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This is not broken down in the report into amounts remaining to be spent in specific towns or villages.
Category Archives: Section 106
“End of Right to Buy set to increase demand for affordable housing”
“Affordable housing output needs to be increased as the Help to Buy scheme is wound down, according to property consultancy Savills. The Help to Buy scheme has been a major factor in helping young people to afford their own home in recent years. However, its eligibility criteria are set to be tightened in 2021 with the future of the scheme up in the air.
[Take this with a pinch of salt – those “affordable” homes are, on average £33,000 more expensive than they ought to be]:
https://eastdevonwatch.org/2019/04/14/help-to-buy-costs-first-time-buyers-an-average-33000-extra/
A report by Savills said that housebuilding in England may need to increase by up to a third between 2021 and 2025 to make up for the end of the current Help to Buy scheme. Emily Williams, associate director for residential research at Savills, said: “Private sector housebuilding for market sale has underpinned the rapid expansion in housing supply since 2013, including affordable housing delivery through Section 106. But that growth is slowing against market headwinds.”
http://www.room151.co.uk/brief/#end-of-right-to-buy-set-to-increase-demand-for-affordable-housing
“Councils made to give £225k BACK to developers – often because they didn’t spend it quickly enough”
Could it, has it happened here? Only a Freedom of Information request will tell …
“More than £225,000 of Section 106 money has been handed back by councils – mainly because they did not spend it in time.
The money, paid to councils by developers, is meant to go on road improvements, public transport and community facilities at new housing estates.
S106 contributions are often included as a way to overcome objections and as a condition of planning approval.
But on a number of occasions in the last five years the money was returned because Suffolk councils had not spent it within a five-year limit, Freedom of Information requests from this newspaper show.
While the sums are a fraction of total S106 contributions made, councillors said they showed deep failings within local government.
Andrew Stringer, leader of the Liberal Democrat, Green and Independent group at Suffolk County Council (SCC), said it was “perverse” that developer contributions were going unspent during a time of austerity.
Much of the returned funding was down to SCC’s failure to carry out highways projects. …”
https://www.eadt.co.uk/news/section-106-ipswich-saxmundham-haverhill-housing-developers-1-5866556
Tory councillor bemoans planning mess
Owl says: What the councillor neglects to say is that the mess he describes is entirely down to HIS own party!
“Cllr Stephanos Ioannou is a councillor in Enfield. He is studying Public Policy at King’s College London:
“Local councillors across the country will know the struggle is real in the planning system. Not only does it seem to be irresponsive to the real needs of our local communities that are in need of mixed residential, commercial, office, public buildings and green space. But we see planning applications that pose more negatives than positives being allowed to pass through for ‘the greater good, and the bigger picture’.
One surprising reason for this can be derived from the fact that awarding planning permission in the UK comes down to a Faustian pact. If the devil is in the detail, then the detail is Section 106 of the Town and Country Planning Act 1990. Specifically, a clause which formalised “planning gain”, making it in the local authorities’ interests to allow schemes to balloon beyond all reason, in the hope of raking some of the developers’ profits for the public good.
Introduced as a negotiable levy on new development, Section 106 agreements entail a financial contribution to the local authority, intended to be spent on offsetting the effects of the scheme on the local area. The impact of a hundred new homes might be mitigated by money for extra school places, or traffic calming measures. In practice, since council budgets have been reduced, Section 106 has become a primary means of funding essential public services, from social housing to public parks, health centres to highways, schools to play areas. The bigger the scheme, the fatter the bounty for both developers and authorities. Vastly inflated density and a few extra storeys on a tower can be politically justified as being in the public interest, if it means a handful of trees will be planted on the street.
My borough, Enfield, is seeing a surge in young families moving to our borough to escape the surge in housing costs elsewhere in the capital. Predominantly the reasons for the rising demand in our borough are those highlighted by an article in the Evening Standard which mention the ease of accessibility with good motorway connections, good transport links into central London, as well as a the fact that average house prices are modestly rising only 0.4% in our borough, which is something to be reckoned with compared to other parts of London.
But things start to go wrong when planning departments do not take into account, aspects of the local area that make our borough unique. Whether looking at local heritage, the mix of commercial, residential, offices, and the style of new builds, often Enfield Council is quick to bow to the demands by developers and architects for the simple reason of referring to ‘the housing shortage and the need for new homes’. This is a poor state of affairs, and I am worried that the council is moving towards the path of jeopardising local beauty and conservation for the sake of housebuilding. Particularly for a borough such as Enfield which is lucky to have the green-belt it does, this is a real problem for councillors who have to defend their communities.
The issue of planning is also one that concerns the issue of bureaucracy within the council, that sometimes leads to poor decisions and outcomes on certain issues. I remember a local constituent having issues with an application for the property behind her. The Council had, instead of looking at the issue and reopening the planning decision, moved on ‘under delegated powers’ despite major resident objections, to see this build through. This point is echoed by a piece in the Enfield Independent which mentioned that the construction caused ‘considerable cracks in the neighbouring properties of other residents’, and that despite objections being raised within the given time-frame of the regulated pre-planning decision consultation, the planning committee on the council did not even bother to respond to residents’ concerns, and even after ringing, residents could not get in touch with the department.
