Meet the councils quietly building a housing revolution

A crescent of semi-detached houses stands on the edge of a playing field in Conisbrough, South Yorkshire, offering views of the rolling hills beyond. With pointed gables, big picture windows and generous back gardens dotted with trampolines, it looks like a development of aspirational “executive homes”, awaiting its gilded electric gates and four-wheel-drives.

“We had people coming along trying to buy them when the hoardings came down,” says Charlotte Johnson, housing manager at Doncaster Council. They had to turn the crowds away – because these are council houses, some of the first built here for a generation. It is just one example of what many local authorities are now managing to achieve up and down the country, against the odds, after decades of central government inaction. Last week, the award for the best new building in the UK went to Goldsmith Street in Norwich, another exemplary development of council homes, marking the first time the hallowed RIBA Stirling prize has been given to social housing. The award sends a powerful message: despite government cuts, a number of bold councils are getting on and doing it for themselves.

“Local authorities are doing a lot more to build housing than we generally think,” says Dr Janice Morphet, public sector planning veteran and visiting professor at University College London, who has been conducting detailed research into the different methods that councils are using to deliver homes in the absence of government grants . “Our findings suggest that around 13,000 homes were built by councils last year. Sure, it’s not the 300,000 we need, but it indicates the beginning of a slow and gentle revolution.”

The 40 homes in the Conisbrough development are some of the 400-plus that Doncaster council has been building over the last few years, since the Labour council came to power in 2013, following the previous administration’s catastrophic legacy of mismanagement. It helps that the mayor, Ros Jones , is a former public sector accountant with a keen eye for detail, and that the council appointed one of those rare species: an in-house architect.

“We’ve taken a similar approach to a speculative house builder, except we’re cutting out the profit,” says Matthew Clarkson, the New Zealander architect behind the new homes. “We realised that if we developed a series of standard house types, we could offer the economies of scale that a house builder would. But we’ve got more generous space standards and a higher quality specification to keep our long-term maintenance costs down.”

Walking through the development, he points out numerous thoughtful details, from the deep welcoming porches with corner kitchen windows, so you feel connected to the street and can see who’s coming in, to future-proofed aspects, like convertible attics and extra large ground-floor loos that can fit a shower if needed, to the neat bin stores with planted tops. The black brick houses even have matching black mortar, giving them a sleek, monolithic feel. These are all features that few volume house builders would dream of shelling out for. “It’s not trying to be show-stopping architecture,” says Clarkson. “It’s comfortable, durable housing that fits with its surroundings.”

Jason Hulme recently moved into one of the new homes with his three-year-old daughter and he can’t believe his luck. “It’s twice the size of my old private-rented place,” he says, standing in the living room where big sliding glass doors lead out to the garden, “and it’s so much lighter and warmer too.”

Morphet’s research, conducted with colleague Dr Ben Clifford and funded by the Royal Town Planning Institute, shows that Doncaster and Norwich are not alone. From Bristol and Bournemouth to Wigan and Wolverhampton, their findings paint a picture of local authorities taking an interventionist approach and using a wide range of powers to deliver homes through a variety of means.

It’s partly because they have no choice. While half of all local authorities no longer own council housing (having transferred their stock to housing associations long ago), the 2017 Homelessness Reduction Act imposed a legal duty on all councils to prevent and relieve homelessness. Given the scale and severity of the housing crisis – from employers struggling to recruit priced-out local workers, to the fact that homelessness has doubled in the last five years – there is growing public expectation for councils of all political shades to intervene.

“We were interested to find that it’s not just Labour councils that are engaging with housing, nor is there an urban-rural divide,” says Morphet. “Some of the Conservative councils are more angry with the government than Labour.” Conservative-controlled Bournemouth, Lewes, Canterbury, South Norfolk, North Kesteven and Newark and Sherwood all cropped up in their survey as having active housing programmes, as did Lib Dem-controlled Eastbourne and Eastleigh.

