KEY LEARNING POINTS
- Although it is challenging to deliver affordable homes via the ‘building group’ model this project demonstrates that groups can be successfully integrated into larger scale projects to meet strong local demand
- The key to the success was the careful planning and viability evaluations that were undertaken by the council in preparation for the release/marketing of the blocks. This ensured that it was feasible for groups to bid (while incorporating large numbers of affordable homes) and for the council to recover its costs
- Large scale projects like this can be completed relatively quickly - the completion of the whole site should take about four years
- It is important to explain the bidding and selection process clearly and to be transparent about how each bid is to be assessed
Freiburg is a city that has pioneered the concept of ‘building groups’ (or ‘Baugruppen’), and over the last 20 years it has delivered many thousands of community-led homes this way through well-known developments such as Vauban and Rieselfeld.
While these projects have generally been applauded there have been criticisms that the majority of the homes have been built by groups who are largely well educated and have above average household incomes; for example many of the residents of Vauban are academics from the nearby university. Land prices have also risen across the city over the last few years, making the delivery of low cost homes more challenging.
The Gutleutmatten site is currently the city’s largest development and has given the council an opportunity to demonstrate that the building group concept can deliver affordable and moderately priced intermediate housing alongside other tenures. The city has significant demand for affordable housing, and wanted to be able to provide homes that could be for social rent or purchased by people on modest incomes.
The overall aim was to deliver an urban development with a mix of homes built by a range of groups and other organisations with around half the homes being for social rent, and half for low cost home ownership.
This 5.4 hectare former allotment site lies close to the centre of Freiburg in southern Germany. The city council is bringing forward the site with a wide mix of housing tenures and a strong design quality. The Brief and Bidding Document for the development had a strong emphasis on delivering affordable and intermediate homes. The site disposal process was based on a series of bidding rounds and an urban design competition, with a focus on making land available for locally organised building groups or housing co-operatives.
Each plot was available for a fixed price (between €383 and €584 per sq m - the market price for the different blocks of land). The council selected bids on a range of plot-specific criteria, but with a strong affordable housing theme (for example, construction cost, proportion of affordable homes, wheelchair accessibility, how innovative the concept for their block was etc).
Work has recently begun on the construction of the homes, which will provide accommodation for more than 1,000 people. More than 200 building groups bid for the 28 blocks that were allocated for group projects. The project has cost just under €24m (initial land purchase, infrastructure costs and internal resources). The receipts from the land sales have enabled all the costs to be recovered and the city council expects to generate a small surplus.
SUMMARYThis 5.4 hectare former allotment site is being developed by the city council with a strong emphasis on delivering affordable and intermediate homes. More than 200 building groups bid for the 28 parcels of land. The overall development is expected to make a small profit for the council.
No. Units around 200
Total Floor Area 45.4 hectare
Construction Cost €24million
For the purposes of this Toolkit we have made the following definitions:
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The site lies in the Haslach district in the western part of the city of Freiburg, less than 1km from the city centre, and is a few hundred metres south of the city’s main railway station (the city’s goods yard is directly to the east).
There are busy roads along the southern boundary (Carl-Kistner Strasse), and through the centre of the site (Eschholzstrasse). A tram also runs along Carl-Kistner Strasse.
SITE AND DEVELOPMENT CONCEPT
The site is divided in two parts, and parceled into 28 blocks of land. A number of these blocks were reserved for the Freiburg Development Corporation to build social housing (see yellow blocks on the plan below). Some of these were required to deliver 100% social rent apartments.
Thirteen blocks were allocated for private ‘building group’ development (the green blocks on the plan). Eleven of these were required to have at least a quarter of the people in the group eligible for social housing (annual household incomes of less than about € 60,000 - roughly £43,000).
Several blocks were available for open bidding (the grey blocks on the plan) – these were open to groups, housing associations and private developers. For most of these blocks the council set additional selection criteria and sought particularly ‘innovative’ concepts/proposals. It also specified that at least 50% of the homes had to be affordable rent – the rest could be for sale or private rent.
The site also includes two terraces of individual plots, with five homes in each terrace (the dark green blocks on the plan). Most of these plots were 131 sq m in size although some were over 200 sq m. These plots were available for individual families, or open to groups to bid for all five homes in the terrace. To minimise build-out delays groups could only bid for these if they were fully formed when purchasing the site.
The distribution of tenures and related selection criteria are set out in the block plan below:
The site was formally acquired by the council at €100 per sq m from a local charitable trust in 2011. Negotiations with the trust started in 2008, and it decided to sell because it did not feel it had the skills or resources to develop the land itself.
A competition to prepare a master plan for the site was organised by the council in 2010. The council’s estates department then prepared a full development brief and devised the bidding process for each of the 28 blocks. This process included an extensive viability assessment to ensure each group could afford to deliver the levels of social housing being sought; the assessment also checked that the council would be able to deliver the overall development without making a loss on the site.
Be open to innovation
Don't just opt for one approach – be imaginative and encourage innovation and new concepts
The council began installing services in 2013 and the bidding process was launched in late 2013. By spring of 2014 a total of 218 bids had been submitted, and the successful bidders for each block of land had been identified. The last block of land sold in December 2014.
The breakdown of successful bidders included: -
- 13 private building groups
- 10 individual private homebuilders for the terraced plots
- Four housing associations
- Three developers
- Two co-operative building groups
By the summer of 2015 detailed planning applications had been submitted for several of the blocks and permission to begin construction was due to be granted in autumn 2015. Servicing/infrastructure works across the site continued during this process.
Undertake detailed viability assessments
Time spent evaluating the viability of all the blocks of land on a complex project like this is time well spent
All the groups have been given 24 months to secure their required permissions and to ensure they have finance in place, so that the site can be built-out by 2019.
