STOCK INVESTMENT RAPID ASSESSMENT TOOLKIT:
23 INDICATORS TO HELP GET IT RIGHT
By Matthew Nimmo and Colin Boxall
The Covid19 crisis has disproportionately affected social housing tenants on any number of measures. The investment we make now in new and improved homes will help build back better.
How can we invest wisely?
We’ve been talking to a number of local authorities and Registered Providers about how best to target investment in their housing stock, particularly how to decide whether to refurbish or redevelop. In this article we summarise what we have learned from these discussions and introduce a toolkit that we hope will provide a useful framework for others in thinking about investment decisions.
We have recently been working with one local authority with a large, diverse housing portfolio. Like many social landlords, they had traditionally based investment decisions on stock condition data, but they are starting to look at estate regeneration options and want to ensure that they aren’t going to upgrade homes that could be demolished in the near future.
Drawing on assessment frameworks from other local authorities, we have co-designed with them a new Stock Investment Rapid Assessment Toolkit (or SIRAT for short). SIRAT combines stock data already held by the Council’s housing team with publicly available data sources to create an index of 23 indicators from resident satisfaction through local deprivation to local house prices. By assessing each housing block and estate in their portfolio against these indicators, the Council has created a quick, high level picture of where redevelopment might be most worth considering and therefore where investments in refurbishment can safely be made.
Figure 1: SIRAT indicators to inform housing stock investment
THE NEED TO TARGET INVESTMENT
Everyone we’ve spoken to agrees that investment needs are increasing, particularly for urgent post-Grenfell fire-safety works (highlighted by the recent publication of the draft Building Safety Bill) and to meet political commitments to achieve zero carbon.
At the same, local authorities and social landlords are acutely aware that funding is extremely limited. Housing Revenue Accounts and General Funds are both under pressure from Covid19 through increased demand for temporary accommodation, rent defaults and welfare issues. And the regeneration cross-subsidy model that has driven most estate regeneration to-date now looks less viable than ever.
WHAT IS OPTIMAL FOR EACH ESTATE AND COMMUNITY?
What a lot of landlords are grappling with is identifying the right investment approach for each block or estate and the communities that live there. In some cases, an affordable refurbishment and retrofit will dramatically improve residents’ living standards, safety and environmental impact. But in others, inherent design challenges, social issues and resident perceptions may make comprehensive redevelopment and renewal the better option.
However, as many Councils know to their cost, it can take significant feasibility work and lengthy consultation with residents (potentially requiring a ballot if demolition is proposed) to fully establish the evidence base and determine the right approach for each estate. This creates an issue for Councils and other major landlords who need to rapidly prioritise investment across large portfolios. Officers are under pressure from residents and local councillors to prioritise investment in the worse housing to improve living conditions, but those are often precisely the blocks where redevelopment may offer a better long-term solution.
TOWARDS A FRAMEWORK FOR RAPID DECISION MAKING
To tackle this conundrum, various Councils and landlords have developed criteria for prioritising investment, ranging from fairly simple exercises based on stock condition to more complex matrices taking into account other factors such as desirability of properties or redevelopment potential. The advantage of this kind of process is that portfolio-level decisions can be taken quickly and site-specific feasibility work can then be targeted on those estates prioritised for either refurbishment or potential redevelopment, speeding up the whole process.
Building on these approaches, the SIRAT tool aims to bring together asset management and regeneration considerations by assessing suitability for redevelopment based on three core considerations:
First and foremost, the direct benefits to the resident community: who are we helping and how? As well as stock condition, we look at the potential for wider benefits from a redevelopment approach (additional homes, jobs, etc.) set against the disruption this would cause to residents (which is likely to be worse if there are lots of vulnerable or elderly residents for example).
Second is the more pragmatic consideration of what is the art of the possible, as there will be particular constraints and opportunities for each estate. For example, the existing tenure mix and local house prices are key drivers of financial viability for an estate regeneration approach. Considering these early on will help to avoid surprises and cost over-runs.
Finally, the framework considers the bigger picture of how the investment can achieve the city, town, borough or neighbourhood vision, meet the wider community and societal needs in the area, and boost employment; the strategic fit.
Within the three core elements are 23 detailed points for assessment that form the first (portfolio) stage in a progressive business case process. Results can be viewed graphically and mapped across the portfolio to give an instant picture of where investment in existing stock can safely be made and where a more comprehensive approach should be considered.
While each social landlord will want to assess its investment options based on unique factors appropriate to local conditions, the three core criteria of Community Fit, Strategic Fit and Deliverability offer a useful framework for decision making that also neatly feeds into more detailed Green Book compliant business cases when progressing to detailed feasibility at the estate level.
The senior local authority officers we are working with are certainly reporting tangible benefits from this approach. Rather than decisions having to be made on a site by site basis in response to ad hoc proposals from councillors or development partners or lobbying from residents, they are able to take a more pro-active, strategic approach to ensure the best long-term outcomes for residents.
The authors are Matthew Nimmo and Colin Boxall from Inner Circle Consulting, a SOLACE business partner.
For further information contact:
Matthew Nimmo email@example.com
Colin Boxall firstname.lastname@example.org