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Small housing associations can help with our chronic lack of housing supply

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Small housing associations can help with our chronic lack of housing supply

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Published by Jon Land for 24dash.com in Housing

Small housing associations can help with our chronic lack of housing supply Small housing associations can help with our chronic lack of housing supply

By Mark Lupton, author of the Joseph Rowntree Foundation’s report 'Smaller housing associations’ capacity to develop new homes' published today.

At last year’s National Housing Federation conference two association chief execs whose views I respect, separately said to me that the key unused capacity within the sector was within smaller associations. When asked neither could point to any hard evidence to base this on.

So do the 962 associations owning and managing less than 1400 units, with a total of 132,097 units – 6% of associations’ stock – really have a great deal of spare capacity? Particularly as of those with less than 400 homes many where already in group structures and had high numbers of supported housing

Today the Joseph Rowntree Foundation publish a report examining this proposition which finds that: the 72 independent associations with between 400–1,399 units could sustain future organic growth at a rate of about 5% a year

Overall associations developed around 50,000 new homes during 2011/12. Effectively using this projected spare capacity of smaller associations would potentially increase the number of homes built by associations by around 2.5%.

This is significant and worth working for; it is not, however, as great as some commentators have suggested. Moreover to make use of that capacity requires sufficient organisational capability or/and suitable partnership arrangements combined with access to new debt finance and grant funding.

Whilst smaller associations do have some potential advantages, with their focus in the main on a particular specialism or locality, they also can experience challenges in terms of access to the right skills and properly quantifying risk which are potential barriers to utilising their development capacity.

The way forward may be to encourage organic growth among smaller associations and innovative approaches by larger associations and potential partner bodies to help them do this. This will not be easy at a time when the development environment for associations is particularly challenging

There are some advantages to smaller associations purchasing from – or managing stock for – larger associations (and others), rather than directly developing. It might therefore be possible for a wider variety of arrangements to emerge where smaller associations trade their surplus capacity in exchange for managing developing associations’ properties or functions

A quick look through the accounts of a few associations with between 1,400 and 7,000 units suggests that there is considerable variation in development performance in terms of their underlying capacity to develop.

So perhaps those chief executives I talked to last year should be thinking more about the need for the sector as a whole to challenge themselves as to whether they are using their latent capacity to best meet their aims and objectives.

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