Open Letter to Councillor Marc Francis

 

EastendHomes Lease/Freeholders Association

 

To:  Councillor Marc Francis, Tower Hamlets Lead Councillor for Housing & Planning

copied to: 
Councillor Stephanie Eaton, Leader of the Liberal Democrats;Councillor Abjol Miah, Leader of the Respect Party;Councillor Peter Golds, Leader of the Conservative Party; Strategic Development Committee Members; Jim Fitzpatrick, MP; George Galloway MP; Peter Marsh, Chief Executive, Tenant Services Authority; Kevan Collins, Interim Chief Executive, LBTH; Boris Johnson, Mayor of London; East London Advertiser

21^st September 2009

 

 

Dear Councillor Francis

 

 

 

_______________________________________________________________________________

 

 

 

As tenants and leaseholders of Tower Hamlets Council estates which were transferred to the ownership of EastendHomes, we have some questions.  This is the first in a series of open letters to Mark Francis, the Lead Councillor for Housing and Planning at Tower Hamlets Council.

 

Our first questions relate to:

 

Providing Decent Homes - the consultation with residents on transfer of our estates to EeH

 

l  Were the promises the Council made to us in our formal consultation documents ones that could be kept?

l  Is EastendHomes keeping these promises to us in the subsequent development proposals for our estates?

 

 

Our second questions relate to:

 

Providing Affordable Homes – Tower Hamlets planning policy and housing strategy

 

l  Do EastendHomes' development proposals meet strategic planning and housing policy objectives?

 

 

 

Promises in our Offer Documents

 

Context: we understand that the Council and EeH undertook to finance a core schedule of Decent Homes or 'promised works' on our estates from 'guaranteed' sources – ie gap-funding, prudential borrowing and receipts from 'Right to Buy' sales.

 

(In addition to this are the rarely mentioned contributions of leaseholders towards the cost of 'rechargeable' repairs to the buildings we live in.  The Housing Corporation assessment from 2005 indicated that three quarters of LBTH housing stock needed  expenditure of between 5K and 15K to bring it up to Decent Homes standards, and a further 12% of homes needed more then 15K investment.  The current number of leaseholder-owned properties on EeH estates is some 1,430 – at 15K per leaseholder, this will contribute 21.45 million towards meeting the Government's 'decent homes' standard.)

 

Our offer documents also included a further list of 'intended works' – environmental improvements including better security, lighting, children's playspace and community facilities etc.  These were only to be carried out to the extent that cross-subsidy could be raised to pay for them from new, 'for sale' homes to be built on our estates. This work would upgrade our estates to 'Decent Homes Plus' standards.

 

Summary: to paraphrase, it was our clear understanding that there would be no need to rely on cross-subsidy from 'market developments' built on our estates to finance the core work needed to bring tenanted homes up to the Decent Homes standard.  The Council's clear stated intention to us was to use the additional borrowing powers of stock transfer organisations like EeH to meet the Government's Decent Homes deadline.

 

Our Questions

 

l  Is our understanding correct – does the Council accept that this was the basis on which residents agreed the Council's stock transfer proposals and accepted EeH as replacement landlord?

 

l  Are EeH' 'guaranteed' sources of funding (the loan agreed with Barclays, the amount agreed with the ODPM in gap-funding and the anticipated RTB receipts) sufficient to meet the cost of core, promised Decent Homes work to the tenanted units on our estates, as we were led to believe?

 

EeH Development Proposals for our Estates - Cross-Subsidy

 

Context - St Georges Estate

In the formal consultation document on the proposed regeneration and transfer of St Georges, the Council told residents in 2004:

 

'within 5 years, EeH intends to spend over 20 million on your estate.....

As well as the repair works guaranteed in this offer document, EeH has investigated the potential for building new homes on the estate......

Any new homes built would be sold to raise money to be spent on the estate.  EeH will carry out a range of works to achieve Decent Homes standards, but will need to raise extra money to carry out a range of environmental improvement works throughout the estate'.

 

In Nov '07, EeH presented a financial breakdown to a meeting of St Georges Estate Steering Group.  This was an unelected, self-appointed group, none of whom we understand had any formal training in social housing finance or estate renewal funding.  The meeting was called at their request to discuss concerns about the proposals and the extent of the new-build element.

 

The Minutes (attached) were added as an appendix to the planning application, which was the second submitted by EeH.  The section on Finance 4.1 states:

 

Steve Inkpen reported that the cost of initial promised works was 17 million, of which 1million funding was cross from subsidy

intended works were 6 million, which was all from cross subsidy

 

Bede, Holland and Eric & Treby Estates

EeH has made three further planning applications for these estates.

 

Our Questions

 

l  Can using cross-subsidy from market development to pay for initial promised Decent Homes work be considered to comply with the terms of the stock transfer offer to residents of St Georges Estate?

 

l  Has core, guaranteed Decent Homes work been similarly financed through cross-subsidy from new-build, market development in the proposals for Bede, Holland and Eric & Treby Estates?

 

 

EeH' Development Proposals - Strategic Impact

Context: Tower Hamlets' planning policy recognizes the 'acute' need for more affordable housing in the Borough and also the 'critical' need for larger 3bed+ family homes, of which there is now serious under-provision across London.  It also recognizes the need to redress the imbalance caused by the glut of smaller units that currently exists.  The recent Audit Commission findings are critical of Councils' undue focus on new-build schemes in their housing strategies, as opposed to making the most of existing housing stock.

 

EeH' first scheme -  British Street Estate

The proposals for British St were based on justifying the need for 161 mainly one and two-bed market flats to provide cross-subsidy to refurbish the estate.  The affordable component of the scheme consisted of 19 bedsits and one-bed flats and two additional family homes.

 

In Tower Hamlets, there is also a planning policy requirement relating specifically to 'estate regeneration sites' like ours– this is that they  'should remain predominantly social rented housing'. British St is unusual in retaining a high proportion of flats in the social rented tenure - the take up of 'right to buy' being comparatively high in Tower Hamlets, most other EeH' estates have significantly high percentages of leaseholders.

 

Bede Estate - according to planning submission documents, Bede Estate currently consists of 170 social rented units and 196 leasehold-owned units.  (It is also the case that it is the larger homes that have been more popular with tenants exercising their right to buy and these properties therefore which have been lost in higher numbers from the social rented tenure.  If, as in calculations for planning purposes, the  figures are presented in terms of 'habitable rooms', on Bede Estate 580 HR remain as social rented housing and 721 HR are now in private ownership.)

 

Holland and Glamis Estates - both  have a current tenure mix, calculated in habitable rooms, of 45% social rented to 55% in leasehold/freehold ownership.  Proposals for development on Glamis Estate are still at the consultation stage, but those for Holland Estate have planning consent.

On officers' recommendation, Strategic Development Committee Members approved plans for new residential development consisting of over 60% market and less than 30% social rented housing.  The result of EeH' proposals will be to increase the overall predominance of housing in ownership on Holland Estate to well in excess of 60%.

 

 

Our Questions

 

 

 

Yours sincerely

 

 

Jan Anstey Hayes, Acting Chair, EastendHomes Lease/Freeholder Association

 

Gloria Thienel, Chair, Island Gardens Leaseholders Association

 

Ares Zaimes, St Georges Leaseholders Action Group

 

Mark Taylor, Acting Chair, Mile End Residents Association

 

John Wright, Glamis Lease/Freeholders Group

 

Brad Prasad, Chair, Holland Estate Leaseholder/Tenant Association