infrastructure Levy, or such like on smallscale (less than 10 units) developments. ment? 3b. RelevantUK examples:

The UK Government's Affordable Homes Programme provides grant funding to support the capital costs of developing affordable housing for ivethe rent or sale.As the Government's housing accelerator, Homes England dispenses the grants available, and will be making available £7.39 billion of"seed from April 2021 to deliver up to 130,000 affordable homes by March 2026.The grants range in scale from 10% to 40% of the costs of the

being development.

by Homes England partners who receive a grant will also be expected to focus on promoting significant use of Modern Methods of Construction mentin (MMC), highquality sustainable design and working closely with local small to mediumsized enterprises (SME) housebuilders. In this way, the

anyou fmunardk(eatspalancea.ccelerator) is used to subsidise the higher costs of innovative build solutions during their introduction / familiarisation into the urther The AHP is also used to incentivise the use of strategic partnerships to deliver affordable and social housing. Strategic partnerships are a range of

yousee tailored, longerterm deals for organisations that have the ambition, capacity and successful track record of delivering large numbers of new kingin homes at significant pace.

Information on the Affordable Homes Programme is available on: https://www.gov.uk/guidance/applyforaffordablehousingfunding.

akethepoint 4. The most timeconsuming and at large' risk that any developer in Jersey has to manage is obtaining Planning Consent and Building Byelaw Approval. The JeCC would like to see more focus on derisking the entire planning process, and ensuring that developers, landowners and contractors are able to be clear

riskbeingan from the outset on the planning risks associated with a development. This risk leads to many inefficiencies in the process, not the least of which is the stop /

ortothepriceof start' nature of a development or construction project, during its procurement. For example:

Jersey.What preApplication advice is now very difficult to obtain, meaning the earliest that a developer or landowner gets feedback on their scheme is after they have rventions submitted it for consideration;

eGovernment

twouldenable the timescales associated with the registration and consideration of the process are presently far in excess of any servicelevel indicator.

withmitigating The JeCC would also like the Government to be clearer on its future capital expenditure requirements, providing upfront visibility of future planned spend and hisrisk?" avoiding curtailing committed spend identified in the Government Plan at short notice to fund overspends on other larger projects. Smallscale (<£2 million)

projects are the lifeblood of the local industry: these are the ones that should be delivered quickest and often.

Finally, the JeCC would like to see more open advertising of all Government construction projects (including those by arms length organisations and functions), to encourage greater participation of local consultants and contractors in the procurement and delivery of the Government's works.

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gofland 5. More land rezoned for either affordable, social or key worker housing should lead to an increase in the supply and availability of the housing (all things othetimely being considered). This, inturn, will assist with meeting demand. The rezoning of land will also assist with encouraging use of the land for an essential ffordablehomes?" purpose, i.e., providing the Island with affordable homes.

6. The JeCC did not use the term NIMBYism' in our previous submission, and don't recognise this as an appropriate term. We do believe though all landowners and developers progressing with a development scheme should expect the plans for any development to be subject to review and challenge from others, especially those

to"NIMBYism"as that live adjacent or near to a development where that development is likely to have an impact.

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edevelopment However, we also believe that greater involvement of the community and public in a preapplication consultation should be encouraged to ensure that views and .Doyouhaveany comments are made early on and are incorporated in the emerging design of the scheme. This would lead to better quality planning applications and assist the

onwhatcouldbe Planning Department with taking into account the view of the public on a scheme. We do not though believe this involvement should be facilitated through negative, gateandmanage offensive or political groups established on social media for purposes unrelated to a project or development.

Finally, we would like to see the Planning Department take into consideration any preapplication structured public consultation that a developer or landowner undertakes when assessing the subsequent comments or letters of objection during the planning consideration period. For example, there is presently no differentiation between those applications where a developer has engaged extensively preapplication, through a structured, public engagement process; and those applications that do not do any of this. Both applications still have a public advertising period; and both may receive objections in writing during that period that can

7a.

eexplainedthat Yes.

ersare For those schemes that will deliver (say) 70% of home as affordable', targeting social / lowincome or keyworkers, then gsignificantdelays definitely.This approach would significantly reduce the planning risk of these schemes and make them more viable / deliverable.

