Funding Repairs & Project Costs
If you’re going to bring some empty properties back into use, then you’re going to need to find some money – but not necessarily that much!
What you’ll actually need falls into two categories:
- The cost of any works that have to be carried out &
- Any costs that arise in connection with running your project/organisation.
1. Cost of Works To Properties
There are likely to be a variety of factors that determine which property/properties you take on and one of these should be the amount of work that’s required to bring it up to the standard you require. Obviously, the less you need to do, the better
You can cut down on expenditure by doing some or even all of the work yourselves, but in all likelihood you’re going to need to spend some money on getting it into shape. There are several possible ways of raising the capital funding that you’ll need.
Recycling Rental Income
It’s a simple idea. You use the rent that the property generates week-by-week, over the life of the property, to fund the initial repairs to the property. However, to do this successfully, there are a number of things you need to take into account:
– Cost of Repairs: you’ll need to raise some money up-front ( perhaps with a loan) unless you’ve got a stream of income from other properties already available to pay for the works,. The amount you can reasonably spend on the property will be based on the anticipated rental income over the period for which the property is going to be available, so that if you take a loan it can then be paid back out of the rent.
– Cost of Maintenance: the rent will also need to cover the cost of maintaining the property
A typical calculation could look like this:
Life of property divided into two flats : 5 years ( 260 weeks)
Rental Income over 5 years x 2 flats @ £40 per week each = £ 20,800
Maintenance costs @ £10 per week per flat : 2 x £8 x 260 = £ 4,160
Money needed to cover any periods when the flats
are empty & bad debts ( say 4 weeks per year): £320 per yr = £1,600
Money available for renovation = £20,800 – ( £4,100 + £1,600) = £15,100
If you’re raising a loan, then it’s important to get the best possible deal and so it’s worth considering going thorough a non-profit making Community Development Finance Institution ( a CDFI) for a good deal. A list of these can be found at www.cdfa.org.uk
Local Authority Empty Property Grants
Local authorities have the power under The Regulatory Reform (Housing Assistance) (England and Wales) Order 2002 to provide funding for the purpose of bringing empty privately owned properties back into use.
Many local authorities provide such grants, although they vary in terms of how they are administered and how much is available, which can be as much as up to c£20,000 per unit. Not surprisingly however, they are often used by the local authority to create additional accommodation for people on the local authority’s waiting list or for whom they want to offer temporary accommodation.
There are examples where privately owned properties have been being brought back into use, in conjunction with a housing organisations and where these grants have been used to help fund repairs. If your local authority has a scheme, then it would be worth enquiring as to whether they would be prepared to provide financial assistance. Further details of these grants schemes can be found on the Empty Homes Agency websites http://www.emptyhomes.com/usefulinformation/grants.html
It may also be useful to speak to your local authority’s Empty Property Officer as they should be able to provide additional information regarding what funding opportunities may exist in your area. For example there may be additional funding provided by sub-regional government which may be allocated in a slightly different format to the traditional local authority discretionary grant regimes.
Some councils will view simply bringing the empty property back into use as a high priority, whilst others will prefer to do so for a specific purpose, such as for a homeless or potentially homeless household. By contacting the EPO you may be able to understand better what opportunities there may exist in your area. To find out more either contact the EHA or the National Association of Empty Property Practitioners (NAEPP) via www.naepp.or.uk. http://www.naepp.or.uk
Temporary Social Housing Grant – Housing & Communities Agency (HCA):
Another possible source of funding is via a registered housing association.
The Homes & Communities Agency, which funds housing associations, operates a grant called Temporary Social Housing Grant (TSHG), which registered housing associations (RSLs) can claim in order to bring empty properties back into use.
It’s possible for a self-help housing organisation to work with a local housing association, which could claim the grant for the repair of the property/properties, and together bring the property back into use. To pursue this option you need to identify a sympathetic housing association willing to claim the grant, on your behalf.
