It’s no secret that there is a global shortage of quality, affordable housing, as spiralling rent and mortgage costs, combined with a lack of available housing stock, has resulted in home ownership and even basic affordable accommodation being out of reach for many.
The availability of public funds to deliver new housing is often limited, as is the will from the state to provide new housing and regeneration projects on the scale that is required.
With that in mind, governments and local authorities around the world are increasingly looking to private sector financing as a way to increase housing stock.
According to a recent report by law firm Shakespeare Martineau: “Public private partnerships can prove fruitful for local authorities and housing associations which are under pressure to deliver more affordable housing, and private companies which can benefit from a longer-term, more-sustainable workstream in an economic downturn.
“PPPs can play a significant role in ensuring the delivery of social housing has its part in regeneration, ensuring that areas are redeveloped with investment from both the government and businesses.”
In the UK, PPPs are increasingly being used as a means to deliver new social housing and regeneration projects, with joint ventures being undertaken in the sector at a steady rate.
A remarkable eight new housing and regeneration projects in the UK have been launched since the beginning of October, with two projects in one London borough alone.
Manchester City Council is tendering a contract for a private partner to support its delivery of at least 1,600 residential dwellings and the redevelopment of a civic shopping centre in Wythenshawe, while the Greater Manchester Combined Authority recently selected international developer Far East Consortium (FEC) as its joint venture partner to deliver the £321.9m Chester Road Residential JV regeneration project.
Meanwhile, Wolverhampton City Council is expected to agree a deal with the English Cities Fund (which comprises Muse Developments alongside L&G and Homes England) as development partner to bring forward its City Centre West quarter. The scheme is due to result in the development of around 1,000 new homes and an improved leisure, food and beverage, and retail offer, connected by new public spaces.
In south east London, housing association the Hyde Group has issued a contract notice seeking a joint venture partner for a major redevelopment project in Charlton. Private partner(s) will be required to deliver up to 1,212 homes and up to 6,863sq m of commercial space under the scheme, known as The Herringham Quarter Project.
However, it is the London Borough of Sutton that has been the most active council in this area during October, issuing two tenders in the space of just a few days, with a combined value of £650m. One of these is for the redevelopment of four sites in the centre of Sutton as part of the council’s overall regeneration plans for Sutton Town Centre. The plans include a retail, dining, cultural and leisure redevelopment, and creating enhanced civic accommodation with a new civic hub.
Sutton’s other prospective JV is the Elm Grove regeneration, which will consist of 300 mixed-tenure homes, as well as commercial and community floor-space at the Market House building on Sutton High Street.
While the UK has seen a flurry of opportunities emerge in recent weeks, other countries also continue to focus on boosting their housing stock by using private partners to regenerate urban areas.
In Australia, for example, a preferred bidder has been named for the Melbourne Affordable Housing Project, with Tetris Capital and Icon Kajima taking on Victoria’s second so-called ground lease public housing renewal project, part of the Victorian government’s AU$5.3bn Big Housing Build programme.
Meanwhile, several regeneration projects have emerged from the US in recent months, with the City of Vero Beach in Florida seeking private partners for a 38-acre waterfront parcel known as Three Corners. A request for proposals (RFP) has been issued by the city authorities, as private partners will be required to lead the redevelopment of a former power plant site into a commercial and recreational marina that will serve as a major economic hub.
In Ohio, the Cuyahoga Riverfront Project in Cleveland is part of a local drive to regenerate the area and deliver the Vision for the Valley initiative - a broad plan for the future of the Cuyahoga River.
And in Colorado, Huerfano County is seeking a private sector partner to develop a P3 to assist in delivering affordable housing and mixed-use projects, including the development of 29 acres of county owned property in the unincorporated community of Gardner.
Elsewhere in the Americas, the government of the State of Nuevo Leon, in Mexico, is planning to structure and implement the design, financing, construction, and maintenance of a mixed-use, residential and commercial housing complex. Being undertaken with the aim of providing 4,500 housing units, the government has enlisted the help of the International Finance Corporation (IFC) to assist with planning and procurement for the project.
Considering the large volume of projects entering procurement in recent months, all signs point towards the PPP model playing a crucial role in enabling new housing and regeneration projects to be delivered at the rate which is required to meet ever increasing demands.