Community-led housing across North Yorkshire

The funding will support community-led housing using:

• revenue funding to support community led housing development which will include community engagement support and set up costs, legal advice and predevelopment work.
• capital funding to support the delivery of specific community led housing schemes across North Yorkshire.

The purpose of this framework is to set the criteria for the allocation of this funding.

This is not an open grant fund, and it will only be allocated for identified community-led schemes to ensure the successful delivery of those schemes. Allocations from the fund must meet the following basic principles for a community led housing scheme:

• A requirement that the community must be integrally involved throughout the process in key decisions (what, where, for who). They don’t necessarily have to initiate and manage the development process, or build the homes themselves, though some may do.
• A presumption in favour of community groups that are taking a long-term formal role in ownership, management, or stewardship of the land/homes. 
• A requirement that the benefits to the local area and/or specified community must be clearly defined and legally protected in perpetuity. 
• The proposed scheme brings added value, it supports the delivery of the Council’s housing strategy and meets local need.  
• Proposals can demonstrate deliverability of schemes (not applicable for Stage 1 funding).
• Demonstrating value for money.
• The proposal supports the North Yorkshire Council Climate Change Strategy.

We will not allocate funding to schemes that do not meet these basic principles.

Funding will be allocated to support specific community led housing schemes. Funding will be made available to the following types of organisations:

Community Organisations

These will be community groups based in communities involved in the development of a community led housing scheme. Community groups will need to be constituted to receive direct funding. The community group could be an existing charitable trust or development trust or similar body. Where a new community group is established to develop a scheme, then funding will be provided to help establish the group (see section: “What can the fund be used for”). 

Registered Providers

Funding can be provided to Registered Providers who are involved in the development of an identified community led scheme. Funding for Registered Providers can be in the form of a grant. Funding from the Community 

Housing Fund for Registered Providers can be made available in addition to funding from Homes England Affordable Homes Programme (AHP). 
Registered Providers can be involved in a community led housing scheme in a number of ways, from acting as purely a development partner and providing a design and build service to a community, through to leading on the development of a scheme and providing the on-going management of the housing. However, it is essential that whatever role a Registered Provider has in a community led scheme that the community takes a long-term role in the ownership, management or stewardship of the land/homes, this is a prerequisite of all community led housing schemes. 

Other development partners

In most cases, communities will be expected to work with Registered Providers as development partners. However, there may be situations where the community works with another development partner to deliver a community led scheme. The Council may provide direct funding to alternative development partners in certain circumstances. 

Other organisations: funding can be provided to other organisations to fund specific issues. These can include funding to consultants for feasibility work, business planning, planning consultants, supporting housing needs surveys etc. 

Direct recipients of funding through the scheme will be required to demonstrate they meet the following criteria: 

• Demonstrate strong governance arrangements by operating through open and accountable, co-operative processes, with strong performance and management systems. 
• Demonstrate it has the skills and capacity within the organisation, or available to the organisation.
• Demonstrate clear, realistic financial plans for the management and development of the housing scheme where applicable. 
• Demonstrate community support for the proposals. 
• Be clear about how the organisation will comply with any relevant legislation and statutory requirements.

In addition, community organisations will need to:

• be a legal entity or be part of a legally constituted consortia agreement.
• be appropriately constituted (examples might include a registered charity, community interest company or charitable incorporated organisation, not for profit company or Industrial and Provident Societies for the Benefit of the Community)
• have stated community benefit objectives
• be non-profit distributing; any surpluses must be reinvested to further its social aims/community benefits

The fund is to support the delivery of affordable housing across North Yorkshire in line with the priorities set out within the our housing strategy. 

The fund can be used for the following broad categories: 

Community Development Work

Funding can be used to support engagement work with local communities to enable them to set up and develop a community organisation. Specific community capacity working will include:

•    Set up costs for the group including legal structures and governance. 
•    Advising the group on community led housing models and the most appropriate models and approaches for their community/development 
•    Any training requirements 
•    Identifying other funding opportunities 
•    Assistance with funding applications and other support 
•    Longer term group and business development 
•    Any other specialist support.

