Agenda item

A report from Sarah Cary, Executive Director Place is attached.  (Key decision - reference number 4999)

                                                         (Report No:  165)

Councillor George Savva (Cabinet Member for Licensing and Regulatory Services) introduced the report of the Executive Director – Place (No.165) proposing the implementation of a borough-wide additional licensing scheme in all wards and a selective licensing scheme in 14 wards.

 

NOTED

 

1.            The detailed proposals set out within the report and the reasons for the recommendations. Members acknowledged the thorough and detailed work that had been undertaken over a significant period of time by Council officers with relevant consultants, to reach this stage and expressed their thanks and appreciation to them.

 

2.            The schemes would benefit all residents in the Borough and result in improvements in the standard of housing in the private rented sector, as set out in the report. The proposed licensing fees compared favourably to other London Boroughs, as detailed in the report.

 

3.            The importance of good quality housing in tackling deprivation and inequality and promoting good health and education was highlighted.

 

4.            The schemes would not be profit making but are intended to improve the quality of accommodation for people living in this sector. It was anticipated that up to 71 officers would be employed to implement the schemes which will include responding to issues of concern, undertake inspections and enforcement.

 

5.            Following the Cabinet Member’s introduction above, Mr Doug Wilkinson (Director of Environment and Operational Services) outlined in detail the proposed schemes and highlighted issues for Members’ consideration as set out below:

 

“The Report for the introduction of Selective and Additional Licensing Schemes in the Private Rented Sector to Cabinet 22 January 2020

 by  Doug Wilkinson – Director of Environment and Operational Services

Members are aware that we have been working on this for over a year along with Cadence and MetaStreet, who are experts in this industry. We have been gathering evidence, modelling and consulting -  with a number of presentations given to members over that time.

This cabinet paper brings all of that work together  and sets out our proposals seeking approval to introduce two licensing schemes covering about 30,000 private rented properties they are:

§  A borough wide additional HMO licensing scheme

These are smaller HMOs occupied by 3 or 4 persons forming more than one household and sharing kitchens/bathrooms (Additional Licences) – across all 21 wards of the borough,

and

§  A Selective licensing scheme for 14 wards,

These are properties occupied by single family households (Selective Licences) - eg one person, a couple or family, this will apply to 14 wards in the east and south of the Borough, namely: Bowes, Edmonton Green, Enfield Highway, Enfield Lock, Haselbury, Jubilee, Lower Edmonton, Palmers Green, Ponders End, Southbury, Southgate Green, Turkey Street, Upper Edmonton and Chase.

This is with the purpose of undertaking inspections and enforcement to address the large-scale issues to

·         Improve housing conditions

·         Improve standards of property management

·         Act on factors to reduce deprivation (eg overcrowding, poor energy efficiency), and

·         Reduce anti-social behaviour

The evidence:

The cabinet report and appendices provide the review undertaken of the Borough’s private rented sector and details the robust and compelling evidence to show why we need to take this action to improve these conditions in the private rented sector.

In order to approve the designations of the area for the Additional HMO Licensing scheme, Cabinet needs to be satisfied that the evidence shows that:

1.    There are a significant proportion of HMOs that:

·         are not being managed effectively, and

·         give rise to problems of poor housing and ASB for the tenants and the public

The evidence for this is set out in the Cabinet report in paragraphs 5.40- 5.46 and also in the evidence report at section 14 of Appendix 3.

For additional licensing, the evidence is that:

§  There are around 8,746 HMOs that would be subject to additional HMO licensing and they are located across all wards in the borough (this evidence is shown in paragraph 14.3 of Appendix 3 – at page 446 of the cabinet papers), and

§  Between 29% and 59% of HMOs are estimated to have category 1 hazards that need addressing, (this evidence is shown in paragraph 14.6 of Appendix 3 –at page 447 of the cabinet papers)

§  On average 23% of HMOs have been associated with ASB in the last 3 years, (this evidence is shown in paragraph 14.3 of Appendix 3 – at page 446 of the cabinet papers)

§  These factors mean that the Council have increasingly had to intervene to address issues in HMOs to tenants and the public.

