Planning Obligations SPD

Ended on the 30th September 2015
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Chapter 6: Affordable Housing

The provision of housing must seek to meet the needs of the whole community. Buying a home on the open market is out of the reach of a considerable proportion of residents and other tenures need to be available - social rented, intermediate rented (known as affordable rent) and shared ownership. The District Council maintains up to date assessments of local housing need to determine appropriate approaches.

6.1. Definition of Affordable Housing

6.1.1. Affordable housing includes social rented and intermediate housing, provided to specified eligible households whose needs are not met by the market. Affordable housing should:

  • meet the needs of eligible households including availability at a cost low enough for them to afford, determined with regard to local incomes and local house prices; and
  • include provisions for:
    1. the home to be retained for future eligible households; or
    2. if these restrictions are lifted, for any subsidy to be recycled for alternative affordable housing provision.

6.1.2. Social rented housing is rented housing owned and managed by local authorities and RP's (Registered Providers or Housing Associations), for which guideline target rents are determined through the national rent regime. It may also be owned by other persons and provided under equivalent rental arrangements to the above, as agreed with the local authority or with the Homes and Communities Agency.

6.1.3. Affordable rented housing is let by local authorities or private registered providers of social housing to households who are eligible for social rented housing. Affordable Rent is subject to rent controls that require a rent of no more than 80 per cent of the local market rent (including service charges, where applicable).

6.1.4. Intermediate housing is homes for sale and rent provided at a cost above social rent, but below market levels subject to the criteria in the Affordable Housing definition above. These can include shared equity (shared ownership and equity loans), other low cost homes for sale and intermediate rent, but not affordable rented housing. Homes that do not meet the above definition of affordable housing, such as 'low cost market' housing, may not be considered as affordable housing for planning purposes.

6.2. Justification

6.2.1. Policy on securing affordable housing in new development is set out in the Council's Core Strategy Policy CS3 (Adopted November 2011). This policy sets out requirements for affordable housing. The policy splits the District into five sub market areas. The minimum requirement for affordable housing provision is 40% in Harborough District's rural submarket areas and 30% in the settlements of Market Harborough, Lutterworth and the Blaby Border Settlements (including Broughton Astley), of the total site yield being proposed being affordable.

6.2.2. Although the policy sets these requirements, a greater percentage of affordable housing may be sought if any subsequent local housing need assessment identifies exceptional housing need.

6.2.3. This policy aims to increase provision of affordable housing, particularly in rural areas, in order to meet the high need across the district as demonstrated in the Strategic Housing Market Assessment (SHMA) 2014,

6.2.4. In light of the Ministerial announcement in December 2014 and a consequential change to the National Planning Practice Guidance (NPPG), the Council will no longer seek obligations on sites of below 11 dwellings or where the combined floor space of the proposal is less than 1000 sqm.

6.2.5. In order to avoid developers simply sub dividing sites and thereby avoiding obligations, applications which are taken from a common access or form a spatial relation to a wider area should be subject to obligations commensurate with the larger area.

6.3. Mix of Housing

6.3.1. Harborough District has an above average number of larger type dwellings (5-7 bedroom) and a smaller number of 2-3 bedroom house types. Smaller dwellings are under represented in the range and mix of house types. It is evident that the number of smaller households is increasing. The majority of our house type requirements will be based on smaller house types to meet demand.

6.3.2. Development proposals should therefore always seek to provide a mix of size and type of dwellings (both open market and affordable dwellings). In particular, housing for smaller households will be supported to meet District wide identified need.