The project is led by the city council housing and estates departments and the city has two full time staff working on the initiative (staff from other council services were also involved on a part time basis). The council is also running a series of workshops to guide/support successful building groups to ensure they comply with the timescales.
The council’s balance sheet for the project is reviewed and reported to councillors annually. All the land has been sold at market value and all costs have been recovered. It is expected that a small surplus of €25,000 will be achieved on completion.
Larger group projects can deliver multi-tenure homes
The project demonstrates that it is possible to successfully combine group private homebuilding projects into larger redevelopment sites on a multi-tenure basis
THE MASTER PLAN
Stuttgart based architectural firm Oberst & Kohlmeyer won the original urban design competition for the site, and set out the vision of a mixture of residential buildings, all arranged in a child friendly landscaped ‘garden suburb’ with the theme of ‘living in a park’.
The council used this concept to inform the preparation of a legally binding development zoning plan and design code (B-Plan) which was prepared for the whole site by the council’s planning department. This is common practice in Germany, and the plan identifies the parameters for the area setting out acceptable building lines, plot ratios and heights for each parcel of land. It also specifies areas of green space, public highways and parking areas.
The B-Plan is vitally important to guide the planning process, and is well understood and transparent. It is particularly helpful for building groups that want to bid for a parcel of land as it clearly sets out the form of development that will be permitted.
The 18 blocks range in size from plots suitable for anywhere between four and 33 homes. Most of them are suitable for eight to 16 apartments. The council felt it was important to break the site up into small parcels to help reduce the impact should one of the groups not be able to build out its site.
THE BIDDING PROCESS
A 100 page ‘bidding document’ was prepared for the disposal of the blocks.
The document explains the background to the development, the timeframe for bidding, the price per sq m for each block of land, the space requirements, the energy standards that must be delivered and the selection criteria that will be used.
It also provides contact details for the team from the city and the dates of various information sessions that were organised during the process.
In addition the document sets out the detailed selection criteria for each block and the level of housing grant available for people that are eligible.
Other sections specify the process for the delivery of the underground car parking, requirements for connecting to the district heating supply, and the on-site provision of solar thermal collectors for heating and hot water production.
Groups who wanted to submit a proposal had to provide information about all their members, and highlight which ones qualified for social housing. There were several other forms and declarations included in the bidding document that the groups had to complete and sign.
Groups were limited to bidding for no more than three blocks and were required to specify which of these they preferred, in order of priority. A €500 non-refundable deposit was also required.
The bidding document also invited interested private homebuilders to declare an interest in joining a building group. Those that were keen had to fill in a form and specify which blocks they would be interested to live in. They also had to be willing for their details to be passed to groups that had bid for one of the blocks, but were not yet fully formed.
Applicants for land set aside for the terraced homes were required to explain if they were part of a group bidding for more than one plot. If they were just bidding for a single plot they were also asked to identify their second and third choice preferences. A €500 non-refundable deposit was also required.
Support from the council throughout the development stage has been intensive – at the outset there was a two-day workshop organised for all the successful groups to explain the timeline they had to work to, the permits they would have to obtain, and the proof of finances they would have to provide.
Since then there has also been a great deal of one-to-one support provided. The council has also funded an external consultant to validate the construction estimates to ensure each groups’ proposals are viable/realistic and deliverable.
There was more demand than expected and 218 groups eventually prepared submissions – roughly 28 submissions for every block that was available. The blocks allocated to private homebuilding groups had the strongest demand.
There were ten submissions for the ten individual plots. Bidding for these was challenging as applicants were required to be eligible for social housing. In effect this meant someone on a low income trying to build and fund a significant individually built home (that they would own rather than rent).
Several of the successful groups are now formally constituted and progressing their projects speedily. Some are still being fully constituted and finalising their funding and designs.
Set out a clear, transparent bidding process
The scoring system that was used to evaluate bids was very clearly set out at the start and rigidly applied throughout the bidding process. Transparency is essential
The land cost €5.5m (at €100 per sq m). This excluded other admininstration related costs of about €400,000.
The infrastructure works are budgeted to cost €3.35m, and the internal resourcing costs will be €1.6m.
The blocks of land vary a little in price, depending on their position and their outlook (see block plan below):
Up to eight council staff have been involved in the project (four of these on the planning side). On average the equivalent of three full time staff have worked on the development.
The receipt from the sales of the land is placed in a dedicated budget, and any surplus is used to fund further housing projects.
Total project cost is estimated at €23.47m (including all expenses and servicing costs). Expected receipts are €23.5m. It is anticipated that a small surplus of €25,000 will be received on completion.
The main marketing effort went into the preparation of the bidding document. The city council’s press office organised some local media coverage to raise awareness and there was a big launch event at the town hall. Lots of architects and other professionals involved in building groups attended this. Social media was also buzzing with the project.
The project was guided by the preparation of a legally binding development zoning plan with a design code (B-Plan). This was prepared with full public consultation, and it informed a masterplan for the site which was drawn up following an urban design completion.
Initial negotiations about land acquisition begin
Urban design competition
Land formally acquired
B-Plan adopted; servicing begins on western part of the site
Marketing of the blocks begins
Successful groups selected
Final block is sold
Expected completion of finance arrangements and permissions for all groups
Expected completion of construction
This case study was compiled with reference to the following sources:
Michael Hogenmuller – Deputy Head of Municipal Property and Housing, Freiburg
The NaCSBA Research & Development Programme is funded by the Nationwide Foundation and aims to promote the self-build and custom build sector as an affordable route into housing for a greater number of people in the UK.
For further information, please visit:www.nacsba.org.uk or www.selfbuildportal.org.uk