Haringey signs off regeneration JV for 6,400 new homes despite protests

Photo (cropped): Alan Stanton, Flickr

London Borough of Haringey has voted to transfer housing stock to a new regeneration joint venture company despite protests from residents.

The council has approved the creation of the Haringey Development Vehicle (HDV) — a joint venture with developer Lendlease, and the UK’s largest “local asset backed vehicle” (LABV) to date.

Around 1,000 protestors gathered outside Haringey Civic Centre as councillors voted to approve the plans, which are aimed at delivering 6,400 new homes in its first phase.

Cllr Alan Strickland, cabinet member for housing, regeneration and planning, said: “We’ve been clear that successful regeneration has to have the best interests of Haringey’s communities at its heart, and that we’re determined to help more Haringey residents live in quality homes in the borough.”

As with all LABVs, the value of sites put into the HDV will be valued and matched with development funding from the developer.
The council estimates it will make £275m in profit from the first phase of development, which will have a gross development value of £4bn.

The land has already been valued during Lendlease’s bid during the procurement process, and will be valued again at the point the land transfers to the HDV.

A report to the council’s cabinet said: “Because a planning consent and vacant possession will usually add value to the land, the uplift will be shared between the council (the landowner) and the HDV (which has done the work to achieve the uplift).” This sum is currently estimated at £18m.

In order for the council to have continuity of income from the HDV, it will also receive 100% of the income from £45m of commercial property assets which will be transferred to the HDV.

The plans also include the creation of a new social impact vehicle, to which Lendlease will give £20m, cash, to be used as leverage for additional funding.

However, the protestors, and a minority of Haringey councillors, opposed the creation of the vehicle, believing the plans amount to privatisation.

They received prominent support this week from Guardian writer Aditya Chakrabortty, who compared the decision to create the HDV to the position of Grenfell Tower tenants whose safety concerns he said were treated with contempt by the Royal Borough of Kensington and Chelsea.

The council has promised all social tenants a right of return to the new development on the same rent and tenancy terms as they receive at present.

However, placards on the demonstration described the creation of the HDV as “social cleansing”.

In a statement to Room151, the council said that around 1,300 homes stand on the sites identified for the first phase.

It said: “Final decisions on precisely how many of these homes will be redeveloped by the HDV are still some way away, but any that are redeveloped will be reprovided on a habitable room basis, as per our housing strategy.”

Peter Redman, housing finance expert and former chief executive of Notting Hill Housing Group, told Room151: “The council has been quite wise in the creation of this venture, it doesn’t have the skills of finances to do this scale of development itself, and instead of selling the land to a developer, the creation of the HDV means it will benefit from any upside.”

He also said that the finances for individual projects within the vehicle will be ring-fenced, which will reduce risk of the vehicle collapsing.