6.3.3. The benchmark housing mix profile we will aim to seek on housing development sites, as referenced in SHMA 2014 at District level, is as follows:

1 bed

2 bed`

3 bed

4+ bed

Market

5-10%

30-35%

45-50%

10-15%

Affordable

35-40%

30-35%

20-25%

5-10%

All Dwellings

15-20%

30-35%

35-40%

10-15%

Source SHMA 2014 Table 86

6.3.4. This is an indicative housing mix for planning purposes within the District. Individual site issues will influence housing mix on a particular development - this is intended to provide a basis for the kind of house types/sizes sought as a starting point in future development. The Council's Housing Enabling and Community Infrastructure Officer will be able to discuss and seek to agree site/ locality specific requirements. There is strong demand for single level development for older people and we encourage apartment and bungalow type development to meet this need.

(10) Question 27:

What are your views on Harborough's affordable housing requirements in respect of the percentage sought and the tenure mix. Does this approach meet the housing needs of Harborough residents?

6.4. Special Needs and Extra Care Housing

6.4.1. Special Needs housing may be included in the definition of affordable housing, where appropriate, or where proposed by specialist developers. In such cases there will usually be no further requirement for affordable housing contribution. Examples of those who may be in 'special need' include the elderly, 16-24 year olds, people with mental health or learning difficulties and people with special access requirements such as wheel chair users. We will also seek the provision of small 1-2 bed bungalows to meet the demand for this house type for our expanding elderly community when required.

6.4.2. Special Needs housing is strongly encouraged and bespoke guidance and support will be provided to assist in implementation. Such dwellings will be required to meet wheelchair and Lifetime Homes Standards as defined by the Homes and Communities Agency.

6.4.3. New forms of sheltered housing and retirement housing have been developed in Harborough District in recent years, to cater for older people who are becoming more frail and less able to do everything for themselves. The Council strongly supports such provision. Extra Care Housing is housing designed with the needs of frailer older people in mind and with varying levels of care and support available on site. People who live in Extra Care Housing have their own self contained homes, their own front doors and a legal right to occupy the property. Extra Care Housing is also known as very sheltered housing, assisted living, or simply as 'housing with care'. It comes in many built forms, including blocks of flats, bungalow estates and retirement "villages". It is a popular choice among older people because it can sometimes provide an alternative to a care home. There are communal facilities with domestic support and personal care available.

6.5. Exceptions Sites

6.5.1. In response to evidence of local housing need, the development of sites for affordable housing as an exception to normal planning policy may be permitted. Rural Exception sites are:

  • Sites primarily set aside for affordable housing but could include some / limited amount of market housing;
  • Developed to meet local affordable housing need and generally held in perpetuity as 'affordable';
  • Sites that are within or adjoining or in close proximity to settlements; and
  • Developed on sites that would normally not be released for market housing.

6.6. Building Standards for Affordable Homes

6.6.1. A decent home is one which is weather tight, warm and has modern facilities. The tests of Decent Homes Standards are:

  • Is above the current statutory minimum standard for housing;
  • Is in a reasonable state of repair;
  • Has modern facilities and services; and
  • Provides a reasonable degree of thermal comfort, effective insulation and heating.

6.6.2. All affordable dwellings provided in the District should meet the Decent Homes Standard and comply with the Homes and Communities Agency Quality Development Standards.

6.7. Development of Affordable Housing

6.7.1. Harborough adopts a partnering approach to development activity relating to affordable housing within the District. This means that Harborough works with specified Registered Provider (RP or Housing Association) partners with whom the Council has a strong working relationship, and who are committed to delivering Harborough's programme in providing affordable housing and a history of good tenant management. A list of current providers and contact details is available in Appendix 1 to this document.

6.7.2. The Housing Enabling and Community Infrastructure Officer will wish to engage with developers and ask developers to engage with our RP partners at the earliest stage so that an affordable scheme can be discussed and agreed prior to the submission of a formal planning application.

6.7.3. Applications should be accompanied by an Affordable Housing Statement to indicate their commitment to affordable housing provision either through a commuted sum payment or on-site provision (whichever is applicable). Harborough will then seek to secure this commitment through a legally binding agreement known as a Section 106 Agreement.

