The evolution of devolution: how housing associations can harness the rising tide of local decision-making

A role for housing associations

 

With their knowledge and insight into local neighbourhoods, HAs have the power to influence how resources are directed, weaving their expertise into the decisions that go beyond individual projects to fundamentally define the very places where their residents live.

 

As larger waves of devolution funding meet the expanding horizon of mayoral responsibilities, the moment has arrived for HAs to carve out new pathways that transform this engagement into something tangible, something lasting.

 

An early example of this is the West Midlands Housing Association Partnership (WMHAP), born from the rise of the West Midlands Combined Authority (WMCA).

 

WMHAP unites 18 HA members with the mayoralty, creating a space for the meaningful exchange of housing policy and action.

 

Collectively, HAs can demonstrate their worth to the region as anchor institutions. 

 

The combined strength of WMHAP, with its vast reach, speaks volumes about the deep social and economic influence HAs hold within the region.

 

We are measured not only by the number of tenants we serve or the people we employ, but by the investment we contribute to the local economy, constructing new homes and revitalising existing ones, as we build both foundations and futures.

 

One of the successes from WMHAP’s partnership with WMCA has been the launch of Homes for the West Midlands, a new vehicle owned by five WMHAP HA members.

 

Homes for the West Midlands will work closely with WMCA and local authorities to identify land developments for affordable housing, ensuring that the developments meet WMCA’s specific policies around the use of brownfield, greater levels of affordable homes, and the use of energy-efficient forms of construction.

 

Homes for the West Midlands will act in a brokerage role to identify the suitable developer and HA to take forward the development based on an agreed design and masterplan, together with an agreed value for the preferred HA to acquire.

 

At the most recent mayoral election WMHAP produced a housing manifesto which set out the key themes the incoming mayor should seek to achieve.

 

This includes more homes in the right place to ensure affordable housing is embedded into a longer-term spatial strategy and revitalising places to ensure devolved resources are directed to areas in need of regeneration.

 

It also consists of energy efficiency for all so that WMCA can support homes getting to Energy Performance Certificate Band C by 2030 and combatting homelessness by delivering pathways out of homelessness and into work to manage the demand on public resources.

 

Playing into these themes, HAs are tailoring their approach to resonate with regional spatial strategies.

 

Mayoral pledges to regenerate urban spaces have unlocked myriad possibilities across the West Midlands.

 

Midland Heart, for instance, is breathing new life into some of the more deprived places in Birmingham – bringing 124 new homes at Icknield Port Loop, and shaping a further 300 homes in Birmingham’s Eastside.

 

Both are thanks to WMCA’s dedication to remediation funding, harmonising with the Homes England strategic partnership’s vision of affordable homes. This fusion of funding makes land viable and housing affordable.

Further evolution in the regional model

 

And while HAs are adapting to the shifting tides of devolution, we expect the regional model will evolve further still.

 

In time to come, opportunities will arise for deeper local control over funding, as the jurisdiction of funding devolves further for social housing.

 

There is the potential to reduce reliance on competitive national bidding processes and allowing mayors greater flexibility in how resources are woven into their communities.

 

The regional model may then evolve into its most potent form – where housing investment is no longer assessed in isolation, but the funding of social infrastructure, transport, skills and education becomes integral to the housing equation.

 

They can then ultimately unlock new possibilities for regeneration and create accessible, connected and thriving communities.

 

Just as importantly, aligned investment strategies will nurture the skills agenda, ensuring a skilled workforce is ready to support the construction and decarbonisation industries, laying the foundation for a sustainable future.

 

Private finance

 

So, what then is the role of private finance in this evolving model of devolution? For too long, our funding discussions have been fragmented and disconnected.

 

The traditional approach – grant funding, bank debt and capital markets – serves the sector, but we pursue these separate funding streams through isolated efforts.

 

This can lead to the misalignment of objectives across key stakeholders and a funding model at risk of becoming slow and stagnant, especially where more significant volumes of investment are required.

 

A useful addition to the funding landscape may lie in regional investment funds, particularly in places where regeneration is required at scale and pace.

 

Here, private capital would also have a regional focus – and sit alongside devolved grant in a single regional funding pool with the objective of creating places rather than simply funding projects.

 

By prioritising the broader investment needs of local communities, including transport and social infrastructure, these funds would unlock the wider housing equation, while delivering the necessary returns through an optimal blend of grant and long-term, patient capital.

 

The direct link between funding and place may be the most sincere expression of connecting finance with purpose, ultimately ushering in a new era of sustainable finance.

 

At the core of this model, there is an opportunity to engage large regional institutional investors, such as local authority pension funds, to provide direct investment, completing the cycle for the local place.

 

This could consist of vibrant, new places, with homes built for residents in the region, funded by private investment from (and returns going back into) the region, and supported by grant funding for the region.

 

Just as in evolution, it is not the strongest or the most intelligent of HAs that thrive, but the ones that are most able to adapt.

 

As mayoral influence continues to grow, and the expanding devolution model manifests, HAs that proactively engage with regional leaders, influence local policy discussions, pioneer a connected approach to funding, and drive holistic place-based investment to unlock the wider housing equation will be best placed to succeed.

 

Not just in terms of delivering more homes, but in creating thriving communities and shaping how the region is governed. It is not just about adapting, it is about leading and creating.

 

Imran Mubeen, director, Newbridge Advisors, and Joe Reeves, deputy chief executive, Midland Heart

 

Hear from Joe Reeves on the topic of ‘National challenges, regional solutions: housing and the role of strategic authorities’ at the Social Housing Finance Conference on 14 May, in London, alongside panellists including Mark Henderson, chief executive of Home Group.

 

In addition, Imran Mubeen will be chairing a breakfast workshop at the same event, entitled ‘If housing finance leaders ruled the world…’ featuring speakers including Tracey Barnes, chief financial officer at A2Dominion, and Malcolm Cooper, president of the Association of Corporate Treasurers. For more information, click here.