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Similar to Regeneration nhf - manchester 23-01_14
Regeneration nhf - manchester 23-01_14
- 1. Funding Regeneration inan Age of Austerity Back to the Future? Chris Cook Manchester 23rd January 2014
- 2. “21st Century problemscannot be solved with 20th Century solutions”
- 3. Resilience Resilience - theenduring power of a body or bodies for transformation, renewal and recovery through the flux of interactions and flow of events Resource Resilience – Natural Grid Financial Resilience – Open Capital
- 4. Financial Resilience –Open Capital Prepay – credit returnable in payment for value Protocol – consensual interactive 'two way' agreement
- 5.
- 6. Tax Prepay Tax Prepay– credit returnable in payment of taxes Tax Return – 'stock' part of tally stick returned to Treasury Rate of Return - rate over time at which stock is returnable for cancellation eg Prepay £8 for £10 tax - £2 profit 25% pa rate of return - not fixed - depends on existence & quantity of flow
- 7. Rental Prepay Credits Creditreturnable in payment for £1.00 of Rent 10,000 Credits sold for £8,000 give a 25% absolute return (£2k profit / £8k investment) If Rent is £10k pa Rate of Return is 25% pa If Rent is £5k pa Rate of Return is 12.5% pa If Rent is £2k pa Rate of Return is 5% pa etc etc
- 8. Protocol - CapitalPartnership Occupiers Occupiers Rental Custodian Custodian Prepay Investors Investors 16/06/10 % Managers 8
- 9. A Capital Partnershipis not an Organisation 16/06/10 9
- 10. It does notown anything, do anything, employ anyone, or contract with anyone 16/06/10 10
- 11. It is simplya framework agreement within which the stakeholders self organise 16/06/10 11
- 12. Conventional property developmentis a transaction model: developer as middleman Land Owner £ 16/06/10 Property Property Buyer Buyer Developer Developer £ Property Property Buyer Buyer £ 12
- 13. Borrow, Buy, Buildand B...er Off... 16/06/10 13
- 14. Financed by Equity(ownership) and Debt (from credit institutions) 16/06/10 14
- 15. Capital Partnership offersa new approach to financing and funding 16/06/10 15
- 16. Financing - forshort/medium term, high risk development of new assets 16/06/10 16
- 17. Funding - forlong term, low risk use of newly complete or existing assets 16/06/10 17
- 18. Financing : Landheld by/transferred to a Custodian Land Land 16/06/10 Custodian Custodian 18
- 19. Land Owners becomeInvestors Land Land Custodian Custodian Land Value Land Owners Land Owners 16/06/10 19
- 20. Councils invest thevalue of planning permission Land Land Value Custodian Custodian of Planning permission Councils Councils 16/06/10 20
- 21. Contractors invest atleast the profit margin Land Land Custodian Custodian Profit Margin Contractors Contractors 16/06/10 21
- 22. Risk-Takers provide £to pay Contractors’ agreed costs Land Land Custodian Custodian £ Risk-Takers Risk-Takers 16/06/10 22
- 23. Developers invest 'IntellectualCapital' of concept and services Land Land Value Investors Investors Land-owners, Councils, Land-owners, Councils, Contractors, Risk Takers Contractors, Risk Takers 16/06/10 Custodian Custodian Value Developers Developers 23
- 24. Capital Partnership createsa Rental Pool Occupiers Occupiers Rental Custodian Custodian Prepay Investors Investors 16/06/10 % Managers 24
- 25. Rental Pools enablea simple but radical new funding option through Prepay 16/06/10 25
- 26. Rental Credits –returnable in payment for property occupation 16/06/10 26
- 27. Funding - EquityRelease by creating Rental Pools from portfolios of completed houses 16/06/10 27
- 28. Existing owner becomesthe Custodian Houses Custodian Custodian
- 29. Affordable index-linked rentalis set Occupiers Rental Houses Custodian Custodian
- 30. Proportional Share allocatedto Manager Occupiers Rental Houses Custodian Custodian % Manager
- 31. Balance of Rentalsto Investors Occupiers Rental Custodian % Investors % Managers
- 32. Prepay Credits returnablein payment for rentals are created and sold to investors 16/06/10 32
- 33. Example – Poolof 1,000 houses has affordable rents of £4m pa 16/06/10 33
- 34. After (say) 25%for maintenance etc £3m pa is available for funding costs 16/06/10 34
- 35. Debt: £3m pawill fund <£40m debt over 20 years at 5% compound interest 16/06/10 35
- 36. Prepay 20 Years' rent= 60m x £1.00 credits: @ 50p raises £30m: Rate of Return = 100%/20 yrs = 5%pa @ 66.6p raises £40m: RR = 50%/20yrs = 2.5%pa 25 Years' rent = 75m x £1.00 credits: @ 50p raises £37.5m: Rate of Return = 100%/25 yrs = 4%pa @ 66.6p raises £50m: RR = 50%/25yrs = 2%pa
- 37. Rental Credits –value proposition for Investors not dissimilar to a REIT 16/06/10 37
- 38. Except that, crucially,Rental Credits are returnable in payment for rent 16/06/10 38
- 39. Rental Credits –as rental levels rise or fall rate of return increases or falls 16/06/10 39
- 40. A Rental Poolwill have a 'common bond' – geographic or otherwise 16/06/10 40
- 41. Occupiers are naturalbuyers and acquire rental credits by paying rent in advance 16/06/10 41
- 42. Occupiers who carefor their property may receive 'Sweat Equity' rental credits 16/06/10 42
- 43. 21st Century Problem RetiringGeneration -'long' of Property and 'short' of Care for themselves and their property - poor returns on deposits (loans to banks) Working Generation – burdened with bank property debt Young Generation – long of Care but short of Property
- 44. 21st Century Resolution RetiringGeneration - exchange rental credits for care - invests directly 'Peer to Asset' in rental credits Working Generation – direct investment in rental credits replaces bank property debt Young Generation – care exchanged for rental credits
- 45. 21st Century problemscannot be solved with 20th century solutions.........
- 46. …....21st century solutionspre-date modern finance
- 47.