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akesuggestions 7b and 7c:

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Jersey has a unique characteristic in that the Planning process must cater for any and all (large / small, macro / micro, major / minor, very large / very small) scales and complexity of Planning decisions.This should be an opportunity to develop a

hinkthereshould benchmark process that supports the overall outcomes of an Island Plan, and its simple and effective application to any and all ckplanningroute instances.

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The JeCC would like to see more application of the rules around deemed consent and presumed planning permission for domestic homeowners (extensions, garages, etc.) and singledwelling applications of (say) less than 1,200 ft2 (as an example).

specificplanning The onus should be on the wouldbe applicant being assured of their compliance with the rules, and the penalties for not being in tcouldbe compliant being more onerous.This approach would remove significant numbers of smallscale minor applications from the toenableplanning process, freeingup PlanningApplications officers and authorisers to focus on more significant applications.

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y(forexample The JeCC would also like to see more use of selfcertification by a wouldbe applicant, who could (if they wished) source and developmentifit appoint an outsourced / thirdparty independent PlanningAssessment by developers, who would submit this evidence of

criteria)? compliance and assessment to the Planning Department at the outset.This could then be used to decide whether an application qualifies for a fasttrack' review and consultation process (against those that haven't adopted this approach and thus would

da&bworkin need a full' procedure).This approach is similar in some ways to how the existing Building Byelaw approvals process is undertaken, and the use of the SER engineering certification scheme, both of which operate and are familiar.

theuseof 8: Possibly, but more emphasis perhaps on using SPG's flexibly to support Planning policy and not further constrain developed design. The existing planning planningguidancein framework already provides robust regulation in planning terms. The existing approach to using SPG's can sometimes be applied and have the opposite effect than nderstandingthe that intended. For example, they can (on occasion) result in less flexibility than an underlying planning policy by stating, in a recent example of a development of

aspecificsite.Doyou affordable housing, the number of units and %mix, without allowing the scheme design, site configuration and development economics to assist in informing it. ntaryguidancecouldbe The JeCC notes also how supplementary regulation is applied in the financial services sector, for example, where the Jersey Financial Services Commission issue pectsoftheplanning

velopment?Ifsowhat "guidance" and the individual companies then apply the guidance and comply with the directions issued. Noncompliance is tested via inspections (random / ewouldyouliketosee?" planned) and then dealt with effectively through sanctions. The threat of noncompliance (and more importantly the need to be compliant') is treated very seriously by senior stakeholders inside and outside the organisation. Perhaps there are lessons that may be ported from this example as to how general (nonsite specific)

SPG's may be used to help developers with meeting Planning policy.

9a: The target for affordable homes should be set by the needs of the Island's present and future planned population, taking into account not only the population plainmorefullywhat numbers, but also other factors such as:

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dablehomesshould present, desired and anticipated household income / expenditure;

latedtodeliveryof availability of funding;

n"? affordability of accommodation; and

msifanywouldyou the state of existing supply.

haplanningpolicy Many of these factors, whilst referenced within and used as research for the informing an Island Plan, are dynamic; they are changing more and more rapidly, as

percentageofall technology and information influences. This trend will only continue in the future as macroeconomic factors (i.e., those outside of Jersey's control) result in an impact dentialsitestobe on the Island's microeconomic means. Therefore, to some extent what's in the Island Plan will only ever be a policy decided on a snapshot in time.

9b. The JeCC notes the example of Guernsey, that adopted their planning policy GP11 in 2016. The policy states that every development over 20 homes must include some affordable units (30% on developments over 20 homes); and developments of between five and 19 homes were expected to include a payment into a fund to build affordable housing. A report by Guernsey Press in September 2020 reported on the States of Guernsey Development & Planning Authority market update: "Since the adoption of the policy in 2016, 57 affordable units have been given permission, but they have not come from private landowners."

