CIL: Kill Or Cure?
If anyone doesn't think that the Community Infrastructure Levy urgently needs reform, do read this 1 March 2017 VOA ruling on one of many thorny issues that arise constantly in practice: how to calculate indexation (as well as how to calculate chargeable floorspace) in relation to section 73 permissions that amend pre-CIL permissions. The copy of the ruling in the link to the gov.uk website is redacted but I can tell you that around £3m turned on the decision relating to a development of 527 dwellings. The authority in question (I will preserve anonymity) has been interpreting the Regulations in a way which it asserts to be literal and correct, but which leads to unfairly onerous liability arising (which for some people arises completely out of the blue by way of revised liability notices being served).
The VOA member considered that the authority's approach "is wrong and undermines the purpose of regulation 128A" (the regulation that seeks to avoid double charging in the case of development pursuant to section 73 permissions). I understand that the issue may now reach the High Court by way of judicial review. As with any tax legislation, the dilemma is as to what room is there for a purposive interpretation, however unfair the consequences of a literal reading. After all, see R (Orbital Shopping Park Swindon) Limited v Swindon Borough Council (Patterson J, 3 March 2016):
"…not only would the defendant's approach be contrary to the whole approach to the interpretation of planning permissions it would be contrary to constitutional principles. As was said in Vestey v Inland Revenue Commissioners [1980] AC 1148 by Lord Wilberforce:
"Taxes are imposed upon subjects by Parliament. A citizen cannot be taxed unless he is designated in clear terms by a taxing Act as a taxpayer and the amount of his liability is clearly defined. A proposition that whether a subject is to be taxed or not, or, if he is, the amount of his liability, is to be decided (even though within a limit) by an administrative body represents a radical departure from constitutional principle. It may be that the revenue could persuade Parliament to enact such a proposition in such terms that the courts would have to give effect to it: but, unless it has done so, the courts, acting on constitutional principles not only should not, but cannot, validate it."
In that case a literal interpretation was to the benefit of the payer rather than the authority. Patterson J underlined "the importance of a close and clear analysis of what the statute actually requires".
The problem is that the 2010 Regulations are a hopeless mess; anything but clear to payer or authority alike – the antithesis of good tax legislation or indeed good planning legislation. The successive sets of amendments in 2011, 2012, 2013 and 2014 have resolved some problems, ignored others and created new ones. Due to ambiguities in the Regulations, CIL liability arising from a development is in many cases dependent on the approach being taken by individual collecting authorities, which is plainly contrary to the rule of law as well as wasteful of the time and money of all concerned. Planning consultants are having to act as tax accountants, with very large amounts of money at stake, dependent not just on an accurate reading of the legislation that accords with the collecting authority's approach (unless there is to be an appeal to the VOA) but on service of the correct notices at the correct time – the process does not allow for any mercy on the part of the authority.
Of course the planning system has from its outset wrestled with two core unresolved issues:
– The extent to which the system should have any land value capture role
– Apportionment of responsibilities between the state and developers/land owners for infrastructure delivery/funding.
CIL is the latest attempt to square the circle but has proved hopelessly inefficient.
For an excellent, detailed, analysis of the underlying issues, still nothing beats Tom Dobson's 2012 paper to the Oxford Joint Planning Law Conference.
Tom of course subsequently was one of the team, led by Liz Peace, appointed by the Government in November 2015 to:
"Assess the extent to which CIL does or can provide an effective mechanism for funding infrastructure, and to recommend changes that would improve its operation in support of the Government's wider housing and growth objectives."
Whilst the political reverberations of Brexit have been an unwarranted distraction from things that might actually help to improve lives and provide homes, it is so disappointing that the review team's report was only published in February 2017, alongside the Housing White Paper. (Why was it held up till then? There is no read-across to the white paper proposals). The report is dated October 2016 but its contents were an open secret as long ago as June last year (see my CIL BILL? 3.6.16 blog post). Not only that but the Government has indicated that it will not be responding to the report's recommendations until this Autumn's budget. This presumably means no substantial changes until April or October 2018 at the earliest.
