option is? (14% rent rise this year and aligned to CPGI thereafter)
Seems to me that they want to have their cake and eat it; sustainable,
affordable housing at 50% discount to market rents and tenants having to
pay no more than 30% of their income in rent, self funding aside from
housing subsidies, no rates money in, no government money in. It's a
fine ideal but I can't for the life of me see how it can work in
practice. The other problem is by its own admission the recommended
option will only cover repair and maintenance, not renewal or expansion
of stock. Given the general age of the stock that will marginalise the
longer standing tenants whose units are older and closer to the end of
their economic life.
Seems to me a false economy to forego the rent rises that would allow
renewal (albeit requiring increased subsidies to maintain tenants'
economic status quo) because the alternative of allowing the
deterioration of the stock is also an expense the council must bear.
Seems to me the only real way forward if the council is to do the job
properly is to borrow and chuck in existing land holding at historic
cost; if they can do that and amortise the loan over say 35 - 40 years
which as a blue chip AA+ credit rated agency they ought to be able to do
(although I don't actually know if that is possible) I think they could
build new stock and cover the cost with the discounted rents they are
seeking.