Ministers agree to ban foreign ‘buy-to-let’ from Waterfront

Thursday 04 February 2021

The Council of Ministers has agreed that none of the 1,000 homes being built as part of the future Waterfront development should be bought by foreign investors, pledging that as many as possible will be made available for social housing.

It follows a proposition published in December by former Housing Minister Senator Sam Mézec, who said that, given the land at the Waterfront belongs to the public, it should be used for public benefit and not, “...the benefit of investors with no presence or loyalty to Jersey."

The Council of Ministers have now put forward an amendment to his original proposal, effectively endorsing the suggestion to ban foreign investors from buying any of the properties that are to be sold as part of the development. 

However, while Senator Mézec referred to “the proposed development of the Waterfront”, Ministers said it should specifically apply to the east of the Esplanade, Les Jardins de la Mer and the Aquasplash/Cineworld site, leaving out La Route de La Liberation.

Pictured: SODC's plans to transform the Waterfront, which were unveiled in August.

Senator Mézec had also requested that half of the homes should be made available for social housing or affordable purchase, but Ministers are instead proposing that guidance be provided to the States of Jersey’s Development Company (SOJDC) on the maximum number of units that could go the Housing Gateway while still maintaining the “overall viability of the scheme."

While they recognised that the future Waterfront development should deliver “a range of housing, including affordable housing”, Ministers said the 50% figure was “arbitrary and that it was too soon to analyse what community facilities and open spaces might be lost if the target is imposed, or what the cost would be.

“This will materially impact viability, and the ability of the development to support wider improvements in public realm,” they wrote in a report explaining their amendment.

“…If a significant proportion of the new residential units is to be allocated to affordable homes the level of financial return will be lower. This will make it more difficult to support the required investment in the public infrastructure improvements, thus significantly reducing the extent of open spaces and leisure facilities available to all Islanders, as well as a reduction in improvements to transport links, e.g. cycle paths.”

Pictured: The Government said it would aim to maximise the number of affordable housing on the site, while still allowing "wider improvements in public realm."

Ministers said the guidance, which SOJDC will have to consider when developing their outline planning application, will be shared with States Members by the end of April so that they can ensure it meets their aspirations for the provision of housing.

“The guidance will allow SOJDC to bring forward a range of solutions, including affordable housing, which are designed to meet the needs of a greater proportion of Islanders, including those who don’t necessarily meet the criteria set by the Housing Gateway but still face barriers to property ownership,” the report notes. 

“This is intended to address the very point Senator Mézec makes in his report by catering for those individuals who have incomes too high to go on the Housing Gateway, but who may not be catered for with the supply in the ‘open’ market. Council believes that solely addressing one section of the market without looking at the wider picture will not help to relieve the pressure on house prices.

“At the same time, Council do agree that providing affordable units on the site, as part of a mixed development, is beneficial as part of creating mixed and sustainable communities that carry the support of Islanders. Indeed, the development of the former JCG site shows how well-received mixed developments can be.”

Ministers hope the guidance will give assurances that the scheme will provide the right balance of housing opportunities for islanders, and allay any possible concerns about developing “a scheme which focuses pre-dominantly on private investment opportunities."

Senator Sam Mézec, who discussed the amendment with the Government, said he was pleased they had agreed to the principles of his proposal.

He said: "I had originally proposed a 50/50 split between affordable and open market sales, but the government have suggested amending this to allow them time to work on what is the most effective split to maximise the proportion of affordable homes (including first-time buyers, downsizers and social rental) whilst still being able to fund much needed public realm improvements, and community facilities.

"I will hold their feet to the fire to ensure that this promise is kept and we do not see government-owned land which ends up serving the interests of investors more than the people of Jersey."

The States Assembly is set to debate the proposition and the amendment next Tuesday. 

Pictured top: Buy-to-lets from foreign investors will be banned in KOS 1, 2 and 3 if the proposition is adopted by the States Assembly.