Affordable Housing

Affordable Housing

Affordable Housing

Draft Supplementary Planning Guidance Affordable Housing Produced by the Forward Planning Section July 2013 Carmarthenshire County Council

Affordable Housing

Carmarthenshire Local Development Plan 1 Draft Affordable Housing Supplementary Planning Guidance – July 2013 Draft Affordable Housing Supplementary Planning Guidance Content 1. Introduction 2. Policy Context 3. Deposit LDP Policy Framework 4. Process o Information required for developer viability appraisals o Affordable Housing Requirement o On Site provision o Low Cost Home Ownership / Affordable Homes o Affordable Rent o Self build / Exception sites o Off site Provision 5.

Commuted Sums o Proposals above the thresholds o Proposals below the thresholds o Legal Agreements for on-site contributions, off-site contributions and commuted sums 6. Design 7. Appendices o Appendix 1 - Map indicating Viability targets within Sub market areas o Appendix 2 - Process o Appendix 3 - Glossary o Appendix 4 - Eligibility to Affordable Housing o Appendix 5 - Mechanism for pooling commuted sums on sites of two or more dwellings up to the threshold level o Appendix 6 - Template Section 106 agreement

Affordable Housing

Carmarthenshire Local Development Plan 2 Draft Affordable Housing Supplementary Planning Guidance – July 2013 1. Introduction 1.1 Carmarthenshire County Council (CCC) is in the process of preparing a Local Development Plan for its area (excluding that part contained within the Brecon Beacons National Park). The aim of the new Local Development Plan (LDP) is to make the Development Plan system more relevant, inclusive and engaging to local communities. 1.2 This Supplementary Planning Guidance (SPG) has been prepared within the context of the Local Development Plan (LDP) to give greater guidance on how policies and proposals within the LDP which are aimed at increasing the supply of affordable housing will be implemented.

On adoption the LDP and SPG will be material considerations in the determination of planning applications and appeals. 1.3 Carmarthenshire County Council aims to ensure that everyone in the county has access to a good quality home that meets their housing requirements. The Council therefore has an important strategic and enabling role in aiming to provide an increasing supply of affordable housing through different mechanisms. 1.4 It should be noted that planning only has a limited role in achieving affordable housing, however the evidence and policy approach used for the LDP tries to maximise the potential of Planning’s role in gaining affordable homes.

1.5 The consultation on the Deposit LDP prompted a number of responses to the Affordable Housing Policies. In light of this, the Affordable Housing Topic Paper has been updated and expanded to take into account some of the issues and evidence that were highlighted. This Supplementary Planning Guidance is not a document to respond to individual issues raised within the consultation responses; however it does address and elaborates upon the common concerns expressed.

Carmarthenshire Local Development Plan 3 Draft Affordable Housing Supplementary Planning Guidance – July 2013 2. Policy Context 2.1 The policy framework for decision-making in Planning comprises policies, advice notes and guidance issued at a national level by the Welsh Government 2.2 Technical Advice Note (TAN) 2: Planning and Affordable Housing (2006), defines the term affordable housing as: “…housing where there are secure mechanisms in place to ensure that it is accessible to those who cannot afford market housing, both on first occupation and for subsequent occupiers …” (TAN 2, 2006) There are two main types of affordable housing as defined by TAN 2: • Social Rented Housing – provided by local authorities and Registered Social Landlords where rent levels have regard to the Welsh Government’s guideline rents and benchmark rents; • Intermediate Housing – where prices or rents are above those of social rented housing but below market house prices and rents.

This includes low cost home ownership models such as shared equity or assisted purchase schemes. 2.3 Annex B of the TAN also indicates that affordable housing should: • meet the needs of eligible households, including availability at low enough cost for them to afford, determined with regard to local incomes and local house prices; and • include provision for the home to remain affordable for future eligible households, or if a home ceases to be affordable or staircasing to full ownership takes place, any subsidy should generally be recycled to provide replacement affordable housing. 2.4 All other housing is classified as ‘market’ housing, which includes private rent or sale in the open market, where no occupancy restrictions are in place.

3. Deposit LDP Policy Framework 3.1 The delivery of affordable housing through the planning system will be through the implementation of Policy SP6, AH1, AH2 and AH3 of the Deposit LDP and are as follows: 3.2 Policy SP6 has been subject to a focused change in light of emerging evidence and representation. Focused change FCT26 now applies. It now states: Provision will be made for 2,915 affordable homes to be delivered through the LDP. The delivery of affordable homes will contribute to the creation of sustainable communities within the Plan area.

Carmarthenshire Local Development Plan 4 Draft Affordable Housing Supplementary Planning Guidance – July 2013 3.3 Policy AH1 has been subject to a focused change in light of emerging evidence and representation.

