Effect of “viability loophole” on rural communities

House builders are exploiting a legal loophole so they don’t have to build as many affordable homes in the countryside, claim campaigners.
Homeless charity Shelter and the Campaign to Protect Rural England (CPRE) analysed data they say shows that housing developers are shirking their responsibilities.

The two charities released their findings ahead of a speech by communities secretary Sajid Javid who is expected to outline government reforms to national planning rules.

Looking at eight rural councils over one year, the analysis shows that half the affordable homes that councils were required to build were lost when viability assessments were used.

Shelter and CPRE said their findings demonstrated that the housing crisis was not just confined to cities – but was having a serious impact in the countryside as well.

They said developers were using ‘viability assessments’ to argue that building affordable homes could reduce their profits to below around 20%.
This gave them the right to cut their affordable housing quota.
It meant developers were over-paying for land and recouping the costs by squeezing affordable housing commitments – a tactic often used by developers building big housing schemes.

Shelter and CPRE are calling on the government to use planning rules to stop developers from using this loophole to wriggle out of providing the affordable homes that communities need.

Similar research carried out by Shelter on housing lost to viability assessments in urban area paints a national picture of the affordable housing drought right across the country.

Shelter chief executive Polly Neate said: “We can see for the first time the true scale of our housing crisis – it’s not just blighting cities but our towns and villages too.

“Developers are using this legal loophole to overpower local communities and are refusing to build the affordable homes they need.”
Both charities said the government should use their current review of planning laws to close the loophole and give local communities the homes they required.

CPRE chief executive Crispin Truman said: “A lack of affordable housing is often seen as an urban problem, with issues of affordability in rural areas overlooked.

“It cannot be ignored any longer.

“Too much of our countryside is eaten up for developments that boost profits, but don’t meet local housing needs because of the “viability” loophole.”

Without adequate affordable housing, rural communities risked losing the young families and workers they needed to be sustainable, said Mr Truman.
The full report is available here.”

http://rsnonline.org.uk/community/loophole-means-fewer-affordabler-homes