London first bilateral meeting report by URBACT Napoli / USEAct project

USEAct Urban Sustainable Environmental Actions

BARAKALDO BUCKINGHAMSHIRE NAPLES NITRA ØSTFOLD | ØSTFOLD NITRA NAPLES BUCKINGHAMSHIRE BARAKALDO | BARAKALDO BUCKINGHAMSHIRE NAPLES NITRA ØSTFOLD | ØSTFOLD NITRA NAPLES BUCKINGHAMSHIRE BARAKALDO | BARAKALDO BUCKINGHAMSHIRE NAPLES NITRA ØSTFOLD | ØSTFOLD NITRA NAPLES BUCKINGHAMSHIRE BARAKALDO | REAL ESTATE BARAKALDO BUCKINGHAMSHIRE NAPLES NITRA ØSTFOLD | INVESTMENT ØSTFOLD NITRA NAPLES BUCKINGHAMSHIRE BARAKALDO | TRUST FOR BARAKALDO BUCKINGHAMSHIRE NAPLES NITRA ØSTFOLD | HOUSING

FIRST TRILATERAL MEETING REPORT rd

LONDON, 3 , 4 April 2014 Meeting Venue: Trowers and Hamlins, 3 Bunhill Row, London EC1Y 8YZ.

USEAct First Trilateral meeting Report Urban Sustainable Environmental Actions Hosting Partner Buckinghamshire Business First Jim Sims USEAct Project coordinator Contacts: email jim.sims@ngagesolutions.co.uk

Lead Partner City of Naples Urban Planning Department URBACT Projects_and Networks on Integrated Urban Development Policies - Central Direction Urban Planning and Management - UNESCO Site Gaetano Mollura USEAct Project coordinator Anna Arena Finance officer Maria Luna Nobile Communication officer Vincenzo Fusco LSG coordinator Contacts: phone +39 081 7958932 - 34 - 17 email gaetano.mollura@comune.napoli.it urbactnapoli@comune.napoli.it Lead Expert Vittorio Alberto Torbianelli USEAct Project Lead Expert Contacts: phone +39 040 5582749 email vittorioalberto.torbianelli@arch.units.it Thematic Expert Pauline Geoghegan USEAct Project Thematic Expert Contacts: email paulinegeoghegan@hotmail.com www.urbact.eu www.urbact.eu/useact

This first Trilateral meeting Report is written by Vittorio Torbianelli, UseAct Lead Expert. It refers to the First USEAct Trilateral Meeting held in London. Jim Sims, Anna Arena, Maria Luna Nobile and Vincenzo Fusco, (Lead Partner team) contributed to editing the report.

Figure 1. The London Bilateral/Trilateral UseAct Meeting, 3rd, 4th April 2014hosted by “Trowers and Hamlins”, in its head quarter in London

REAL ESTATE INVESTMENT TRUST FOR HOUSING Meeting Report by Vittorio A. Torbianelli UseAct Lead Expert DRAFT n.1 - 03.05.2014

1. INTRODUCTION INNOVATION IN FUNDING “AFFORDABLE HOUSING”: THE UK CONTEXT AS STARTING POINT TO BROAD THE VISION

and approaches to develop affordable Social Housing and in particular on the role that municipalities and local administrations can play to reach this target trough taking advantage not only of national or regional funding schemes but also the services provided on the market by other subjects.

People attending the meeting Mr. Gaetano Mollura, City of Naples, UseAct L.P., Mr. Vittorio Torbianelli, UseAct L.E. Mr. Jim Sims, Buckinghamshire Tame Valley LEP Mrs. Linda Iren Karlsen Duffy, Østfold County Council

1.1. The issues of the London Meeting

Mr. Alvaro Cerezo, Municipality of Barakaldo

As pointed out in the concept paper produced for the London Meeting by Mr. Jim Sims, in many UseAct partner countries, developing affordable houses is perceived as a priority and in some cases, municipalities are currently developing programs for affordable housing.

Mr. Stefan Lancaric, Municipality of Nitra

The target of the first Bilateral/trilateral meeting of the UseAct project is focusing on innovative tools

Mrs. Kathryn Mallet, Senior Manager KPMG

Mr. Piers Williamson, Chief Executive of “The Housing Finance Corporation (THFC)” Mr. Joseph Carr, Finance Policy Leader, UK National Housing Federation

1.2 What do we mean by Affordable Housing and where is the demand? According to many authors, the ‘Housing Market’ can broadly be split into 5 discrete market segments; •New-build to buy; •Second-hand to buy; •Private rental (Buy to Let); •Intermediate Housing (below 80% market rents); •Social rent (below 40% market rents) Whilst the relative strength of these segments various across Europe, generally speaking, current forecasts indicate that housing demand in many Metropolitan areas (particularly in the better performing regions) outstrips supply. In recent years, in those member states where home ownership is the norm, a number of factors have combined to suppress the growth of the new-build to buy and the second-hand to buy markets, including rising house prices in relation to earnings; the clampdown in mortgage lending after the financial crisis; the scrapping of rent controls; and the proliferation of buy-to-let mortgages. Whilst these markets have experienced weaker demand, the private rented sector has largely blossomed. For example, today, its estimated that more than 10 million people in the UK – around one sixth of the UK population – are living in privately rented accommodation. In addition, according to a recent report by Knight Frank, the sector accounts for around four million households, some 17% of the total number of households in the UK. Knight Frank also forecast that the number of households in the private rented sector will continue to rise over the next 10 years.That said, the private rented sector is dominated by numerous individual landlords, with a high proportion of aged, often poor quality stock. In addition, the current economic climate is combining with demographic changes across Europe (particularly the ageing population) to result in an increase in demand for intermediate and social rented housing. In these segments, the total need for new affordable housing again outstripping supply. Given the above, there are three particular gaps in the affordable housing market across Europe;  The Rent/Buy gap. Households in this gap can afford market rent without the need for Housing Benefit, but cannot afford to buy outright. Tools which are designed to support residents that fall into this segment are shared ownership models and solutions like the UK governments ‘Help to Buy’ scheme, which aims to make the deposit needed to purchase a hose ‘affordable’.