The Main features of TSHG are:
It can be used to bring back into both private and publicly owned properties use, but not those owned housing associations.
Funding is exclusively for capital works and is agreed between the association and the local HCA on the basis of each property. The amounts of money are relatively generous
It can be used on properties with a life of between 2-30 years
Bids for TSHG can be submitted by the RSL at any time since it is part of an initiative called ‘continuous market engagement’.
The property would be made available to the self help organisation on the basis of a management agreement.
What’s particularly attractive about this is that the amounts of money available per property are fairly generous – on average in excess of £20k – although it will depend on the life of the property.
For more details regarding how to access this grant, and how it works, see our the full section Temporary Social Housing Grant – A Guide
Further details of how the grant works are set out in the HCA’s Affordable Housing Capital Funding Guide: http://cfg.housingcorp.gov.uk/server/show/nav.3527
There’s also the option of applying to a charitable trust or foundation for a grant to carry out the capital works. Each trust and foundation has its own rules in relation to what they will and won’t fund and you’ll find that many won’t fund any capital projects.
However, if you’re looking for funds to renovate a building as part of a training programme then the solution might be to put forward the application as being for “training” rather than simply for “renovation”.
However, it may be worth looking into, especially if it’s a local trust or foundation and it has a particular interest in the area in which the properties are located.
Finally, it may be possible to get some free or recycled materials, which will reduce the overall cost of works. If it’s possible to secure these, then it’s likely to be on a local basis.
There’s a small organisation called CRASH which specialises in providing help with materials and technical assistance to frontline organisations tackling homelessness. They describe their role as “harnessing the skills, products and goodwill of the building industry to improve hostels, day centres, night shelters, training centres and move-on accommodation, for frontline homelessness agencies who work directly with homeless people” http://www.crash.org.uk/
2. Cost of Running The Organisation
When it comes to financing the running costs of the organisation (eg stationary, office equipment, computers, utilities, expenses and even salaries) charitable trusts and foundations are definitely worth approaching.
They all differ in terms of their objectives and in what they’ll fund and so it’s a question of finding out which ones might be sympathetic and working out how best to make an approach. It’s worth remembering that although then big national charitable trusts will usually have more money to give away, they’ll be inundated with applications and so it’s always worth looking at local charities with perhaps less resources, but a particular interest in your locality.
A website such as Funder Finder (see links below) provides a portal to a very large number of charitable foundations/trust’s websites, but the problem is knowing which of these is likely to be interested in funding the sort of work that you want to undertake. DSC (see below) publish some very useful and affordable directories to charitable trusts which are cross referenced according to the areas in which trusts are interested and fund. They also produce a very comprehensive CD, which is more expensive, but very versatile.
The NCVO have been funded by the Government to provide probably the most comprehensive free site providing information about funders at national, regional and local levels – Funding Central (see links below) – which is well worth exploring.
The Big Lottery
The National Lottery runs a wide range of grant programmes at any one time. Many of their programmes provide large grants. Unfortunately, these are usually heavily subscribed and the application process can be quite complex.
However, they run a small grants programme called “Awards For All” aimed at local community based organisations which provides funding up to £10k. This is designed to be relatively easily accessible and to support community action. It could be a good place to look for a “starter” grant.
To find out what is currently available across all their programmes visit their website.
3. Other Sources Of Funding
It might also be possible to secure funding from some other funding stream via the local authority, the local Regional Development Agency or even via local businesses (most likely in kind) .
It’s not possible to cover all these avenues and so it’s really a matter of carrying out local research. A local organisation of some sort which acts as broker or information resource is the place to go. Your local voluntary action organisation/council would be a very good place to start. Go to www.navca.org.uk for details of voluntary action councils
Community Development Finance Association
Temporary Social Housing Grant
NCVO Funding Central
Directory For Social Change
The Big Lottery
Awards For All
National Association Of Voluntary & Community Action