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Differences
Between Housing Grant and HART Credits
Historically, affordable housing production and urban regeneration
have been gap-funded with sponsor-specific housing grants. Awards are
entity-based: application procedures are lengthy, awards are small,
and recipients are limited to RSL's targeting very specific properties.
These features make housing grants difficult to use in larger, multi-use,
or non-RSL schemes, which are in fact the plurality of the urban regeneration
initiatives now taking place.
Conversely, HART Credits are property-based awards that are predicated
on levering other resources and are funded only after the development
is completed. As such, HART Credits will engage the local community
in places where the regeneration/ affordability goals otherwise will
not work. Unlike grants, HART Credits will catalyse neighbourhood revitalisation,
as a tabular comparison reveals.
Tabular comparison: Housing grants and HART Credits
| |
Housing
grant
|
HART Credit
|
|
1. Source
of capital
|
Appropriated
funds
|
Tax foregone
|
|
2. Who
can receive it?
|
RSL's only
|
Any developer
|
|
3. Regulation
after receipt?
|
Entity based
|
Property based
|
|
4. Tenures
allowed
|
Rental and shared
ownership
|
Rental, homeownership,
mixed
|
|
5. Property
types allowed
|
Residential
|
Residential,
supporting retail (including existing and small)
|
|
6. Pay
for performance?
|
No
80% by ground
break, 100% before placed in service
|
Yes
0% before placed
in service
|
|
7. When
paid?
|
Lump sum by
completion
|
Earned over
three years
|
|
8. Devolution
to regional/ local government?
|
No; central
decision-making
|
Yes; decisions
by regional allocators
|
|
9. Levers
private capital
|
Limited to security-based
loans
|
Yes, of necessity,
and widens scope of investors
|
|
10. Private investors involved
in testing credibility?
|
No
|
Yes, through
pricing
|
|
11. Investor scale supported?
|
RSL's only
|
Small (via SPO)
through large (via investor)
|
|
12. Enables capital pooling
of motivated investor?
|
No
|
Yes, investors
could become major buyers
|
|
13. In Public Sector Borrowing
Requirement?
|
Yes
|
No
|
|
14. Vulnerable to later annual
budget squeezes?
|
Yes
|
No
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Differences
Between Housing Grant and HART Credits