You may not recognise the name ‘York Buildings’ but you would probably recognise them if you saw them. It is an attractive building with black glazed bricks in the town centre and Millets occupies the ground floor. The whole building is owned by Hastings Borough Council. The floors above the shop are empty, derelict in fact. Plans have been put forward for the Council to turn them into flats and to rent them out at the low housing authority rate to create some supposedly affordable rental housing units. What follows is good example of what goes wrong when a local council gets involved with market forces it doesn’t fully understand.
The original proposals to restore and create the flats on the upper floors were very expensive indeed with the total refurbishment costing £757,000 or £126,000 per flat, despite the whole building being only worth around £500,000. My deputy, Cllr Andy Patmore put forward the very sensible suggestion that the top floors should actually be sold off at auction with a covenant that the refurbishment of the flats takes place within two years. This would have provided a useful cash injection into the council which could be reinvested and taken away the liability of the dilapidated building. This suggestion was dismissed out of hand. We fought the plans but were voted down by the Labour administration.
A few short months later and the plans have come back again. The only real change is an adjustment to the cost which has now climbed to a staggering £846,000 for the refurbishment (£141,000 per flat).
The enormous cost of this scheme will predictably be met entirely by taking out a loan to be paid back over 40 years. The Council does hope to take in some income through renting out the flats but the margins are tiny. They anticipate making only £1,971 profit a year which equates to less than 0.25% profit a year on the costs of the refurbishment and as usual the council have not allowed for void periods or repairs to the building over the 40-year life of the loan.
As I mentioned at the beginning of this column, the intention among Labour Councillors was that the flats were to be rented out at low, affordable rates. However, under closer inspection, the anticipated rental income from these flats indicates that the rents will be far higher than the Local Housing Allowance would be for flats of this size.
The project is too expensive and does not provide affordable housing to those who need it most. It should be stopped at once.