This goes fundamentally to the heart of what us Councillors try to do, and sometimes can’t do, that is to help our residents most when they need it. Why? Because the failures of planning departments, in this case, mean bureaucracy causes delays, which then causes miss-representation, which then lead to poorly made planning decisions that affect not only the aesthetics of the area, but the general confidence residents have in the council dealing with their concerns in future.
It also raises a bigger question, as to how many similar cases are there, where other developments have gone through without the necessary vigorous scrutiny they need? I agree that we must build for new families and promote a home-owning democracy, but if departments simply rubber stamp applications without giving the power to residents and councillors to scrutinise for the greater good, then what’s the point in even having these departments anyway. We might as well pack up and go home as Councillors, because they are making a major part of our job redundant.
Overall, we have a conundrum of problems. Firstly, local councils are disregarding the necessary mix of residential, commercial and office space for the sake of building homes to fix the housing crisis. This is further worsened by the fact developers can ‘help’ plug the funding pressure of new homes, and contribute towards the funding of some local services, and this makes it increasingly tempting for councils to bow to these demands so that they can increase provision because budgets are tight. And then there is the nitty-gritty issue of local residents who struggle to even express their concerns to local planning departments, and this does not help residents build trust in councils who clearly disregard their concerns.
Local council planning departments such as those in Enfield need a major rethink as to how they approach future planning applications. Otherwise we can expect poor decisions on planning to continue into the future, to the detriment of existing residents.”
“Property downturn could reduce number of affordable homes built by 25%”
“major downturn in the housing market could reduce the number of affordable homes built by a quarter, the property firm Savills has warned.
Savills estimates that about 100,000 new homes a year – a third of the government’s 300,000 target – need to be priced at levels below the going market rate, whether for rent or for sale.
However, only 43,498 such homes were built in England in the financial year 2017-18, albeit 10% higher than the previous year, according to government figures.
Many were built for so-called “affordable rent”, where rental costs are capped at 80% of local private sector rents.
Negative gearing report finds housing less affordable now than at height of the boom.
About half of affordable new homes, 22,000, were built through section 106 of the housing act, for social rent, affordable rent, intermediate rent and shared ownership.
Section 106 is a planning clause requiring developers to include a proportion of affordable housing in their developments, which is often sold to housing associations.
It accounts for 53% of all affordable homes built, passing the 50% mark for the first time in six years.
However, if there was a major housing downturn akin to the late 1980s, early 90s or 2008, when prices and the volume of transactions crashed, the number of section 106 affordable homes would be halved to about 11,000, Savills predicts.
A housing slowdown is also likely to lead to fewer of those homes being constructed. House prices have been falling in London and parts of the south-east for more than a year but values are still rising elsewhere in the UK.
Chris Buckle, Savills’ research director, said: “From the end of the last cycle in 2007-8, we saw a roughly 50% fall in section 106 affordable housing completions to fewer than 4,000 homes.
“Although we are not predicting a market downturn, the housing market is slowing and this could result in fewer section 106 affordable housing completions.”
The Savills analysis comes after official figures showed the number of new homes built for social rent has fallen by almost four-fifths in a decade – while more than 1 million families are stuck on waiting lists for council housing in England.
Only 6,463 homes were built in England for social rent in 2017-18, down from almost 30,000 a decade ago.
In London and southern England the affordable housing shortage is particularly acute. An estimated 42,500 households need homes priced below market rates every year but over the last three years only an average of 5,600 were built a year, leaving an annual shortfall of 36,900, Savills says.”
Cranbrook – town centre and skateboard park problematical
Developers need to build another 500 houses to trigger skateboard park – but even then, it isn’t certain – nor is a new town centre.
“The district council said it is a ‘difficult and uncertain time’ to be planning a new town centre amid the collapse of several big high street stores.
The authority reiterated the importance of getting the ‘right balance’ between community facilities, retail and leisure space, and homes, adding: “We are developing an understanding of what a 21st century town centre should be and how we can deliver a viable town centre for now and the future in partnership with the town council and the developers.
“The location of the skate park is a key element of the town centre and a decision on its location cannot be made in isolation of other key decisions.
“We are working hard to avoid conflict with other uses that are also proposed within the town centre such as a care home, library and town hall and to ensure that it is well related to other youth facilities.
“This work is complex but vital to ensure that the town centre at Cranbrook meets the needs of all groups in the community and pulls in people from the surrounding area.
“It is not the council’s intention to delay delivery of the skateboard park – indeed there has been no delay to date, but it is important that the right location for this and other key activities are found, so we can ensure that Cranbrook’s town centre is a big success.”
East Devon has more than £5 million of unspent money from developers – topping Exeter and Plymouth for non-spending
A Freedom of Information request revealed East Devon has received nearly £8.4 million from developers of Section 106 money, of which it has spent only about £4.4 million.
The exact amount not spent is £5,139,000.
Section 106 contributions are paid to local authorities by developers when planning permission is agreed. The contributions are discussed and agreed before developments are given the go ahead. The money is ringfenced for certain projects and has to be spent within a time period – usually five years [after that the money is lost and can never be reclaimed, any interest on the money is presumably retained by EDDC].
It is by far the highest amount of all the local councils which responded.
Exeter has £872,183 unspent; Teignbridge nearly £4 million; Plymouth nearly £2.5 million.
https://www.devonlive.com/news/devon-news/councils-millions-pounds-developers-cash-1951395
Cranbrook Town Council and EDDC at loggerheads over “country park resource centre”
“A bid has been launched by Cranbrook Town Council (CTC) to halt the building of the new country park resource centre.
