Planning Obligations SPD 2021

5.0 AFFORDABLE HOUSING

5.1 The Housing policies in the Harborough Local Plan 2011-2031 can be found in Chapter 5. Policy H2 requires 40% affordable housing provision on sites of more than 10 dwellings or with a combined gross floorspace of more than 1,000 square metres. Policy H2 sets a tenure split of the affordable housing of about 75% affordable or social rented and 25% low cost home ownership, or a different mix if justified by the latest assessment of affordable housing need. Clause 5 of Policy H2 advises that proposals which do not meet the policy requirements will be acceptable where it is demonstrated to the Council's satisfaction that a different level or mix of affordable housing is required to make the development viable and the approach contributes towards creating mixed and balanced communities.

5.2 It should be noted that Local Plan Policy H2 seeks contributions on sites of more than 10 dwellings (i.e. 11 dwellings or more) or on sites for development with a combined gross floorspace of more than 1,000 sqm. It is noted that the NPPF 2019 policy states that Affordable Housing should only be sought on 'major developments', and as set out in the Glossary 'major developments' of housing are defined as 10 or more units. The Council will apply the adopted Local Plan policy when seeking contributions to affordable housing.

Neighbourhood Plans

5.3 Made Neighbourhood Plans form part of the Development Plan for their area. Neighbourhood Plans may include policies on housing and affordable housing, and new Neighbourhood Plans should consider the issue of First Homes.

Changes to National Planning Policy and the introduction of First Homes

5.4 On 24^th May 2021 the Government published its policy on First Homes. https://www.gov.uk/guidance/first-homes

5.5 This guidance includes the definition of First Homes and the eligibility and qualifying requirements for purchasers, and the limited circumstances in which the criteria could be applied. The guidance sets out how First Homes should be taken account of in plan-making and decision-taking and sets outs the Government's policy for enabling First Homes exception sites. Neighbourhood Plans are also encouraged to support the delivery of First Homes.

First Homes in Harborough

5.6 Under the transitional requirements, plans which have reached an advanced stage of plan making do not need to be amended to reflect these new First Homes requirements. After 28 June 2021 all local plans and neighbourhood plans will be expected to take account of the new First Homes requirements. First Homes will therefore be an important part of the next Harborough Local Plan and the appropriate place to consider if there is evidence to justify a higher level of discount and/or local connection criteria for First Homes in Harborough. Therefore, the current adopted Local Plan policies on affordable housing will continue to apply until the next Local Plan is adopted.

5.7 The Government's policy also sets out transitional arrangements for decision-making on applications which indicates that applications for full or outline planning permission which have been subject to significant pre-application engagement and determined before 28 March 2022 do not need to apply the First Homes policy. It is however, also noted that Government policy requires Local Planning Authorities to be open to, and supportive of, proposals to deliver First Homes on existing sites.

5.8 The Council also notes the Government's support for First Homes exception sites, which are defined as sites that can come forward on unallocated land outside of a development plan. Whilst such sites, by definition, will not be allocated for housing in the Local Plan, they will still be expected to comply with other relevant Local Plan policies including good design and layout etc.

Definition of Affordable Housing

5.9 Affordable housing is defined in national policy as social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market. Eligibility is determined with regard to local incomes and local house prices. Affordable housing should include provisions for the development to remain at an affordable price in perpetuity for future eligible households or, where any affordable housing development is subsequently sold on the open market, for the value to be recycled for replacement affordable housing provision in the locality.

5.10 The definition of affordable housing included in the glossary in the adopted Local Plan (page 282) references only housing for social and affordable rent. The updated NPPF (2021) definition of affordable housing also refers to a number of housing products and includes a wider range of rented and low- cost homes tenures and options. Social rented housing is rented housing owned and managed by local authorities and RPs (Registered Providers or Housing Associations), for which guideline target rents are determined through the national rent regime. This type of housing may also be owned by other organisations and provided under equivalent rental arrangements to the above, as agreed with the local authority or with Homes England.

5.11  Affordable rented housing is let by Registered Providers (RPs) to households who are eligible for social rented housing.

5.12  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).

5.13 Intermediate housing is homes for sale and rent provided at a cost above social rent, but below market levels. These can include shared equity (shared ownership and equity loans) and other low cost homes for sale and intermediate rent.

5.14 Therefore, the current definition of Affordable Housing includes social rented housing, intermediate rented housing, shared ownership and shared equity products and as of 24^th May 2021 First Homes as well.