The review team considered four options:
– do nothing
– abolition
– minor reform
– more extensive reform
The report is a solid piece of work, well argued and rooted in experience. It identifies CIL's failings (raising less money than anticipated, over-complicated, opaque) and firmly recommends extensive reform, particularly the replacement of the current system with a more standardised approach of Local Infrastructure Tariffs (LITs) and, in combined authority areas, Strategic Infrastructure Tariffs (SITs). LITs would supposedly be set at a low level calculated by reference to a proportion of the market value per square metre of an average three bedroom property in the local authority area, although the "example rates" in appendix 5 of the report are not particularly low given that there would be far fewer exemptions and reliefs and less opportunity to net off existing floorspace:
* £20 – £90 per m2 for Authorities in the North of England
* £30 – £90 per m2 for Authorities in the Midlands
* £30 – £220 per m2 for Authorities in the South and East of England
* £50 – £440 per m2 for London Boroughs
For developments of ten dwellings or more, there would be a return to the flexibility of section 106 for provision of site-specific infrastructure (netting off LIT liability) and of course abolition of the pooling restriction (come on government, if you do nothing else, remove the pooling restriction – even Donald Trump would be able to achieve that!).
There would be transitional arrangements, with the review team speculating that these could take us to the end of this Parliament in 2020. Alas, with subsequent slippages even that now looks optimistic.
What do we think the Government will do with the report? It is worrying that Gavin Barwell was talking at MIPIM of somehow including affordable housing in any revised system (see for instance Inside Housing's article 24 March 2017). Keep it simple!
My personal guess is that significant change may well be too much for this government at this time. If so, ministers need to face that reality and it really is urgent that we at least push for Plan B: a further set of amending Regulations (preferably in the form of a consolidated version of the 2010 Regulations), putting right what we can, including abolition of the pooling restriction, alongside a clearer approach to indexation, to section 73 permissions and to payments in kind. The report called for interim measures but without setting them out in detail.
Many of you remain in the "kill CIL" camp. I recognise that the CIL review team's recommendations are radical but to go one step further and lose any levy or tariff mechanism would in my view be impractical. For bigger schemes, section 106 agreements definitely have advantages (as long as the negotiation process can be as streamlined as possible and the authority's requirements signposted in policies) but for smaller projects a standardised approach should in theory leave everyone knowing where they stand – and another major lurch to a new system would inevitably have unanticipated outcomes.
That June 2016 blog post was my first. And this is my 50th, with no real progress on CIL in the meantime. Gavin Barwell has rightly won many plaudits as planning minister but for many of us his real test will be to clear up quickly this CIL mess created by his predecessors (the coalition government in 2010 should have ditched it in the way that the Conservatives' Open Source Planning manifesto document had suggested). As politicians love to say about most things, but true in the case of CIL, it's broken.
Author simonicityPosted on March 25, 2017 March 25, 2017 Categories CIL, InfrastructureLeave a comment on CIL: Kill Or Cure?
London Calling: Mayoral Interventions
Sadiq Khan is now 10 months into his role. How has he been using his Mayor of London Order 2008 powers to intervene in relation to strategic planning applications? The number one priority in his manifesto was, after all, to:
"tackle the housing crisis, building thousands more homes for Londoners each year, setting an ambitious target of 50 per cent of new homes being genuinely affordable, and getting a better deal for renters."
The consultation draft of the new London Plan is expected in August 2017, although we already have his draft affordable housing and viability SPG with its 35% affordable housing threshold approach (below which viability appraisal justification is required), covered in my 1.12.16 blog post. Ahead of the anticipated adopted version, a couple of items in the 14 March 2017 report to the London Assembly's Planning Committee are of background interest:
– from page 9 a transcript of a discussion held on 1 February 2017 with James Murray, Jamie Ratcliff and private sector representatives in relation to the draft SPG
– from page 51 the Committee's proposed response to the draft SPG.
