AFFORDABLE HOUSING SUPPLEMENTARY PLANNING DOCUMENT - REPLACEMENT ADVICE NOTES FOR DEVELOPERS
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BOURNEMOUTH BOROUGH COUNCIL
AFFORDABLE HOUSING SUPPLEMENTARY PLANNING
DOCUMENT
REPLACEMENT ADVICE NOTES FOR DEVELOPERS
November 2011
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Não fala inglês? É favor consultar a última páginaContents
Main
1 Purpose 2
2 Tenure Split 2
3 Site Viability 3
4 On-site or Off-site Provision? 3
5 Financial Contributions Towards the Cost of Affordable Housing Quotas 5
6 Design, Quality and Sustainability Standards 5
7 Ensuring Timely Delivery 6
8 Development Appraisal 6
Appendix
1 Affordable Housing DPD Policy Adopted December 2009 9Affordable Housing SPD - November 2011
2
1 Purpose
1.1 The purpose of this Supplementary Planning Document is to provide greater
detail on Policy AH1 in the Council’s Affordable Housing Development Plan Document
(Appendix 1). The guidance is intended to be used in decision making relating to
planning applications that include residential development.
1.2 Following meetings with the development industry this SPD has been revised
to address concerns of certainty and will assist developers in being able to assess
the likely levels of affordable housing contributions that will be required by the
Council.
1.3 Policy AH1 aims to ensure that affordable housing is provided as part of all
development schemes that include residential development. The aim is that 40%of
the dwellings on these sites should be affordable housing.
1.4 The type and size of the affordable housing units to be provided should fully
reflect the distribution of property types and sizes in the overall development. For
example, in a 40 unit development comprising thirty flats, (twenty 2-bed and ten
1-bed units) and ten 2-bed houses, the affordable housing element would comprise
eight 2-bed flats, four 1-bed flats and four 2-bed houses.
1.5 The provisions of the Affordable Housing Development Plan Document will
apply to any net increase in the number of residential units proposed for the site.
2 Tenure Split
2.1 The tenure split the Council is seeking is set out on the Council’s website.
The tenure split reflects that current need can change quite quickly. The website
is updated to show current need.
2.2 The Council aims to secure a long-term supply of affordable housing through
Registered Providers (RPs). Usually this will be through developers’ affordable
housing quotas being transferred into the ownership of an RP. Developers generally
find this arrangement most effective. Social rents are subject to strict control
under the national rent regime established by the government and this ensures
that social rented housing will deliver the Council's priorities in the long-term.
Furthermore, RPs are subject to rigorous monitoring and therefore the Council can
be confident that the affordable housing will be managed to a high standard. A list
of the Council’s current RP partners is set out on the Council’s website. However,
there may be occasions to be determined by the Council whereby it is appropriate
to work with other RP partners in order to deliver additional affordable housing.
2.3 In certain circumstances, the Council may agree that developers can deliver
affordable housing quotas through alternative products. Such circumstances may
include:Affordable Housing SPD - November 2011
3
- Where the developer can demonstrate to the Council’s satisfaction that it is in
the best interest of meeting the identified housing need or in individual cases it is
not appropriate that social housing should be delivered (e.g. in the case of
professional landlords specifically providing housing for renting). This is subject to
all of the following provisos:
The Council is satisfied that the proposed intermediate rents are at a level
that is considered affordable having regard to local incomes and local open
market rents will remain at affordable levels, and
The Council is satisfied that the proposed Affordable Rented units are provided
in accordance with the HCA's latest prospectus, and
The developer enters into a nomination agreement in perpetuitywith the
Council, and
The proposed housing management arrangements are to the satisfaction of
the Council. Generally the Council expects that management of intermediate
rented housing should be through an agency that is and remains a full member
of a nationally recognised association e.g. The National Residential Landlords
Association or The Association of Residential Letting Agents, and
The home should remain affordable for future eligible households.
3 Site Viability
3.1 Policy AH1 seeks 40% affordable housing provision and states that when
assessing proposals the Council will have regard to the economics of provision.