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The ‘Intermediate housing’ gap - Intermediate housing is defined as housing between a social rent and market rent. As far as the UK is concerned, this is defined as being anything below 80% market rent; The Social rented gap – This is often classed as being housing suitable for ‘vulnerable’ and ‘at risk’ individuals, many of whom often need to access government benefits to be able to afford to get on the housing ladder

1.3 A dynamic ‘supply side’ Housing Development Community In many countries, national ‘state’ funding schemes and tools are an important driver in stimulating affordable housing. However, more constrained public finances since the onset of the recession have resulted in some member states finding it difficult to stimulate sufficient affordable housing to meet the needs of the local residents. Given this scenario, member states are having to find more innovative approaches to ensuring they develop sufficient affordable homes to meet the needs of local residents. The UK context is rather interesting as a starting reference for exploring the opportunities to deal with the social housing issue (and with the correlated - often challenging -funding issue) through innovative governance and funding tools and models. The UK situation is rather dynamic at present, as their developer community is probably more active/mature than other member states. The reason for this is because, in addition to the traditional private sector players, they also have an active Not-for Profit Sector, in the form of ‘Housing Associations’ or ‘Registered Providers’. These Housing Associations were formed under the previous Conservative government in the late 1980’s to try and encourage the transfer of publicly owned housing stock out to market, under the then governments drive to try and make it possible for every individual in the country to realise a goal of owning their own home. Since this time, Municipalities have been encouraged to transfer what housing stock they did own out to Housing Associations, in return for a capital receipt and a potential Right to Buy ‘kick back’ when these residents bought former council homes. In addition to these Housing Associations, commercial house builders are active in the development of large ‘New Build to buy’ estates, which the UK government now mandates must include a target of 40% of Social Housing which are supported by ‘Developer 1 Contributions’ (from Section 106 or Community Infrastructure Levy) from these developments). 1

http://www.pas.gov.uk/3-community-infrastructure-levy-cil//journal_content/56/332612/4090701/ARTICLE

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Help to Buy - Help to Buy is an equity loan scheme that makes new build homes available to purchasers Buckinghamshire’s Housing Market struggling to buy. The Help to Buy equity loan is funded by the Government through the HCA. The The cost of housing in the private rented sector rose 6.3 perHelp centtoinBuy theproduct year towill Q3be2013, withto eligible available Buckinghamshire’s median monthly rent standing at £850, the third highest among county councils and purchasers and will be paid directly to registered 43 per cent above the national median. Over the last six months of 2013, median rents in the county were house builders. It offers a maximum 20% equity unchanged. Mean rents rose 1.4 per cent to £1,042 a month, the second highest level among county loan (minimum 10%) on new build properties up to council areas behind Surrey and the second highest among LEPs behind London. a maximum purchase price of £600,000. The equity The private rented sector accounted for 25,875 households at the 2011 Census, 12.9 per cent of loan will be madefor byBuckinghamshire’s the HCA to the purchaser; Buckinghamshire’s total, up from 14,678 or 7.8 per cent in 2001. Earnings there is no house builder contribution. residents fell by 2.7 per cent from April 2012 to April 2013, the second successive annual fall, to stand 5.0  Build to Rent - In response to the recommendations per cent below 2011’s peak. of the Montague report, the Buildoutside to Rent Fund was At £1,100 a month, South Bucks has the highest median rent of any local authority district launchedhas to stimulate new private rented housing London, despite recording an annual fall of 12.0 per cent. Chiltern the 35th highest median rents in supply opportunities for new England having seen the 24th highest rate of growth over the last and yeartoatprovide 8.9 per cent, although rents in the district in Q3 have fallen slightly since Q1. institutional investment in the sector. The Fund is a Aylesbury Vale has the lowest rents in Buckinghamshire at fully £695recoverable, and saw rent inflation investment of only 1.0 where per commercial cent, well below the 3.5 per cent recorded across the country as a whole. Government will share risk or bridge finance to The median rent for a studio in Buckinghamshire is £525 a allow month, the 5thtohighest any of the schemes be built,ofmanaged and27 let.county The council areas, at only 8.2 per cent above national level. Rooms are 21.2 per cent more expensive, with investment could be used to cover development successive rises from 30.0 per cent above for one bedroomcosts properties 68.2 per cent for with such asto land, construction orhouses management four or more bedrooms. Smaller properties have seen the highest year on year increases, with median costs. After an overwhelming response from the rents rising 10.5 per cent for studios and by 8.3 per cent for one bedroom homes, respectively the 3rd and sector to the Fund, which was initially set at £200m, 2nd highest rate of increase of all county councils. Rent inflation was above the national level for all the Chancellor increased the funding available to property types except rooms and houses with four or more bedrooms. £1bn in the Budget 2013. At the 25th percentile, Buckinghamshire’s rents are comparatively high with a room costing £375, 24.4  atGet Britain - The is £500m Building per cent above the £299 recorded across England, while £525, rentBuilding on a studio 17.2 Get per Britain cent above announced as part of the the national level, while for a three bedroom home the rent programme at the 25th was percentile is £895, 62.7 per cent Government’s Housing Strategy for England in (£345) above the £550 for England as a whole. November 2011, aims unlock locally-backed While median rents have increased by 10.5 per cent for studios and 8.3 perand cent for to one bedroom homes, stalled rent sitesinflation with planning permission the largest houses have see a 2.6 per cent fall. For all properties has been higherand for deliver up properties at the 25th than the 75th percentile, with only rooms to 12,000 and very new large homes. houses A recoverable seeing private investment, rents rise by less than inflation. Similarly rents in Buckinghamshire risen faster than across England as a in thehave programme is intended to address difficulties whole for all properties except room and houses with more accessing than fourdevelopment bedrooms. finance faced by some house builders, and to help bring forward marginal sites by sharing risk.

1.4 Access to Finance in the ‘Affordable Housing’ Sector In addition having an active ‘supply side’ Housing Development Community, the UK has over the last 20 years or so also broadened the range of funding that is available for the development of Affordable Housing. In the UK, the Housing Community Agency (HCA) operates a number of grant schemes to encourage the development of Affordable Housing, including;  The Affordable Homes Programme – Invests over £4.5bn between 2011-15 in affordable housing for Affordable Rent with some for affordable home ownership, supported housing and in some circumstances, social rent.