Focused Change FCT61 now applies. It now states: Provision for affordable housing for local needs will be required on all housing proposals. The Authority will seek an affordable housing target of 30% in the higher viability sub market areas and a 20% affordable target in all other sub market areas. The sub market areas are identified in the Affordable Housing Supplementary Planning Guidance. The targets will apply on sites of ten or more dwellings within the defined Growth Areas and on proposals for five or more dwellings within the Service Centres, Local Service Centres and Sustainable Communities.

Specific site targets may vary subject to viability and negotiation.

Where adjacent and related proposals result in combined numbers exceeding the above threshold provision for affordable housing, the Council will seek an element of affordable units to be provided on site. Proposals for affordable units will be required to ensure that the benefits of the initial affordability will be retained for all subsequent occupants. For residential sites which fall below the thresholds, the Council will seek a commuted sum contribution to support other affordable schemes within the county. The commuted sum contributions apply on sites of 2 or more dwellings and placed on all new open market dwellings.

The SPG clarifies the make-up of the commuted sum payments.

3.4 Policy AH2 of the Deposit Plan is identified as: Proposals for 100% affordable housing development on sites immediately adjacent to the Development Limits of defined settlements (Policy SP3), will in exceptional circumstances be permitted where it is to meet a genuine identified local need (as defined within the Glossary of Terms) and where: a) The site represents a logical extension to the Development Limits and is of a scale appropriate and in keeping with the character of the settlement; b) The benefits of the initial affordability will be retained for all subsequent occupants; c) It is of a size, scale and design compatible with an affordable dwelling and available to low or moderate income groups; d) There are no market housing schemes within the settlement being, or projected to be developed which include a requirement for affordable housing.

3.5 Policy AH3 of the Deposit Plan states Proposals in the open countryside for affordable housing for a single dwelling will be permitted within settlements, hamlets and groups of dwellings without Development Limits where it is to meet a genuine identified local need (as defined within the Glossary of Terms) and provided that: a) It represents sensitive infill development of a small gap within an otherwise continuous built up frontage; or, a minor extension which does not result in ribbon development or perpetuate existing ribbon development;

Carmarthenshire Local Development Plan 5 Draft Affordable Housing Supplementary Planning Guidance – July 2013 b) It is of a scale and size appropriate to, and in keeping with (and not detrimental to) the character (including landscape and townscape) of the area; c) The benefits of the initial affordability will be retained for all subsequent occupants; d) It is of a size, scale and design compatible with an affordable dwelling and is available to those on low or moderate incomes. 4. Process 4.1 The requirement to provide affordable housing is a material consideration in determining all planning applications for residential developments within Carmarthenshire.

4.2 The delivery of affordable housing through the planning system is to be through three policy mechanisms: • The provision of an appropriate proportion of affordable housing on site; • Commuted Sums for on and off site provision; • The development of affordable dwellings through exception sites. 4.3 Prior to an application being submitted, developers are encouraged to contact the Planning Division and Housing Division, as appropriate, to determine site-specific requirements. The requirement to contribute towards other planning obligations such as education and parks does not negate the need to provide affordable housing.

Developers should take into account the costs associated with the provision of affordable housing (and its affect on land values) before entering into land negotiations.

Information required for developer viability appraisals 4.4 Where a developer believes that delivering the level of affordable housing stipulated in the LDP policies are not viable, they will be required to demonstrate to the Council’s satisfaction why the policy requirements cannot be achieved, and indicate what level of affordability would make a scheme viable and deliverable. A full and detailed appraisal would need to show: • the acquisition price of the site • projected construction costs – Build costs per square metre (with either reference to industry standard BCIS or comparable evidence based contract prices).

The build cost should include the allowance for Code for Sustainable Homes, Sprinkler Systems etc. (These should not identified as exceptional costs) • Exceptional Costs attached to the development – These costs are identified as unforeseen costs, which have come to light subsequent to the purchase and / or start of development, i.e archaeological findings, unknown mine shafts, utilities provisions. This list is not exhaustive. The list of abnormal costs would need to be broken down and highlighted within any assessment.

o Costs such as demolition of buildings on site, or works to the topography of the site are not unforeseen / abnormal and should be factored into build costs / site purchase.

Carmarthenshire Local Development Plan 6 Draft Affordable Housing Supplementary Planning Guidance – July 2013 • Proposed final sales values per unit • the applicant’s profit requirement • unit types • finance costs • Professional Fees • Costs of other planning obligations • any other relevant information 4.5 The Council will then use a Development Appraisal Toolkit to examine the economics of the development and determine the viability of affordable housing provision.

Where the developer can demonstrate that the provision of affordable housing required would not be viable, a lower percentage may be negotiated. In the event of a dispute over site viability, the local authority will commission an independent consultant for a third party appraisal. The cost of this independent appraisal will be met by the developer.

4.6 Affordable housing will be required on all outline, full, or change of use planning applications for housing which meet the thresholds. In situations where affordable housing has been secured at outline planning stage, any change in numbers as a consequence of a subsequent application may result in an increase or decrease in affordable housing provision. 4.7 As a result of changes in the policy context, affordable housing provision will be sought on planning applications for the renewal of planning consent for housing which meet the thresholds. This would take effect even if there were no previous affordable housing obligations.