6.7.4. The Housing Enabling and Community Infrastructure Officer will provide advice on the delivery of affordable homes through the planning process when consulted by Planning Officers in assessing applications. The Officer will advise on the provision of affordable housing in eligible applications, whether off site provision is appropriate and whether a commuted sum should be accepted. The views of the community via local ward Councillors and Parish Councils will also help inform the position the Council takes on the approach to the affordable housing component in new development

6.7.5 Our current tenure requirement is to seek in general terms a 60 / 40 split between rent (a percentage of which we would accept as Affordable Rent) and Intermediate social housing respectively. However each site is assessed independently in meeting specific local housing need.

6.7.6. The affordable housing will be transferred to a partner Registered Provider at Open Market Values to be agreed between the developer and Registered Provider partner and approved by Harborough District Council. The transfer values will be built into the Section 106 Agreement if details are available at the time the Agreement is drafted.

6.7.7. Applicants are advised to consult Harborough District's partner RP's to discuss these matters at an early stage. Contact details of our RP partners are listed in Appendix 1 to this document.

6.7.8. There is a clear obligation on part of the developer to deliver an affordable scheme to a RP as a requirement of the S106 Agreement. The agreed transfer of any affordable housing via a S106 agreement should always be on the basis of NIL grant input. The Homes and Communities Agency which provides affordable home building funding has clearly stated this to be the case.

6.7.9. The costs associated with affordable provision on any site meeting Council planning obligations and requirements should be factored into the equation to ensure that these obligations are delivered without any alternative funding streams coming into play. The costs of all commitments should be factored in by the developer in their acquisition of the site. This is an obligation to be met by the developer.

6.7.10. It is not considered appropriate to build in any "cascade mechanism" within a S106 Agreements relevant to the provision of affordable housing (mechanisms which enable developers to agree reduced or different mixes of affordable housing, e.g. if agreements are not reached with registered providers in a specified time period). Should issues of viability affect the delivery of obligations when entered into, then the procedure for considering variations of agreement should be followed whatever the obligation.

6.8. Meeting an Obligation by means of an Alternative Site or Commuted Sum

6.8.1. In accordance with both national guidance (NPPF) and local policies, there is a clear preference for affordable housing to be provided on and within the site subject to planning approval. Whilst on-site provision will always be the priority option for providing affordable housing, it has become apparent that there are exceptional circumstances where the inclusion of affordable housing may not be appropriate. Harborough District Council therefore will need to consider that, in such circumstances, a commuted sum may be an acceptable alternative to the provision of land or units of affordable housing on residential developments within the District and there will also be circumstances when off site provision can be justified. Examples of such exceptional circumstances include:

  • The case for off-site provision has been satisfactorily demonstrated as undeliverable. This may occur for example where the proposal involves conversion or redevelopment of existing buildings, such as barn conversions, listed buildings or development proposed in conservation areas. These are often expensive to create, resulting in dwellings that do not comply with The Homes and Communities Agency Scheme Design Standards (Homes and Communities Agency) and can be expensive to repair and maintain. As such they will not attract grant funding and are unlikely to be self-financing and therefore potentially unacceptable to any of the Council's preferred Registered Provider (RP) partners.
  • Where matters relative to viability mean that an RP or developer is unable to commit to the scheme, the Council will expect adequate evidence to be submitted that any given scheme is financially unviable. Submitted viability appraisals will be re appraised by the Council's contracted partner before consideration can be given to acceptance of a commuted sum in lieu of on-site provision of any affordable housing obligation.
  • Where housing need priorities could be better met in an alternative location.
  • Where there is a dominance of a particular type of affordable housing provision in the immediate area.
  • Where the viability of the particular form of development might be compromised by the integration of affordable housing into that development, for reasons that can be clearly set out and justified.

6.8.2. It should be noted that the above is not intended to be an exhaustive list and, if there are exceptional circumstances, these will be considered on their merits upon receipt of an evidenced application.