The move comes a month after permission was granted by district planning chiefs for the 135sqm centre on land west of Stone Barton.
However, a report by CTC clerk Sarah Jenkins said East Devon District Council (EDDC) went back on an ‘understanding’ to adopt the country park resource centre, which its country park ranger would use it as a base.
However, EDDC cite the ‘economic climate’ and ‘availability of local authority funding’ as the reason it prefers to merge a number of facilities into a single building.
In her report, Mrs Jenkins said: “Under the section 106 agreement (private agreements made between local authorities and developers), the Consortium are required to provide a country park resource centre, hence the recent planning application.
“At the time, there was an understanding that EDDC would adopt the centre and their country park ranger would use it as a base. Since then, EDDC has decided that it does not want to adopt the centre.”
In January this year, councillors at CTC resolved to agree in principle that it would take ownership of the centre direct from the Consortium, once it is delivered.
They also resolved to enter negotiations with EDDC to determine the future role of the country park ranger and their future employment arrangements.
But in her report, Mrs Jenkins said: “The country park ranger has since left and EDDC has made the decision not to recruit a replacement ranger.
“Having been faced with the EDDC withdrawal, the town council has indicated to the Consortium and EDDC that it may not wish to have resource centre.”
At a meeting last month, CTC resolved to request the centre is not built and that the function of the facility and country park ranger be accommodated instead in Cranbrook’s future town hall.
Councillors also resolved to request that the section 106 funding for the country park centre be transferred to the town to provide other ‘much-needed’ facilities.
A spokesperson for EDDC said: “The section 106 agreement that secures developer contributions and obligations in relation to the country park resource centre and other infrastructure at Cranbrook was originally signed in 2010.
“At the time, it was envisaged that the town would be served by a number of individual buildings to accommodate civic and community uses.
“When the original legal agreement was approved, EDDC had been indicated as taking ownership of the country park resource centre.
“In the absence of having responsibility over any part of the country park, that now sits with Cranbrook Town Council, it was decided to offer the asset to the town council for adoption.
“From April 2018, Cranbrook Town Council adopted the country park in the town and is now responsible for its management and maintenance.
“A building housing the permanent offices of Cranbrook Town Council (as well as the library) is envisaged to be built on land immediately south of the country park in the town centre, a location where many of the functions of a country park resource centre could be accommodated.
“The community space element of the previously proposed country park resource centre could be accommodated in another community building and this could be part-funded by some of the monies that would have otherwise been spent on the centre.
“The Cranbrook country park ranger had been employed by East Devon District Council but the ranger left post earlier in 2018 and before the end of the developer funding for the position.
“A new legal agreement to pass the remaining funding to Cranbrook Town Council to enable them to employ a ranger to manage the land they have adopted is under way.
“In the interim there is currently no Cranbrook country park ranger in post.”
Affordable housing: Housing Minister promises to, er, look into things!!!
Owl says: Since when did “addressing issues” and “looking into measures” ever count for ANYTHING? More meaningless claptrap.
“In his first major speech as housing, communities and local government secretary today, Brokenshire said communities felt let down when developers reneged on pledges to build essential local infrastructure or affordable housing.
“We’re addressing these issues head on through our consultation into reforming developer contributions,” he said in his speech to think-tank Policy Exchange.
“These will ensure that developers are left in no doubt about what’s expected of them. Local authorities will hold them to account.” …
… Brokenshire added that, in future, government would require much more transparency from developers on the pace and timing of delivery. “We’re currently looking at measures to make this reporting a compulsory requirement.”
Yet another loophole cuts affordable housing
Turning offices into flats does not require planning permission so no Section 106 payments towards affordable housing:
“Lack of investment and deregulation of planning were the main reasons given for hampering councils’ ability to help provide the number of homes needed in the UK, the report published by the not-for-profit Association for Public Service Excellence found.
Of 141 UK councils surveyed, 63% described the need for affordable housing as ‘severe’ while 35% describe their need as ‘moderate’.
Seventy per cent of 124 councils in England noted an increase in statutory homelessness in the last year, the survey revealed. It was researched and written by the campaigning organisation the Town and Country Planning Association on behalf of APSE and released last week.
Paul O’Brien, chief executive of APSE, said: “Investment in high quality social housing can also save public funds, such as through reducing poor physical and mental health outcomes that are currently experienced by those living in an unstable private rented sector or those in temporary accommodation.”
Kate Henderson, TCPA chief executive added: “We are not providing anywhere near enough genuinely affordable homes and homelessness is rising.
“Our latest research highlights that councils want to provide more affordable housing for their local communities, but their ability to do so is being undermined by planning deregulation.”
The report noted that while relaxing planning regulations allowing developers to convert offices into homes without the need for full planning permission had created more accommodation it had made it more difficult for councils to secure ‘affordable properties’. If development plans go through the full planning process local authorities can secure ‘affordable homes’ through section 106.
“Relaxing permitted development has led to tens of thousands of new homes being created without having to get full planning permission and this means that councils are unable to secure a contribution to affordable housing from the developer”, Henderson said.
The research by the TCPA showed that one in three councils in England believed these changes to permitted development had a negative impact on the delivery of affordable homes.