4.8 Where the Council identifies that developers have sub-divided sites in order to avoid affordable housing provision, the total residential unit provision will be calculated and the affordable housing policy will be applied accordingly. This approach will also apply where planning applications are staggered over a period of time. 4.9 On most development sites, the affordable housing provided by a developer will need to include both types of affordable housing: affordable housing for rent and Low Cost Homes Ownership.

4.10 Policy AH1 makes reference to the need of ensuring that the benefits of the initial affordability will be retained for all subsequent occupants.

The means of ensuring affordability in perpetuity will be through legal agreements (Section 106 agreements) between the Planning Authority and the developer. This is important to ensure that future generations have suitable housing choices available to them. 4.11 It is the Council’s preference for a Registered Social Landlord (RSL) to be involved in the development and management of affordable housing where possible to ensure control that the units remain affordable in perpetuity. Affordable Housing Requirements On-site provision 4.12 A contribution to affordable housing must be provided on all housing allocations in accordance with the requirements of LDP Policy AH1.

Affordable housing should be

Carmarthenshire Local Development Plan 7 Draft Affordable Housing Supplementary Planning Guidance – July 2013 provided on the development site except in circumstances where a financial contribution is more appropriate. 4.13 On all housing developments in the Growth Areas, the site threshold for affordable units is based on 10 or more dwellings. Within the Service Centres, Local Centres and Sustainable Communities this is based on 5 or more dwellings. The affordable housing target is set by a settlement’s location within a sub market area. The submarket areas are identified within Table 3.1 of the Carmarthenshire County Council Affordable Housing Viability Study Update Report - May 2013.

In the higher viable areas, the maximum target is set at 30%, and in all other areas, the maximum target is set at 20%. Appendix 1 delineates these target areas on a county wide map. The red areas indicate the 30% target areas and the green the 20% target areas. 4.14 Where the calculation for affordable housing results in a fraction of a unit, the contribution via a commuted sum based on that fraction will be required. For example, on a development of 25 new dwellings: 30% of 25 dwellings = 7.5 dwellings, therefore 7 dwellings would need to be on site and a commuted sum worth 0.5 of an affordable home.

The calculation for a Commuted Sum is shown in Paragraph 5.2.

4.15 Where the delivery of affordable housing are to be provided on-site by a developer it is the preference of the LPA that the homes be transferred to an RSL approved by WG to operate in the Local Authority area. The LPA does acknowledge however that developers may sell completed homes to private rental companies, or manage themselves, provided that the rent is affordable (benchmark or intermediate rents) and that the tenants or occupants are selected from the Common Housing Register, and assessed as being in need by the Housing Authority.

Low Cost Home Ownership / Affordable Homes 4.16 Affordable homes are those which can be bought at below open market value or open market rents, and which are within the means of households on typical or below average incomes for the area.

4.17 Affordable homes for sale are aimed at people who can get a mortgage, but cannot afford a suitable home at open market prices. 4.18 These homes are usually delivered through the planning system on new private housing developments; on council owned land; or by housing associations. These are usually sold on a shared equity basis, with applicants purchasing a % share and the Council or housing association taking the remaining share up to the market value of the home as a second charge.

4.19 The Housing Section of the Local Authority has undertaken a report for developers on the sale value of affordable homes within different areas of the County. 4.20 The agreement with Low Cost Home Ownership will also show how the sale prices of affordable homes will be restricted, both at initial sale and at all future sales. This is based on multiples of the gross median household income in the six community network areas of Carmarthenshire. 4.21 Prices vary according to the size of the property. The table below indicates the variance in house values for LCHOs.

Carmarthenshire Local Development Plan 8 Draft Affordable Housing Supplementary Planning Guidance – July 2013 Community Area Median household income 1 bedroom apartment 2 bedroom apartment or house 3 bedroom house 4 bedroom house Aman £23,459 £49,387 £61,734 £74,081 £86,428 Gwendraeth £23,817 £50,141 £62,676 £75,212 £87,747 Llanelli £21,756 £45,802 £57,253 £68,703 £80,154 Taf Myrddin £24,542 £51,667 £64,584 £77,501 £90,418 Teifi £21,467 £45,194 £56,492 £67,791 £79,089 Tywi £24,176 £50,897 £63,621 £76,345 £89,069 Notes 1) Based on household incomes data supplied by postcode by CACI Paycheck, December 2012 2) Based on 3 times median income plus 5% deposit for 'typical' 3 bedroom house 4.22 The type, size and mix of affordable housing on a particular site will be determined according to local needs, and as identified in the LHMA.

