HBC’s affordable housing target in question

Although several of Hastings Borough Council’s key housing projects have for one reason or another been knocked off course, it still maintains that it is on track to meet its target of delivering 500 affordable homes by 2027. The claim is questionable, although a boost is certainly needed, as the supply of affordable homes has slumped in recent years. Text by Nick Terdre, research and graphics by Russell Hall.

The council has told HOT it is on track to meet the target of building 500 affordable homes by 2027 set by the Cabinet in November 2021. “Hastings Borough Council is pleased to be on track to reach its 500 affordable homes target by 2026/7,” a spokesperson said. “This includes 279 Affordable/Social Rent homes and 236 Shared Ownership homes, providing our community with much-needed stable homes.”

The motion passed by Cabinet in November 2021 does not in fact mention shared ownership units. It states: “That the council sets a target for the delivery of 500 homes for affordable rent (capped at Local Housing Allowance rate) over the five-year period 2022/3 – 2026/7.” The reference to rents capped at the LHA rate indicates that the 500 dwellings are intended to be let at social rents, which is more advantageous to the tenant than affordable rents set at 80% of the market level.

The Hastings and St Leonards LHA rate for a two-bedroom home is £149.59 a week. According to the home.co.uk website, the average market rent in St Leonards is £293.72, making the average affordable rent £234.98, 56% more expensive than the social rent.

The Cabinet has not since been asked to alter the original formulation.

Five key projects

HBC says its current target is based on five projects:

• Holmhurst St Mary, on The Ridge
• The former St Leonards Academy, Darwell Close (now Porter’s Grove)
• Former Ashdown House off Harrow Lane
• Former Mount Pleasant Hospital in Frederick Road, Ore
• Harrow Lane Playing Fields (now Eversfield Rise).

However a different picture of the number of affordable dwellings set to be delivered by these projects emerges from a check of the planning permission and associated Section 106 agreements with the developer, which represent the legally approved status for each project.

At Holmhurst St Mary, where the construction of up to 208 units is under way, HBC say that these will all be affordable, 104 for affordable rent and 104 for shared affordable ownership. However the affordable housing requirement set in the planning permission is 83 units, equivalent to 40% as required by HBC on a greenfield site. Moreover the report to Cabinet notes that this may be contested by the developer, which maintains only 30% is viable, or 63 units.

At Porter’s Grove, 52 affordable units have been approved, 36 for affordable rent and 16 for shared ownership. Here HBC’s claim and the S.106 agreement concur.

The approved plan for the former Ashdown House site is 151 units. Here the council claims there will be 59 units for social rent. However, according to the S.106 agreement, a mere 17, just over 11%, will be affordable homes, the mix of tenure to be decided. (Had HBC’s policy requirement of 25% on brownfield sites been adhered to, this number would be 37).

At the former Mount Pleasant Hospital, where HBC claims all 56 units will be affordable, the planning permission calls for only 14, equivalent to 25%, tenure yet to be decided.

On Eversfield Rise, where HBC foresees all 140 units being affordable, split equally between affordable rent and shared ownership, the S.106 agreement calls for 34 affordable rent units and 22 shared ownership homes, equivalent to 40%.

These five projects, which according to HBC will deliver 515 affordable dwellings, are set, if planning permission and S.106 agreements are adhered to, to deliver 222 units. The difference is summarised in the table below.

And who knows how many affordable units will actually be built on the Eversfield Rise estate? Since Ilke’s demise in July, a new developer has to be found to partner social provider Orbit Homes, which may well struggle to find one willing to accept a 100% affordable housing quotient.

Pipeline of affordable units

Back in 2021 there were hopes of a much greater number of affordable homes being delivered by 2027 - the Cabinet report gave details of a “pipeline” of 799 affordable homes to be delivered by 20 projects, some under way, some potential, in that period.

Some of these projects have been hit by setbacks. The latest, prompted by the desperate state of HBC’s finances, was the Cabinet’s decision in August to sell off two properties where it had ambitious plans:

• Land to the rear of 419-447 Bexhill Road, which has outline planning permission for 16 units. Here the affordable housing quota would be seven units, though HBC suggested there could be potential for making all units affordable;
• And Mayfield East in Hollington, where outline planning permission for 38 units, including 15 affordable homes, has been granted.

The council also had high hopes for a large estate of 192 rented affordable homes on the lower tier of Bulverhythe recreation ground, but this project was scrapped last year when the Environment Agency, to no one’s great surprise but the council’s, identified a potential level of flood risk which rendered development inadvisable.

Park Lane’s development on land off Harrow Lane adjacent to 777 The Ridge is moving ahead, but the hoped-for quota of 26 affordable units has been scrapped following a viability assessment.

Plans remain in place for a large development on the former bathing pool site in West St Leonards, involving 152 units, of which the affordable housing quota is 38. Here a contract has been signed with developers County Gate and Sunley, though there is no recent news of any progress on the project.

The council hopes to shore up its finances to the tune of some £3m with the sale of the site to the rear of 419-447 Bexhill Road and Mayfield East, along with 12/13 York Buildings, where it has six flats converted with a grant from Homes England for letting at social rents, and acreage at Upper Wilting Farm in Rother. It will be up to the new owner to decide whether to let the flats at an affordable or a market rent.

The York Buildings flats, as yet unoccupied, represented HBC’s first foray into directly providing affordable housing, a role which the Cabinet decided to renew in August last year. Now that portfolio is empty.

The sorry state of council finances is largely due to the continuing squeeze on central government funding and a massive rise in the call on the council to help homeless families, a statutory requirement, which is expected to cost £6.6m and rising in 2023/24.

HBC has earmarked nearly £12m in its capital strategy, of which nearly £6m is expected to be spent in 2023/24, for its programme to potentially acquire up to 50 existing housing units of various bedroom sizes to use as temporary accommodation for homeless families to reduce the cost to the council of using privately owned accommodation.

Deliveries slump

Since 94 units were delivered in 2015/16, the best result since 2006/07, the supply of new affordable dwellings has slumped, as detailed in HBC's Local Plan Monitoring Report. In the five years to 2020/21, the last for which figures are available, the average return per year was 36.

It is not entirely the council’s responsibility. If a developer can’t persuade the planning committee to reduce the affordable housing quotient at the application stage, they often come back later with a viability assessment claiming that their project is unviable unless the affordable housing share is dropped. It’s a scandal that was called out by former prime minister Theresa May, who said in March 2018: “… by ending abuse of the “viability assessment” process, we’re going to make it much harder for unscrupulous developers to dodge their obligation to build homes local people can afford.”

No action was taken at the time or since, and the government still suggests (in para 018 of its guidance on viability) that developers should expect to make a 15-20% return on their investment, a level much higher than is considered realistic for other sectors.

Some councils have introduced the use of a Supplementary Planning Document to strengthen their position against such arguments, though HBC has resolutely refused to do so.

In the midst of its difficulties, HBC can perhaps take comfort from pledges given by Labour at its recent conference. Deputy leader Angela Rayner insisted: “…we will strengthen the rules to prevent developers from wriggling out of their responsibilities and we will speed up the building of new social and affordable housing.”

If Labour comes to power, and decides to put its money where its mouth is, that will strengthen HBC's ability to insist on affordable housing being provided in accordance with its policies — but it will also require the will to stand up to developers.

 

A second article on house-building in general in Hastings will follow.

 

Also in: Home Ground

« Does HBC’s tree officer understand Government guidance for Tree Preservation Orders?
Cohousing offers solutions and ‘intentional communities’ »