Given that the Mayor's intervention powers under the 2008 Order (to direct refusal of an application or call it in for his own determination) are the most direct levers that he can pull in relation to specific development proposals, it is perhaps surprising that so far we have not seen them used as much as under the last days of the Johnson regime.
This is how it stands as at 18 March 2017:
Flamingo Park, Bromley
Khan's first intervention was in fact to direct refusal on 15 June 2016 of the Flamingo Park scheme in Bromley of a Green Belt scheme for a new stadium for Cray Wanderers FC along with 28 flats. (One for pub quizzes: Cray Wanderers claim to be the oldest football club in London – and second oldest in the world!).
The London Borough of Bromley was minded to grant planning permission, but the Mayor considered that the 'very special circumstances' test for inappropriate development in the Green Belt had not been met. He added:
"Whilst writing I would take this opportunity to express my concern as to the lack of affordable housing and the effect the excess parking provision will have on the highway network in the vicinity of the site."
Unusually, the Secretary of State promptly intervened and called in the application before the refusal was issued. The Mayor was preparing to defend the refusal direction but the applicant Cray Wanderers announced yesterday (17 March 2017) that it has withdrawn the application following legal advice and discussions with the Mayor and Bromley Council. It will resubmit a new application "in the next four to six weeks".
It will be interesting to see the extent to which the new scheme sees any increased housing component and the approach taken to affordable housing.
Plough Lane, Merton
Khan's next intervention also related to a proposed football stadium – this time Galliard Homes proposal for a new 20,000 seat football stadium for AFC Wimbledon and 602 residential units, on the Wimbledon Greyhound Stadium site, next to the site, now redeveloped for housing, of the old Wimbledon FC stadium in Plough Lane (Wimbledon FC now having of course having emigrated to Milton Keynes as MK Dons). (I hope you're following this – I rather wish I had included Wimbledon and Cray Wanderers in my 7.1.17 blog post Level Playing Fields: Football Stadia & Planning).
The proposals included 9.6% affordable housing (all intermediate, shared ownership) with a review mechanism. The application was called in by previous Mayor Boris Johnson on 26 March 2016 (against GLA officers' advice), but in an unusual twist, Mayor Sadiq Khan released it back to Merton on 19 August 2016 for Merton to approve. I had previously doubted (and possibly still do) whether it is lawful for a Mayor to release back an application which has previously been called in – there is certainly no express power to do so – but the Mayor's reports set out the legal justification that he relies on.
Bishopsgate Goodsyard, Hackney
There is one further Johnson hangover, the application for the mixed use redevelopment of Bishopsgate Goodsyard (including 1,356 residential units) which was called in by him on 23 September 2016 at the request of the applicant. Despite having been called in presumably with the intention of approving it, or at least reaching a determination more speedily than if it had been left with the London Borough of Hackney as local planning authority, the application then hit the buffers when a GLA officers' report was published on 8 April 2016, recommending that he refuse it at the representation hearing arranged for 18 April 2016. The applicant decided to defer the hearing to address the issues and there it rests. The next twist is anyone's guess. Will Khan even have to reach any decision or will we see withdrawal and resubmission?
We now come to two much more recent decisions, both on 10 March 2017. The Mayor's draft SPG was obviously referred to in both cases and affordable housing review mechanisms imposed in both cases, with a cap of 50% – which is the borough-wide requirement applicable in both cases (albeit Haringey's emerging local plan appears to be proposing a lower 40% borough wide target).
Hale Wharf, Haringey
Haringey members had resolved, against officers' recommendations, to refuse planning permission for this 505 residential unit scheme, within the Upper Lee Valley Opportunity Area and the Tottenham Housing Zone, on no fewer than eleven grounds. The Mayor called it in on 4 January 2017 and approved it on 10 March 2017 as recommended in his officers' stage 3 report.
The position secured on affordable housing was as follows:
"a minimum of 177 units (35% of overall units) to be affordable, with 20% affordable rent and 80% shared ownership by habitable room.
