Costs vs benefits of Thanet pod homes

News outlets are reporting that Thanet District Council (TDC) is considering investing in temporary accommodation pod homes to tackle the growing housing waiting list.

TDC will be only the second council to make use of these pod homes. The first was Ashford Council according to Kent Online. That does rather overlook other pod home projects like Hope Rise in Bristol.

Pod homes are prefabricated living spaces that can be deployed in temporary spaces and moved later. It is hoped that this project will improve the currently lengthy temporary accommodation lists. After all, the easiest solution to “some people have nowhere to live” is to give them somewhere to live.

The project, which cost £7.4m, was created through firm ZedPods. Each pod weighs 12 tonnes and is highly insulated and triple glazed, with a lifespan of 60 years. Each home is partly powered by 180 solar panels installed on their roofs.

Council explores use of ‘pod’ homes to expand temporary accommodation in Thanet, Kathy B…, The Isle of Thanet News

Pod homes costs

Pods vs need

There are currently 173 isle households in temporary accommodation that are not within Thanet.

Council explores use of ‘pod’ homes to expand temporary accommodation in Thanet, Kathy B…, The Isle of Thanet News

By this figure, Thanet’s council will need to add at least another 139 pod homes to house those from Thanet who are in temporary accommodation outside of Thanet.

Cost projection to bring all Thanet families back to Thanet

Assuming £217,647 per pod, that’s £30,252,933 still to go.

To buy a flat in Arlington House (the big thing near Margate train station) would cost only £85,000. Sure, that £85k does not get you solar power but it is a lot cheaper. That same money could buy a lot more on the current property market.

Who is paying for all this?

Where’s the money coming from? If TDC is covering the entire cost, this is pricey. However, as so often happens, funding at the governance level is rarely so simple. I expect we will find that some or most of the money is coming from somewhere else. In which case it would be a case of spend this money on pods or don’t get the money at all.

After reading my way through some dry TDC documents, I am now under the understanding that TDC has a statutory requirement to make such investments but can take out a loan to fund them.

Working out where the money comes from is no small task. Councils tend to have a collection of ring-fenced funds that can only be spent in certain ways, government and grant funding, and loans and partnerships.

The project would not just be a straight £7.4m dip into the general purse.

I have made a FOI (freedom of information) request to get more details on the costings for this project.

See the benefits section for more exploration of funding sources.

Pod home benefits

Is the £7.4m the total project cost or will it buy more pods later? If that cash is only buying the pods with a 60 lifespan, are there some cost/benefit I’ve not noticed?

One-week installation time

ZedPods make the pod homes. According to their website, the pod homes can be installed in just one week. That’s a lot faster than building or buying flats and houses on the open market.

Maybe there is a benefit to the cost. It takes quite a long time to buy land and build a house on it. On the other hand, these pods could start going in early next year. Thanet District Council might be trading time for money. The need is now so this could make sense.

Tried and tested

Thanet District Council are hardly trailblazing here. ZedPods have a decent number of installed and successful projects under their belt.

Possibly cheaper long term than emergency accommodation

According to one council report from 2020, they spend a considerable sum on hotels and other emergency accommodations.

Temporary Accommodation (TA) was at an all time high in April 2018 with 188 households in
temporary accommodation of which 51 were in hotel type accommodation

Housing, Homelessness & Rough Sleeper Strategy March 2020

The ongoing cost of emergency housing sat at £2.1m in 2019/2020. I do not imagine it has gone down by much. If anyone has access to newer data, please do share it with us. They have received some money since the Homelessness Reduction Act 2017 that seems like it came in at around £1.1m over a two year period (page 25).

According to a more recent council document, this budget is projected to sit at £2.4m in the coming years.

It is quite likely that the cost of loan repayments would be cheaper than the ongoing cost of emergency housing. Thus I would expect only a very minor blip in the council budget from the pod home proposal.

The 2020 report details several funding streams some of which, I suspect will be used for this pod home project.

Low-risk project

Thanet District Council is rarely known to gamble or take big risks. This pod home project is probably the lowest-risk home creation project. That’s because ZedPods offer warranty backing on their product.

Buying homes at market rates, on the other hand, comes with all sorts of unseen renovation and remedial work costs.

Combining the warranty and the minimal-impact installation, I can see why this low-risk, high-reward idea might appeal.

Makes use of brownfield sites

The low-impact carbon-neutral homes can be installed in otherwise dead and unused spaces. This means that Thanet District Council can provision new homes without cutting into greenbelt land. Given the huge fuss going on at the moment over building private housing on farmland, this might be a solution that (for a higher cost) solves a lot of these other problems.

Provides the homes the UK government is demanding

At present, Thanet Council is expected to build 1145 new houses. That is a lot of houses when the only land left is mostly used for growing food.

Rather than letting developers bully the council into granting permission, this could allow the council to deny the more destructive planned builds by pointing to the pod solution.

Possibly lowering rent

There is no denying that renting costs are too damn high. There is a solution to sky-high rents we don’t talk about all that often. Council rent prices. Councils are required to offer their homes at a price that is set by law. This is often significantly lower than the market rate.

If TDC can create enough lower-rent homes, this has the potential to drive down private renting prices as landlords try to compete with the council’s lower rent prices.

Will this happen with 34 cheaper rents? Probably not in any way that we will notice. However, it is not about where you start but where you finish. If the pods prove to work, we could see more of them in the future.

Ticks the climate protection boxes

The pods are promoted by ZedPods as carbon neutral. This again can help address the pressure on councils to lower their carbon footprint.

Maybe not everyone cares about protecting the environment but for those of us who do, this is a benefit.

Much cheaper to heat

I think that most of us have noticed energy prices shooting upwards. There is not a lot that Thanet District Council can do about that.

Maybe they can. Whoever lives in these pods will find that the combination of solar panels and good insulation will mean their energy bill will be significantly lower than for most families.

Conclusions

I went into writing this thinking that TDC had lost their minds with such a high price tag. Having looked at the costs and the potential benefits, I now suspect that they are on to something.

While, yes, this is not the cheapest option available, pod homes may be a good compromise for avoiding destructive building and making homes available quickly.

The council already shoulders a cost burden in the same order of magnitude as the cost of this project. While the price seems large and the unit return small, in the overall scheme of things this is a significant improvement for a cost in line with the council’s other costs.

Given the potential benefits this project might offer, I am starting to think that the proposed new pod homes could be a net gain for Thanet. Thanet has a lot of people who need homes. Maybe projects like this can start to meet that need.

Ideally, I’d like the council to take advantage of economies of scale to lower the unit cost. This could be by ordering a few hundred of these pods or by teaming up with other councils to make a bulk (and discounted) order.

What do you think? Leave a comment or reply with your thoughts on Thanet’s possible pod homes.

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