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Care & Support Specialised Housing Fund - The Care and Support Specialised Housing Fund was announced by the Department of Health in the White paper Caring for our future: reforming care and support published in July 2012. The main aim of the fund is to support and accelerate the development of the specialised housing market, particularly at a time when the wider economic factors may place limitations on the growth of this market. Over five years from 2013/14, the Department of Health is making available £160m capital funding for specialist housing providers to bring forward proposals for development of specialist housing to meet the needs of older people and adults with disabilities outside of London. This funding may be supplemented by up to a further

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£80m capital funding in the first two years of the programme. Clusters of Empty Homes - A £50m fund to tackle the worst concentrations of empty homes was announced on 21 November 2011 by the Prime Minister and Deputy Prime Minister as part of Laying the Foundations – a Housing Strategy for England. Community Led Project Support funding - In March 2013, the Housing Minister, Mark Prisk announced funding, originally earmarked for communities seeking to achieve planning permission via a Community Right to Build Order would be expanded to also cover community groups who want to submit a planning application, but who need some help to achieve this. This is separate from the funding available for community led housing under the Affordable Homes Programme. All community groups in England (outside Greater London) are invited to apply for a share of the £14m fund which is being made available to help groups to formally establish, build up their development proposals and submit a either a Community Right to Build Order or a planning application. Custom Build - In Laying the Foundations – a Housing Strategy for England, the Government announced that it would be making up to £30m of funding available to provide short-term project finance to help unlock group custom build – or selfbuild - schemes. Right to Buy - The Right to Buy scheme was introduced in 1980 and gives qualifying social tenants the right to buy their home at a discount. Government announced in the 2011-15 Housing Strategy its intention to increase the caps on Right to Buy discounts to enable more tenants to achieve their ambition for home ownership, while at the same time, help maintain a supply of affordable housing. Builders Finance Fund - The prospectus for the Builders Finance Fund has been published outlining a fund for £525m of capital finance to support the delivery of housing sites. The fund is intended to address difficulties in accessing development finance faced by some housebuilders and to help accelerate and unlock housing developments between 15 and 250 units that have slowed down or stalled completely. The fund intends to focus on unlocking deliverable projects which can start or restart soon and achieve good value for money for the tax payer. Bidding will be open to all private organisations which control the relevant site and will carry out the development

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Local Infrastructure Fund - As part of Autumn Statement 2013 the Chancellor announced a £1bn extension of the Local Infrastructure Fund for large scale housing sites, to unlock around 250,000 homes over 6 years. This is in addition to the funding being invested through the current round of the Local Infrastructure Fund. Large Sites Infrastructure Programme - The Large Sites Infrastructure Programme will provide a package of support to bring forward large scale housing development. As part of Autumn Statement 2013 the Chancellor announced that a package of support would be made available to accelerate and unlock the development of large housing sites, and the prospectus formally inviting expressions of interest to this package of support is now available. In summary the Large Sites Infrastructure Programme comprises: Access to a £1bn recoverable Large Sites Infrastructure Fund to enable delivery of the major infrastructure which is needed to get house building underway; A Local Capacity Fund to enable local authorities to put in place the skills and capacity that they need to progress schemes through the planning and consent process; Access to expert planning and technical advice through the Advisory Team for Large Applications (ATLAS) to help schemes progress from conception through to planning consent; and Dedicated brokerage support from central government to help resolve barriers that are preventing schemes from moving forward.

In addition to the above, The Housing Finance Corporation (THFC) - an independent, specialist, not-for-profit organisation that makes loans to regulated Housing Associations, that provide affordable housing throughout the United Kingdom – provides finance to Housing Associations by issuing bonds to private investors and by borrowing from banks. In delivering this programme of work, THFC works closely with the European Investment Bank. THFC, through its subsidiary, Affordable Housing Finance is the delivery partner for the Affordable Housing Guarantee Scheme. AHF makes loans to RP borrowers and funds itself through the issue of bonds and by borrowing from the European Investment Bank. AHF's obligations under the terms of its financings and the obligations of its RP borrowers are guaranteed by the Government. The scheme has been designed to allow RPs to access cost effective funding so as to act as a stimulus in the building of affordable housing.

of borrowing and an alternative to bank debt for established charities with strong credit worth. It also gives charities the opportunity to significantly raise their profile and engage with a new audience of investors.

1.5 What is the role of Retail Investors in supporting Affordable Housing? Whilst many of the above schemes rely on ‘State’ or ‘Institutional’ funders, there has been a growing interest in recent months on whether additional opportunities exist to develop affordable housing by securing funding from retail (individual) investors, including businesses. Not only do Retail Investors provide a potential new source of finance for the Housing Sector, but the returns that retail investors potentially want are less than Institutional Investors. One of the most under-developed tools for securing funding from retail investors, which is attracting interest across Europe are Real Estate Investment Trusts (REITS).  Real Estate Investment Trusts are quoted companies that own and manage income-producing property, which provide a way for investors to access property assets without having to buy property directly. REITs were created in the United States when President Dwight D. Eisenhower signed into law the REIT Act contained in the Cigar Excise Tax Extension of 1960. REITs were created by Congress in order to give all investors the opportunity to invest in large-scale, diversified portfolios of income-producing real estate in the same way they typically invest in other asset classes – through the purchase and sale of liquid securities. Since then, more than 20 countries around the world have established REIT regimes, with more countries in the works. The spread of the REIT approach to real estate investment around the world has also increased awareness and acceptance of investing in global real estate securities. A comprehensive index for the REIT and global listed property market is the FTSE EPRA/NAREIT Global Real Estate Index Series, which was created jointly in October 2001 by the index provider FTSE Group, the National Association of Real Estate Investment Trusts (NAREIT) and the European Public Real Estate Association (EPRA). As of mid-2012, the global index included 414 public real estate companies from 37 countries representing an equity market capitalization of about $1 trillion (with approximately 68% of that total from REITs). Other tools which might potentially be of interest to making the sector attractive to Retail investors are;  Retail Charity Bonds - Retail Charity Bonds is an issuing platform to raise medium term debt finance for charities through bonds issued to retail and wholesale investors and listed on the Stock Exchange. The platform opens up a new dimension

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Social Investment Tax Relief - Social investment tax relief gives individuals who invest in qualifying social organisations a reduction in their income tax bill for that year. In the UK, this reduction currently sits at 30%. The 30% rate is the same rate as the Enterprise Investment Scheme and Venture Capital Trust investments, and is designed to attract the same capital gains tax reliefs, creating a level playing field for investment.