The report called on the change to be reversed and for planning powers to be given back to local authorities allowing them to make decisions to “reflect local circumstances”.
O’Brien said the report showed that insecure private rented sector tenancies had contributed to the rise in homelessness.
He said local authorities needed to bring “stability and capacity to the social rented sector, which in turn will help to stem these almost unprecedented rises in both statutory homelessness and rough sleeping”.
The government must be “bold and ambitious in challenging the shortfall of housing for hose in the most need in society,” O’Brien added.
It must also help councils return to their historic role as a provider of homes, he urged.
APSE is a non-profit membership organisation for local government officers.”
Parish council successfully overturns officer “delegated authority” decision
“A parish council recently enjoyed success in a legal challenge over a purported exercise of delegated authority. Meyric Lewis explains how.
Newton Longville Parish Council has secured a quashing order by consent in their judicial review challenge to a grant of planning permission by Aylesbury Vale District Council under purported exercise of delegated authority.
District Council members resolved to grant planning permission for residential development “delegated to officers… subject to such conditions as are considered appropriate and to include a condition requiring that a reserved matters application be made within 18 months of the date of permission and that any permission arising from that application be implemented within 18 months”.
In exercising their delegated authority, officers took the view that there was insufficient justification for shortening the period for applying for reserved matters and for requiring implementation within 18 months. But that matter was neither raised with members nor addressed in the delegated report published by the Council.
In committee, members had wished to impose these short timeframes because they were concerned about the length of time that the site had remained undeveloped notwithstanding the existence of planning permission granted in 2007 and then renewed in 2011 and so they wished to encourage the building out of the site more swiftly than if longer timeframes were allowed.
Permission to apply for judicial review was granted by the High Court on the ground that the decision went beyond the terms of the delegated authority because it conflicted with the confined terms of the members’ resolution.
Permission was also granted on a ground concerning the related section 106 agreement and in respect of officers’ failure to provide adequate reasons, as required by under reg. 7 of the Openness of Local Government Bodies Regulations 2014, in that they did not address the matters relied on as justifying a departure from the terms of the members’ resolution in the delegated report.
The District Council and Interested Party have now signed a consent order submitting to judgment on all grounds.
Significant points to note on the case are that:
The parish council’s grounds distinguished Ouseley J’s decision on implied delegated authority in R (Couves) v. Gravesham BC [2015] EWHC 504 (Admin) because of the specific requirements as to time frames stipulated by members, see Couves at 47
It highlights the importance of officers going back to the terms of any resolution delegating authority to them and ensuring that their proposed action complies with its terms.
Developers and potential challengers will be astute to perform the exercise under (2) to see if a challenge can be mounted.
So there are practical consequences for officers, similar to when they receive an engrossment of a section 106, that they check the terms of what was resolved/agreed before issuing a formal grant of permission.”
“Councils sit on £375m earmarked for affordable housing”
“Local councils in England are sitting on hundreds of millions of pounds of money designated for affordable housing.
A total of £375m is available, £100m of which has not even been earmarked for a specific project. This is despite a survey last year for the Town and Country Planning Association showing that 98% of councils described their need for affordable homes as either “severe” or “moderate”.
The cash has been accumulated under so-called section 106 agreements by which builders and developers give a council a ringfenced amount of money instead of building affordable homes within a development themselves.
James Prestwich, the head of policy at the National Housing Federation, which represents housing associations, said it confirmed the federation’s view that section 106 was flawed. “Affordable housing should be delivered within new developments, rather than developers simply funding its delivery elsewhere,” he said. “This would guarantee that affordable housing will be built alongside other homes.”
Some of the worst offenders shown up by research carried out by the Huffington Post are in London and the south-east. The housing minister Dominic Raab’s own local council, Elmbridge in Surrey, has £8m waiting to be invested.
Raab was criticised this month after he blamed high levels of immigration for increasing house prices. A review by the statistics watchdog found that his department had used an outdated statistical method to calculate the causes of housing pressure and their relationship with house prices.
The London borough of Kensington and Chelsea, which has yet to find new homes for two-thirds of the Grenfell survivors and other families affected by the disaster, has £21m of dedicated reserves. It says £19m has been set aside for Grenfell families.
Two Labour-held councils also in London, Southwark and Camden, between them have more than £90m that could be spent on affordable homes. Altogether, just 14 councils account for two-thirds of the unspent cash.
Rough sleeping in London has risen by at least 18% over the past year; in England as a whole, it is up 15%. Although a shortage of affordable homes is only one of many causes that explains the continuous rise over the past seven years, its consequences have a series of knock-on effects.
A spokesman for Southwark said the money it had was already allocated and the projects for which it was intended would be completed within the next five years.
Camden has set up a new scheme for affordable home building, the community investment programme, which is intended to create 1,400 affordable homes over 15 years.
Tony Travers, a local government expert at the London School of Economics, said nearly a decade of cuts had left council capacity to manage big projects “hollowed out”.
“Average cuts of between 25% and 30% over eight years and the way they have protected children’s and adult social care services have led to bigger cuts in departments like housing and planning. There is no question that their capacity to handle major projects has been eroded.”
“Parish [council] wins permission for judicial review over decision under delegated authority”
“A parish council has been granted permission to apply for judicial review in their challenge to a grant of planning permission by a district council under purported exercise of delegated authority, barristers’ chambers Francis Taylor Building (FTB) has reported.
