Jessica regeneration cash could pay for homes in north west
Landlords target £60m EU fund
A European Union-run funding pot that could kick-start millions of pounds worth of regeneration schemes in the north west is set to make its first investment.
The joint European support for sustainable investment in city areas fund, drawn from the €3 billion European regional development fund and distributed in the UK through the Homes and Communities Agency, could be made available to landlords for new housing after the region received £60 million to invest in regeneration projects.
Initially the investment will be limited to commercial developments. But it can be reinvested after the first wave of projects, giving housing providers the opportunity to bid for funding.
It is expected that one of two urban development funds selected by the HCA to manage funding will make its first drawdown this month. It will mark the first investment from Jessica since the HCA took on responsibility for the fund from the regional development agencies last year - and the first ever investment in the north west.
Deborah McLaughlin, executive director for the north west at the HCA, said that future rounds would be ‘very likely to include housing’.
Jessica funding will be allocated in the Greater Manchester region by the Evergreen UDF and in Merseyside by the Chrysalis UDF after both won competitive tenders in 2010.
Ms McLaughlin added: ‘They [the UDF] have a broad strategy which includes the housing offer. The incentive for the UDFs is that the more they get, the bigger the pot grows. They may want a mixed-use scheme with housing. There’s a lot of potential.’
The UDFs will keep the fund for 10 years before it is returned to the HCA along with any returns on investment.
While the fund is being seeded with money from the ERDF, it is hoped that it will attract further investors, including local authority pension funds, and could reach several times the size of the initial investment.
‘That’s the reason for creating this kind of fund,’ said Paul Creed of the HCA’s economic assets team. ‘Using pension funds and other finance, there’s no reason it might not grow.’
On Merseyside, Plus Dane is one of a number of social landlords understood to be monitoring the situation.
‘It will depend on the cost of funds and the terms,’ said Claire Griffiths, managing director for regeneration and commercial development at the 12,500-home landlord. ‘If a local investment could be linked to public land that would be a double win.’