In general, it is of useful – for the UseAct partners to consider a wider panoply of tools, because each country is at a very different stage in its development and has a different starting framework which will require flexible approach. What are the concrete options, in the different countries, to exploit the newly emerging tools aimed at funding social housing schemes? What the conditions – in terms , for example, of owners involved, scale of intervention, legal/financial framework available, rent level, needed for successful initiatives? What is the role that local administration can play to boost the process? These question have been touched during the meeting with the support of professionals and experts operating in the real estate and financial sector. The first document, presented during the London meeting, that can support UseAct partners in approaching the Social Housing Innovation issue is the “Joseph Rowntree Foundation Report” (March 2013) entitled “Innovative Financing of Affordable Housing – International and UK perspectives” is a stimulus to focus on, from a broader perspective, different innovative ways to finance urban “sustainable” developments . Figure 2. The cover of the 2013 Joseph Rowntree Foundation Report

The research , that can be considered as one of the “sources of inspirations” of the UseAct Trilateral Meeting in London, draws on UK and international evidence on innovative ways to support financing for new affordable housing supply. Emerging themes and key points in light in the JRF Report can be summarized as follows: a)

in a context of declining public funds, need to shift from a traditional “social-housing” approach towards a “affordable housing” one (higher rents and more limited security for tenure), due to the reduction of public expenditure capacity; as a consequence, the opportunity for more state-backed guarantees, more competition among providers, alternative sources of provider income, possibilities to “blend” different subsidies (at different tiers of government and agencies) and encouraging solidarity-based cooperation among providers, in particular at local/small scale level (community-based housing associations clubs); need to refocus specific “social” housing programs, with a clearer policy, to face possible market failures and rising housing needs and, at the same time, to avoid over-provided or poorly targeted subsidy Opportunities for cooperation among providers, aimed for instance to pool and recycle funding, could encourage lower cost an less – per-unit subsidy, also trough competition. Policy makers and providers are increasingly interested in management income streams associated with “Real Estate Investment Trusts” (REITS) and other sale and leaseback vehicles and tax credit models.

The research stresses that, in general, the scope for innovation is closely related to the regulatory context (social housing governance and interface between non-profit housing and financial sector). Many examples of transferable international policy are provided in the research report. Among these, some can be mentioned: the Spanish developer/occupier supply subsidy; the Australian “NRAS” Scheme, that includes a tax credit solution based on the U.S. low income tax credit model, blending subsidies and beneficial “placemaking”; the state-backed loan guarantees, as the Scottish National Housing Trust; policies to assist sustainable home ownership (e.g. the Canadian silent mortgage); the Danish housing association national surplus fund, to make creative use of surplus funds; the Irish model of private renting with a discounted long-lease rent.

In practical terms, for UseAct partners, it has be to recalled that each country shows extremely specific institutional/market/cultural conditions that heavily influence the possibility to adopt “imported” models. Moreover, the required “scale” for the implementation of the tools is often national (e.g. trough housing taxation, safety nets for vulnerable home owners, ) and not only local. However, some “general principles” for innovative” affordable housing policies” can be considered as basically valid and of use, in particular at local level: first principle is that any affordable housing policy should be fluid and subject to innovation and novelty and that such innovations should be securely located in a long-term framework, that is coherent, progressive, inclusive for those in pressing housing need, and consistent with talking market failures. The second is that, also at local level, a high degree of innovation, flexibility and ability to utilize the PPP approach potentially allows to overcome the increasingly shortage of public governmental funds and subsidies.

1.6. The experience of Housing Associations in UK and the funding social housing issue Turning on the UK “social housing” framework, UK Housing Associations - as explained in the “guide” published by THFC - are independent private sector, not-for-profit bodies that provide rented homes at sub-market rents. 85% of HA turnover comes from renting general needs housing at submarket rents. 70% of rents are paid directly to Landlords from Housing Benefit (although this is increasingly coming under pressure from changes to the Benefit system). HAs also undertake development for low cost home ownership; principally shared ownership. This helps meet government objectives to extend home ownership and has cross-subsidised development of general needs housing. HAs also cross-subsidise their affordable housing development through open market sales. The “Homes and Communities Agency” is the grant distributing body to HAs. Grant is subordinated to Housing Associations, with the HCA taking the “1st charge” over the HA assets. Falling rates of public grant over a period have led to private finance becoming the main source of investment. The biggest proportion of HA loans are long or shortterm fixed rate. Bond issuance has risen dramatically since the onset of the banking crisis

2. FOCUSING REITS (AND OTHER FINANCE TOOLS)

bonds and own-named bonds), sale and leaseback options, free and discounted land (by public or charities entities), HA’s accumulated reserves. Moreover, some non-core activity (as care contracts, PRS, property sales, student accommodation) can provide further resources, that, at the moment, can be considered as marginal but that could potentially improve their role.

2.1. REITs in UK “Real Estate Investment Trusts” are, without doubt, one of the most interesting solutions to fund affordable/social housing developments. Joseph Carr and Kathryn Mallet, respectively from the UK National Housing Federation and from KPMG, reviewed the history of social housing funding in England, the Emerging funding options and in particular the “Real Estate Investment Funds”. The issue has to be linked to the increasing role played by private funds in funding social/affordable housing in UK. In the UK experience, main funding sources/tools available for housing associations (HA) are the following ones: bank loans and EU funding, bond finance, private placements, Public bonds (club

Figure 3. The UK funds for social housing

Source: UK Social Housing Federation

Private resources are rather expensive: in the following Figure, the “costs” for private finance (increasing with the duration) are showed. Figure 4. Cost for private finance (April 2014)

Source: UK National Housing Federation

The following Figure shows the spread between the spreads between the rates by private finance operators and UK Public Bonds (“Gilt”). Figure 5. UK Social Housing Sector – Bond issuances

Source: UK National Housing Federation

Focusing on the “REIT” formula, the following key points emerge for UK. REIT is not a trust despite the name. It is an ordinary company which is UK resident and listed on a recognised stock exchange. It is Property investment company, and not a development company. REIT status exempts from UK corporation tax the profits derived from property rental business. It must pay out 90% of rental profits as a dividend which is then taxed on shareholders as rental income. In general, REITs offer an additional financing option, with potential to raise new capital from equity investors. There are many practical and sensitive issues to be considered when REITs are taken in consideration from the point of view of Registered Social Housing Providers (Housing Associations). REITs are related with transfer of “regulated” assets and availability of grant. Listing requirements are needed (complying with listing rules, preparing prospectus, etc.). There is on-going relationship between the REIT and the Registered Providers, but the existence of multiple (and often small) RPs can generate complexity. Moreover, a conflict between

social purpose and commercial purpose is always potentially existing. Asset sales and shared ownerships are another potential problems which is difficult to be overcome. Moreover, there are distribution requirement (more than 90% of the income) and complex rules around sale and leaseback transactions (maturity transformations). Finally, the Stamp Duty Land Tax (it is a tax on documents which applies to stock transfer forms transferring shares) reduces return, and can be tricky where returns are already tight.