Details of affordability will be secured. Review mechanisms as follows will secure the delivery of more affordable housing (up to 50% of the scheme or the level of grant funding) should it be viable: -
Review mechanism (1): In the event that the development has not been substantially implemented within 2 years of the date of the decision, an updated viability assessment shall be submitted in order to establish if additional affordable housing can be provided and any such additional affordable housing shall be provided on site; -
Review mechanism (2): A viability assessment shall be submitted prior to substantial completion of Phase 1 in order to establish if additional affordable housing can be provided and any such additional housing shall be provided on site; -
Review mechanism (3): A viability assessment shall be submitted prior to substantial completion of Phase 3, to establish whether there is any surplus from the completed scheme which can be contributed towards off-site provision of affordable housing. -
Review mechanism (4): Further review if development stalls for a period of more than 24 months."
It's worth noting that there was already significant GLA funding being given for infrastructure for the scheme before the application was called in but the Mayor's involvement appears to have secured £7.75m worth of affordable housing funding to a registered provider, so the review mechanism will be aimed at recovery and recycling of that grant funding.
Palmerston Road, Harrow
Harrow members resolved, again against their officers' recommendations, to refuse an application by Origin Housing for a mixed use development within the Harrow and Wealdstone Opportunity Area and the Heart of Harrow Housing Zone to provide 187 residential units, within 5 buildings of between 1 and 17 storeys. Again, on 10 March 2017 the Mayor accepted the recommendations in his officers' stage 3 report.
The affordable housing position secured is as follows:
– a minimum of 74 homes (40% of overall units) on the site to be provided as affordable homes, with 30% affordable rent and 70% shared ownership (40% was proposed in the original application but the tenure mix is different);
– a viability review mechanism will secure the delivery of more affordable housing (up to a level of 50% of the scheme) should it be viable.
The affordable housing is with grant based on the Mayor's Affordable Housing Programme 2016-21, with an early review mechanism if enabling works are not substantially commenced within two years.
Of course the Mayor has to be selective as to how to use his powers. After all, the legal limits are clear from R (Spitalfields Historic Trust) v Mayor of London (Gilbart J, 10 May 2016), where Mayor Johnson's use of the Mayoral call in power was tested and just about survived. However, so far, perhaps true to the man – and maybe no bad thing – we have seen a more cautious approach from Sadiq Khan:
– one direction of refusal where, who knows, a compromise may be on the cards
– one previously called in application returned to the borough to determine
– two applications called in and approved, but both schemes offering more than 35% affordable housing, with a review mechanism potentially to get to 50% – both schemes in opportunity areas and London housing zones where officers' recommendations to approve had been overturned.
Administrations usually become more interventionist over time. I headed this piece London Calling, but with Mayor Khan we certainly haven't yet seen The Clash.
Author simonicityPosted on March 18, 2017 Categories Affordable housing, Development management, Football, Housing, London, StadiaLeave a comment on London Calling: Mayoral Interventions
Aarhus: Caps In The Air Again
The Aarhus Convention requires that access to justice in environmental matters should be "be fair, equitable, timely and not prohibitively expensive".
Dear patient reader, you will recall that in 2013 the Government introduced a relatively simple mutual costs capping system. It is described in my 19 November 2016 blog post Mending Aarhus, along with a summary of the Government's response to consultation in 2015 as to proposed changes to the regime to address a number of practical flaws or unfairnesses.
Rule 8(5) of the Civil Procedure (Amendment) Rules 2017 came into force on 28 February 2017, largely implementing the Government's November 2016 proposals.
The new rules will change the nature of planning litigation in a number of important ways:
1. The procedure was available for judicial review litigation concerning "environmental matters". The reference to "environmental matters" has been replaced by more specific references to claims within the scope of Articles of the Aarhus Convention that relate to access to environmental information and environmental assessment. Claimants challenging decisions in relation to non-EIA development may now find that they can no longer secure costs protection, even though their claim concerns environmental issues.
2. The procedure is widened from judicial review litigation to include challenges to enforcement notice appeal decisions but, contrary to what the Government has previously indicated, not section 288 planning appeal decision challenges (nor indeed other statutory appeals, for instance in relation to plan making or compulsory purchase orders).
