New Homes in New Ways
Jez Sweetland’s Opening Night Speech
Watch Jez give his speech here.
The following blog is a reproduction of the speech given by Jez Sweetland on the 24th October 2024 at the opening of the New Homes in New Ways exhibition - the below has minor adaptations from the transcript to enable it to be more easily read as a blog.
Jez Sweetland speaking at the launch of the New Homes in New Ways exhibition
Mixed emotions for me tonight.
It's great to be here, it feels like a party. It's great to be amongst friends and have a drink and yet, I'm also quite angry. You know, it's hard to be celebrating a story together that actually looks like systemic failure.
In Newham tonight, one in nine children are homeless. I just can't comprehend that we've got to that point.
So I'm going to bring you a provocation and we're going to go on that journey of despair, to hope. But we're going to go on that together by recognising where we are. If that provocation, at any point, offends you, I apologise. This is not about taking offence personally, it's about recognising we need a step change and that it takes collective leadership, collective responsibility.
I want to also recognise that for all of you in the room tonight, you probably got involved in housing in some capacity because you believe and understand the importance of housing for society, for communities, for resilience, for well being, for health. It's the very fabric of what combines us and makes us human. Yet between us we come to work currently to support a failure. That means that we are supporting people living in systemic poverty.
So let's just recognise that. Let's not beat ourselves up because we are people who are innovative, we are resourceful, we are creative, we are compassionate, we have wisdom and we need to bring that to bear. So let's start there.
For the last decade we built about 80,000 social rent homes in the UK. We lost about 160,000 of those homes to right to buy and demolition. So over a decade we've lost 80,000 social rent homes. And we reckon we need an additional 90,000 a year for 10 years.
So can we just be very clear? We're not talking about a tweak to a system. We're not talking about whether I can squeeze out five homes there or 10 homes there through planning. We're talking about really redesigning the wisdom of how we commission, think, deliver, build, operate, manage - at scale - housing that is for those most vulnerable in our communities.
I think that should be an exciting challenge. I'm also confident it's one we can rise to. But that means we need to be really thinking about outcome led approaches from the top. That isn't, where are we now, how do we get it, what's the outcome? How are we going to possibly create and commission that opportunity and that scale. The idea of this exhibition is to say that MMC is a part of that solution, that it has to sit in an ecosystem, it has to sit in a context and an opportunity that understands how to create value, operate within that machinery, and drive those outcomes.
The playbook asks three very simple questions. I'm quite simple. I like simple questions. So the first question we ask is, where is that land that can help us build those first 120-130,000 homes, where we need to focus on social rent.
And I've got good news for you. The housing crisis is not about a lack of land or money. And again, if you don't agree with that provocation, we can have that discussion. But I'm pretty confident from the assessment we've done, we have plenty of land and we have plenty of money.
What we have is a lack of wisdom.
The good news is that local governments across the country have within their control huge amounts of underutilised, unloved, forgotten land. Small sites, infill sites, sites that are effectively allowing us to do gentle infill, that does not overwhelm existing communities and build social rent housing.
Yes, there's a problem with that land. It's complicated, it's difficult. So what do you do with complexities? You don't do them individually. You have to think systems. So that's the land that we need to look at, aggregate, and bring forward.
Local government, to be very clear, is the only actor that suffers economically as a consequence of this broken system. Why? Because local government has a responsibility to house the homeless and the vulnerable. I think that's a good thing. But local government needs the tools to be able to do that and not bankrupt themselves. So using that land supply means it is in the interest of local government to understand and work with each other and regional and national government to bring that land forward.
The second question you have to ask is, if we have the land, who's going to build that stock? Let's be clear, that land is not going to be brilliant for making loads of money on. It's not particularly the most profitable land. So it won’t work for the current development model that is about extracting and taking profit. I'm not demonising large PLC house builders, I'm just recognising that that model works for a particular area, but it's not fantastic for social infrastructure. It probably isn’t the right supply chain.