So how are they going about it? In the absence of central government grants, local authorities have been forced to be more creative in exploiting the various powers at their disposal. In the early 1990s, grants covered around three-quarters of the costs of building new sub-market homes, but this fell dramatically after the 2008 financial crisis. Under David Cameron and George Osborne, the 2011-15 Affordable Homes Programme gave no grant to social housing at all. There were high hopes when Theresa May scrapped the borrowing cap in 2018, which had previously constrained the amount that councils could borrow to build housing. But her triumphant rhetoric conveniently ignored the fact that fewer than half of all councils actually have any housing stock to borrow against – and those that do are very cautious, knowing that any new homes they do build would be subject to the right to buy policy. Last week the government imposed a shock rise in interest on cheap Treasury loans, further scuppering many councils’ carefully laid plans.

• Berry Court, by BrightSpace Architects, is one of Bournemouth’s innovative housing complexes built above a car park. Photographs: Jack Lodge Photography

“It’s been very difficult for councils to build proper social housing because government subsidy has vanished,” says Morphet. “So they’ve looked at all these other models to compensate for the fact they haven’t been able to do what they need to do. Councils have always had a large set of property powers, but they haven’t really thought of using them to build housing until now.” Desperate times call for desperate measures.

She cites the 1963 Local Authorities Land Act, which gave councils the power to develop land; the 2000 Local Government Act, which gave them the power to do anything that promotes the “wellbeing” of their communities; and the 2011 Localism Act, which bestowed the “general power of competence”, giving councils the legal power to do anything a private individual can do. None of these were housing acts per se, but their ramifications for housing have been significant, allowing local authorities to behave in a more entrepreneurial way.

The results are wide-ranging. Bournemouth is building housing above many of its surface car parks, and has won planning awards for the results. Wigan is transforming tricky former mining sites with an exemplary programme of housing for older people. Exeter has one of Europe’s largest Passivhaus schemes underway, while Liverpool is developing rent-to-buy homes. Spelthorne was faced with a problematic pub-turned-strip-club in the green belt, so it decided to buy it and convert it into flats. Plymouth is building council housing for homeless veterans, involving the future residents in construction to help with their adjustment back to civilian life. They receive certificates in carpentry, plastering, bricklaying and management of site safety, making them more employable by the end of the project. The list of local innovations goes on.

“Government has been distracted by other things, so local councils have been able to plough on and do it under the radar,” says Morphet. “There’s a bit of competition and local pride, and they’re inspiring each other to do more.” The rivalry even extends to baking: in Doncaster, I’m shown a picture of the house-shaped cake made to celebrate the completion of one of the projects; soon after, Nottingham followed suit, as have many others.

Bristol is one authority that has embraced every housing delivery method going (and impressive cakes too). It’s now on target to meet its goal of building 800 affordable homes a year by 2020. When the current Labour administration took over in 2016, the council had 80 hectares of housing land up for sale – which they hurriedly took off the market. “Our strongest power is land ownership,” says cabinet member for housing, Paul Smith. “We cancelled all the sales, and focused on how we could build housing on our land ourselves.”

One such scheme, Challender Court by Emmett Russell architects, won a RIBA award last year for transforming a brownfield site with a handsome terrace of low-energy Passivhaus homes. The council has 11 such sites in the pipeline, expected to provide 550 new homes. As well building social-rented housing through its Housing Revenue Account (HRA) – the ring-fenced budget that receives rents from tenants and spends it on building and maintaining housing – the council has set up its own development company, Goram Homes, to build a mixture of housing for private sale and affordable rent on council land, the former subsidising the latter.

It is a “profit for purpose” principle that many authorities have embraced in the last few years in response to austerity cuts, particularly in London where the sales values are so high. As private entities, wholly owned by the councils, these development companies can act beyond local government constraints, avoid the right to buy, and develop market housing to cross-subsidise affordable homes and other services. Morphet’s research has found that 42% of local authorities now have a housing company, from Croydon’s Brick by Brick, which plans to deliver 500 homes a year in perpetuity, half affordable, half for sale, to Barking and Dagenham’s Be First, which has ambitions for 3,000 homes by 2024, almost three-quarters affordable (although critics have disputed these figures). County Durham’s company, Chapter Homes, delivered 500 units last year, with the primary aim of generating income to support council services. It’s a contentious model, seen by some as selling off public land for short-term profit, and it’s another symptom of council budgets being savagely strangled by austerity.