5.15 Policy H3 allows for exception sites where they are supported by a Local Housing Needs Survey. The Council would expect such surveys to follow the best practice methodology of a parish level two-part survey which is independently undertaken and analysed. The pre-survey consultation with the Town or Parish Council to raise awareness of the surveys is an integral part of the process and helps ensure as high a response rate as possible for this snapshot survey and gain local support. Survey findings are considered valid for three years. It should be noted that owing to the snapshot nature of the survey, results should not be extrapolated, and any resulting scheme would not be expected to meet all of the identified affordable housing need. In practice, parish level local housing need surveys are usually used to justify a scheme to meet around 50% of the affordable housing need identified. Where surveys find evidence of a demand for open-market housing within a parish it is useful that this is reported, but it must be noted that this provides evidence of demand, not local housing need.

Housing Mix

5.16 The District has an above average number of larger type dwellings (5-7 bedrooms) 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. In light of this, the majority of our house type requirements will be based on smaller house types to meet demand.

5.17 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 in order to meet District wide identified need. Local Plan Policy H5 specifies that major housing developments should provide a mix of housing types that is informed by up-to-date evidence of housing need. In establishing the appropriate mix of housing types account should be taken of the range of accommodation types required in the local area. This is derived from the understanding of the size and characteristics of future households over the plan period and an appreciation of how well suited the existing dwelling stock is to meet those demands.

Affordable Housing Mix

5.18 The type of affordable housing sought will be negotiated on a case by case basis. The discussion will be informed by percentages set out in the Table 2 below, as a starting point.

Table 1 - On proposals above 10 units

benchmark affordable housing mix profile

Source: Table 52 of the HEDNA, Estimated Size of Dwellings Needed 2011 to 2031 – Affordable Housing – HMA

5.19 The HEDNA (Our policies, plans and strategies - HSG8 Housing and Economic Development Needs Assessment (HEDNA) | Harborough District Council) includes an estimate of the size of affordable housing dwellings needed across the Housing Market Area for the period to 2031. This evidence provides the indicative mix of affordable housing that will be sought on sites within the Harborough District. However, the characteristics of individual sites and more detailed evidence of local housing needs, for example from a parish level housing needs survey or evidence prepared to support a Neighbourhood Plan, may also influence housing mix sought on a particular development.

5.20 Therefore, applicants are advised to consult the Harborough District Council Strategic Housing and Enabling Officer at the earliest opportunity to discuss and agree site/locality specific requirements and details of the affordable housing contributions prior to the submission of a planning application. It should be noted that:-

• All affordable housing must comply with Homes England Quality Development Standards particularly in relation to space and floor areas as a minimum requirement;
• Affordable housing for rent will be transferred to a partner Registered Provider (RP) at open market values to be agreed between the developer and the RP partner and approved by Harborough District Council.
• Developers are required to negotiate the price paid as a percentage value of shared ownership directly with the Registered Provider
• Other/alternative forms of housing / development, including community led options, will be dealt with as part of the Council's Strategic and Enabling function and we will actively engage with providers to assess opportunities where these options may be appropriate.

The range and type of affordable housing should be secured through, and specified in, the Section 106 agreement.

Special Needs and Extra Care Housing

5.21 Special Needs housing may be affordable housing, where it meets the definition of affordable housing and/or where proposed by specialist providers. However, specialist housing that is not affordable would normally be expected to make affordable housing contributions. 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. The Council will also seek the provision of small 1-2 bed bungalows on appropriate sites to meet the need for this house type for our expanding elderly community.

5.22 Special Needs housing is strongly encouraged, and bespoke guidance and support will be provided to assist in implementation. The Council will work to meet wheelchair and Lifetime Homes Standards which are now covered through optional requirements in Building Regulations.

5.23 New forms of sheltered 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.

5.24 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. Most people who live in Extra Care Housing have their own self-contained homes, 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.

Specialist Housing and Viability

5.25 The Government issued revised Planning Practice Guidance on Housing for Older and Disabled people on June 26^th 2019 (after the adoption of the Local Plan). This guidance includes a specific section on viability noting the front-loading of viability testing in plan-making and that the emphasis is on the applicant to demonstrate whether particular circumstances justify the need for a viability assessment at the application stage.

5.26 It is noted that the PPG gives housing for older people as an example of a type of development which may significantly vary from standard models of development for sale. This factor is also recognised in paragraph 5.3.10 of the Local Plan. As such we encourage specialist housing providers to engage in early dialogue with the Development Management planners and the Strategic Housing and Enabling Officer if viability is an issue for your proposal, and to submit any supporting evidence and site-specific viability assessment as soon as possible. It should be noted that, as set out in para 5.3.10 of the Local Plan, as with all submitted viability assessments the Council will commission an independent review at the expense of the applicant.

5.27 Further information about the self-build and custom housebuilding register can be found at Self-Build and Custom Housebuilding Register - Harborough District Council. The register provides evidence of the demand locally for self-build and custom housebuilding and is a key part of the Council's evidence base for this type of housing.