FTB, whose Meyric Lewis is acting for Newton Longville Parish Council, said members at Aylesbury Vale District Council had resolved to grant planning permission for residential development “delegated to officers… subject to such conditions as are considered appropriate and to include a condition requiring that a reserved matters application be made within 18 months of the date of permission and that any permission arising from that application be implemented within 18 months”.
The set said that in exercising their delegated authority, officers took the view that there was insufficient justification for shortening the period for applying for reserved matters and for requiring implementation within 18 months. “But that matter was neither raised with members nor addressed in the delegated report published by the Council.”
FTB added that in committee, members had wished to impose these short timeframes “because they were concerned about the length of time that the site had remained undeveloped notwithstanding the existence of planning permission granted in 2007 and then renewed in 2011 and so they wished to encourage the building out of the site more swiftly than if longer timeframes were allowed”.
The set said permission to apply for judicial review had been granted by the High Court on the ground that the decision went beyond the terms of the delegated authority because it conflicted with the confined terms of the members’ resolution.
Permission was also granted on a ground concerning the related section 106 agreement and in respect of officers’ failure to provide adequate reasons, as required by under reg. 7 of the Openness of Local Government Bodies Regulations 2014, in that they did not address the matters relied on as justifying a departure from the terms of the members’ resolution in the delegated report.
The parish council has made representations based on the terms of the judge’s grant of permission to see if a full hearing can be avoided, FTB said.
Meyric Lewis is instructed by Bob McGeady of Ashtons KCJ.”
How to stop developers using the “viability assessment” loophole to avoid building affordable housing
Excellent report on the current disgraceful situation and what needs to be done about it. Part of the conclusion of the 38 page report of November 2017 which should be required reading for all council planning officers:
“… On its own, Section 106 will never meet the country’s need for new affordable housing supply. But the current use and abuse of viability assessments means that we are getting less affordable housing out of private developments than we were before and during the crash, and certainly less than we could.
Flexibility in the viability system has driven down affordable housing provision at the expense of land price inflation, essentially making development more expensive.
By amending the National Planning Policy Framework and National Planning Practice Guidance to close the viability loophole, we can maximise developer contributions to affordable housing, with knock-on positive effects for overall housing supply, build out rates and community support for new housing.
The government is already consulting on the changes needed to turn affordable housing policies into cast iron pledges. It is now vital that they follow through on these plans.”
Click to access 2017.11.01_Slipping_through_the_loophole.pdf
EDDC/Pegasuslife Section 106 agreement
“Knowle developer will only pay for affordable housing if profits exceed expectations” – yeah, right!
Over 100 flats selling at around £400,000 or more with massive service charges. Will they make a profit? Of course not – developers never do in these circumstances!
“PegasusLife had argued its proposals should be classed under ‘residential institutions’ – branded ‘C2’ in planning terms – meaning it would not need to make a contribution.
Landowner East Devon District Council (EDDC) had contested it should be classed as C3 for housing, meaning there would normally be a payment towards off-site affordable housing.
An agreement between the parties, revealed last week, shows there is an ‘overage’ clause, so PegasusLife would only pay out if the scheme exceeds its forecasts.
An EDDC spokeswoman said: “PegasusLife has submitted viability evidence to demonstrate that the scheme would not be viable if it were to provide affordable housing, which the council has accepted.
“The council has had this information independently assessed by specialists in development viability who have confirmed that the development cannot afford to meet the council’s policy requirements for affordable housing.
“Accordingly, the council has required an overage clause to be included within the section 106 agreement, which will seek to obtain a contribution towards affordable housing in the event that the scheme is more profitable than currently envisaged.
“This approach has been used before and supported by planning inspectors at appeal. If the development is found to be C2 by the inspector then there would be no affordable housing required to be provided.
“However, the Knowle inquiry is still ongoing and is timetabled to conclude today (Tuesday).
“We anticipate receiving a final decision from the inspector in January.”
The section 106 agreement shows that the land is valued at £5.8million.
The deal with PegasusLife is worth £7.5million to EDDC, which will put the cash towards its £10million relocation to Exmouth and Honiton.
The dispute about whether the development should be classed as C2 or C3, as well as concerns about overdevelopment and the impact on the site’s listed summerhouse, led councillors to refuse planning permission last December.
The developer took its appeal to the Planning Inspectorate.
The inspector, Michael Boniface, is set to make a site visit this afternoon to inform his decision.”
Developers, magic money trees and (un)affordable housing
Government thinks 20% profit is acceptable for developers.
We all know that, as developers make their case to cut affordable homes on a development by development basis, and not on aggregate figures, they can make numbers tell any story.
Seems weird that, with this system, as so many developments don’t make enough money to fund affordable homes, their profits soar, their directors get bigger and bigger bonuses and their shareholders get higher and higher dividends.
It’s a magic money tree!
“The countryside is facing a shortfall of 33,000 affordable homes over the next five years despite builders making record profits at a time of rising rural homelessness.
Profits at Britain’s three biggest builders have quadrupled since 2012 to £2.2 billion, yet they regularly cite financial constraints when cutting affordable homes in developments. Builders miss targets for affordable homes in the countryside by 18 houses a day, research by the Campaign to Protect Rural England (CPRE) shows.
Profits at Barratt Developments, Britain’s biggest developer, increased almost sevenfold from £100 million in 2012 to £682 million last year. Meanwhile, the number of affordable homes fell from 23 per cent of the total built in 2012 to 17 per cent last year.
