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The future of high rise housing

22 June 2017 •

After the tragic events at Grenfell Tower the future of high rise towers blocks will be under close scrutiny like never before. But beyond the immediate safety and reassurance of tenants, we reflect on some of the further considerations for the sector.

The public inquiry will hopefully establish the facts of the disaster and address the issues of responsibility, however, there will be a number of broader questions and considerations that housing providers will need to address in order to ensure the safety of their own towers blocks.

Much of this will have significant cost implications, and whilst costs are not a matter that seem fitting to discuss in light of the tragic circumstances, this is what it may boil down to in many instances. And unfortunately, if costs increase in one area, it will impact on another.

These are some of our initial thoughts on the issues:

Informed Boards

When making decisions about refurbishment or retrofitting of tower blocks, Boards need to ensure that they are armed with all relevant information to enable them to make informed and safe decisions. Decision making is made harder because of the layers of contracts required for a project, however, Boards must remember that tenant safety is at the heart of their decisions.

Serious detriment

Boards and executive teams will be conscious of the regulatory framework and the serious detriment test, which could be seen as a governance and viability failure, leading to a downgrade.

Funders’ reaction

How will funders react to the tragedy? Are they likely to increase their scrutiny of refurbishments and housing providers’ compliance with health and safety, fire and building regulations? At what cost? And will tower blocks still be seen as stable security?

Insurance

Will landlords with tower blocks see an increase in insurance premiums, or policies caveated? And again, at what cost? Are some insurers likely to reconsider the provision of insurance on tower blocks at all?

Contractual arrangements

Are housing providers sufficiently involved in the contractual arrangements for retrofits and refurbishments? On such projects there can be dozens of contractors and sub-contractors and it can be difficult to monitor who is responsible for which element of the project, and who has liability.

Cost of retrospective / retrofit works

If tower blocks are to be inspected by all housing providers in the wake of this tragedy, and perhaps have retrospective works carried out on them, how will this be funded? Will there be financial assistance from government, or will housing providers have to pay for it themselves? If it’s the latter, this could well come out of RP’s already decreased development budgets and will impact on their ability to develop new homes.

For more substantial retrofitting of tower blocks, there is not only the cost of the works, but also in respect of decanting residents, finding them temporary accommodation and home loss payments. How will these costs be met? Housing providers have already seen a cut of 1% a year for four years in their rental income and so cannot increase rents. Perhaps the government might allow housing providers to increase rents, or even retract the 1% decrease to help landlords fund what’s needed to ensure the safety of their tower blocks?

PAT testing

If the fire was caused by a faulty kitchen appliance as suggested, will landlords want, or be expected, to PAT test the equipment of the residents? This is likely to be impractical and have significant cost implications.

Regulations

If the refurbishment of Grenfell Tower was actually compliant with building, fire and health and safety regulations, will the government push through a change in those regulations, and are they likely to be retrospective? In that case, even if the fault lies with legislation, housing providers would still be the ones who would need fund relevant safety measures to comply with any new regulations.

Management

Is there a discussion to be had about the management of high rise flats and who should be overseeing and have ultimate responsibility for matters which affect the residents both individually and as a whole?

Housing policy

What impact will this tragedy may have on wider housing policy? Just this year the Housing White Paper sought feedback on proposals to amend national policy to address, among other things, the scope to extend buildings upwards in urban areas to help deliver higher density housing. Will there still be an appetite for that?

Whilst it will take time and the conclusion of the public enquiry to find fault, it is perhaps equally important to begin discussions now about the future of high rise housing and how to ensure the safety and welfare of residents in order to avoid such a tragedy ever happening again.


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