 

In order to approve the designations of the area for the Selective Licensing scheme, Cabinet needs to be satisfied that the evidence shows that:

2.    The 14 wards proposed have at least 19% of properties in the private rented sector in relation to the total number of properties in the area and that such properties are occupied either under assured shorthold tenancies or licences to occupy, and that there are:

§  Significant numbers of private rented properties that have poor housing conditions and need inspection,

§  The area is suffering high levels of deprivation and affect a significant number of private rented properties, and

§  The area is experiencing significant and persistent anti-social behaviour and appropriate action is not being taken by private sector landlords.

The evidence for this is set out in the Cabinet report in paragraphs 5.10- 5.39 and also in the evidence report at sections 9-13 of Appendix 3.

The evidence is that:

§  All 14 wards have between 25% and 44% of private rented properties (which exceeds the threshold of 19% nationally), (this evidence is shown in paragraph 10.1 of Appendix 3 – at page 431 of the cabinet papers), and

§  All 14 wards have between 24% and 40% category 1 hazards (poor housing conditions) which exceeds the threshold of 15% nationally (this evidence is shown in paragraph 11.4 of Appendix 3 – at page 432 of the cabinet papers), and

§  All 14 wards contain the highest levels of private rented properties and are within the top 50% of the most deprived wards in England, in fact 10 of the 14 wards are actually in the 10-20% most deprived wards in England (this evidence is shown in paragraph 12.1 of Appendix 3 – at page 435 of the cabinet papers), and

§  13 of the 14 wards have the highest levels of ASB in the borough and is not being effectively combated by landlords.  The incidence of ASB is 10 times more likely in the private rented sector than in the owner-occupied sector, and almost 3 times more prevalent in the private rented sector than in social housing (council housing and housing association properties). (this evidence is shown in paragraphs 13.2 and 13.3 of Appendix 3 – at page 442 of the cabinet papers).

The Public Consultation:

For both the proposed Additional and Selective licensing schemes, Cabinet must be satisfied that:

§  The Council has taken reasonable steps to consult persons who are likely to be affected by the designation (for at least 10 weeks), and have

§  Considered any representations made in accordance with the consultation.

On the first point, we undertook an extensive public consultation on the licensing schemes proposed for a 13-week period both inside and outside of the borough, using various media to promote the consultation locally, regionally and nationally. As a result, there was a high level of engagement with almost 1,900 persons responding to the questionnaire. Feedback was recorded at four public meetings attended by 241 persons, and 35 written responses were submitted by interested parties and via 10 stakeholder interviews. 

There were high levels of support – 70% -  for the proposed licensing schemes and licence conditions (about 70% of respondents), and over half of the respondents felt that the licence fees were reasonable.

The details of the consultation can be found at Appendix 1 and 1A of the cabinet papers – pages 255- 366.

In general, by group responding to the consultation:

§  Residents were strongly supportive of the proposals (86% for selective licensing and 87% for additional HMO licensing), followed by

§  Private renting tenants who were also strongly supportive (81% for both selective licensing and additional HMO licensing)

§  However, landlords were generally opposed to the proposed selective licensing scheme; only 18% agreed (and 73% disagreed) with selective licensing and 30% agreed (with 56% disagreeing) with additional HMO licensing.

On the second point about consultation, the Council’s careful consideration of the consultation responses, and changes made as a result, are detailed in Appendix 2.

A couple of examples of suggestions received and subsequent changes made are:

·         Propose to set up a stakeholder group involving landlords and letting agents operating in the borough to work with us on setting the guidance and information we provide to landlords

·         Removal of draft condition 3.5 from the additional and selective licence conditions (external property decorative order)

·         Removal of draft conditions 8.1, 8.2 and 8.3 from the additional licence conditions (responsibilities for Council Tax and payment)

Finally, the Cabinet must be satisfied that:

1.    Firstly, that the proposed licensing schemes are consistent with the Council’s Housing Strategy, and a co-ordinated approach with the Council’s Homelessness, Empty Properties and ASB strategies.

This is demonstrated in the cabinet report and Appendix 3 section 16 at pages 451-453 of the cabinet papers.