Developers use “viability studies” under planning laws to pressure local authorities into cutting the requirement for affordable homes. The reports are kept confidential, on commercial grounds, but documents seen by The Times show that officials from the Department for Communities and Local Government (DCLG) ruled that 20 per cent profit was a “reasonable” margin for a developer. They backed a builder’s attempt to cut the number of affordable homes at a development in Gloucestershire to safeguard that return.
Sajid Javid, the communities secretary, has said that failing to fix Britain’s “broken housing market . . . would be nothing less than an act of intergenerational betrayal”.
Research by the CPRE found that the government overruled councils fighting house builders in 17 out of 23 appeals since 2013. Matt Thomson, the CPRE’s head of planning, said developers had councils “over a barrel”. “The developers will say, ‘Either you give us the 20 per cent profit we need, otherwise we won’t build the houses’,” he said. “It’s just extortion at the end of the day.”
The charity analysed more than 60 local plans, which are council blueprints for new housing, and found that the average rural authority needed 68 per cent of new homes to be affordable. Affordable housing includes shared ownership schemes, council houses and properties owned by housing associations which are rented at no more than 80 per cent of the market rate.
In practice, the councils cut the official requirement to just 29 per cent affordable, on the ground that developers would never agree to 68 per cent. Even that has proven unachievable. Just 26 per cent of new homes in the countryside were classed as affordable over the past three years. The average rural authority is short of 46 affordable homes a year. Across 145 rural authorities in England that is a shortfall of 6,670 homes a year.
A separate report by the Institute for Public Policy Research found that 6,270 rural households became homeless in 2016, part of a 40 per cent rise in rough sleeping since 2010. The centre-left think thank partly blamed “shortages in affordable homes”.
Polly Neate, the head of Shelter, a charity for the homeless, said the crisis would only get worse “if we keep letting developers off the hook”.
The Home Builders Federation, which represents developers, said local authorities “should be realistic”. “Making projects unviable reduces overall housing supply, including the supply of more affordable housing,” Andrew Whitaker, its planning director, said.
Georgina Butler, head of affordable housing at Barratt, said the company was “absolutely committed to delivering the homes of all types that the country needs”.
A spokesman for the DCLG said almost 333,000 affordable homes had been built since 2010, more than 102,000 in rural local authorities.
A funding crisis in social housing will continue unless the government “breaks with the past” to provide financial backing for new affordable homes, the head of an influential housing sector body will say today.
Billions of pounds of taxpayers’ money could be saved by building social housing instead of channelling housing benefit to private landlords, David Orr, chief executive of the National Housing Federation, will tell the organisation’s annual conference.
The government decided in 2010 that no further public money would be made available to finance social housing, which provides accommodation at below-market rents to those on low incomes.
Britain needs to build about 250,000 new homes a year to cope with an existing shortage and a growing population, but only 141,000 homes were built last year.
About a million families are on the housing waiting list, said the NHF, which represents housing associations and social landlords.
In a report published today, the NHF says that the government is now spending “more than ever” on housing benefit to accommodate people in private rentals instead of cheaper social homes, which cost £21 a week less per person.
The amount of housing benefit channelled to private landlords almost doubled in the last decade to £9.1 billion.
“This is poor value for the taxpayer and has a knock-on effect on everyone struggling to rent or buy,” the NHF said.”
Source: Times (pay wall)
Developer Bovis too poor to finish Axminster estate – and “steep slopes” came as a surprise (and Owl says ‘I told you’!)
Owl predicted problems with this development LONG ago:
https://eastdevonwatch.org/2016/04/04/axminster-regeneration/
Recall the site was acquired below market value when Axminster Carpets got into difficulty.
And it seems that Bovis has its own troubles:
https://eastdevonwatch.org/2017/04/30/bovis-slow-down-will-hit-east-devon-hard/
Although again Owl drew attention to another problem affecting house sales on the site:
https://eastdevonwatch.org/2016/12/23/axminster-and-cranbrook-slums-of-the-future-says-councillor-hull-whilst-councillor-moulding-says-nothing/
So, it’s hardly surprising we find that Bovis blames everyone but themselves for their so- called plight – though its directors are probably not too worried about their bonuses:
http://www.constructionenquirer.com/2017/06/21/new-bovis-homes-boss-buys-extra-2m-shares/
“HOUSE building on the Bovis Homes Cloakham Lawn estate could cease unless planning conditions are removed or eased.
Bovis Homes says the scheme is in the process of stalling and, unless it can be brought back into viability, the company will have “no option but to cease work and mothball the development”.
But Axminster Town Council feels it is an attempt by the developer “to wriggle out of its commitments”, with district councillor Ian Hall saying: “‘Trying it on’ comes to mind.”
Bovis Homes has submitted a planning application to East Devon District Council (EDDC) to vary the Section 106 agreement (a set level of affordable housing and contributions towards the local infrastructure and facilities).
The development includes permission for up to 400 dwellings, and the company celebrated the second anniversary of its on-site sales office in September last year.
But a summary of an independent viability assessment, produced by chartered surveyor Belvedere Vantage Ltd, says: “The local market in Axminster has proved very difficult, with interest in the first phase of the development having slowed significantly, resulting in a large number of completed unsold ‘standing units’.”
