Case studies – 14 Highlighting how housing associations are determining how to make the most of their existing housing stock Hexagon HA – when to repair and when to re-let Hexagon is a traditional, developing housing asociation working across five South London boroughs, developing approximately 80 homes per year. It owns just over 4,000 homes across South-east London, approximately 25% of which are Victorian and Edwardian street properties (converted flats). These properties are usually hard to heat because of their construction and expensive to insulate. Typically they are located in popular areas. The big conundrum was whether Hexagon should retain or replace them? There were pros and cons to consider: • Replacement – difficult to achieve, and could shift Hexagon’s geographical focus, but high returns from sale. • Retention – high maintenance costs, higher energy bills for residents, but popular and sustainable. What Hexagon did to assist with decision-making Hexagon assessed void properties with a view to re-letting or disposing. The organisation found that in nearly all cases, it made more financial sense to sell these older properties and provide a new home, even when only relatively low levels of expenditure were required to bring the void up to a lettable standard (in some cases as little as £5,000 was required). Hexagon also took account of the future costs. The main driver for the decision to dispose was the size of the receipt that would be generated from selling these high-value properties. Hexagon wanted to protect the family silver. It wished to develop a method of taking into account the broad social-value attributes of its housing stock when deciding on disposals, so that these decisions are not simply made on long-term financial grounds. Hexagon also wanted the method to be capable of being applied with data it already held or could easily obtain with only minimal changes in its practices – basically, the solution had to be practical. Hexagon devised a methodology for assessing the social value of these properties alongside the financial value of disposing of the property and building a new home. With input from staff in housing management, maintenance and stock improvement departments, it came up with a suite of relevant measures that were weighted and the scores fed into a lookup table, which formed the basis for deciding whether it was better value to retain or dispose. The next challenge was deciding on the relevant indicators of social value that should be considered. The impact of this was that disposal outcomes subsequently slowed down as only properties needing a significant investment were sold off. Hexagon’s view is that as an organisation which holds assets, it should be clear about how each asset performs financially and utilise this data to make decisions about retention, depending on the drivers for considering any properties for disposal at any given time. These drivers will be an influencing factor on the extent to which the social value criteria feeds into the final decisionmaking. There is no single measure of social value; a unique set of indicators needs to be developed that reflects the objectives of each organisation and its stakeholders. Within Hexagon’s disposals procedure, social value is considered according to the following factors: • Concentration of stock -is the unit in a block or street with other Hexagon units? • Is the unit family-sized? • Is the rest of property all tenanted/ part already-sold to a leaseholder? • Is the property in an unprotected flood risk area? • Quality assessment, are there 21st century facilities in the home? • Location such as the proximity to shops and transport (the Public Transport Accessibility Level [PTAL] indicator may be of interest here). Other factors which can be considered, (although they are not at Hexagon) include: • Health outcomes – this is difficult to assess in a meaningful way for a dispersed stock portfolio across a broadly homogenous geographical area. • Level of worklessness. • Level of anti-social behaviour. • Locational indicators, including: average gross income per week; percentage of the population claiming housing benefit; percentage of households in poverty; percentage of economically active in (full or part time) work; percentage of pupils achieving five GCSEs at Grades A – C; percentage of those economically active with limiting long-term illnesses; and the total number of reported crimes. • Management time. • Access to public services. • Access to green spaces – this may be a useful determinant of locational quality. • Long-term demand issues.
15 Publizr Home