The £300m limited liability partnership (LLP) model is the first of its kind to be signed in Scotland and will see homes built across Aberdeen without no government subsidy or grant funding.
Aberdeen City Council and Places for People will each take a 50% share in the new development partnership. It will build, own and manage a range of homes across eight sites in the city, and split an equal share of any development profits.
The council transfer ownership of the development sites to the partnership organisation, receiving payment in the form of land receipts on the completion of each new development.
The deal will deliver an initial 1,000 new affordable homes for rent and 1,000 new homes for private sale. There is the potential to create 1,000 further properties, the two parties said.
Places for People already owns or manages 152,000 properties across Great Britain, including 10,000 in Scotland. As a not-for-dividend organisation, any profit it makes is re-invested back into the business.
The deal is the first time a Scottish local authority has created a 50/50 partnership with a developer which creates both affordable housing and homes for private sale where the rental asset is retained in perpetuity by the limited liability partnership.
Places for People chief executive David Cowans described the deal as transformational. He said: “Creating 1,000 new affordable homes for rent will help to transform Aberdeen and the lives of key workers such as nurses and teachers. This deal is also transformational for how new homes are delivered in Scotland and provides a blueprint to show that new housing can be built without any government subsidy or cost to the taxpayer.
“In order to tackle the housing shortage in Scotland and the rest of the UK, public and private sector organisations need to explore new models and new ways of working together.”
In Aberdeen eight sites are initially committed for the project including at Summerhill, three at Tillydrone, Craighill, East Woodcroft, Kincorth and Bucksburn Farm (Greenferns).
The developments will consist of a housing mix of social rent, mid-market rent, shared equity/low cost home ownership and private sale depending on site location and regeneration objectives.
Aberdeen City Council leader Jenny Laing said: “This project will support and is also in addition to ACC’s own building programme, setting up registered social landlords and low cost home ownership which has already delivered 1,081 affordable properties in the last four years.”