4.23 LCHO is intended to provide a housing ownership option for local people in housing need. People on the Affordable Homes Register can express an interest in buying a LCHO property, while in addition developers and home owners can advertise for other potential buyers. The eligibility of households which are not already on the Affordable Homes Register will be assessed by officers from the Local Housing Authority in accordance with the affordable homes policy Affordable Rent 4.24 This is usually called intermediate renting which aims to provide a housing solution to people who are in regular work but are unable to buy a house due to financial circumstances such as no deposit being available to them, their income is not high enough or there may be problems with their credit score and mortgage companies will not accept them for a mortgage.

4.25 The intermediate rent is normally above the social rents usually charged by the Council or housing associations, but below open market rents. This is at 80% of the market rent, and normally within Local Housing Allowance for the type of property. 4.26 This scheme could lead to low cost home ownership as the housing association will sell for below open market value in the future as long as the value has increased above the cost of the development. 4.27 There is eligibility criteria set out by the council for both schemes under the affordable homes policy. This is identified in Appendix 4.

Self Build / Exception sites

Carmarthenshire Local Development Plan 9 Draft Affordable Housing Supplementary Planning Guidance – July 2013 4.28 Where an individual wishes to build an affordable unit for themselves or members of their family as an exceptions site, the applicant must provide sufficient evidence to indicate the need to build an affordable dwelling, as identified in the criteria of LDP Policy AH2. The individual must sign a legal agreement (section 106 agreement) which would restrict, in perpetuity, all future sale prices to an affordable level and occupancy to local people in housing need.

Off Site Provision 4.29 It is the Council’s preference for on-site provision of affordable housing to encourage mixed, balanced and inclusive communities.

Off-site provision will only be considered in lieu of on-site provision in exceptional circumstances, to be considered on a site- by-site basis. In such instances, the affordable housing provided should be of the same quantity, type and quality as that which would have been provided on-site. The onus will be on the developer to set out the exceptional circumstances as to why the provision should not be on site and how their alternative proposal will address the affordable housing need identified by the LPA.

4.30 A sequential approach to the location of off site provision will be appropriate with the preference being for the provision of affordable housing within the same settlement. If this is not achievable then provision should be made within the same sub-market area and then, only if no other options are available, provision may be acceptable elsewhere in the county where there is evidence of need. 5. Commuted Sums Proposals above the threshold 5.1 In exceptional circumstances where on-site provision is not considered appropriate and off-site units cannot be delivered on an alternative site, the Council will consider whether a commuted payment in lieu of on site affordable housing provision would be appropriate.

5.2 The commuted sum should be of equivalent value to the developer contribution if the affordable housing was provided on site. This will be determined by calculating the difference between the residual value of providing 100% market housing and the residual value of providing the required levels and mixes of housing. RV (100%) – RV (AH%) = financial contribution RV 100% - The residual value of a site with 100% market housing RV (AH%) – The residual value of a site after the area-specific target for affordable housing is applied e.g. 20% affordable housing 5.3 This provides the Local Authority with a strong case to utilise the ability of commuted sums to fund affordable housing schemes, projects and initiatives within the locality of the development site or within the sub market areas.

5.4 This may include, but does not limit, the use of these financial contributions to provide:

Carmarthenshire Local Development Plan 10 Draft Affordable Housing Supplementary Planning Guidance – July 2013 • The purchase and refurbishment of long-term empty properties by a RSL, which will be managed as affordable housing • Delivery of Mortgage Rescue; • To top up any existing Social Housing Grant Scheme or match fund any other scheme to maximise their delivery; • Development of Supported or Adapted Housing; • Purchase of land for affordable housing; • Any other method identified strategically that will increase the supply of affordable housing in the County.

5.5 Where the contributions secured would fund less than a whole dwelling, contributions can be pooled until sufficient funding has been secured for the provision of one or more dwellings. The provision of affordable units should then be provided in the same settlement as the application site. Should no suitable options for the provision of affordable housing be available within a specific settlement, provision should be made within the same sub-market area. If neither of the options is achievable within a period of three years, the Local Authority retains the right to spend the money elsewhere in the County.

The Council will monitor the expenditure of received funds and make this information available should a request be submitted. Proposals below the thresholds 5.6 The Deposit LDP policy AH1 states that ‘For residential sites which fall below the thresholds as stated above, the Council will seek a commuted sum contribution to support other affordable schemes within the county.’ The threshold is based on two or more dwellings and the commuted sum will take effect up to the thresholds until on-site provision is required.

5.7 It is considered in the main that developments on single plots are built for an affordable, local provision, which is commonly seen in all settlements within the county. It would be prudent therefore not to expect a contribution from self-build single plot developers. 5.8 However for developments of two or more dwellings on a site, all new market dwellings should be expected to make a contribution towards affordable housing provision, as at least one of those properties could be deemed to be developed for profit making, resulting in the provision of new dwellings being outside the scope for those seeking affordable units within their community.

5.9 This SPG recognises that a balance is required between the viability of small site developments and the need to provide an element of contributions for future affordable housing contributions. Due to the variance in house prices throughout the county a clear distinction is made between the charge in the lower viable areas and higher viable areas. These have been calculated separately in Appendix 5.