The summary also referred to a number of physical constraints at the site, and “potential abnormal costs” associated with the constraints, which started to become clear during detailed site investigations after outline planning permission had been given.
Constraints include areas with very steep slopes, a flood plain boundary, two distinct drainage catchments, a watercourse running through the site, the need to maintain access to existing leisure facilities.
The negative impacts, including an inability to plan the scheme effectively, of a tree preservation order are also mentioned.
Axminster Rural district councillor Ian Hall, having declared an interest as he is the chairman of Cloakham Lawn Sports Centre (a Bovis Homes tenant), said in a formal response: “I have absolutely no sympathy.
“This land was purchased by Bovis for £2.9m cheaper than the market price when the failing Axminster Carpets Ltd was winding up.
“Bovis representatives (who were the strong arm of Bovis during the purchase of the land) were very aware of the agreements and were more than happy to proceed with the bargain of the decade.
“I am not one to make unnecessary fuss, although, on this issue, I will not compromise.
“ ‘Trying it on’ comes to mind.”
The independent viability assessment is confidential because it contains commercially sensible information, which is not included in the publicly available summary.
Axminster Town Council has requested more detailed confidential information and, in its formal response to EDDC, said: “The town council objects to this application, which appears to be an attempt by the developer to wriggle out of its commitments.
“There is insufficient information on which to make a well-reasoned response.”
The town council requested a meeting with EDDC and the developer so that it would be able to “respond in the light of more detailed, commercially confidential information”.
The town council also requested a site meeting in the company of a planning officer.
Town clerk Hilary Kirkcaldie said EDDC replied it could not share confidential information, but had appointed an independent viability consultant.
EDDC also expressed a willingness to host a site visit, which is yet to be arranged.
In her formal response to the application, EDDC housing strategy officer Melissa Wall said: “We are disappointed that the applicants have not approached the council before submitting their application to vary the S106 contributions to discuss their viability concerns.
“We are open to suggestions regarding changing the tenure and numbers of affordable units in order to assist viability.
“We are hopeful that agreement can be reached between the council and the applicant to ensure that the development can support some form of affordable housing.”
Bovis Homes would not say how many houses have been built and how many are under construction – nor would the company comment on Councillor Hall’s claims.
A spokesperson said: “We cannot comment on live viability applications but we will continue to work closely with the local authorities to deliver the new development at Axm- inster, which is providing much-needed new homes as well as an economic boost and jobs for the area.”
https://www.viewnews.co.uk/housing-development-axminster-stop/
Corruption, absolute corruption, developers and councils
BUT THIS BLOG AND OTHERS HAVE BEEN SAYING THIS FOR YEARS AND YEARS AND YEARS AND YEARS!
HEAD … BRICK WALL … HEAD … BRICK WALL
Here are just a few recent East Devon Watch articles:
https://eastdevonwatch.org/2014/11/28/another-loophole-to-avoid-section-106-payments/
https://eastdevonwatch.org/2014/10/23/developers-councils-and-section-106-the-shocking-truth/
and the BBC has only just discovered it!
“The council that ran the Grenfell Tower block struck deals worth nearly £50m last year to allow developers to avoid having to build affordable homes, research for BBC News shows.
Kensington and Chelsea’s own analysis shows it has built a fraction of the social housing the borough needs.
Developers can pay a fee if they can convince the council that affordable homes would make their plans unviable.
The council said it struggled to build affordable homes in a crowded area.
Kensington and Chelsea has been severely criticised for its failures over Grenfell Tower, including allegations that the regeneration of the tower was done on the cheap and that survivors of the blaze were not properly cared for.
At least 80 people died in the fire.
The disaster, in one of the richest areas in the country, has also thrown a spotlight on the council’s attitude towards its poorest residents.
Huge shortfall
The council’s policy is for half of homes in large housing schemes to be available for rent or sale at below market rates.
The official target is to build 200 affordable units – flats or houses – each year between 2011 and 2021.
But the council’s own figures show that since 2011-12, just 336 units have been built; in 2012-13, just four were completed.
At the same time, Kensington and Chelsea struck deals with developers to pay it nearly £60m.
Since 2011, the council has agreed payments worth £59.7m, in what are known as Section 106 agreements.
The council is allowed to charge developers a fee if their scheme would ordinarily be liable to include social housing but its backers can convince officials that to do so would make the proposal unviable.
That headline figure includes £47.3m in 2016 alone.
The figures have been calculated for BBC News by EG, a property consultancy firm, whose work includes researching planning committee reports for Section 106 payments.
Senior analyst Graham Shone said payment to the council had undergone a “step change” on previous years.
“Maybe the council is a bit more receptive to those kinds of agreements going through as a way to encourage development across the borough,” he said.
The council will gain £12.1m instead of affordable housing at Knightsbridge station
K1 development, Knightsbridge
Developers Chelsfield plan to “reinvigorate, restore and celebrate” the block above Knightsbridge Tube station.
The design includes retail outlets at street level, new offices, 35 residential apartments, an underground car park and a rooftop garden and restaurant.
Given the size of the development, to comply with the council’s own policy, the scheme should include affordable housing.
However, in their planning application, the architects say: “The size of units [flats] are larger than what would normally be associated with affordable housing based on the London Housing Design Guide.”
They also argue the service charge on the flats “would far exceed what would be a sustainable level for affordable housing”.