2.    Secondly, cabinet must be satisfied that other courses of action were considered but will not alone address the issues or achieve the objectives that licensing seeks to achieve, and that the proposed licensing schemes will significantly assist the Council achieve the objectives alongside other course of action such as the continued use of existing powers. These are detailed in Appendix 3 section 17 at pages 453 - 455 of the cabinet papers for alternative courses of action, and also at Appendix 6 at pages 479-480 of the cabinet papers for the scheme objectives.

In working with our legal colleagues and Counsel throughout this process, Officers and Counsel are satisfied that the legal requirements have been met to recommend to Cabinet that they are able to approve the designations for Selective Licensing (Appendix 4) and Additional HMO Licensing (Appendix 5), licence conditions (Appendix 8 & 9) , scheme objectives (Appendix 6)and licence fees (Appendix 7).

If approved, these licensing schemes will run for 5 years and will be self-funded by income from the licence fees paid. The proposed fee for selective licences is £600 per property for up to 5 years, and the proposed fee for additional HMO licences is £900 per property for up to 5 years.

If approved, Conditions will be attached to licences to require licence holders to ensure that properties are properly managed. These conditions include matters such as:

·         Proper management of tenancies

·         Proper facilities for the storage and removal of waste, including arrangements for rubbish/contents disposal at the end of tenancies

·         Safety of gas appliances and electrics, and provision of smoke alarms

·         Management of concerns and complaints about disrepair or conditions

·         Regular inspection of the properties by the licence holder or manager

·         Minimum room sizes and Maximum occupancy levels for HMOs

 

If Cabinet approves the licensing schemes, the next steps will be to apply to the Secretary of State for the Ministry of Housing, Communities and Local Government to confirm the selective licensing scheme (as it covers more than 20% of the private rented sector properties). This decision can take up to 3 months. If confirmed by the Secretary of State, the notice of designation of the scheme has to be published during a 3-month period before the schemes can go live.

Confirmation by the Secretary of State is not required for Additional HMO licensing schemes so the designation notice to that scheme can be published if approved by Cabinet.

With these timescales in mind, and if all approvals are given, we plan to introduce both the additional and selective licensing schemes on 1 September 2020.

Thank you

The team and I are happy to answer any questions members may have.”

 

6.            Following the comprehensive presentation above, Members noted the significant work in compiling the necessary evidence provided within the report and its appendices. This represented a comprehensive proposal for Members’ approval. Questions were invited from Cabinet Members and a detailed discussion followed on a range of issues including those set out below.

 

7.            Members requested a detailed explanation of the selective licencing scheme in 14 wards and how this would work in practice. Officers outlined in detail the criteria that had been met in the wards affected and how this would be applied. There would be widespread publicity using a variety of methods plus individual visits to properties as required to ensure that properties are licensed by landlords.

 

8.            In response to a question raised with regard to tackling rogue landlords only, it was explained that a significant amount of enforcement work had been carried out over the last 3 years but that a licensing scheme was required to supplement current enforcement powers in order to have a significant improvement realised on the scale required in the borough.

 

9.            When asked about the experiences of other Councils that had implemented these schemes, Officers outlined to Members examples of other local authorities who were implementing or had already implemented such licensing schemes including Newham and Waltham Forest and had successfully improved housing conditions which had been supported by data and feedback from tenants.

 

10.         Members acknowledged the significant amount of work and welcomed the proposals which would help to address many areas of concern on the negative impact of poor quality housing. The number of staff required to enforce the schemes was clarified in response to Members’ questions. At present there were 6 to 8 officers, it was anticipated that 60 – 65 new jobs would be created. It was likely that approximately 71 officers would be required at the start of the schemes but that this would average out to 30-40 officers over the 5 year life of the scheme to deal with the peaks and troughs in demand.

 

11.         Members questioned Officers’ confidence in the proposals and evidence provided. In response Officers explained that the Council had sought extensive Counsel advice and had worked closely with the Council’s legal officers. They were confident in the robust advice received. Jeremy Chambers, Director of Law and Governance, reiterated his confidence. It was noted that whilst you could not eliminate the possibility of legal challenge, the Council was as prepared as possible and would defend any challenge that came forward. The proposals had been endorsed by the Council’s Executive Management Team.