Initial Feasibility Work

Funding can be allocated to undertake initial feasibility work to identify the potential to develop a community led housing scheme. Initial feasibility work can include:

•    Feasibility study, including local housing needs surveys
•    Research into opportunities for low carbon design and build methods, and resilience to climate change impacts.
•    Commissioning of a development agent to progress the scheme to a planning application 
•    Identification and initial assessment of site/sites 
•    Development of a project plan, including a financial plan and identification of match funding 
•    “Pre application” planning advice 
•    Scheme design including all relevant drawings appropriate for a planning application 
•    Preparation of surveys and reports in advance of a formal planning application, including site investigations and site surveys 
•    Identification of any abnormal costs or site-specific issues, which would require further exploration 
•    Any further community engagement work

Project management costs

Project management costs can cover any work undertaken on a specific site prior to and including start on site of a scheme. This can include:

•    All professional costs: Design and Architectural costs, Quantity Surveyor, site surveys and investigations etc. 
•    Planning fees and any specialist planning advice 
•    Legal costs 
•    Procurement costs 
•    Site Management costs 
•    Site acquisition 
•    Any abnormal costs such as contamination or site clearance

Construction Costs

This will be for all the build costs associated with the construction including any off-site works that may be required for the development.

Other costs: The Council will consider use of the fund for specific one-off costs for a particular site, without which the scheme could not be developed or be viable. This could include acquisition of particular sites, which could be “transferred” at a later date to a community led housing group for development. The fund could also be used as gap funding to support viability of a particular scheme.

What the fund will not support

We will not fund:

• any development which does not meet the basic principles for a community led housing as set out previously
• any organisation that does not meet the criteria listed previously
• any development that has already commenced
• any retrospective costs, which have already been incurred by the organisation

There is a three-stage process for grant funding set out below. Not all stages will be applicable as some community organisations may already be established and not require community development funding and in some cases may have already undertaken feasibility work in respect of a potential scheme, so may not require feasibility funding.

Stage 1: Community development or set-up fund

Funding of up to £10,000 per community can be provided to support the development of a specific community group. If the group is already constituted, then the funding will be paid directly to the community organisation. If the group is not yet constituted, then the funding will be held by the Council and spent on set-up costs until such time that the organisation is constituted.

Stage 2: Feasibility fund

Funding of up to £80,000 per community can be provided to support initial feasibility work for a potential community led housing scheme. Subject to the amount of funding requested, feasibility funding will only be specifically granted to Registered Providers or other development partners and community organisations whose financial and organisational capacity meets the Council’s procurement requirements.

Stage 3: Development Fund

Grant funding for capital costs to cover project management costs and construction costs will be made to up to 50% of the total development cost of the scheme. 
Funding from the Community Housing Fund can also be matched with funding from Homes England. 

This can be done in one of 2 ways:

Community Housing Funding can be used in addition to Homes England funding. 

Community Housing Funding can be used to fund a specific one-off cost, such as site acquisition, site clearance, any abnormal cost etc. or be used as gap funding to support viability. Specific one-off costs will be considered on a case-by-case basis depending on the specific issue. The amount and proportion of funding to support a specific one-off cost will depend on the actual issue. Please note that development funding will only be provided to a maximum of 50% of the total development cost for any scheme. Communities will be required to find the remaining 50% funding from other sources. 

This could be via several possible routes, including:

Loans

Through a loan, which is repayable over a fixed period through the rents. This is the traditional route undertaken by Registered Providers, usually combined with Homes England grant. This would be a lower risk option for communities where they would utilise a Registered Provider as a full development partner. 

Other grant funding

Communities have access to a wider range of grant funding sources, which would not be available to Registered Providers or other public sector bodies. Support and advice will be provided to communities both through the Council and specialist advisors on alternative sources of funding for community organisations.

