Council set to drop tool for boosting affordable housing

Hastings Borough Council’s plan to introduce a supplementary planning document to encourage the building of more affordable housing is about to be dropped. Meanwhile a planning application shorn of affordable housing has been refused by Rother District Council. Nick Terdre reports.

Hastings Borough Council’s Cabinet is set to drop plans to introduce a supplementary planning document for affordable housing at its meeting on Monday 4 February. Although the introduction of such an SPD was first mooted in 2004, it is less than a year ago, with affordable house-building plummeting, that Cabinet actually gave the green light.

“The SPD will include guidance on meeting the Policy requirement for the delivery of affordable housing contributions within residential schemes, the type and standard of affordable housing that will be required; and the assessment of the financial viability of a scheme,” a Cabinet document stated at the time.

In developments of 15 houses or more the council’s H3 policy calls for affordable housing to constitute 25% of all units on brownfield sites and 40% on greenfield sites.

But now the council is gearing up for a major revision of the Local Development Scheme (LDS) or Local Plan, one of the agenda items for Monday’s meeting. Because priority must be given to commencing the review process, the report to Cabinet says, only one of two SPDs in the pipeline will now be progressed – the design SPD. The one to be dropped doesn’t get name-checked, but it is the affordable housing SPD.

“Disappointing”

“This document has been promised for 15 years,” says local resident Russell Hall, an dedicated follower of planning matters. “It is disappointing that such a policy document, that would help increase the number of affordable homes in Hastings and provide clarity for developers, has been dropped yet again.

“Other councils have found the policy detail and guidance such a document provides strengthens their negotiating hand with developers to help secure more affordable homes for folks struggling to find somewhere they can afford.”

After a nightmare year in 2016/17 which saw only two units added to Hastings’ supply of affordable homes, a better return was secured in 2017/18, though the statistics offer varying pictures: according to HBC, net completions included 50 affordable houses (out of a total of 204 new units), while government figures indicate a total of 94 affordable houses, comprising 70 newbuilds and 24 units rehabilitated or acquired.

Rother says no

Meanwhile the Rother District Council planning committee has unanimously refused planning permission for an application from Park Lane Homes to build 30 houses at Strand Meadow in Burwash. Refusal was based principally on design grounds, but the lack of affordable homes was also a notable feature.

When Park Lane successfully sought outline permission for the development in 2017, they did not object to complying with RDC’s affordable housing quota of 40%. However they insisted that 30 units were needed to make the development viable, although the allocation in the Local Plan was only 17, and got their way.

When they applied for full planning permission, however, they filed a viability assessment which concluded that the inclusion of affordable homes made the development unviable. The viability assessment is the tool developers have used since 2012 to rid themselves of the affordable homes obligation with great success, thus contributing substantially to their own profits on the one hand and society’s housing crisis on the other.

Viability assessments have usually been kept secret, and not even shown to the members of planning committees, but under new planning guidance brought in by the government last year, they are now required to be made public, along with the appraisals of them by the District Valuer Service, an HMRC division.

In this case the DVS report agreed with the developer that if the scheme included affordable housing, it would not be viable, and the RDC planning department accordingly recommended that planning permission be granted for 30 market units.

However the DVS reviewer calculated lower costs and higher returns than Park Lane and concluded that the scheme was more viable than the developer claimed. It estimated the profit level at 25%, well above the 20% recommended in the new planning guidelines.

Infrastructure levy

Although the scheme would not have delivered any affordable housing, the developer would have been liable to pay nearly £725,000 in Community Infrastructure Levy (Cil) as a contribution to funding the additional infrastructure made necessary by the development.

The DSV report also recommended the establishment of a review mechanism so that if the scheme proved more profitable in practice than on paper, part of the additional profit could be clawed back to the benefit of society, possibly leading to the retrospective inclusion of affordable housing.

Although the application was refused mainly on design grounds, a second reason given was the developer’s failure to come to a Section 106 agreement laying down the infrastructural additions and improvements to be made, and including the recommended review mechanism.

HBC has consistently – and perversely, some would argue – refused to introduce Cil, although when it decided not to in 2013 on the grounds that it would impose too great a burden on developers, it accepted a consultant’s recommendation that the situation would change if house prices rose by 10%.

House prices have since increased by more than 50%,” says Mr Hall. “But still the council claims that Cil is unviable. It could also introduce a review mechanism to claw back greater than expected profits, but has shown no sign of doing so.”

Such a review mechanism for affordable housing is something HBC could have used for years, and given that average Hastings house prices have increased by 54% since the council’s Cil review in August 2013, it could also have introduced this levy several years ago, Mr Hall commented.

 

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