3. The procedure is now only open to "members of the public" as defined in the Aarhus Convention (the Convention defines "the public" as "one or more natural or legal persons, and, in accordance with national legislation or practice, their associations, organisations or groups"). The interpretation will ultimately be for the courts to determine (more unnecessary cost and uncertainty) but in my view this is likely to exclude local authorities and other emanations of the state, including parish councils. The idea of a district or borough council seeking to rely on Aarhus costs capping in a claim against another council has sometimes been bizarre but query whether poor as church mice parish councils should be similarly shut out.
4. Any claimant seeking to have its costs exposure capped will have to file and serve with the claim form a "schedule of the claimant's financial resources which takes into account any financial support which any person has provided or is likely to provide to the claimant and which is verified by a statement of truth". It will be crucial, in the short period of time available before the claim is filed and served, to make sure that what is said is both accurate and is not likely to lead the court, on application by the defendant or of its own accord, to increase or remove the caps, having regard to the following principles:
Varying the limit on costs recoverable from a party in an Aarhus Convention claim 45.44.—(1) The court may vary the amounts in rule 45.43 or may remove altogether the limits on the maximum costs liability of any party in an Aarhus Convention claim.
(2) The court may vary such an amount or remove such a limit only if satisfied that—
* (a) to do so would not make the costs of the proceedings prohibitively expensive for the claimant; and
* (b) in the case of a variation which would reduce a claimant's maximum costs liability or increase that of a defendant, without the variation the costs of the proceedings would be prohibitively expensive for the claimant.
(3) Proceedings are to be considered prohibitively expensive for the purpose of this rule if their likely costs (including any court fees which are payable by the claimant) either—
(a) exceed the financial resources of the claimant; or
(b) are objectively unreasonable having regard to—
(i) the situation of the parties;
(ii) whether the claimant has a reasonable prospect of success;
(iii) the importance of what is at stake for the claimant;
(iv) the importance of what is at stake for the environment;
(v) the complexity of the relevant law and procedure;and
(vi) whether the claim is frivolous.
There are some big uncertainties in these criteria. For example, what are the "financial resources" of the claimant? Is the claimant expected to sell illiquid capital assets (such as his or her home, or cash in his or her pension) to meet a costs award that has a short deadline for compliance? If what is at stake is of great importance to the claimant, for example the loss of his home, should he be prepared to accept a higher cap? Does the claimant have to own up to what he is paying his own lawyer? How detailed must the information be as to financial support received from, for instance, contributors to a litigation fighting fund? Will potential contributors be discouraged from reaching in their pockets?
Is this the end of wealthy litigants, whether corporates or individuals, relying on costs capping? Few surely would have any problem with that (if you embark on litigation, be prepared to meet to the other side's costs if you lose – someone has to) but will this also kick out the JAMs? Will the big NGOs face difficulties explaining that a cap of more than £10,000 would be prohibitively expensive? Will the uncertainties prevent potential litigants from embarking on proceedings in case they lose protection when it is too late in practical terms to back out?
5. Defendants who unsuccessfully challenge costs caps will no longer face an award of costs on an indemnity basis in relation to their challenge. Surely challenges will be much more frequent – and the threat, in responses to pre-action letters, of challenges to costs caps so as to discourage potential claimants.
6. Any hearing on costs capping issues may be held "in private if it involves confidential information (including information relating to personal financial matters) and publicity would damage that confidentiality". If hearings are required, which judges seek to avoid on costs cap issues so as not add to the costs burden of the parties, what personal financial information wouldn't fall into that category?
7. The rules now make clear, in line with case law, that where there are multiple claimants, the £5,000 (for an individual) and £10,000 (for a group) caps apply to each claimant rather than being apportioned between them.
8. The costs capping regime has now been extended to the Court of Appeal but only in the most sketchy way, not materially changing current practice. The Court of Appeal is simply directed to "consider whether the costs of the proceedings will be prohibitively expensive for a party who was a claimant" and "if they will be, make an order limiting the recoverable costs to the extent necessary to prevent this".