Carmarthenshire Local Development Plan 11 Draft Affordable Housing Supplementary Planning Guidance – July 2013 5.10 Money will be pooled until sufficient funding is secured to develop an affordable unit or units within a larger scheme.

The Local Authority will reserve the right to develop new units in conjunction with the sequential approach adopted in paragraph 5.5. 5.11 The Council will monitor the expenditure of received funds and make this information available should a request be submitted. The Council will also review the suitability of these commuted sums in light of market changes, and will be amended as, and when necessary.

Legal Agreements for on-site contributions, off-site contributions and commuted sums 5.12 Developers will be required to enter into a legal agreement with the Authority that ensures that affordable housing will be available to local people in need and at an affordable rent or price for the lifetime of the home. A template legal agreement is provided in Appendix 6. To avoid unnecessary delay with the processing and negotiations within the planning application cycle, an application will not be validated until the following information is submitted as part of any planning application which falls within the remit of providing contributions.

• Certificate of Title – proof of ownership of all the property and/or land affected by the application site edged red, because planning obligations run with the land, all owners, lessees and mortgagees must be signatories; • Details of the solicitor that will be handling the case; • Any valuation to prove eligibility for reduced contributions, accompanied by information detailing how costs were derived; • All other requirements outlined by the application form checklist 5.13 The County Council will seek contributions towards both the legal fees and administrative costs of planning obligations.

Such costs will be relatively limited as a proportion of the overall contributions, but it will enable the County Council to resource the process effectively. In addition to meeting legal costs, such contributions will help to fund systems which manage and co-ordinate the process of handling applications liable to result in developer contributions from start to finish. 5.14 Should an application be approved subject to the signing of a Section 106 agreement, it should be determined within 9 months from the date of the resolution to approve. Should this not be forthcoming, the Local Planning Authority has the scope to refuse the application based on the non-completion of the S106 agreement.

6. Design 6.1 Developers should refer to national guidance on design in Technical Advice Notes 12 ‘Design’ and Tan 22 ‘Planning for Sustainable Buildings’ and to other relevant policies in the Local Development Plan.

6.2 Affordable housing should be fully integrated within a development in order to ensure that the units contribute towards the aim of achieving balanced and sustainable communities. Housing layouts should therefore be mixed and affordable dwellings

Carmarthenshire Local Development Plan 12 Draft Affordable Housing Supplementary Planning Guidance – July 2013 should not be concentrated in one area of development, but dispersed in smaller groupings.

Carmarthenshire Local Development Plan 13 Draft Affordable Housing Supplementary Planning Guidance – July 2013 Appendix 2 Process The information in this section sets out what a developer and planning officers should consider when dealing with a planning application for housing.

Pre application – Developer Step 1 • Identify the site area • Identify the location of the site within a sub market area, and the affordable target that the Local Authority will look to achieve. • Indicate the number and type of market and affordable units to be provided on site. • Contact the Local Housing Authority for evidence of local need for affordable homes and for advice on the tenure split between rented and LCHO affordable housing. • The number and type of affordable rented and Low Cost Home Ownership dwellings required by the Authority • Contact the LPA and engage in Pre-application discussions and negotiations Step 2 If you intend to sell on to a management company (either RSL or private) contact them for an indication of: • Willingness to purchase; and • The price they will pay Calculate the projected income from sales of market and affordable units.

Step 3 Calculate the viability of the scheme, taking into account costs, including required provision of affordable housing units and other planning obligations, versus income; Negotiate options with the land owner.

Step 4 • Draw up detailed proposals; • Prepare an affordable housing statement; • Certificate of Title – proof of ownership of all the property and/or land affected by the application site edged red. Because planning obligations run with the land, all owners, lessees and mortgagees must be signatories; • Any valuation to prove eligibility for reduced contributions, accompanied by information detailing how costs were derived; • All other requirements outlined by the application form checklist; • Details of the solicitor that will be handling the case; • Submit a planning application with all the supporting information set out above

Carmarthenshire Local Development Plan 14 Draft Affordable Housing Supplementary Planning Guidance – July 2013 Post Submission of application – the LPA Step 5 • Check that the scheme is in accordance with all relevant policies and SPG; • Ensure the percentage and type of affordable housing is appropriate, and any agreed negotiations are highlighted by detailed evidence. • Where individual properties and exception sites are proposed check housing needs survey and / or eligibility of nominees.

Step 6 • Check that the section 106 template matches the number and type of units required; • Pass to legal officer to check that the agreement matches all requirements including for community infrastructure and / or community payments, phasing, DQR requirements etc.

Step 7 If all the above steps have been taken: • Sign the section 106; • Recommend for approval. Post permission – the LPA Step 8 • Check that the development is in accordance with the permission; • Ensure that occupancy and phasing conditions are met; • Ensure the transfer of homes to an RSL or management company if appropriate; • Provide a list of affordable properties to estate agents and solicitors operating in the County.

