Camden set to create house-building company to give it access to millions in grant funding
Camden Council looks likely to set up a new subsidiary company to help it build new homes and access millions in grant funding.
It plans to update Camden Living Ltd, created in 2016 to offer people intermediate rent housing at below market rate.
The changes will see the formation of a group of companies, including two subsidiaries, under the Camden Living Ltd umbrella.
It will be called (Camden Living (General Offer) Ltd) and Camden Living (Social Offer) Ltd if the scheme gets the green light from senior councillors.
A Town Hall report said Camden Living (Social Offer) Ltd could apply to become a registered provider of social housing, meaning it could apply for grants from the Greater London Authority (GLA). These grants are not available for homes sold to Camden Living.
Council bosses said £3.4m in grants to build 34 new council homes by 2024 in Somers Town “would be lost” if it did not get the registered provider status.
The report by Cllr Danny Beales, the cabinet member for new homes, jobs and community investment, said: “There is no other viable delivery strategy for this scheme.”
He added: “The only alternative delivery option for the 34 units would be disposal to a private registered provider at low or even nil consideration.”
The council would then lose out on the GLA grant and income from rents, he explained.
The report goes on to say that the creation of a not-for-profit company could also speed up a scheme for 93 social rent and 36 intermediate rent homes at Camley Street near Kings Cross by a decade.
The council has “ambitious targets” to build more than 4,850 homes, including 1,800 council homes, 350 at “intermediate rent” and temporary accommodation and hostel beds for homeless people.
It said it has looked at the way other councils run their companies, such as Ealing’s Broadway Living Ltd, and at how to avoid the “pitfalls” experienced by Croydon Council.
Croydon’s Brick by Brick house-building company is being wound down. It received £200m in funding from the council from 2015 onwards, but failed to provide dividends or interest for the council. The authority was forced to file a section 114 order banning non-essential spending after racking up a £66m deficit.
Camden’s second subsidiary, Camden Living (General Offer), “would continue to provide a range of housing opportunities for Camden residents including key workers by offering intermediate and quality market rent homes in the borough”, the report states.
Camden Living currently owns 65 intermediate rent homes, mainly let to key workers. It has also leased 48 homes from the council to trial “a market rent offer”.
The report said being a registered provider of homes “would increase the range of housing tenancies Camden Living Group could offer”, including council homes as well as those for intermediate and private rent.
The council said it was essential to ensure good governance and the board would include non-executive directors from outside the council, as well as council officers. An independent person would chair the board.
The proposals will be examined by the housing scrutiny committee on Monday 5 September, and are likely to be approved by Cabinet on Wednesday 7 September.