The House of Lords Secondary Legislation Scrutiny Committee has strongly criticised the amended rules: "The MoJ has not provided a convincing case for changing from the previous standardised system of cost capping, which was well understood, to this more complex system which appears to have significant potential to increase both the costs for public administration and the uncapped litigation costs of the claimant".
Furthermore, in bad timing for the Government, the UN Aarhus Convention Compliance Committee published a report on 24 February 2017, only four days before the amended rules came into force, continuing to express concerns about the operation in England and Wales of costs capping in environmental cases and the changes that were consulted upon in 2015: "with the exception of the proposal to broaden the scope of "Aarhus claims" to include statutory appeals falling within article 9, paragraph 2, of the Convention" [ironically now not fully included as it transpires!] "all proposed amendments would increase rather than decrease uncertainty and risk of prohibitive costs for claimants".
The compliance of the amended rules with the Convention is heading for the courts, following a judicial review brought by ClientEarth, Friends of the Earth and RSPB.
As both poacher and gamekeeper, what do I think? The 2013 rules have not been working badly but it has been absurd on occasion to see wealthy individuals and substantial companies and groups take advantage of extremely low costs caps in litigation against local authorities that have increasingly tight budgets. What would be wrong in that situation in having a mechanism for doubling or trebling the default £5,000/£10,000 cap, as long as the mechanism can be kept as fast and simple as possible? Balancing simplicity against fairness to all is as always the challenge – and for the developer sitting on the sidelines as an interested party the real devil, as always, is delay.
NB Invaluable to this piece was first a call from Nicola Gooch at Irwin Mitchell on 28 February, then this good Will Upton blog post and then finally a thought-provoking Francis Taylor Building event presented by Robert McCracken QC, Ned Westaway and Charles Streeten.
Author simonicityPosted on March 11, 2017 March 11, 2017 Categories Aarhus Convention, Costs, Judicial reviewLeave a comment on Aarhus: Caps In The Air Again
Definitely Maybe: Defining Affordable Housing
Affordable housing is defined in the NPPF as follows:
The Government carried out a consultation in December 2015, proposing that the definition be expanded so as to include
– low cost ownership models, which "would include products that are analogous to low cost market housing or intermediate rent, such as discount market sales or innovative rent to buy housing"
– starter homes (of which more later).
Two further changes were proposed in the February 2017 response to consultation:
* introduction of a household income eligibility cap of £80,000 (£90,000 for London) on starter homes.
* introduction of affordable private rented housing
The Government is accordingly consulting until 2 May 2017 on the following replacement definition for the NPPF (long isn't it?):
There were howls of anguish at the starter homes initiative as first unveiled by the Government, the key elements of which were (as set out in chapter 1 of the Housing and Planning Act 2016 and March 2016 technical consultation):
– a legal requirement that 20% of new homes in developments should be starter homes, ie
– to be sold at a discount of at least 20% to open market value to first time buyers aged under 40.
– Price cap of £250,000 (£450,000 in London)
– The restriction should last for a defined number of years, the first suggestion being five years, replaced with the concept of a tapered restriction to potentially eight years
– Commuted sums in lieu of on site provision for specified categories of development, eg build to rent
The obvious consequence would have been a significant reduction in the potential for schemes to include a meaningful proportion of traditional forms of affordable housing.
After all of last year's battles over the Bill, it is now plain from the Government's response to the technical consultation, that the starter home concept is now much watered down:
– There will be no statutory requirement on local planning authorities to secure starter homes, just a policy requirement in the NPPF, which is to be amended accordingly.
– Rather than requiring that 20% of new homes be starter homes, the requirement will be that 10% of new homes will be "affordable housing home ownership products" so could include shared equity or indeed low cost home ownership.
– maximum eligible household income of £80,000 a year or less (or £90,000 a year or less in Greater London
– 15 year restriction
– No cash buyers, evidence of mortgage of at least 25% loan to value
– It will only be applicable to schemes of ten units or more (or on sites of more than 0.5h).