3.2 In instances where applicants claim full delivery of affordable housing in
accordance with the DPD is not possible on viability grounds they should submit a
viability statement as part of the application. Ideally this should be completed as
part of the pre-application process prior to the submission of the planning
application. In such development proposals where the full delivery of affordable
housing is not deemed possible by the applicant, the LPA will need to receive all
the required figures for a viability test prior to the application being validated for
consideration. This will prevent unnecessary delays to applications being decided
within target dates.
3.3 The applicant should ideally have their figures independently verified using
the services of the Council's preferred independent verifier prior to submitting
them to the Council. This open book approach will enable any reduced affordable
housing contribution to be assessed and agreed prior to the submission of a formal
planning application. In this way data which the applicant may regard as
commercially sensitive will remain outside the public domain. Agreeing to this
approach will assist in the efficient consideration of the planning application.
4 On-site or Off-site Provision?
4.1 Policy AH1 requires that on-site provision of affordable housing quotas will
be the preferred option. However, there may be instances where off-site provision
is more appropriate in meeting identified need. For example, some developmentsAffordable Housing SPD - November 2011
4
are high value schemes of flats and this results in high service charges that affect
the affordability of the affordable housing. Furthermore, high market values of
such accommodation can result in homes being sold under shared ownership or
other shared equity schemes at values being too costly to be regarded as affordable
having regard to local incomes.
4.2 The developer may negotiate with the Council for the provision of the
affordable housing on another site where it can be demonstrated that on-site quotas
are inappropriate. This will be negotiated on a site-by-site basis.
4.3 Where the principle of off-site provision or a financial contributions in lieu
of on-site provision is agreed the alternative provision should deliver an equivalent
quantity and quality of affordable housing.
4.4 In situations where the calculation of the affordable housing element results
in a fraction of a dwelling then the affordable housing element can be rounded
down to the nearest whole number where it applies to the provision of units, but
if a financial contribution is being provided it should be made to equate to the
delivery of the fraction of the unit averaged over the type and tenure of the
affordable housing part of the overall scheme.
Alternative Sites
4.5 In some cases the developer may wish to offer an alternative site to deliver
the affordable housing quota. It would normally be expected that this would
accommodate the same number and type of units that would otherwise be required
on the main development site. Where this is not possible a commuted payment
would be payable for the balance of housing units that cannot be delivered.
4.6 As an alternative to on-site or off-site provision of affordable housing,
agreement between the applicant and Council may be reached to consider a
financial commuted payment. The Council is not obliged to accept a commuted
payment. Only where it can be demonstrated that there is no scope for on or
off-site provision will the Council consider a financial payment in lieu of an
affordable housing contribution. It is not acceptable on the grounds of an applicant’s
preference.
4.7 The contribution should be of broadly equivalent value (PPS 3) and should
contribute to the creation of mixed communities in the local area. The calculation
is based on the equivalent amount that would be contributed by the developer /
land owner were affordable housing provided on site. The commuted payment will
be subject to viability. The commuted sum will be calculated using the Free
Serviced Land methodology that assess the value of land in the locality of the
development site as an alternative to provision on site by the developer. It is
assessed by a residual valuation for unit types reflecting the mix of the actual
application
4.8 The Council would use commuted payments in the following ways:Affordable Housing SPD - November 2011
5
To fund the costs of building new affordable housing on Council owned land
where the site is considered to be available, suitable and achievable;
To fund the costs of area regeneration of Council Housing Revenue Account
housing estates that would provide new affordable housing;
To fund the provision of new affordable housing through RPs and/ or other
social housing providers;
To purchase land for new affordable housing schemes either directly by the
Council or through RPs;
To fund activities relating to the delivery of affordable housing.
5 Financial Contributions Towards the Cost of Affordable
Housing Quotas
5.1 In the recent past the Council has had no social housing grant set aside to
contribute to the delivery of affordable housing. Therefore, developers are strongly
advised that they should work on the basis that social housing grant will not be
available and that affordable housing quotas should be delivered without input of
public subsidy i.e. social housing grant either from the Homes and Communities
Agency or the Council.