Step 9 – The Local Housing Authority • Nominate tenants for private rental and buyers for the Affordable units; • Check the eligibility of any nominees that are not taken from the Common Housing Register.

Carmarthenshire Local Development Plan 15 Draft Affordable Housing Supplementary Planning Guidance – July 2013 Appendix 3 Glossary Affordable Housing The definition of ‘Affordable Housing’ for the purposes of the land use planning system is housing where there are mechanisms in place to ensure that it is accessible to those who cannot afford market housing, both on first occupation and for subsequent occupiers.

Benchmark Rents Rent levels set by the Welsh Government which are affordable. Common Housing Register The register for people who wish to be considered for affordable rented accommodation in Carmarthenshire owned by Carmarthenshire County Council or RSLs. Applicants are assessed and placed in bands on the register..

Design Quality Requirement (DQR) Minimum space and technical standards required of all affordable homes constructed with the benefit of Social Housing Grant. These standards are set by the Welsh Government. Exception sites These are sites for 100% affordable housing to meet local needs, within or adjoining settlements, on sites where housing would not normally be permitted. Allowing housing on land with little or no development value can enable housing to be built at a low cost and sold or rented at affordable levels. Low Cost Home Ownership (LCHO) Affordable Housing that is available to purchase at a price below what is provided on the open market.

Low Cost Home Ownership homes in Carmarthenshire are available to purchase by eligible households. Prices vary according to the size of the property.

Nominations Nomination agreements are used to ensure that the affordable housing units of the development are held for local people in affordable housing need. Those nominated for affordable housing should be listed on Common Housing Register which is operated by all social housing providers across the County. Perpetuity Affordable homes should remain affordable for the lifetime of the property. This has been described as “in perpetuity” for the purposes of this SPG. Registered Social Landlord (RSL) Registered Social Landlord (RSL) is the term for a landlord registered with the Welsh Government.

Most are Housing Associations

Carmarthenshire Local Development Plan 16 Draft Affordable Housing Supplementary Planning Guidance – July 2013 but they may also be trusts or co-operatives. They are run as not-for-profit businesses. Any surpluses are ploughed back into the organisation. They are run by committees or boards of management made up of volunteers. A typical board might include tenants, local authority members, business / professional people and representatives from voluntary organisations. Section 106 Agreements A legal agreement made under section 106 of the Town and Country Planning Act 1990, between a Local Planning Authority and the person, organisation or business that owns the land subject of a planning application, specifying, how various planning obligations are to be achieved.

Section 106 agreements run with the land and apply to successive owners. The delivery of affordable housing will normally be through a section 106 agreement as its future retention is often too complex to be suitable for inclusion within a planning condition.

Social Housing Grant The grant paid by the Welsh Government to Local Housing Authorities to aid the building of social housing programmes. Viability A development scheme is considered viable if overall revenue is greater than costs, by sufficient margin for the developer to make a reasonable profit and the landowner to be paid an acceptable residual value. Carmarthenshire County Council assesses the viability of development sites using the 3- Dragons Development Appraisal Toolkit Welsh Housing Quality Standard (WHQS) A standard set by the Welsh Government to ensure that dwellings are of good quality and suitable for the needs of existing and future residents.

It relates to both existing and new dwellings.

Carmarthenshire Local Development Plan 17 Draft Affordable Housing Supplementary Planning Guidance – July 2013 Appendix 4 Eligibility for Affordable Housing The process and criteria for deciding who is eligible for affordable housing - Clarification on how people get access to affordable homes for sale or intermediate rent. How do people find out what’s available? People must put their details on the Council’s Housing Choice Register. They can fill out a form or apply on the Council’s website. The Local Housing Authority (LHA) will contact people by their preferred method (letter, email, text) when affordable homes are coming up in areas they have chosen.

This applies to both homes for sale and for rent. The LHA will also publicise affordable homes on the Council’s website, in Carmarthenshire News, through press releases, on partner housing association websites, and through private developers where relevant.

Who can buy an affordable home? Applicants need to show that they cannot buy a home at full open market value, but that they can get a mortgage and have money for a deposit and legal fees. Applicants’ total household income before tax must be less than 3 times the open market value price of the property. - Applicants must be a Carmarthenshire resident, work full-time in the County or have a long standing local connection to Carmarthenshire such as immediate family within the area. - Priority is given to Council and housing association tenants who live in Carmarthenshire -The LHA do not set limits on how much of the purchase price comes from a mortgage and how much from a deposit.

Mortgage lenders will have minimum figures for a deposit. -Applicants need to provide the Council with evidence that their savings and income are not enough to buy a suitable home for their needs on the open market. Applicants will not be considered if they: - currently own or have a share in another home. - are unwilling to provide details of their income, savings and mortgage. - are a cash buyer.

