David Ward and Judy Wayne outline the plans behind a development near Cardiff that includes affordable homes without grant and could become a model for other projects across Wales
As you journey into Cardiff from the west, and cross the River Ely, a wide expanse of cleared ground greets you. This is the site of the former Arjo Wiggins Paper Mill site, now remediated and ready for the start on site of a major regeneration scheme. In the distance, the new school buildings for Ysgol Treganna opened their doors in September, the start of a new community. New homes, community facilities, a riverside park and shops, connected by a new bridge over the River Ely will turn this former derelict site into a vibrant place to live. Access to Cardiff City Centre and Cardiff Bay will be enhanced by a dedicated bus service through the site.
The plans are for approximately 750 new homes with 60 per cent being offered at discounted rents. Some 70 units will be offered for social rent with 400 units being available at a minimum discount of 20 per cent below market rents. The remaining 280 units will be constructed by house builders for owner-occupation. The mix and tenure of the site has been specifically designed to be attractive to young working families who are struggling to access high quality, well- managed homes with secure tenure.
Ely Bridge Development Company (EBDC) is working hard with employment and training agencies to ensure the economic benefits of the project are captured, as far as possible, in the local economy. This will be achieved through training and apprenticeship programmes and identifying potential supply chain benefits that can help support local businesses. Opportunities for promoting social enterprise are also being explored.
The Mill development is a fine example of the public and private sectors working in partnership to deliver much needed new housing and the regeneration of a site that has lain derelict for almost 15 years. The development is being delivered by a new private development company formed by the Welsh Government and the Principality Building Society to deliver affordable housing projects in Wales. The new company, EBDC, is a not-for-profit vehicle charged with planning, designing and constructing new housing using a new financial model that seeks to finance the development using institutional finance (pension funds).
The design principles of the model rely on the formation of an investment company and a charitable parent company alongside EBDC.
The investment company will secure the institutional finance, purchase the housing from EBDC and manage the estate through services provided by a registered social landlord (RSL) in perpetuity. This is a critical point, as the investment company’s long-term interest in the site drives the delivery of high quality housing managed to the highest standards. Cadwyn Housing Association is the preferred managing RSL for the development and will work closely with EBDC to explore opportunities for new social enterprises at the site.
The charitable parent company will provide overall strategic direction to EBDC and the investment company, and will receive financial surpluses generated by EBDC and the investment company for the furtherance of other affordable housing projects in Wales. On retirement of the senior debt the charity will take ownership of the housing assets creating a self-sustaining long term model for the financing, construction and management of affordable housing in Wales.
Following formation of EBDC in April 2012 the focus has been on remediating the site and securing planning consent for the development. The remediation of the site was successfully completed in August but securing planning consent has been slower than expected which has delayed the programme by several months. Particular issues have been demonstrating there is no increased flood risk in surrounding areas during extreme events and agreeing a realistic financial contribution towards community facilities that does not threaten the viability of the project.
The planning application will be considered in October and should planning consent be granted then it is anticipated the advance infrastructure works will commence in March 2014 with the construction of new houses commencing in September 2014. It is hoped that new residents will be occupying their new homes by the spring of 2015.
In principle support from a major bank and the Principality Building Society is in place for the development finance as well as for the senior debt from a well- known pension fund. Should The Mill be successfully delivered using this model then it is the intention to roll out the development of affordable housing projects across Wales with surpluses generated in some locations cross-subsidising projects where the investment proposition is more marginal.
David Ward is the CEO of the Ely Mill development company, david.ward@elymill.com 07825 054220. Judy Wayne is a director at consultant Altair, which is supporting the organisation with financial modelling, judy.wayne@altairltd.co.uk 07880 606067.