There will be a transitional period of 18 months (to August 2018) rather than the initially intended 6 to 12 months.
Whilst we now have a more workable arrangement, plainly all that Parliamentary work was a complete waste of time. There was no need for chapter 1 of the 2016 Act – the current proposals can be delivered without any need for legislation.
We will need to see the degree to which LPAs embrace the starter homes concept in reviewing their local plans. We will also need to be wary that we may lose the only benefit of a national standardised approach, ie the hope that there might be a standard set of section 106 clauses defining the operation of the mechanism (which will not be straightforward – see my 21.6.16 blog post Valuing Starter Homes).
Affordable Private Rent
One of the documents accompanying the Housing White Paper was a consultation paper: Planning and affordable housing for build to rent.
The term Affordable Private Rent is now used for what we have all previously been calling Discounted Market Rent. Changes to the NPPF are proposed (subject to consultation) advising LPAs to consider asking for Affordable Private Rent in place of other forms of affordable housing in Build to Rent schemes, comprising a minimum of 20% of the homes in the development, at a minimum of 20% discount to local market rent (excluding use of comparables within the scheme itself), provided in perpetuity. The Affordable Private Rent housing would be tenure blind and representative of the development in terms of numbers of bedrooms. Eligible income bands are to be negotiated between developer and LPA. Developers will be able to offer alternative approaches where appropriate (eg greater discount, fewer discounted homes – or different tenures). "Build to Rent" will be defined and it is acknowledged that developers should be able to cease to operate the property as Build To Rent subject to payment of a commuted sum reflecting the affordable housing requirement that would otherwise have been applicable.
There is also recognition in the consultation paper that factors in London may be different, allowing for an amended response and recognition of Mayor of London's November 2016 affordable housing and viability draft SPG.
There will be a transitional period of 6 months from the time that the NPPF changes are made. The possibility is held out of model section 106 clauses, which would help minimise unnecessary delays.
The recognition that Build to Rent is a model that doesn't sit well with 'ownership' forms of affordable housing is what that industry (largely self-defining through scale of scheme and extent of professional management) has been lobbying for. Nor is there any more any reference to off-site starter home provision.
Wider implications
The extensions to the meaning of 'affordable housing' are all in the direction of private sector provision. The definition is now very wide indeed. Battles lie ahead once LPAs consider the implications of the changes for their local plan affordable housing requirements against a backdrop of, for example:
– reduced levels of socially rented housing over the last six years or so following the introduction of affordable rent (minimum discount of at least 20% to market rent), vividly demonstrated in the Government's affordable housing statistics published on 2 March 2017:
– restrictions on housing benefit, for instance ineligibility of 18-21 year olds from 1 April 2017 under the Universal Credit (Housing Costs Element for claimants aged 18 to 21) (Amendment) Regulations 2017 made on 2 March 2017.
– the continuing, onerous, requirement on registered providers since 2015 to reduce rents by 1% a year for four years resulting in a 12% reduction in average rents by 2020-21.
– Loss of stock via the Housing and Planning Act 2016's voluntary right to buy scheme in relation to registered providers and the Act's provisions requiring local authorities to sell vacant higher value housing (the Government's most recent statistics on sales date from October 2016 but already show significant numbers).
A debate took place in the House of Lords this week, on 2 March 2017, on the Economic Affairs Committee's July 2016 report, Building More Homes in the context of the Housing White Paper. Lord Young closed for the Government saying many of the right things but, after such a background of continuing changes (I believe it was Adam Challis at JLL who recently counted 180 housing initiatives since 2010), with further uncertainty for at least 18 months, surely we now just need to get on with the matter in hand – ensuring that there are enough homes to meet all social needs, whilst not killing the golden goose without which this will simply not happen under any foreseeable system, ie profitable development by the private sector.
Simon Ricketts 4.3.17
Author simonicityPosted on March 4, 2017 March 5, 2017 Categories Affordable housing, DCLG, Housing, Housing and Planning Act 2016, NPPF, Section 106, Starter homesLeave a comment on Definitely Maybe: Defining Affordable Housing