Preference The LHA will try to make best use of affordable homes available, and will do this in the following way:

Carmarthenshire Local Development Plan 18 Draft Affordable Housing Supplementary Planning Guidance – July 2013 • Specify a date by which people must tell us their income; any savings and demonstrate their ability to get a mortgage for the required amount. The date specified will be at least 2 weeks from the letter, but may be extended as appropriate, for example in the run-up to Christmas. • If there are unsold homes after the specified date, people will be nominated who meet the eligibility criteria on a first-come, first-served basis.

Size of home Priority order 1 bed home Couple or single person (equal priority) 2 bed home 1st Couple or adult & 1 child or 1 other family member 2nd Couple 3rd Single person 3 bed home 1st Couple or adult & 2 or more children or other family members 2nd Couple or adult & 1 child or other family member or pregnant 3rd Couple 4 bed home 1st Couple or adult & 3 or more children or other family members 2nd Couple or adult & 2 or more children or other family members • In the event of two or more families having the same priority for a home, the family nominated will be the family that applied on the housing choice register first.

Affordable homes for intermediate rent This scheme aims to provide a housing solution to people who are in regular work, but are unable to buy a house at the moment. This might be because they do not have a deposit, or because their income is not high enough, or there may be problems with their credit score. Rents are above social rents normally charged by the Council and housing associations, but below open market rents. This is at or below 80% of the market rent, and normally within Local Housing Allowance for the type of property. This is needed as a safeguard in case the

Carmarthenshire Local Development Plan 19 Draft Affordable Housing Supplementary Planning Guidance – July 2013 tenant loses their income – they will be entitled to full Housing Benefit if they are fully occupying the property. This scheme could lead to low cost home ownership, as the housing association will sell for below the open market value in the future, as long as the value has increased above the cost of development. To be eligible for the scheme, applicants must meet certain criteria – see below. Eligibility - You must be a resident or be working full time in the County, or have a long standing local connection to Carmarthenshire, such as immediate family within the area.

- Priority is given to Council and housing association tenants in Carmarthenshire - You must be working at least 16 hours a week (or an average of 69 hours per calendar month) - Your income before tax should be a minimum of £15,000 a year. This figure can include benefits other than Housing Benefit.

We will use the same priority order for household size as for low cost home ownership. In the event of there being homes unallocated at the end of the marketing period, these should be allocated according to the normal access to social housing policy.

Carmarthenshire Local Development Plan 20 Draft Affordable Housing Supplementary Planning Guidance – July 2013 Appendix 5 Mechanism for pooling commuted sums on sites of two or more dwellings up to the threshold levels The following calculation indicates how commuted sums will be considered from sites of two or more dwellings up to the threshold at which on-site contributions are required.

Please note that the commuted sum calculations on small sites differ from those required for on-site developments as identified in paragraph 5.2.

Low viable areas 1. An average cost of a typical 3 bedroom semi detached home in the lower viable areas as defined by the Affordable Housing Viability Study 2013 is £128,000. 2. The average LCHO prices for those areas equates to £74,000. 3. The difference between the values (£128,000 - £71,500) is £56,500. This notional figure is calculated from what a developer would receive from a Registered Social Landlord (RSL) on any large development over the thresholds. 4. For onsite contributions, the target level is set at a 20%, as identified in Policy AH1 of the Deposit LDP, however in the interest of viability and the deliverability of development on smaller sites, a contribution through a 10% affordable target is reasonable in these lower viable areas.

5. 10% of £56,500 = £5,650 6. The average size of a standard 3 bedroom property in these low viable areas is 92 square metres. 7. The cost of floor space therefore per dwelling would equate to £61.41 per square metre (£5,650 / 92sqm). For ease of reference, this is rounded to £60 per square metre. High viable areas 1. An average cost of a typical 3 bedroom semi detached home in the higher viable areas as defined by the Affordable Housing Viability Study is £155,000 2. The average LCHO prices for those areas equates to £77,000. 3. The difference between the values (£155,000 - £77,000) is £78,000.

This notional figure is calculated from what a developer would receive from a Registered Social Landlord (RSL) on any larger development over the thresholds. 4. For onsite contributions, the target level is set at a 30%, as identified in Policy AH1 of the Deposit LDP, however in the interest of viability and the deliverability of development on smaller sites, a contribution through a 10% affordable target is reasonable in these higher viable areas.

5. 10% of £78,000 = £7,800

Carmarthenshire Local Development Plan 21 Draft Affordable Housing Supplementary Planning Guidance – July 2013 6. The average size of a standard 3 bedroom property in these low viable areas is 92 square metres. 7. The cost of floor space therefore per dwelling would equate to £84.78 per square metre (£7,800 / 92sqm). For ease of reference, this is rounded to £85 per square metre.

Carmarthenshire Local Development Plan 22 Draft Affordable Housing Supplementary Planning Guidance – July 2013 Appendix 6 Template Section 106 agreement AGREEMENT DATE: (1) CARMARTHENSHIRE COUNTY COUNCIL whose Offices are at County Hall, Carmarthen Carmarthenshire (“the Council”) (2) (“the Owner/s”) (3) (“the Mortgagee”) AGREEMENT: 1.

