GMCA HOUSING FUND - THE TRUTH
Between Zoë Bread and Reform, there's now an insane amount of misinformation out there regarding GMCA and the Housing Investment Loan Fund (GM HILF), so let's clear the slate (buckle up!)
When the GMCA signed its first devolution deal, it included a £300 million pot of money for loans that could be recycled multiple times over the next decade.
This investment fund (the GM HILF) was never intended to have a primary purpose of building social or affordable housing because it was a loan fund, not a grant fund, which is usually required for the viability of social housing.
The fund existed to provide market-rate loans to developers at a time when virtually no one would invest in city-centre development. Previously, banks had capped lending for these types of development because the market was unproven. Offering these loans through the HILF catalysed development in Manchester and Salford city centres by increasing liquidity available to developers, thereby boosting investor confidence and making the asset class viable.
By speeding up the pace of development in the city centre via the provision of debt and equity, development could actually happen, and that's one of the main reasons Manchester is thriving as much as it is today!
Up to 2024, the fund was responsible for helping deliver over 10,000 homes, which smashed the initially set target and is part of why rents have remained relatively stable across the city centre. In addition to every penny being repaid, it has generated £29 million in interest for the GMCA, which has been reinvested into town centre regeneration projects across Greater Manchester.
The construction made possible by the GM HILF has supported around 750 FTE jobs per year, as well as keeping an estimated £2.1 billion of construction spending within Greater Manchester - 75% of this development supported was on Brownfield sites, protecting the Greenbelt by delivering on housing targets. Supported projects are also projected to generate nearly £14 million a year through council tax, which is redistributed to essential council services.
Low levels of social housing provision in recent years have nothing to do with the GM HILF or GMCA - for years, successive Conservative governments prioritised financial support for building shared ownership and similar products over social housing, refusing to provide the grant necessary to make it viable.
This has changed since the Labour government came in, and Manchester City Council just announced its most successful year ever in delivery, with 1,000 affordable homes delivered in the last year, nearly half of which were for social rent. That is a huge number, given how difficult it is to make social housing stack up financially. Additionally, GMCA has used various funding sources, such as the Brownfield Housing Fund, to provide affordable housing across all 10 boroughs for years. Now that the Social and Affordable Housing programme is partially ringfenced for social housing, it is certain that delivery will only increase moving forward. Combine that with GMCA's new 'Good Growth Fund', and it's hard to argue that they could be working harder to achieve their ambitious housebuilding targets for genuinely affordable, socially rented and energy-efficient homes.
The other criticism usually centres on the fact that a large share of the GM HILF loans was awarded to Renaker. Up to 2024, 48 developers had received loans from GMCA through this fund, following a decision-making process that the courts have found perfectly rational and "not defective". Renaker delivered homes using the fund and repaid the loans, plus interest, again and again. It's that simple. It wasn't preferential treatment, it wasn't "cronyism". They delivered. They delivered thousands of units and paid back every penny on time.
The Combined Authority can't control where one man goes and what he does with his money, nor can they deny loans on that basis, nor can they force a developer to build affordable housing if their maths shows that it would make the product completely unviable. It's a market - they're entitled to make a profit, and companies aren't obliged to do the moral thing out of the kindness of their heart.
Like it or not, Manchester has only become the thriving and successful city it is today because of smart decisions like those the GMCA has made over the last decade in supporting the market. Both the Greens and Reform should think carefully before implicitly or explicitly threatening the growth we've seen as a city-region over the last thirty years, because I'd hate to be the person responsible for it coming to an end.
This is the real Andy Burnham.
He promised affordable housing, then diverted hundreds of millions in taxpayer funding to one developer's property empire.