2.2. REITS in Italy Lead Expert, Vittorio Torbianelli, presented the case study on the National Italian Fund for Social Housing , managed, with REITS approach, by the Bank Agency “Cassa Depositi e Prestiti (selected trough a national bid). The total Amount of the National Fund (Ministry of Infrastructure), established in 2008, is 2 billion Euro ready for investments. However, until now around 54% has been “targeted”, but few schemes actually «started».

The «national agency» that manages the trust – as a «Trust of Trusts» - buys shares (until 60%-80% after elimination of the max 40% rule) of «local» regional/local trusts that «activate» local capitals, creating a multiplier «effect» . Regional Authorities or other administrative bodies establish and «fund» local trusts that – trough other specialized providers - work at local level to gather further capitals (e.g. banks and foundations) and activate development schemes and projects. The system is therefore a «two layer» system of trusts. Strong cooperation between the «father trust» and the local subjects is required. In Central Italy, many local trusts have been launched by «COOPERATIVE» with social targets, to use the money. The expected return is around 3% (+ inflation rate). The three formulas allowed are:   

«affordable selling» «rent to buy» «affordable renting», that dominates with around 50% of the total amount.

The main physical «targets» for the schemes are: 

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Properties (land or low quality buildings) of «local administrations» or other not business-oriented bodies (e.g. church; health care institutions, etc.) Priority to already «urbanized areas» «un-sold» recent private developments Some problematic issues have emerged in the Italian national REITS development policy.

They are in particular: 

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weak involvement of «private» (not institution) owners, that imply not many «real estate targets» actually available. low returns that, in most cases, are not compatible with expectations of private players, in particular real estate developer involved as unsold properties owners; often «small» schemes/buildings (no scale economies) difficulties in involving local authorities; need to identify very well the «projects» and the rule framework: the trust does not «fund» the project until everything is defined: limited potential for «re-using» existing depredated buildings (but some cases occurred) need to reinforce the incentive framework

Given the limited use of the opportunity, recent changes (2014), aimed at improving the use of the fund and in general to develop social housing schemes, have been introduced. They are in particular: 

speeding up the approval of schemes for social housing: it is possible easily «convert» into social housing previous approved development schemes (but only for «reuse», not for new constructions);

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possibility to «add» ancillary services to the social housing development (retail, parking spaces, etc. – malls are excluded) new rules related to town planning schemes which include social housing: variations of own planning scheme can be discussed only between municipality and proposer, without the need to involve regional administrations as usual within 60 days from the proposal, regional administrations have to establish the affordable rents and conditions for social housing.

The most important features of the Italian REITS policy for social housing have been also highlighted by the L.P. Mr. Gaetano Mollura, who provided supplementary information on the Italian REITS systems (see the above paragraph on the L.E. presentation). With the so called “Legge Finanziaria 2007” (Art.1; 119-141) “REITs” in Italy were linked to specific companies, the so called “SIIQ: Società per investimento immobiliare quotate” (Companies for listed real estate investments). For the Italian law, the system of SIIQ, is of a complementary nature and not necessarily an alternative to the so called “FII - fondi immobiliari di investimento (Real Estate Investment Funds). In fact, real estate funds will continue to be eligible for federal tax benefit (the fund may reinvest the income generated each year). The (special) discipline of SIIQ require that: 

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SIIQ are Public Limited Company (PLC /Spa) located in the territory of the State whose equity securities are traded on Italian regulated markets; to be able to use the “special option scheme” , SIIQs have to operate “prevalently” in the business of rented properties; the activity is considered “prevalent” if the property held by way of ownership or other real rights allocated to it represent at least 80% of the assets, and if, in any financial year, revenues earned from that represent at least 80% of positive components of the income statement.

Tax exemption is a very sensitive aspects for REITS. In Italy, as in other countries, the REITs initiative was launched with the objective to enable financial leverage for the estate properties and interesting perspectives for the "real estate" through a series of tax incentives such as preferential taxation regime that exempts them from “business” taxes as IRES and IRAP. A 20% tax plafond is applied to investors, with exemptions provided for integrative pension funds. As already explained by the L.E., a recent policy initiative called “Piano Casa” (Decreto Legge 47, March 2014) has been introduced, with the aim of increasing the supply of rental fee agreements and encouraging a greater “rotation” in housing and public housing. Furthermore, the same policy framework introduced: tax breaks for those who occupy social housing; a plan for the recovery of public housing units for an amount of 500 million

euros; a “full ownership” principle at the end of seven year rent agreements; disinvestments and redevelopments of social housing managed by the previous social housing public providers ( former “IACP”) with construction of new housing; fight against illegal buildings; from 15 to 10 tax reduction for renting agreements, applicable only in large densely-populated areas; bonus for housing not strictly related to the value of the restructuring. Improvements of the housing supply through new maintenance and management activities carried on by public residential property manager (ERP) without new land take are also expected. Gaetano Mollura also pointed out that that REITs seems to highlight the lack of a pan-European real estate investment vehicle. In his opinion, an “European REIT” could provide an incentive to develop real estate investments, at a regional level, by the private sector; therefore, the European countries should establish an European REIT; coordination of the “REIT community” through an enhanced European cooperation framework on REITs could support social housing developments (with positive impact on building industry) and could compete with the non-EU REITs already existing on the markets. A question arose: which role should/could play the EU in funding REITs?

2.3. REITs in Spain Barakaldo Municipality contributed to the meeting with a presentation on the Spanish way to “REITS”, entitled “Restoring agent-entrepreneurs and the public private partnerships: Spanish REITs (SOCIMIs)” The Spanish REITs are corporations whose main activity is the acquisition, development and restoring of urban assets for renting purposes, directly or through some other REIT shares. The Spanish REITS have the following characteristics:  

 



This type of corporation shares must be traded in the Spanish or European stock exchanges; The minimum share capital for its constitution is 5 million euro (4.15 million British pounds) and a minimum of 50 initial investors are requested; The investment and real estate requirements are the following ones: 80% of its value must stand in urban assets, with renting purpose, and fully owned or shared with some other REITs. 80% of the yearly incomes must be rents or dividends from other REITs. the REITs must hold the renting properties for a minimum period of 3 years for bought buildings or 7 years for the self developed building plots. they must own three real estate properties; each of them not representing more than the 40% of the total value of the REIT at the acquisition time.

On profit sharing, Spanish REITS will have to be allocated to dividends:   

At least the 90% of the total renting incomes; At least the 50% of the total real estate sales benefits or other share dividends; 100% of other REITs dividends.