5.28 Local Plan Policy H5: Housing density, mix and standards criterion 4 supports the provision of self-build and custom-build housing plots in locations that would be suitable for housing. The mechanism for securing these plots will be through the s106 agreement.

5.29 Government policy allows for self-build/custom build exception sites. Developers wishing to deliver self-build/custom build exception sites should note that, as any such proposals are by definition in locations where housing would not normally be permitted, they will be assessed against Policy H3: Exception Sites (not Policy H5) which requires development to meet a clearly evidenced local affordable housing need. Furthermore, as set out in paragraph 5.5.2, exception site proposals would normally be subject to a local connection requirement in the Section 106 (via a housing association). For self-build/custom build exception sites of a single house the applicant will need to demonstrate their local connection to the area. If a developer was proposing a small development of custom-build houses, then both a local occupancy clause and a self-build/custom build clause are likely to be required in the Section 106.

Delivery of Affordable Housing

5.30 The Council supports a range of Registered Providers (RPs or Housing Associations) to provide and manage affordable housing in the District. A list of current providers and contact details is available on our website.

5.31 The Strategic Housing and Enabling Officer will engage with developers and ask them to contact RPs at the earliest stage so that an affordable scheme can be discussed and agreed preferably prior to the submission of a formal planning application.

5.32 Planning applications should be accompanied by an Affordable Housing Statement to indicate commitment to affordable housing provision through on-site provision. The question of accepting a commuted sum payment is a matter for the Council to determine if it deems it appropriate to accept an off-site contribution in lieu of on-site provision. It is not a matter for the applicant to propose. The Council will then seek to secure this commitment through a planning obligation.

5.33 The Housing Enabling Officer will provide advice on the delivery of affordable homes through the planning process. 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 relevant Town/Parish Councils will also help inform the position the Council takes on the matter.

5.34 The Council will seek, in general terms, a mix which is split of about 75% affordable or socially rented and about 25% low-cost home ownership products. However, each site is assessed on its merits regarding how best it can meet local housing need and the Council will adopt a flexible approach in assessing need and provision. A variation of the housing mix may be acceptable if justified by reference to the latest assessment of affordable housing need.

5.35 The affordable housing secured will be transferred to a Registered Provider (RP), at values to be agreed between the developer and RP.

5.36 Applicants are advised to consult RPs to discuss these matters at an early stage in the preparation of a planning application including an element of affordable housing.

5.37 The cost associated with the necessary level of affordable provision on any site should be factored in by the developer in their acquisition of the site.

5.38 Development proposals involving 100% affordable housing will not normally be exempt from S106 obligations as any new development is likely to have an impact and an effect on local services and infrastructure.

Commuted Sums

5.39 In accordance with both National Planning Policy Framework (NPPF) and adopted Local Plan policies, there is a clear preference for affordable housing to be provided on-site, within the site subject to planning approval. Whilst on-site provision will always be the priority option for providing affordable housing, there may be some circumstances where the inclusion of affordable housing on-site may not be practical or appropriate. In such circumstances, a commuted sum is the acceptable alternative to the provision of units of affordable housing on a site. The following are circumstances where a commuted sum may be justified:

• Where a Registered Provider (RP) is unwilling to acquire affordable units. This may occur where the proposal involves conversion or redevelopment of existing buildings such as listed buildings or development in conservation areas. It may also occur because the affordable housing proposed may be in a location, or is of such a limited scale, that a Provider considers it unsuitable to manage efficiently.
• 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. Submitted viability appraisals will be re-appraised by the Council (as referenced in paragraphs 3.7-3.9 above) before consideration can be given to acceptance of a commuted sum in lieu of on-site provision of any affordable housing obligation.

5.40 If a commuted sum payment is accepted, the value will be based on the cost to the developer of meeting the affordable homes requirement. Using HDC's percentage requirement to guide negotiations, the off-site contribution or commuted sum will be based on the following approach:-

• Agree the average Open Market Value (OMV) of each affordable house type i.e. 2 bed terrace, small 3 bed semi etc. that is to be included on the site.
• Calculate the affordable housing requirement using the formula 50% of the average OMV of an affordable house type x Harborough % of affordable provision requirement.
• e.g. OMV x 50% for each unit X the number of affordable units required (40% of site yield) if the open market value (OMV) of a two bedroom house was £150,000 and the policy requirements was for 40% affordable housing provision on a 15 dwelling site equates to 6 units, the commuted sum received would be 6 units x 50 % of the OMV (£75,000) = £450,000.

Questions

The SPD has been updated to include further guidance on the definition of affordable housing, affordable housing mix, First Homes, self-build and housing needs surveys.