We spoke to those big PLC house builders. They do not want this land. But we also know the MMC supply chain. We're not really focusing on the big volumetric players here. Think about SME, MMC panelised systems. Organisations like Agile, organisations like ZEDPODS and others here tonight. They are proving time and time again that they can unlock those sites and the good news is that they can scale and they can bring standardisation and they can drive zero carbon.
So there is a supply chain, and - here's a real novelty - they actually will build as many homes as you ask them to. And they'll just charge a small profit for building them because their business model is built around aggregation of demand to drive delivery. We cannot build 1.5 million homes in this country currently without incubating a new supply chain of housing.
So we have a supply chain, we have land. We have to fix the economics.
And this is where we think that the TA crisis, and let's be clear, it’s a burning platform, is an opportunity. If we understand better something of the viability of house building, and we are actually a bit wiser about looking at building, not just looking at the cost of building and the repayment capital, but looking at the cost of revenue loss, which is currently £1.7 billion a year, is affecting our balance sheets and is going to bankrupt local councils, if we bring that back into the viability, we can build these homes. The viability is not the challenge, it's the wisdom of the system that looks at value and cost.
Now, the good news is we can change that and I think this government is already doing some of that work. So there is an opportunity here together to say we need to incubate a new supply chain of homes that can build at scale and pace. We need to understand how we bring together aggregation. This does not work piecemeal. It's too expensive, it's too difficult. And what we will learn is that it was too expensive and it was too difficult. The fear I have is that we're going to do pilot after pilot after pilot and go, that was really expensive, really difficult. We learned that the people who have been doing this for 30 years say, by the way innovation is scary and difficult, I told you, innovation is scary and difficult.
So let's start with the outcome in mind.
If we are going to build 120,000 - 130,000 social houses at pace, we need to unlock that land. And it is local government that has that land in its supply. We can incubate that new supply chain. There are powers here that need what I would call just courage and leadership. I'll give you one little example. We're exploring now the opportunity to deploy local development orders. This is something that sits within the national planning policy framework. It's a massively underutilised tool in my view, where local government can say, here is some of our land, we're going to put that into an LDO, we're going to create permitted development rights to get housing accelerated through planning. Well, here's the thought. What if we understood how to align that LDO with a standardised approach to house building that supported MMC?
The despair is we are in a really tough place and the tough place is also exacerbated by the reality for local government that there is no money left. It's also exacerbated as for national government there is not much money left. So, who's going to pay for this housing?
Well, here's some good news.
Institutional investment. Pension funds are desperate to find ways to invest in long term social rent homes. You've created effectively a local government guaranteed rental yield that can unlock investment. The money is there. The capital wants to look at this low yield, low risk investment, but at the moment some of the rules are stopping that connection happening. And the real risk is that the planning risk and the scale of opportunity is too small to unlock that investment. But if we can bring that together, which is already starting to happen at genuinely interesting levels of government, there is an opportunity of creating that investment mechanism and doing this at the scale we need.
So this exhibition tonight is both a plea and a challenge. It's a plea to say, can we stop just working within the existing grids that we've created for ourselves? They're a human construct. We know the cost of everything and the value of nothing. Can we have the courage to question that and look at value in the broader sense, thinking about health and resilience, the long term sustainability of our communities and our planet. And as we do that, we will start to build these homes that we need. And I'm confident what we'll also do is learn a better wisdom for the next challenge. And the next challenge.
Human endeavour is incredibly resourceful. But if we don't all agree there's a crisis, and if we all go home tonight, back to our beds and say, well, that was a really interesting discussion, thank you very much, back to work tomorrow, let’s carry on as we are - we fail to deliver change. So the challenge is what's your role? What's your role in challenging the status quo? What's your role in advocating for change? What's your role in thinking about how you drive better wisdom and compassion to your job? The reality is we have to work within our complex and wicked systems, in which housing is one. Housing doesn't sit in the housing department. It sits in finance and procurement, legal and political. It sits across the whole breadth of everything society does.
We are all connected.
So those complex and wicked systems need collaboration and strength of leadership. So thank you for being here. But please do not leave here tonight without recognising. It's on us. It's on us to fix it. And there is good news. It is totally fixable.
Thank you.