Spanish REITS will have a special tax regimen, with the following general characteristics:  

0% corporate tax; 19% tax for the share dividends.

Other REITs and nonresident partners with less than 5% of the total shares are excluded from the share dividend tax. At the moment, there are only four Spanish REITs (two of them formed in the last month and 20 more up to come), which might imply that the Spanish real estate market has reach its lowest point, with a bright future ahead of possible profits, that might counterbalance the inherent risks of the real estate operations.

2.4. “Debt aggregation” as an alternative to REITs During the London meeting, Mr. Piers Williamson, Chief Executive of “The Housing Finance Corporation (THFC)”, a UK based company that plays a key role in lending funds for affordable housing to Has, presented the mission of THFC and its business approach. THFC is is the foremost aggregating funder to the HA sector in UK. THFC runs a model which can be considered similar to REITs in terms of final outcomes, although it is based on a different principle: REITs implies, for the investors (e.g. Insurances or pension funds), to be involved, trough shareholding, into the “development business” risk, while THFC operates only as a “bank”, without involving the lenders into the development business risk, which is managed by HAs only. THFC acts as principal and borrows in its own name. It on-lends immediately and only to registered providers. Funds borrowed are on-lent on similar interest and repayment terms (liability matching but not maturity transformation) thus ensuring that THFC is protected against interest rate risk. THFC provides “Bond Aggregation”, EIB Loan distribution and servicing for Housing Associations, and issues Guaranteed Debt under the Government’s Affordable Housing Guarantee Scheme. The “debt aggregation” function provided by THFC allows individual (small scale) Housing Associations to get “affordable” housing finance (as showed in the Figure), guaranteed by investments of Annuity Funds, Insurance Funds, Pension funds, Retail.

Figure 6. The Debt Aggregation function played by THFC

Source: THFC

The banks, in general, and especially institutions like THFC have no problem in lending to the sector as they use the rental streams of HAs and 30 year business plans as a model to base their lending criteria. They also use the homes owned by the 2 organisation as security for the debt raised .

Real estate federations. This research pointed out that:

3. LEARNING FROM THE LONDON MEETING: THE PARTICIPANT’S POINT OF VIEW

According to experts, a reinforced social housing development policy, could be also a driver for local economic development.

 

in Naples there is a potential demand for "social housing" about 22.3% of the resident population four categories, in particular, would need social housing developments : pensioners, unemployed, young people (working age) and migrants.

It has been recalled that until now, REITs initiative took place mainly in the Northern Italian Regions, and not in Southern ones (see Figure 7) Figure 7. REITS social housing initiatives in Italy

3.1. Naples The potential relation between REITs – and in general innovative funding tools - and the Naples situation has also clearly defined by the L.P. His presentation focused on a recent study developed during 2013 by Naples Chamber of Commerce in cooperation with associations and 2

As suggested by Mr. Jim Sims, it should be checked if the law in either Italy or Spain or other UseAct countries would allow such organisations (as THCF) to exist, but it may be worth exploring.

Source: Il Sole 24 Ore

The “REITs challenge” has to be considered as a part of a wider challenge framework that City of Naples has to face. L.P. recalled that the USEACT LAP of the city is to develop tools able to support rehabilitation of private buildings within the (protected by “UNESCO”) historic center, and to avoid gentrification as well. In the Naples historic center (which is included in the “World Heritage List” of UNESCO since 1995), 80% of the buildings are private properties. Buildings are often split in several apartments which are mostly rented. The majority of the properties are “regulated“ by rental agreements (very old contracts). Therefore the apartment owners earn low rents that are not sufficient to invest on rehabilitation of the buildings. The inhabitants (rent occupiers) of this area also construct its cultural identity that must be preserved. Some questions arose, from the L.P. presentation, and in particular how new finances (beside private ordinary real estate investments) could be found to support rehabilitation and whether/how ERDF Funds and/or REITs could be of use for this aim. Mr Mollura also recalled the Naples “Sirena Project” experience, still in development, which is a potential field of application for REITs and EU funds opportunities. “SI.RE.NA. Città Storica” Company, a no–profit public/private subject under public control, developed a program to restore the buildings’common parts in the old town areas of Naples and outskirts (12.000 ha). Municipality assigned to public sector the task to define rules and quality control procedures. SI.RE.NA promoted protocols of Understanding with sector experts, banks, insurances in order to offer to the involved subjects some measures to ease the interventions. Since 2003 until 2012, 1200 private buildings has been involved into the “Sirena Project” and the owners of 800 buildings obtained free grants and made restoration works, mostly in the Historic Centre - UNESCO Heritage. The contribution (without return), granted by Campania Region and Naples City Council, amounts up to 37% of comprehensive intervention amount. A further contribution up to 3% is granted to those who applied the so called “Building Maintenance Booklet”. The grant cannot exceed in all the threshold of €130.000,00/160.000,00 for each building. Moreover this contribution is cumulative with further incentives and/or easing granted from the Public Authorities. The citizens ask the grants sending to the Municipality an application form as provided for by specific announcement. Subsequently the Municipality, trough SIRENA Company, judges the compliance with the announcement and makes the list.

3.2. Nitra

During the meeting, Municipality of Nitra started from a description of the state of the matter and the current mechanisms of supporting “social housing”. In Slovakia, a “State Fund” for “housing” development (Act 150/2013) is currently available. Applicants can be individuals, private companies, municipalities, NGOs, association of the apartment owners /APO/. The aim is the construction of new housing facilities/apartment houses, family houses, purchase of apartments, reconstruction of existing facilities in order to increase the energy efficiency standards, reconstruction of the technical infrastructure of the facility. The fund is available for individuals or families/age up to 35, with income of 4times the “life minimum” threshold. It is directed to support building of houses or apartments up to 120m2, with 5% co financing, loan for 20 years, interest rate fixed – 2%, or purchase of houses or apartments with loan up to 55.000€. Municipalities or APO can use it for reconstruction of apartment houses and to improve energy standards, technical infrastructure, lifts. The interest rate is 0,5 – 3% for 20 years. Total yearly support is around 165 million €. An another program is aimed at providing “purpose building” savings. The subsidy is available to everyone, no matter the age. The specific aim is supporting construction of new housing facilities, apartment houses, family houses, purchase of apartments, and reconstructions. The building purpose is set for 6 years saving, after 6 years period, and the money could be used for any purpose. Conditions of the support re the following ones: interest rate 2% of savings, 0–2 years of saving withdrawal without the bonus. The building purpose must be declared, for 2–6 years of saving withdrawal with the bonus, the building purpose must be declared. After 6 years of saving withdrawal with the bonus, there is no need to declare the building purpose. The total yearly funding is as follows: State bonus: 8,5 % of yearly savings, up to 66,39 €. Minimum yearly savings, in 2014: 780,96 €. A relevant issue is the “mortgage” issue, which seem to show also in Slovakia, rather difficult aspects. The lesson learned, that has to be considered as the most interesting aspects of the meeting from the Nitra point of view, can be summarized as follows. a)