And while they had considered creating another lift to accommodate affordable housing, this would “compromise” the retail units on the ground floor.
A mix of private and affordable homes, they say, is therefore “not viable”.
The council accepted the arguments, passed the scheme, and will receive £12.1m in lieu of affordable housing at the development.
The payments are meant to help the council provide affordable housing in other parts of the borough or to renovate existing stock.
A paper prepared for the council’s cabinet last year shows that of the nearly £21m the council has received since 2009-10 for affordable homes, £9.2m remains unspent.
Developers can also pay fees to off-set other impacts of their schemes. And the same paper shows that of the total £57.3m that Kensington and Chelsea has received since 2009-10, £36.7m has still not been spent.
None of the developers’ contributions has been used to improve air quality, libraries, sports facilities or healthcare, and very little has been spent on employment initiatives or children’s playgrounds.
The leader of Kensington’s Labour group says he is shocked by the lack of new affordable homes
Robert Atkinson, head of the Labour group at Kensington and Chelsea, said he was shocked by the amount of money the council was receiving and how few affordable homes were being built.
“One of the beauties of living in London is you have a balanced population, and I do think we have a duty not to produce the prettiest ghost town in Western Europe.
“Our first loyalty should be to maintaining and strengthening our communities, and we have fallen down on that job terribly.”
The need for affordable housing in Kensington and Chelsea is acute.
A Freedom of Information request submitted by the BBC last year showed the council had spent £28m providing temporary accommodation to homeless residents in 2015-16, a figure that has doubled in five years.
Almost three-quarters of those people are being housed outside the borough – the highest proportion in London.
The council said that “as the smallest London borough”, with the second highest population density in England and Wales and 4,000 listed buildings, “the borough only has a limited capacity to deliver housing”.
A spokesman said its policy of allowing developers to negotiate on affordable housing “stems from government policy”.
“The council scrutinises any viability information provided by the applicants in detail and in some cases is able to secure higher proportions than those proposed by applicants,” he added.”
“Inspector to decide if developer should pay more Sidmouth community cash”
Recall that PegasusLife is calling it’s plans for the Knowle “assisted living accommodation”. Why? Because it doesn’t then have to contribute to affordable housing.
Does anyone recall EDDC making a fuss about that? No – they left it to local objectors to point it out!
“A government planning inspector will decide whether a developer will have to pay a share of its profits from 36 proposed sheltered apartments to the public coffers.
The matter was the subject of an inquiry this week after Churchill Retirement Living and East Devon District Council (EDDC) could not agree terms for an ‘overage’ clause.
Churchill hopes to demolish the former Green Close care home in Drakes Avenue to make way for the development. The firm launched an appeal due to non-determination of its application.
The delay in EDDC deciding the fate of the scheme was due to officers trying to apply an ‘overage’ clause that would require Churchill to pay up if its profits exceed current expectations.
EDDC documents argue plans to create the apartments for the elderly should be worth nearly £1million to the Sidmouth community – but the developer has shown it is ‘unviable’ to pay more than £41,000.
Churchill’s five-figure offer towards off-site ‘affordable’ housing was last year slammed as an ‘insult to Sidmouth’ by town councillors, who suggested the developer should pay at least £360,000.
Papers submitted to the appeal process from EDDC say there is a policy expectation that half of the site should be provided as ‘affordable’ housing and that there is a ‘substantial’ need for one- and two-bedroom units in Sidmouth.
If 18 ‘affordable’ homes cannot be provided on-site, a payment of £935,201 would be expected so the properties can be built elsewhere.
Churchill said a viability assessment showed building ‘affordable’ homes on the site was ‘impractical’ and ‘unrealistic’.
It added: “It has been demonstrated that the application development is not sufficiently viable to permit the imposition of any affordable housing or planning gain contributions above £41,208.”
An EDDC spokeswoman said: “Unfortunately, the development is not sufficiently viable to pay this [£935,201] sum and, following an independent assessment of the viability of the scheme, it was reluctantly accepted that the scheme could only afford to pay £41,208 towards affordable housing.
“Under government guidance, we are required to reduce our requirements where a development is unviable and so we have no real choice but to accept this position.”
EDDC also expected Churchill to pay £22,536 for habitat mitigation, plus an £18,400 public open space contribution. The total is nearly £1million.
At the hearing on Wednesday, a representative for the developer said a viability report showed it could not offer more than £41,208 if it wanted a competitive return of 20 per cent.
He argued such developments, both locally and nationally, did not have an ‘overage’ clause like the one proposed and added that it was not in line with national guidelines.
“We need to ensure there are competitive returns for the developer and the landowner,” said the representative.
“If the developer, through his own skill or from fortuitous circumstances, makes a larger profit than intended, then the council wants to have a proportion of it and, if they are not so fortunate and make less than 20 per cent, the entire downside is to be borne by the developer.”
Town councillor Ian Barlow argued that the £41,208 contribution was only agreed to because councillors were told it was subject to an ‘overage’ clause. He added: “If they make an obscene amount of money from our community, then they should put it back into the community. They are now saying it is not plausible.
“We only deal with common sense.
“Theoretically, if someone builds a £5million-ish place and they are only giving around £41,000 back, at the end of the day, that does not seem right.”
Cllr Barlow argued that he found it hard to believe such a successful company would make an investment which was not financially viable.”
East Devon Watch 