Definitions and interpretation 1.1 In this Undertaking and the Schedule the following words and expressions shall have the following meanings unless the context requires otherwise:- “the Act” the Town and Country Planning Act 1990, as amended by the Planning and Compensation Act 1991; “the Council” the party so described at the head of this Agreement [“Disposition” means Conveyance, Transfer of the freehold Sale of Legal Interest, Lease Licence or Tenancy and transfer by way of gift and sale at undervalue and

Carmarthenshire Local Development Plan 23 Draft Affordable Housing Supplementary Planning Guidance – July 2013 assent of any of the dwellings to be constructed on the Red land as authorised by the Planning Permission] “the Mortgagee” the party so described at the head of this Agreement “the Owner/s” the party/parties so described at the head of this Agreement “the Plan” the plan annexed to this Agreement “the Planning Application” the Planning Application for the … … … … … … “the Planning Permission” the Planning Permission granted pursuant to the Planning Application subject to the conditions contained therein and in the form of the draft annexed hereto “the Red Land” the land shown edged red on the Plan and referred to in Planning Application No … dated … … and known as … … “Same Settlement” the Same Settlement of - - as defined in the Deposit Local Development Plan

Carmarthenshire Local Development Plan 24 Draft Affordable Housing Supplementary Planning Guidance – July 2013 “Same Sub-Market Area” the Same Sub Market Area of - as defined in the Carmarthenshire County Council’s Affordable Housing Viability Study 2013 by reference to house price differentials and areas defined by reference to postcode sectors or amalgams thereof “SPG” the Affordable Housing Supplementary Planning Guidance 1.2 Unless the context requires otherwise, references:- 1.2.1 to a Schedule or Clause are references respectively to a Schedule to or a Clause of this Agreement 1.2.2 in a Schedule to paragraphs are references to paragraphs of that Schedule 1.3 The expressions “the Council”, “the Owner/s” and “the Mortgagee” shall include their respective successors in title and assigns 2.

Statutory Authority 2.1 This Agreement is made in pursuance of Section 106 of the Act and it is hereby agreed that the obligations contained in Clause 4 and the Schedule shall be planning obligations for the purpose of Section 106(9) of the Act 2.2 The Council is the enforcing authority for the purpose of Section 106(9)(d) of the Act

Carmarthenshire Local Development Plan 25 Draft Affordable Housing Supplementary Planning Guidance – July 2013 3. Recitals 3.1 The Council is the Local Planning Authority for the purpose of the Act for the area within which the Red Land is situated 3.2 The Owner/s is/are the registered proprietor/s with Title Absolute of the Red Land subject to the matters referred to in the Charges Register(s) of Title Number(s / owner/s in fee simple absolute in possession of the Red Land [by virtue of a conveyance dated the day of and made between of the first part and the Owner/s of the second part] subject to the Legal Charge referred to in Clause 3.3 3.3 The Mortgagee is the Proprietor of the Registered Charge(s) contained in the Charges Register of the Title Number(s) referred to in 3.2 above/a Legal Charge dated the … day of … … One thousand nine hundred and … secured on the Red Land or part thereof in respect of the repayment of certain monies with interest thereon 3.4 Conditionally upon the Council granting the Planning Permission and the Owner/s implementing the Planning Permission the Owner/s and the Mortgagee hereby enter into the planning obligations contained in Clause 4 and the Schedule to this Agreement 4.

Obligations of the Owner/s and the Mortgagee 4.1 The provisions of this Clause 4 are conditional upon:-

Carmarthenshire Local Development Plan 26 Draft Affordable Housing Supplementary Planning Guidance – July 2013 4.1.1 the grant of the Planning Permission by the Council; and 4.1.2 the implementation of any of the development authorised by the Planning Permission 4.2 Subject to the occurrence of both the events specified in Clauses 4.1.1 and 4.1.2 the Owner/s and the Mortgagees enter into the following obligations with the Council that:- 4.2.1 the Red Land shall be subject to the covenant(s) regulating the development and the use of it specified in the Schedule 4.2.2 the Mortgagee agrees that the Red Land shall be bound by such covenant(s) and that the security of its legal charge(s) shall take effect subject thereto 4.3 No person shall be liable for any breach of this Clause 4 or be bound by any of the obligations contained in this Clause 4 or the Schedule in respect of any period during which he no longer has an interest in the Red Land or any part thereof 5.

The Owner/s hereby agree/s to apply to the Land Registrar for a restriction to be entered in the proprietorship register of the title to the Red Land with regard to the restrictions set out in the Schedule that “no disposition of the registered estate by a proprietor of a registered estate is to be registered without a certificate signed by the Carmarthenshire County Council, County Hall, Carmarthen that the provisions of the Schedule to a Section 106 Agreement dated the ----

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