The concept of the UK Housing Associations (HA) in general, especially due to the fact, that the HA are not just the managers of existing facilities – as currently in Slovakia - but also take the role of the developers of new housing capacities, as well, as funders of the development. b) Each partner provided information on the matter of housing trusts at national level: some schemes are similar, some quite different, but in general, the knowledge transfer but especially the transferability of solutions seems

to be not so easy. The national legal frameworks set, in fact, strict boundaries for the issue: in order to be able to transfer some good practice from partner to partner and to reach effective outcomes, the approach needs to be changed, not only at local/municipal level, but also at the national level, Nitra municipality considers some points and issues emerged during the meeting, as a potential scope for knowledge improvement 



Funding and mechanisms of the reconstruction of the existing housing capacities within the city centrum, often under the heritage protection /the communication with public included/. Cooperation among the Housing associations and the Municipal officers responsible for the urban development and planning, experiences, good practices. General spatial configuration of the new housing facilities in the urban areas of the middle – sized Municipalities from the point of view of the land consumption /green areas, brownfields, centrum, suburbs?/. PPPs focused on the housing development.

3.3. Barakaldo Considering the general description of the Spanish REITs (presented above), the Barakaldo ULSG Core Group decided to start a debate on the following topics related to the urban interventions on new soils and in the existing city:     

Planning conditions for Public Rented Housing developments. REITs for Social Housing with no private property (developing and managing activities only) REIT´s niche markets and its conditions. Spanish REITs on restoring initiatives. Spanish REITs on restoring interventions.

Advanced conclusions to the meeting, for Barakaldo Municipality, are the following ones: On planning conditions, it seems that is no possible and also unlikely to restrict the type of housing for a specific type of ownership (renting), because is less flexible and because the actual Spanish housing renting systems does not generate enough profits to cover the provable expenses. Inside PPP conception and according Spanish law regulations, there are serious doubts about the possibility of managing not owned properties for renting purposes, including public plots or buildings (either housing or retail). Once the Spanish RIETs have been analyzed, we can conclude that these type of investment and intervention tools are primarily focused on not fragmented properties or not divided properties (either housing, retail or offices), as long they are

able to control and secure the investment, or decide about the improvements that will lead to a value and profits increase. It is all about risk limitation. In Spain, there many REIT examples on retail and offices, and also in the touristic complexes. But the common Spanish urban housing typology, together with the tenant still protective legal system in case of defaults, moves away the Spanish REITs from these niche markets. On the other hand the building restoration is not a handicap for the Spanish REITs, because the starting point in their business is the control of the 100% of the property. Behind this key issue, it is all depending on the figures (cost, incomes, profits, rents, etc.). Initially, the Spanish REITs should be interested in restoration and regeneration interventions, including the fact that they would have to assume certain cost increases, because the property valueand possible rent increase would be higher, with the consequent profit. Parallel to the American and British BIDs, the Spanish REITs would be highly interested in investing and deploying the necessary improvements, of course considering the economic viability and the property value increase results. The only risk stands on not preview urban regeneration interventions, where not considered cost and wages could unbalance the profit and loss account. To minimize the risk a public urban regeneration strategic plan should be developed, where trust could be offered and transparent information of future urban interventions could be foreseen. The urban regeneration interventions will not be possible to develop unless there is not a bottom-up majority who is not voluntarily in favor. But it is precisely in those occasions of urban improvement qualified citizen majorities, where there is a higher probability for the entrepreneurial developers, such as the Spanish REITs. Specially to enhance the requested financial support against the obstructionist attitudes to the urban regeneration. Nevertheless, it is important to notice that under the real estate market present conditions (owning and renting), for the Spanish REITs is possible that renting may be an inversion guarantee (no loss guarantee), waiting for real estate market recovering that will bring unrealized gains (if the real estate market sinks the rents covers the losses, if the real estate boosts the profit gains will be considerable). For Spain, the Housing Association scheme and development seems very useful in the long term period, no matter legal changes are requested to overcome the typical separation of the public and private initiatives on urban regeneration. Along with this blurring of boundaries between the public and the private, we would like to remark the idea of the community participation, decision and benefit in the urban interventions through the Housing Association tool.

The fact that the Housing Associations deal with not only new real estate developments, but also in the preexisting city interventions gives the idea of the flexibility of these type of mechanisms. From the economic and budget accounting point of view, we consider that the Housing Association provides two key solutions to our present problems in urban regeneration interventions: 



they allow the public budget to get rid of the public debt, attracting all sort of funding mechanisms (public funds, EU program funds, EIB, Pensions, Trust, Private investors, etc.) and making the risk transfer to the private. they makes possible botton-up urban interventions (the mental and cultural change we demand) through not only with the community participation, but also with the community economic involvement for their future benefit.

The British Housing Association model allows to implement the requested flexible tools for the urban regeneration interventions for each case/aspect (economic, finance, entrepreneurial, social and urban) and makes viable the European PPP model, becoming the demanded real and decisive third sector, taking the advantages of both sides, either public and private initiative.