The policy is extremely difficult to work with, especially where there is only one registered social housing provider (Guernsey Housing Association). For example, several largescale housing developments in Guernsey (including Leale's Yard, owned by the Channel Islands Cooperative Society) have not moved from site to development because of matters related to the GP11.

Jersey would be no different. The adoption of a "must provide" policy such as GP11 could have a similar impact on privatesector development. The JeCC would favour

11a.

Andium Homes (a JeCC member) have successfully trialled:

urmembersInsulated Concrete Forms (ICF – EPS insulation) at Rosemount Mews (2 townhouses) and Robin Hood (5 townhouses).

utilisedmodern

constructionHadley Steel Frame at Plaisant Mews/Convent Lowrise (21 apartments + Age Concern HQ).

o,inwhatform?They are currently looking to trial Porotherm for 2 new houses and 12 new apartments.

thebarrierstoThe Limes project will be constructed from HSF (127 apartments) and another majorCapital redevelopment will be a blended solution nviaMMCin of ICF & HSF.

They are also researching woodcrete ICF and modular construction options.

MCbeusedasan 11b.

oltoboostthe One of the main issues is shipping costs for preassembled elements such as HSF panels, bathroom pods and modular units. However, omes,particularly Andium Homes are trying to develop onisland assembly facilities and have had some initial success with HSF panel assembly by Normans homes? Ltd, for the Plaisant Mews scheme.

11c.

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ale?" Yes, they can, subject to upskilling the local workforce and establishing assembly facilities.

11d.

Develop new supply chains to increase competition.Onisland assembly facilities for bathroom/kitchen pod production.

hallengesdoyou 12. In any normal period, the opportunity to raise and improve new design standards and environmental features would be welcomed by the industry and used as an romthe opportunity to innovate and adapt. And it's true that the events of the past 18 months (and their impact on global supplychains and labour resources) have brought

tointroducenew out some of the best behaviours and responses from all sectors, including the construction industry.

dardsand However, whilst the construction industry is working hard to adapt its procedures and operations in order to ensure it can continue to safely and efficiently deliver new

talfeatures, buildings, the Government should consider the very real impact that further new environmental and design standards may have on developments, and whether the rbonreduction Government's desired outcomes may be best served by timing their introduction more effectively in order to support the island's development sector.

s? On larger projects, where the budgets are significant and annualised increases in the costs of materials and labour costs are more felt, will likely already see great

innovation take place (see – for example – the work of Andium on their larger housing projects, described above).

On smaller / mediumscale projects, where the labour costs are typically a more significant element of the overall costs, the focus of all clients (public and private urmembers' sector) should be on helping to ensure / maintain production as efficiently as possible.

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mentofaffordable 13. None that are specific to the development of affordable homes or working in the affordable sector.

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14a.

The JeCC and our members are able to work effectively with all proactive, understanding and wellran clients, regardless of whether they are a private or publicsector

organisation. The key to this, however, is consistency, transparency and visibility of our client's requirements; and in this regard, there are may different experiences and ourmembersable examples of good and bad clients.

ctivelywith 14b.

dtheHousing

Yes. Most clients generally understand that the commitment of an entrepreneur to establish and run a building company or subcontractor is built from an underlying passion

to want to build and develop. They also generally understand that profitability margins are very low, when expressed as a %age of the overall costs and when seen in the reareasfor context of the risks that the contractor or developer is having to manage.

nt?" However, some Clients (including examples from within the longarms of the public sector) are still able to (and frequently do) change the scope, timing, duration or delivery

of a project (that can take years to plan / design / procure) in days or weeks, leaving organisations (both main contractor and supplier level) with no immediate replaceable workload.

