Inventing our future Collective action for a sustainable economy

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5 More, sustainable housing provision
Bringing about the step-change in delivery
5.1 Probably the key challenge for the RHS is to provide an effective strategic approach to ensuring
that there is sufficient housing of the right types, in the right places and at the right time, within
the new stock, and that it is affordable for consumers. Faced with a continuing demand from the
growing number of households in the Region arising from natural growth and in-migration, this
is therefore clearly a challenge of supply. Left to themselves, commercial mechanisms would
deliver new housing to meet market demand. The challenge to the public sector is to be able to
intervene in the market to ensure it can help create further housing to meet all the additional
needs which cannot be satisfied by the market i.e. what is termed ‘affordable housing‘. This needs
to be done, moreover, without significant negative affects on the market housing position. Failure
to achieve this will have potentially serious consequences and represents a significant risk (see
section 9) that must be addressed in the monitoring and review of the RHS.
5.2 As indicated in the previous chapter, it is currently estimated that regional production of affordable
housing will be needed at an average annual level of some 11,000 dwellings over
the period of the RHS:
• 7,200 new households needing social rented housing
• an additional 1,320 social rented homes to deal with the existing backlog, plus
• 2,400 homes for low-cost home ownership or sub-market renting.
5.3 This represents a significant step-change over current rates of production, and achieving this
will clearly pose an enormous challenge to those involved in the housebuilding industry in the
Region. The complexity of this challenge predetermines that there can be no single policy solution.
The RHS therefore sets out to pursue a range of measures whose aggregate effect is aimed at
achieving the objective.
5.4 The measures proposed fall into four categories:
• reducing the production costs of new affordable housing, without reducing quality
• reducing the average need for subsidy to make decent housing affordable
• creating more resources for subsidy to meet the need
• raising the general quality of housing within a sustainable framework.
5.5 Through these measures, the aim is to match the supply of affordable housing in the Region
to the need. With all interventions in the market, it is recognised that they can only be achieved
within overall financial arrangements that make business sense to the producers.
Reducing production costs
5.6 New affordable housing can be produced either by the purchase of existing properties or the
construction of new housing. The cost of existing properties is essentially determined by market
supply and demand, and therefore is not addressed directly by these measures.