3.4. Østfold Since the early eighties housing has more or less been considered as a market issue in Norway, and there have been little debate about it. The responsibility of the public sector has mostly been regulating enough land to build on, providing infrastructure, subsidizing affordable starter loans and providing social benefits so people with a lower income can afford to buy or rent a home. Only 2,5% of the total housing is owned by the public sector, about 78% live in a home they own, and in Østfold about 70% live in a detached single family house. However during recent years it has risen on the agenda, and there is a strong demand for more affordable housing in the cities. In Østfold there are some additional challenges, by Norwegian standards we have a high level of social problems, a large immigrant population (about 12% in the towns, and with a large group of these being refugees and asylum seekers who need some help before they can be self-sufficient), generally a lower average income, and lower property prices. The high demand for affordable housing, and the low supply from the public sector has given rise to a lot of speculation in the rental market, and to some landlords who take advantage of those who have few resources by offering the sub-standard housing, and of the municipalities which is responsible for helping people get a roof over their head, by charging extremely high rent when they know the public sector will pay it. These landlords often live

elsewhere and are not overly concerned about the upkeep and the look of their buildings, adding an extra element of shabbiness and deprivation to neighborhoods and further lowering the property prices and the attractiveness to investors. On the bright side, much of Østfold is within commuting distance to Oslo, and with better transport solutions and continuing growth in Oslo property-prices it is reasonable to believe that within few years we will be considered more attractive. Moss is already starting to experience this at a small scale, but is not yet seeing the “invasion” of well to do, well educated people from the capital that they want. Somebody would like the Norwegian government to go back to a publicly regulated housing market, like we had in the past, where prices were consciously held down, families got grants and subsidized loans for building their own one family house and apartment buildings were mostly built by workers building cooperatives. But is this possible in today’s economy, and if it was, is that really a desired target? Norway is a rather rich country, but regional and local government has very little financial leeway once they have (tried to) fulfill their obligations in the education, health and infrastructure sectors. They usually do not own much land, and what they own is often fragmented. The Norwegian housing bank is a national institution responsible for housing for disadvantaged groups, universally designed homes and buildings and environmentally friendly building practices. They also give out starter-loans and housing allowances mostly administrated by the municipalities. They typically do not build anything themselves put partfinance public or private projects. They have also done a couple of larger scale “arealifts” where they work with the whole local community to improve a run-down area with severe social issues. The Østfold town Sarpsborg has tried to get a project like this for their central east-end, but has not won through. What they want to do instead, and which the housing bank is thinking about, is getting involved in is a smaller scale renovation in one of the blocks, where they combine funds from the municipality, the Housing bank, and possibly private investors to make an example building with both social housing for disadvantaged groups combined with high quality apartments for the open market in order to upgrade the whole look of the neighborhood and show private developers that investing in this area might be worth the risk. This effort has to be combined with other community action in order for it to have the desired effect. A new housing policy should therefor be developed in Østfold and Norway. The “Norwegian dream” of everyone owning a big house with a big garden is not sustainable, and there are a lot of people who wouldn’t even want it if it was handed to them. It is

not possible to turn back the clock and reintroduce the old systems, and to adopt the large scale systems of other European neighbors either. However, Norway can learn from foreign experiences, and pick up elements that in many cases could be scaled-down or adapted.

3.5 The United Kingdom As far as the UK is concerned, Buckinghamshire sees that the key issue for them in the development of affordable housing is the alignment and ‘aggregation’ of Housing Developers, Landowners, Land-Use Planners and Investors into a model which generates sufficient ‘returns’ for all parties. The general thinking is that the goal to achieving successful appropriate development is to first align the housing developers with the municipalities and landowners to ‘come together’ to identify what development might actually be desirable/achievable in the next phase of development. Structuring the funding arrangements and stacking up a sufficiently attractive proposition for any potential investor will only from a successful alignment of these parties. All to often, the goals of these stakeholders are not aligned. Generally speaking, there is a perception that accessing sufficient finance is not a problem, once the development goals of the developers, the municipalities and the landowners have been aligned. Whether a REIT is the model to be taken forward or not will depend on the ultimate number of investors that are needed, the structure of the deal etc. In many cases, the UK feels that it is often more attractive to have a fewer number of institutional investors, rather than a large number of ‘retail’ investors. To that end, they are keen to work more on aligning the first three categories of stakeholder, before approaching investors.

A FINAL LOOKINGFORWARD VISUALIZATION OF THE OPPORTUNITIES FOR INNOVATION IN PROVIDING AND FINANCING AFFORDABLE/SOCIAL HOUSING DEVELOPMENTS: SCOPE FOR USEACT PARTNERS INVOLVEMENT As emerged during the London meeting, innovation in social/affordable funding and governance is a multifaceted issue. Each country and each local administration is called to reason, from an open minded perspective, about how to follow the innovation path, picking up the most adaptable models and solutions. The table below, drown down as a first “working draft” by Mr. Jim Sims, is a great opportunity to improve focalization on problems and potential tools by each UseAct partner and to promote discussions and “shared” paths among the UseAct partners. Building up a more comprehensive list of tools, to be ranked in order of priority, could be a first step to deep, within the whole UseAct partnership, the issues faced during the London meeting.

Table 1. Social housing funding issue: problems and tools – a work in progress cooperation perspective for the UseAct partnerhip Problem

Development is broken

Cash-flowing development is a difficult for the public sector to do. Often takes up front investment. Consumers cannot find the initial investment to take out a mortgage

Lack of Funds in the public Sector to fund Social Housing

Institutional Lenders want too high a return on investment The property development community is not dynamic/active enough

Tools  Creating more dynamic local “Arms Length Management Organisations” by local authorities (Urban Development Companies, Housing Associations, PPP etc.) Loans from Central Government to cash-flow Development:  Public Works Loan Board (UK)  Cassa Depositi e Prestiti (IT)  Norwegian Housing Bank State-backed guarantees for residents  (www.helptobuy.org.uk)  Norwegian Housing Bank  Attract Institutional Investors (REITS)  Work with Pension Funds (on Sale and Leaseback vehicles)  Municipality Aggregation Models (to access EIB Funds)  Tax credit models  Community Investment  Community Owned Assets  Owners Associations (Stefan’s Scheme) Increase competition or between (forprofit and non-profit) housing providers. 

Lower land values, lack of finance etc. now requires more complex national, regional and local partnerships, with a range of organisations contributing into development and openly sharing returns Fragmented Ownership Structures Private Sector is not investing in run down areas, resulting in degradation of the area

Blended Finance Models – using mixed finance sources to get a scheme to work  Localism - Devolution of subsidy from the centre (for example, national tax authorities or federal programmes) to lower tiers of government where there is freedom at the more local level to augment subsidy (for example, with land) for locally-tailored affordable housing solutions.  3R Area type solutions  

Compulsory Purchase Heritage Lottery Fund style grants to provide GAP finance

URBACT

European

exchange

and

learning

programme promoting sustainable urban development. It enables cities to work together to develop solutions to major urban challenges, reaffirming the key role they play in facing increasingly complex societal changes. URBACT helps cites to develop pragmatic solutions that are new and sustainable, and that integrate economic, social and environmental dimensions. It enables cities to share good practices and lessons learned with all professionals involved in urban policy throughout Europe. URBACT is 500 cities, 29 countries, and 7,000 active participants. URBACT is jointly financed by ERDF and the Member States.