• Clockwise from top: Auckland Rise, in Upper Norwood, by HTA architects and Lion Green, Coulsdon, by Mary Duggan Architects, both projects from Croydon’s Brick by Brick scheme. Photographs/Illustratiosn: Jon Aaron Green/HTA/Mary Duggan Architects

Colm Lacey, director of Brick by Brick, describes the company model as “a deliberate attempt to pull apart the development system and repackage the individual elements so the council benefits”. The company borrows money from the council at commercial rates, so the interest goes back to the public purse, not a bank. “Nowhere along the way does money leak out to the private sector,” he says. Their planned developments have about three times the amount of affordable housing than schemes previously built in the borough, providing useful precedents for the council’s planners to demand these sorts of numbers from other developers.

As Paul Smith puts it: “Our company allows us to set an example for other house builders, because it’s operating in a commercial way. Developers might claim they can’t provide social housing and low-energy features, but we’re showing that you can, and still make a profit.”

A slightly different tactic is being used in Nottingham, where the council’s development company, Blueprint, has been building high-spec housing for sale to kickstart private-sector investment in a waterside regeneration zone. “Before we started building here, no developers were interested,” says Nottingham council’s head of regeneration and housing delivery, Mark Lowe. “Since the Blueprint schemes at Trent Basin, a whole range of sites have come forward, stimulating this new area of the city.”

Waterside regeneration is one thing, but the pressing need is for more council homes. Nottingham has around 8,500 people on its housing waiting list, a figure that has doubled in the last four years. The council has been trying to keep up, building almost 600 affordable homes through its arms-length management organisation, Nottingham City Homes, with projects like the Lenton Green estate. Here, smart new low-energy brick houses with rooftop solar panels have replaced ailing 1960s towers, but it’s not nearly enough to keep up with the number of council flats being lost through the right to buy. Last year the city lost 436 homes this way, more than one a day.

“It’s just not sustainable,” says Lowe. “We’re losing many more homes than we can possibly replace. We’re doing all this good work, yet we’re still in a situation where net housing numbers fall.” Current rules mean that councils can only use their right to buy receipts to cover a maximum of 30% of the cost of building new homes, with a strict three year limit in which to spend it, or else the money goes to the Treasury, with interest. Meanwhile, any new homes built through the HRA are subject to right to buy after 15 years.

“It’s economic madness,” says Paul Smith. “Imagine building properties then selling them for less than you built them for. What kind of business is that? We’ve got 12,000 households on the waiting list in Bristol and 500 families in temporary accommodation. Why would you sell off the resource, at a cut price, that you desperately need more of?”

Speaking to local authorities up and down the country, the right to buy recurs again and again as the biggest obstacle to delivering more council homes. In Rotherham, which is currently building 340 new homes, with 200 more set to start next year, housing manager Tom Bell is frank. “We used to have 40,000 council houses,” he says. “Now it’s around 20,500. We’re losing up to 200 homes a year. It’s incredibly damaging because you lose your best properties and your most stable tenants. It can change the dynamic of a place very quickly.”

The replacement homes aren’t always social housing as we once knew it, either, with secure tenancies and fixed social rents. Morphet and Clifford’s research found that, of the new housing being delivered by councils, only 23% is social-rented, while 42% is affordable (up to 80% of market rent), along with 10% intermediate (including shared ownership), 16% for sale and 8% private rented sector.

While the difference between social and affordable rents looks minor in some parts of the country – Bell says it’s “a few pounds” in Rotherham – homelessness charity Shelter has pointed out that affordable rents work out at 36% more expensive than social rents overall, amounting to £1,737 per year more on average, meaning bigger housing benefit bills in turn. The charity has joined with the National Housing Association, Crisis, the Chartered Institute for Housing and the Campaign for Rural England to call for £12.8bn of annual investment in social rent and sub-market homes as the only real solution.

“The simple fact is we need more subsidy,” says Paul Smith. “The last 100 years of council estates was built on public subsidy, and it pays itself back. We’ve estimated a 30-year payback time, but it’s probably quicker. Every time we build more housing, it improves the finances of our business plan, because the new homes have lower repair costs. It’s financially positive for our budget to build more housing.”

It is a message that Westminster must wake up to. Local authorities are ready, willing and eminently capable of building the next generation of high quality council housing. Many are already finding ways to do it, despite the constraints. They just need to have their full potentials unleashed.

Follow Guardian Cities on Twitter, Facebook and Instagram to join the discussion, catch up on our best stories or sign up for our weekly newsletter