6.9. Provision on an Alternative Site

6.9.1. If it is accepted that Harborough District Council will forego on-site provision, we will consider the offer of provision of an alternative site, within the same locality if achievable, capable of providing at least the same number of affordable units as the subject site. This may apply where Harborough District Council considers that the provision of land, either on the proposed development site or on an alternative site, would enable the Council to enable the available contribution more effectively towards meeting the identified housing needs of the District.

6.9.2. The contribution of land will in most cases be land serviced to its boundaries, of sufficient area to provide the equivalent on site provision. Financial contributions may be sought in addition where the land is of insufficient area to provide the equivalent on site provision, and where necessary, an independent valuation of the proposal will be sought.

6.9.3. Provision of completed units on an alternative site will be in addition to any applicable affordable housing requirement arising from the development of the alternative site.

6.10. Commuted Sums

6.10.1. Harborough District Council and its RP partners do not have extensive land holdings on which to accommodate the use of Commuted Sums. The cash in-lieu approach therefore has to reflect the cost of buying plots elsewhere, on the open market. It is also recognised that off-site contribution alone may be insufficient to secure an equivalent level of provision without any further public subsidy.

6.10.2. If a commuted sum payment is accepted, the method of calculating the amount of payment is as follows:

  • We will agree the Open Market Value (OMV) for a new built two bedroom house (as this house type is in greatest demand in Harborough District) or similar affordable house type within the locality or close proximity. Our requirement will be calculated to be 50% of the OMV of a two bedroom house X the number of affordable units that would be affordable on 30% / 40% of the site yield.
  • For example, if the open market value (OMV) of a two bedroom house is £180,000 and the 30% requirement equals to 3 affordable houses on a development of 11 houses in total, the Commuted Sum that a developer is required to pay would be 3 houses X 50% of the OMV (90,000) = £270,000.

(4) Question 28:

Is the formulae for determining off site contributions for affordable housing appropriate, fair and reasonable? If not, what approach would you propose?

6.11. Spending of Commuted Sum

6.11.1. Commuted sums that are generated as a result of the Council's affordable housing policy will be used for initiatives that support the delivery of affordable housing generally within the area where the obligation arose. The use of any commuted sum will normally be referenced within the Section 106 Agreement within which it is provided.

6.11.2. Wherever possible the Council will continue to spend monies derived from Commuted Sums within the same sub market area as they were generated. (see Core Strategy policy CS3 here: However exceptions to such an approach may be required where:

  • There are no feasible suitable sites available within the locality for the development;
  • An affordable housing development opportunity arises within a neighbouring area and the affordable housing provided on this alternative site would be of greater or equal benefit in meeting the housing need; and
  • If no suitable sites/housing need exists within the immediate adjoining areas, then the funds can be utilised District wide to support affordable housing generally across the District.

6.11.3. Commuted sums that are generated as a result of the Council's affordable housing policy will only be used for initiatives that support the delivery of affordable housing.

6.11.4. Registered provider partners and agencies can apply for funds, and will be required to justify their claim for funding through the submission of a detailed report

6.11.5. Examples of the type of initiatives that to be financed through the use of commuted sums will include:

  • Development of rented and low cost home ownership;
  • Loans/ grants to RPs/ agencies in return for affordable housing nominations;
  • Development of supported housing schemes and key worker initiatives;
  • Initiatives that support regeneration projects, such as offering loans/ grants to tackle empty homes, and bring them back into use, or poor housing conditions, in return for affordable housing nominations;
  • The purchase of land for affordable housing;
  • Use of commuted sums as a lever to generate additional resources/ funding from external sources in providing affordable housing.

6.11.6. Applications will be assessed on the basis of schemes demonstrating:

  • an overall strategy to improve affordable homes;
  • ability to attract additional funding;
  • overall benefit of the local community.

6.11.7. Decisions on applications are delegated to the relevant Director with agreement of the Planning Portfolio Holder.

(2) Question 29:

Do you have any comments to make about Affordable Housing Contributions?

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