Community Share Offers

Specialist independent support can be made available to groups seeking to undertake a community share offer. Your eligibility to undertake a Community Share offer will depend on your legal structure. You will need to consider this at the early stage of the process.

Funding can be made available to communities or organisations where they have expressed an interest in developing a community led housing scheme. 

Funding can be made available to groups in accordance with the framework to initially undertake community development work and/or feasibility work. Community groups will be required to complete a standard application form for both the Community Development Set-up Fund and for the Feasibility Fund. 

Where appropriate and delivering value for money, work will be undertaken by the Council’s enabling team to identify further communities who are interested in developing community-led housing schemes that can support the delivery of the Council’s Housing Strategy priorities. 

Assessment Panels

The panel will be held on a Continuous Market Engagement basis.

Assessment of applications to the Community Development Set-up fund will be undertaken by the Council’s Housing Strategy, Partnerships and Enabling Team. 

Assessment of applications to the Feasibility Fund will be undertaken by the Council’s Housing Strategy, Partnerships and Enabling Team. 

Assessment of applications to the Development Fund will be undertaken by the Council’s Housing Strategy, Partnerships and Enabling Team. 

Any grant allocation will be subject to an assessment that it is compliant with the Subsidy Control Act 2022. 

All grant allocations are subject to the authorisation by the Corporate Director for Community Development 

The outcome of the feasibility work will determine whether the scheme will progress to the development stage. Determination of development funding for schemes will be subject to a more detailed appraisal process, which will comprise of the following:

• Deliverability
• Value for money
• Alignment with Council Priorities, including the climate emergency declaration. 
• Eligibility, in terms of meeting the basic principles outlined in Section 1 and the wider criteria outlined in Section 3
• Allocations Policy. 
• How the scheme will be managed and maintained 
• Robustness of the business model and financial viability 
• Other sources of funding and finance 

Applicants will be required to complete and submit a development appraisal form and relevant supporting information. The appraisal can be completed by the community organisation, development partner, Registered Provider or consultant acting on behalf of the community.

Initial assessment of the appraisal will be undertaken by the Council’s Housing Strategy, Partnerships and Enabling Team, who will then recommend to the Corporate Director for Community Development whether funding should be granted.

Grant recipients will be required to enter into a standard grant agreement with us, which will stipulate a number of requirements including:

Monitoring arrangements

We will require grant recipients to provide regular monitoring information as per the grant agreement. 

Use of grant and details of works required

The grant agreement will set clear what the grant can be used for and details of the works required. 

Withholding, suspending and repayment of grant

The grant agreement will also set out the circumstances in which grant may be withheld, suspended, or repaid. This will include disposal of the properties within a certain timescale, use of grant for purposes other for which the grant has been awarded.

Stage 1 community development set-up fund

Grant payments will normally be paid on receipt of grant claim form and invoices for work carried out.

Stage 2 feasibility fund

Grant payments will normally be paid on receipt of grant claim form and invoices for work carried out. 

Stage 3 development fund

Payments from the development fund will normally be made on a staged basis. 

It is expected that applicants will have sufficient development finance in place to ensure that they are able to manage their cashflow throughout the duration of the project. 

Where the grant funding is being used to support a one-off specific cost such as site acquisition, site clearance or providing gap funding, then payment will normally be made to the applicant once that cost has been met by the applicant and upon receipt of evidence of payment of the cost by the applicant. 

Cost overruns

Funding of cost overruns will only be considered in exceptional circumstances where costs are deemed unavoidable and unforeseeable. We will fund cost overruns only as a last resort and expect all other sources of potential funding to be exhausted. There can be no guarantee that we will fund cost overruns and if we do, it will only be as a contribution so that it does not exceed 50% of the total scheme costs. 

We reserve the right to review eligibility and assessment criteria of the fund to adapt to the market and to best complement other funds that are available. Equally, we reserve the right to withdraw or reduce the fund should the financing of the fund become uncertain.