 

12.         The importance of providing decent standards of accommodation was reiterated and clarification sought as to whether these schemes would apply to Council housing and temporary accommodation. Members highlighted the significant investment that was already being done to improve standards of existing Council housing stock and in the estate renewal proposals. It was noted that temporary accommodation was exempt in accordance with national legislation. Officers explained the Pan London agreement (‘Setting the Standard’) that existed and the practice of inspecting temporary accommodation prior to tenants being placed.

 

13.         Members’ sought reassurances on the robustness of the consultation which had been undertaken and the level of responses received. In response, Officers highlighted the extensive and far reaching consultation that had been carried out locally, regionally and nationally as set out in the report. The Council had worked with expert consultants who had experience of working with other local authorities on similar schemes. Enfield had gone above and beyond the requirements with a comprehensive 13-week consultation period. The range of methods used and the responses received were explained in detail.

 

14.         Members asked how we would work with responsible landlords. Officers explained that the scheme would provide support for landlords through the development of a website with clear information and guidance with dedicated points of contact. The Council would be working with a group of landlords to develop and work through the guidance and support to be provided/made available.

 

15.         Members praised the proposals and highlighted the benefit that would be felt within the most deprived wards in the Borough. The raising of housing standards would support improved public health and reduce inequality.

 

16.         In response to a question raised, it was noted that there was no evidence (as referenced, a Government report on the effectiveness of selective licensing schemes) that landlords would pass on the cost of the licence fees to tenants through increased rents as it was found that market forces determined the level of rents.

 

17.         Officers, in response to the potential impact on evictions and homelessness, explained that the schemes should assist in reducing these by tackling the root causes including anti-social behaviour. The schemes would be implemented alongside the range of housing initiatives being implemented by the Council.

 

18.         In summary, thanks were expressed to all involved in this significant piece of work which had been developed in response to poor quality housing; and, represented a direct intervention into the private housing sector. The Council’s commitment to the provision of high-quality affordable housing was reiterated.

Alternative Options Considered: NOTED, the detailed alternative options that had been considered as set out in section 4 of the report and summarised as follows:

·         The Council could decide to do nothing.

·         The Council could rely on voluntary accreditation schemes or landlord membership organisations.

·         The Council could decide to only designate an additional licensing scheme and not a selective licensing scheme.

·         The Council could decide to only put forward the 14-ward selective licensing scheme and not pursue the borough wide additional licensing scheme.

 

DECISION: The Cabinet agreed to

 

1.         Note that the evidence in Appendix 3of the report supports the designations for two selective licensing schemes of 14 wards, and be satisfied that the designated areas have higher than the national average (19%) of private rented sector and exceeds the minimum criteria of 1 (of 6) and actually meets 3 of the legislative criteria (2 of the criteria for Chase ward ? ), namely:

§  significant numbers of private rented properties that have poor housing conditions (more than the national average of 15% category 1 hazards) and need inspection,?

§  the areas are suffering high levels of deprivation (between 10-50% of the most deprived wards in the country) and affect a significant number of private rented properties,? and

§  the areas are experiencing significant and persistent anti-social behaviour (ASB)(higher than other wards in the borough) and appropriate action is not being taken by private sector landlords to combat ASB.

 

2.         Note that the evidence in Appendix 3of the report supports the designation for an additional licensing scheme for all 21 wards and be satisfied that a significant proportion of the HMOs in the area are being managed sufficiently ineffectively, so as to give rise to one or more problems either for those occupying the HMOs or for the public, namely:

§  significant numbers of HMOs have poor housing conditions (more than the national average of 15% category 1 hazards), and

§  the area is experiencing significant and persistent anti-social behaviour (across all wards in the borough) and appropriate action is not being taken by private sector landlords to combat ASB.

 

3.         Consider the outcome of the public consultation in Appendix 1 and 1A of the report, in particular the representations received and the Council’s consideration of, and response to, these representations in Appendix 2 of the report.

 

4.         Consider and agree that the objectives of the selective and additional licensing schemes are consistent with the Council’s strategies and policies (Appendix 3 section 16) namely the Corporate Plan, the Housing Strategy, and will seek to adopt a co-ordinated approach in connection with dealing with homelessness, empty properties, anti-social behaviour and poverty affecting the private rented sector.

