Manchester’s housing crisis and what the city council is doing to deliver 36,000 new homes

Manchester must build 36,000 new homes across the city over the next 10 years to keep up with demand – and 10,000 of them should be affordable.

That is the town hall’s take on what the city must do to tackle its housing crisis.

Manchester city council will sell land on the cheap so housing associations can create more affordable housing, build new homes itself and push developers to play their part too, leaders have said as they launch a new housing strategy.

And at least a third of the city’s 70,000 social homes should be retro-fitted by 2032 to cut carbon emissions and bring energy bills down, the strategy says.

It comes as Manchester council launches its housing strategy for the next decade, the first since ex-leader Sir Richard Leese resigned six months ago.

The former leader’s 25-year reign saw huge growth across Manchester.

But during that time, high demand for housing has contributed to a ‘crisis’ with an average of more than 1,000 people becoming homeless every month now.

Almost 3,000 households are currently in temporary accommodation, including hundreds of families, with some in B&Bs, the latest data reveals.

Senior councillors say this is why they are ‘passionate’ about affordable housing – but delivering it will require ‘significant’ government support.

Manchester council’s new leader Bev Craig has made housing a priority since taking over in December – not just in the city centre, but across the whole city.

She said: “Good quality housing is a fundamental need for everyone.

“Having a secure home is the cornerstone that enables our residents to prosper, to live fulfilling lives and to support good health.

“We don’t want this to be a game of chance – we want everyone in our city to have access to a good home.

“Manchester has changed lots over the last two decades.

“This is an exciting place to live and more people are choosing to live in our city.

“This success and our growth should be celebrated, but at the same time we need to make that everyone in our city can share in this success.

“Our new housing strategy is about making sure than Manchester works for everyone.

“It means building the homes our residents need, adapting to tackle climate change head on, and making the city affordable to anyone who wants to live here.

“Manchester has always been a place of opportunity and ambition.

“Our approach to housing must meet that potential and deliver the homes that work for Manchester people.”

Impact of Right to Buy

The council’s current strategy says 6,400 affordable homes should be built between 2015 and 2025 – a target the town hall says it is on track to achieve.

However, with around 250 homes taken out of the city’s social housing stock every year through the Right To Buy, which allows council tenants to buy their homes at a discount, many new properties are simply replacing those sold.

For many years, local authorities have relied on council policies to make private developers pay for affordable housing – but many say this approach has failed.

Taking matters into its own hands, Manchester council decided to set up it own development company which aims to build 500 new homes a year.

This City, which already has plans in place for new developments in Ancoats and the Northern Quarter, is expected to deliver at least 2,000 affordable homes over the next 10 years – a fifth of the total required in the strategy.

The cost of renting many of these new homes will be capped at the Local Housing Allowance Level, making the newly-coined ‘Manchester Living Rent’ truly affordable to everyone in the city, even those relying on housing benefits.

Meanwhile, privately sold and rented properties within these developments would be used to raise revenue, subsidising the cost of the affordable ones.

Altogether, it is estimated between a third and half of the affordable homes to be built in Manchester over the next 10 years will be on council-owned land.

The council will continue selling land its owns across the city – particularly in the North, the East and in Wythenshawe – at a lower price than the market value to housing association who agree to build more affordable housing.

Housing associations, which are expected to deliver the largest share of the 10,000 new affordable homes over the next decade, are also being asked to price some of their new properties at the level of ‘Manchester Living Rent’.

Private developers will also be encouraged to offer ‘truly affordable’ housing – but there will be no legal obligation to do this as part of the planning process.

Lack of affordable housing in apartment blocks

The council has been criticised for letting private housebuilders ‘get away with’ building major developments which have no affordable housing at all.

None of the new skyscrapers planned in the city centre will feature affordable flats and only small sums are offered towards affordable housing elsewhere.

Instead, developers have paid for improvements to public spaces and even a new school, but claim they cannot afford to offer affordable housing as well.

Despite council policy dictating that 20 % of these new developments should be affordable – or an equivalent financial contribution for affordable housing off site is paid – exceptions can be made if this affects the project’s viability.

According to government guidance, anything yielding less than a 20 % profit margin is considered ‘unviable’ – but Manchester council says that is too high.

Labour councillor Gavin White, who is the executive member for housing and development at Manchester council, says he wants to see more affordable housing offered within city centre developments, including luxury skyscrapers.

But failing that, he says the council must ‘push’ developers to pay for more affordable housing and hold them to account when they claim they cannot.

He said: “I would say we have always pushed [developers], but we have been constrained by central government saying developers can make 20 % profit before they have to contribute to affordable housing.

“We do want affordable housing across the board in all developments and our target is 20 % for 15 units or more.

“There is a real political ambition and appetite for that.”

Ultimately, Manchester council’s new housing strategy, which councillors will consider next week, will rely on government support if it is to be a success.

Funding from Homes England, the public body set up to finance affordable housing projects across the country, is essential for housing associations.

And cash is needed to cut carbon emissions by retrofitting homes in the city.

It is hoped that this ambitious aim of retrofitting at least a third of the city’s 70,000 social homes will not only cut carbon emissions and help bring the cost of energy bills down, but also create jobs and training opportunities.

The town hall is hopeful that it can win the government’s support, citing the Victoria North development in Collyhurst which benefitted from brownfield land funding and a Homes England grant to create new affordable housing.

Coun White also referred to affordable housing being built at the former Boddingtons brewery and social housing planned at an old market in Newton Heath as a sign the local authority is already making progress on its ambitions.

Alan Caddick, Manchester council’s interim director of housing and residential growth, said this new strategy takes the city’s aspirations to the ‘next level’.

He said: “This is our statement of intent.

“It’s almost our pitch to government – it’s our ask.

“It’s saying to government and to others, ‘this is Manchester, this is what we want to achieve, come and work with us.'”

Manchester’s new housing strategy will be presented to councillors on the economy scrutiny committee at a town hall meeting on Thursday 23 June.