A report to the council's cabinet, due to be heard on July 14, outlines how the city council would generate the finance to support housing and regeneration activities outside of its current social housing provision, including up to 200 new homes within the proposed Canal Quarter development in the city, and the regeneration of the Mainway estate.
It also emphasises the need for "good quality housing options" for Morecambe residents, and schemes which address housing needs for an ageing population.
The report asks councillors to approve the use of up to £50,000 funding from the council's reserves for the initial specialist legal and financial advice required to set up a Local Housing Company (LATCo).
Subject to a business case being made, it would then "purchase a Housing Stock Condition Module to provide a comprehensive dwelling stock and energy efficiency database at address level based on cost estimates of £67,000".
Part of the strategy includes setting up a housing company and/or a development company in order to pursue other tenures outside those traditionally operated within the council's Housing Revenue Account.
This would include the use of borrowing in order undertake projects which may make a positive financial return as well as deliver positive housing outcomes.
The report outlines a number of ways in which the LATCo could benefit the district
It says: "In many cases, it might be that a site is capable of providing multiple tenures by using profits from one form of housing to subsidise another.
"Control over environmental standards in houses developed by the Council to improve the quality and choice of the local housing offer.
"Involvement in sectors such as private sector rental and extra care housing in order to provide good quality and fairly priced housing options in these sectors."
A Housing Strategy Group set up in 2019 identified priorities within the council's draft Homes Strategy.
Development at Canal Quarter – potential to develop between 100 and 200 units which might be mixed in nature including designated housing for older people, outright sale units, PRS scheme and affordable units in the form of shared ownership and affordable rented units.
Acquisitions of existing houses – in order to provide good quality housing in the private rental sector.
Particular emphasis has been placed on Morecambe where it is felt that the council can become a good and responsible landlord to ensure that good quality housing options remain for Morecambe residents.
Extra care housing – working with the County Council to develop schemes for extra care which address housing needs of an ageing population.
The regeneration of Mainway estate. Options are still to be considered and consulted upon but could potentially include comprehensive programme of development.
The report also outlines the potential for borrowing for housing projects.
Some analysis of borrowing headroom has previously been undertaken by Savills in 2019, which suggests that the council could comfortably borrow £25m through its Housing Revenue Account.
The report says: "The council would borrow from the PWLB and then “onlend” to the LATCo to create the development finance.
"This offers potential for the LATCo to deliver mixed tenure schemes, create some surpluses and increase the supply of affordable housing available locally which would not be governed by housing legislation such as rent setting controls, allocations and the statutory Right to Buy scheme.
"This report seeks authority from Cabinet to develop specialist legal and financial advice on the most suitable type of vehicle that will allow Lancaster City Council to achieve its housing and regeneration priorities."