Clients also use a myriad of ways to source their building contractors and suppliers. Some favour a more collaborative, partnering based approach (that helps our members to plan for a project carefully and with good results). Others still (to this day) favour a more adversarial approach that focuses on price (as that is how they measure value'), seeking to save small sums off an alreadythin bottom line

These inconsistencies are the singlebiggest area for improvement and which – if improved – will introduce a much stronger and more productive industry delivering a more

ourdevolvinggreaterto 15a.

rishesindevelopment No. It will lead to parishioners finding ways to celebrate their identity, and what they want their parish to be known for. It will also lead to greater interaction gmatters. between the parishes and their parishioners, the majority of whom already take huge pride in the way their parish is ran and administered.

hinkthatthiscould 15b.

sistencyintermsof A ranked / tiered hierarchy of opinions and involvement could be established, where those closer to the project (in terms of vicinity, locality, or enduse) are ssparishes? given greater opportunity to have their objective opinions heard in the context of the Planning Policy. A good example of this can be seen in the criminal

courts, where victim impact statements and pleadings are taken into consideration by a judge when considering sentencing. This approach could therefore uldalocalised permit a parish, coordinated by the parish, to assemble a local' consensus, that should be given more currency in the context of a development.

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t? 16. There are several challenges towards a successful implementation of the Island Public Estate Strategy ("IPES"), which include:

1. The Government's ability to resource and support its implementation, particularly given how funding of the Government is only allocated on an annualised basis via the Government Plan. The JeCC would like to see more funding strategies that spread a number of years, recognising the scope and depth, and potential impact, of the Estates Strategy on the delivery of the island's public services in the future.

oyouthinkarethe

barriersthatthe 2. The public's huge level of interest in all things property (which can, on occasion, be unhelpful for the Government). As the island has a large number of property

cEstatesStrategy owners (by proportion to the overall population), there are always plenty of opinions as to what the Government should do with its property. Whilst the JeCC supports

gingforwardsites public interaction with the Government, we would prefer to see this interest harnessed and focussed on where the Government need help, and not sometimes on mentatpace?" where the Government don't need help.

3. Visibility. Since its final (and longawaited publication), there has been no followup on timetable for implementation. Indeed, the launch of the Strategy had no real publicity or communications (its publication appears from the outside to have been something of a source of tension between the Government, the Council of Ministers and the members of Scrutiny).
4. The interdependence between significantscale projects (e.g., Our Hospital, Fort Regent, Inspiring Active Places) and their impact on those smaller in scale, scope or complexity (which ironically almost always appear to be overlycomplicated to deliver and complete because of the resource and dependence on the outcomes from the largerscale projects).
5. Political support and scrutiny of the IPES implementation. The JeCC absolutely agree with the need to hold officers and the Government's executive to account on its process, approach and progress. However, property and development of real estate (and disposal or repurpose) is not a simple, daybyday activity that shows progress monthtomonth. Also, the implementation of the IPES will require the Government to maximise it's commercial leverage, and it can only do this is certain activities are undertaken in a commerciallysensitive environment. Therefore, appropriate and timely interest from members of the States Assembly – as opposed to

The Jersey Construction Council (JeCC) is the voice of the island's construction industry. Our focus is on building Jersey better.

Our 130 member organisations include clients (developers, Government agencies), utilities companies, contractors, subcontractors, suppliers, designers, and consultants. The JeCC occupies a unique role within the Jersey construction industry. The breadth and depth of its membership means that JeCC is the only body able to speak with authority on the diverse issues connected with construction without being constrained by the selfinterest of any particular sector of the industry.

This document has been prepared by the JeCC as a response to the request for written submissions made by the EHI Scrutiny Panel. This document contains the views of the JeCC as a collective, and does not comprise the views of any one individual within the JeCC. It contains the views on those matters identified as areas for consideration in the document.

Any comments or requests for further comment from the JeCC shall be directed to the address and contact below.

Jersey Construction Council Limited

Company registered in Jersey, Channel Islands. Company registration number 87793

Level 2, 1 Brittania Place St Helier

Jersey JE2 4SU

Channel Islands, UK

+44 (0)1534 725417 info@jerseyconstruction.org

www.jerseyconstruction.org