 

5.         Agree that other courses of action considered will not alone provide an effective method of achieving the objectives that the additional and selective licensing schemes seek to achieve (Appendix 3 section 17 and Appendix 6), and agree that the licensing schemes will significantly assist the Council achieve the objectives (as well as other course of action such as continued use of existing powers).

 

6.         Agree that reasonable steps were taken to consult persons, for more than the required 10 weeks, who were likely to be affected by the designations (Appendix 1), and that the representations made in accordance with the consultation have been considered and changes made where appropriate (Appendix 2).

 

7.         If Cabinet is satisfied upon consideration of the above matters and in exercise of its powers under section 80 of the Housing Act 2004, approve the designation of 13 wards (Bowes, Edmonton Green, Enfield Highway, Enfield Lock, Haselbury, Jubilee, Lower Edmonton, Palmers Green, Ponders End, Southbury, Southgate Green, Turkey Street and Upper Edmonton) ‘Designation One’ as a selective licensing area as delineated and edged red on the map at Appendix 4. This will come into being at the earliest opportunity following the statutory process and not before 3 months after the requisite confirmation from the Secretary of State for MHCLG – estimated 1 September 2020.

 

8.         If Cabinet is satisfied upon consideration of the above matters and in exercise of its powers under section 80 of the Housing Act 2004, to approve the designation of Chase ward ‘Designation Two’ as a selective licensing area as delineated and edged blue on the map at Appendix 4. This will come into being at the earliest opportunity following the statutory process and not before 3 months after the requisite confirmation from the Secretary of State for MHCLG – estimated 1 September 2020.

 

9.         If Cabinet is satisfied upon consideration of the above matters and in exercise of its powers under section 56 of the Housing Act 2004, to approve the borough wide designation as an additional HMO licensing area as delineated and edged red on the map at Appendix 5. For administrative practicality, this designation will come into being at the same time as selective licensing, estimated to be 1 September 2020.

 

10.       Agree the proposed scheme objectives as detailed in Appendix 6.

 

11.       Agree to the proposed fee structure for licence applications made under the selective and additional licensing schemes at Appendix 7.

 

12.       Agree the proposed licence conditions that would accompany any granted additional HMO licence at Appendix 8.

 

13.       Agree the proposed licence conditions that would accompany any granted selective licence at Appendix 9.

 

14.       Note the Equalities Impact Assessment in Appendix 10.

 

15.       Subject to Cabinet agreeing 7- 9 above, that Cabinet delegate to the Cabinet Member for Licensing & Regulatory Services in consultation with the Director of Environment & Operational Services responsibility for agreeing the final document requesting confirmation of the selective licensing designation from the Ministry of Housing, Communities and Local Government (MHCLG) in consultation with the Director of Governance and Law.

 

16.       Delegate to the Cabinet Member for Licensing & Regulatory Services in consultation with the Director of Environment & Operational Services authority to ensure compliance in all respects with all relevant procedures and formalities applicable to authorisation schemes.

 

17.       Delegate to the Cabinet Member for Licensing & Regulatory Services in consultation with the  Director of Environment & Operational Services authority to keep each scheme under review for the duration thereof and to agree changes to the proposed implementation of the schemes where necessary, including authority to keep the licence fees and licence conditions under review and to amend if necessary (either in an individual case or generally), and to ensure that all statutory notifications are carried out in the prescribed manner for the designations and to take all necessary steps to provide for the operational delivery of any licensing schemes agreed by Cabinet including but not limited to the procurement of services subject to the Council’s Contract Procedure Rules. 

 

Reason: NOTED, the detailed reasons for the recommendations as set out in section 5 of the report and summarised as:

The introduction of Additional and Selective Licensing would:

·         Improve housing conditions.

·         Seek to reduce deprivation and inequalities, in conjunction with other key council strategies (for example, homelessness prevention, housing strategy, corporate plan, poverty commission actions)

·         Help to tackle anti-social behaviour linked with the private rented sector as part of a broader tool kit

·         Contribute to an improvement in the health outcomes of residents in the most deprived areas by improving property conditions.

(Key decision – reference number 4999)