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The Secret to Regeneration

Big names in UK residential development gather at Buro Four's RESI roundtable to discuss the challenges and key factors in delivering successful regeneration schemes 

This year’s RESI 2014 conference was host to delegates from across the UK debating the political, economic and market outlook for the residential sector.  To further the debate, Buro Four‘s Russell Doughty, Iain Roberts and Mark Dedman hosted a roundtable seminar on ‘The Secret to Regeneration’ to discuss the latest challenges and changes affecting regeneration schemes and their residential components. Participants on the panel included some of the UK’s biggest names in residential development including British Land, Grainger Plc, The London Boroughs of Newham and Croydon, HUB Group, Urban Exposure, Dolphin Square Foundation, Peabody and Muse Developments who offered their insights into what makes a successful regeneration scheme.

As trusts, private companies and government bodies try to find better ways to increase housing stock while maximising value, here’s what we found out: 

The nature of local authorities is changing as are their requirements when entering into public-private partnerships. The necessity for local authorities to balance the creative, entrepreneurial outlook needed to deliver positive income-generating schemes whilst still serving the needs of their residents was a key issue highlighted during the discussion. An area of particular importance for the boroughs will be to focus on generating the incomes needed to deliver services in financially constrained times.

This means it is likely that we will find boroughs seeking partnering arrangements with a wider scope than previously seen. It is possible these will include organisations with long enough time horizons and strong enough balance sheets to make long-term infrastructure investments needed to service a site earmarked for regeneration.

The importance of both parties understanding what they were seeking to achieve from a public-private partnership was stressed, as well as having a clear understanding of how this was going to be valued. There was a shared understanding of the need to balance the hard numbers with an appreciation of place-making and design quality.  It was agreed that regeneration needs to be about the local community members as much as it is about the area.  The need for social and economic diversity in London housing was underlined, and it was discussed how this can be objectively valued.

Discussion moved onto the subject of values and funding, providing insight into the economics of regeneration and the critical need for gap funding. The need for equity over grant funding was stressed whilst the increasingly prominent role of the housing associations as a driver for major regeneration schemes was cited.

Eventually the wider issue of under supply in the housing market was brought to the table as we discussed the role of both strategic land and regeneration schemes; it was posited that the growth of the 'Garden City' could create positive feelings about development in the public’s mind.

All topics highlighted the complexity of successful regeneration including the importance of true regeneration schemes over estate renewal, the increasing number of parties involved, the difficulty in funding the early stages and the governance issues involved. All of this as housing associations and local authorities try to find new, innovative ways to work with the private sector to deliver income and much-needed housing.

The key messages we take from the session are:

  1. True regeneration needs to address the very specific circumstances of each locality.
  2.  Private and public partners need to have a clear understanding of what they all hope to achieve.
  3. As the lines get increasingly blurred between the different parties, governance is key.
  4.  Finance is available once a scheme is proved viable but the key enabler is gap funding to prime the pump. This should pay for itself in later phases but the issue of who can provide this equity remains.
  5. Regeneration will not solve the housing crisis on its own. There are simply too many moving parts to rely on, but it must be part of an economically and socially diverse housing market.

Again, we hope to further explore the topic of the secrets to successful regeneration in the coming months, so watch our website for more thought-provoking insights on this timely and important issue.