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Steve O’Brien, of Tenn Capital, invites a government representative to contact him to discuss a possible answer to one of the Island’s most pressing challenges
THERE is undoubtedly a housing problem in the Island, and this seems to acutely influence our ability to attract and retain key workers, particularly in the medical, educational and therapeutic space, a situation which has damaging long-term implications for our society and significant cost implications for government.
We cannot change the past and therefore should not waste energy on how we got into this position. Rather than point the finger of blame, I have set out below a simple solution which we, at Tenn Capital, can deliver and I invite the appropriate person in government to pick up the phone to me so that we can work in partnership with them to deliver it.
All it requires is a simple joined-up approach from the government at the highest level, and we can start to solve this problem in a practical way by delivering highquality, affordable housing for a targeted segment of society which is critical for our overall wellbeing.
All the houses would be sold to qualifying key workers at affordable prices below the market rate on the condition that they continue in their professions in the Island for a minimum of five years.
This is how we would do it:
- We create a special purpose vehicle into which Tenn Capital puts £10m.
- The government lends the SPV £10m at a low rate of interest.
- The government is the senior lender, which means it is repaid first.
- Tenn Capital takes 100% of the first loss.
- The government fast-tracks specific brownfield sites through the planning process on the condition that the houses built are affordable houses for key workers only.
- We have two sites in mind to start with and a construction firm that we are happy to work with.
Neither site would be an outrageous plot of land on which to build and one would certainly not get planning permission for the very ugly hotchpotch of buildings that are currently on it if an application was submitted today.
Without a fast-tracked planning process. no landowner or developer is going to take on the risk unless they were building premium-priced housing. Therefore. these sites are likely to continue to sit and rot and no lender would lend against them.
The government will not earn much interest on its loan but it would also not take much risk as Tenn Capital would suffer the first £10m of any losses. What the government would get is a quick solution and significant savings on the cost of temporary key workers.
Tenn Capital, the landowners, and the appointed construction firm would make modest profits but certainly much less than they would make through their normal commercial activity.
Tenn Capital is one of a small group of alternative lenders in the Island. This small niche in the finance industry has never been fully appreciated for the “multiplier effect” that it has on local economic activity. This is our suggested solution to a considerable social issue affecting the Island and it would positively impact many people and businesses in the community. I look forward to hearing from the government officials in due course.
