Thanet council aims to create its own housing company to tackle the isle’s homes shortage.
An initial budget of £50,000 needs to be agreed with the aim of launching the company by April 1, 2020.
The company would enable the council to directly buy land and build properties.
It is hoped the project will mean better standard housing,better management and more affordability for residents.
The initial budget would come from the Business Rates Equalisation Reserve, and spending authority would be delegated to the council’s the Deputy Chief Executive.
Need for 1,137 new homes per year
A report to Cabinet members, who are due to discuss the plans this week (July 25) says: “The draft Thanet Local Plan sets the housing requirement for 17,140 homes by 2031. This sets the annual requirement for 897 homes, including 397 new affordable homes, per annum over the 20 year plan period.
“As a result of slower than required delivery in the early years of the Plan, the residual requirement has increased for the remainder of the plan to 1,137 per annum. Over the last 10 years, however, annual completions have averaged only 424 units.
“This illustrates the need for the council to identify a different way of delivering housing to address the under-performance of the development sector in the district. A wholly owned housing company has the potential to be part of the council’s response to these challenges.”
Council owned company
Officers are recommending the company is limited by shares with 100% of these held by the council. The company would be able to establish subsidiary companies or joint ventures and to issue shares to other partners in exchange for equity investment.
Wholly owned housing companies can trade for profit and proposals will include using those for other housing projects or priorities. Income from rents and sales would be available to the company to fund borrowing costs and management and maintenance costs.
Any surpluses, after corporation tax, could be returned to the council in the form of dividends. Council officers undertaking work for the scheme could recharge their time to the company.
Cabinet members are expected to approve the initial budget of £50,000 for legal, taxation and treasury advice.
There are approximately 2,645 households registered on Thanet’s housing waiting list and some 111 placed in temporary accommodation.
Thanet council is tackling the issue with its own scheme of building or refurbishing 150 homes by 2020 at a cost of £30million.
A bid to government to fund a further 35 new homes at the cost of £8.8million has also been made.
Some £14million has been spent on housing schemes across Thanet. These projects include new build programme, Margate Housing Intervention project, Empty Homes Project 2012-15, and King Street intervention.
Investment has been £7,258,330 in Ramsgate, £1,377,202 in Broadstairs and £6,048,514 Margate.