5.2 If an RP is to acquire the affordable housing it will be expected to contribute
towards the cost of each unit being acquired from the developer. The contribution
will reflect the amounts that the RPs can borrow against the target rents of the
affordable housing units. For social rented units current indicative contributions
are set out on the Council’s website and will be subject to annual review by the
Council. The amounts that RPs can pay for other forms of tenure will vary between
individual RPs depending on the scheme and the RPs ability to borrow. This is
subject to negotiation with the Council.
5.3 An alternative delivery route is for the Council to use developer contributions
and leveraging that capital with prudential borrowing to fund the remainder, which
would be secured by rent streams.
6 Design, Quality and Sustainability Standards
6.1 Policy AH1 expects the delivery of mixed, balanced and sustainable
communities with affordable housing being integrated with market housing. In
order to achieve a successful development the affordable housing should not be
visually distinguishable from the market housing on site in terms of build quality,
materials, architectural details, levels of amenity space, parking provision and
privacy. It should be fully integrated with the market housing and distributed across
the site or in clusters distributed throughout the development.
6.2 The affordable housing element which is to be transferred to an RP should
be built to meet the latest Homes and Communities Agency Code for Sustainable
Homes building standard applicable at the building standard applicable at the date
of commencement of the development. The Code can be viewed on the CommunitiesAffordable Housing SPD - November 2011
6
Agency website. In addition developers are strongly advised to consult with the
Council’s RP partners at an early stage to ensure that the design of affordable
housing units will meet these standards.
7 Ensuring Timely Delivery
7.1 The Council will expect timely delivery of the affordable housing element
of implemented schemes. To ensure this happens the Council will set an initial
benchmark for negotiation requiring no more than 50% of the total number of units
in the development are to be occupied until the affordable housing units have been
completed. Those affordable housing units which are to be transferred to a social
housing provider must be completed to the social housing provider's satisfaction.
8 Development Appraisal
8.1 Where an applicant claims that full delivery of affordable housing in
accordance with the DPD is not possible on viability grounds the Council will require
evidence to be submitted as part of the planning application to substantiate this
claim. In such cases applicants will be required to demonstrate the financial
viability of their scheme using an industry recognised development appraisal toolkit,
such as the Three Dragons Toolkit, the Homes and Communities Agency Economic
Appraisal Toolkit or the Argus Toolkitwhich are essentially best suited to single
phase residential schemes. For larger phased schemes and those involving mixed-use
development applicants are encouraged to liaise with the Council to discuss the
use of particular development appraisal programmes.
8.2 The Council’s preferred approach is that applicants submit an electronic
version of the Development Appraisal Toolkit when submitting their planning
application, so that this can be considered early on in the planning process. Where
a Toolkit is not submitted, the Council will require applicants to submit the
‘Development Appraisal pro-forma’ in order that viability testing can still be
undertaken. A copy of the pro-forma is available for download from the Council’s
website.
8.3 The planning application details provided by the applicant become public
information once the application is registered. Documentation and plans appear
on the Council's website whilst an application is under consideration and when a
planning application has been made, which provides a clear audit trail of the
decision making process. In exceptional circumstances and where supporting
information for schemes includes commercially sensitive information, then it may
be that such information is excluded from the website after due consideration of
all the circumstances, including guidance under the Freedom of Information Act
and an assessment of the public interest.
8.4 An administration fee will be charged to applicants pursuing a viability test
and the charge will be determined annually by the Council and calculated on the
basis of only covering costs incurred by the Council in direct relation to this, and
should be paid on submission of the application.Affordable Housing SPD - November 2011
7
8.5 In certain circumstances a scheme in question may incur exceptional
development costs, over and above typical build costs, which will impact on the
financial viability of a scheme. However, applicants should not automatically
assume that because a site is previously developed and site
clearance/decontamination, for example, is required, that these are exceptional
costs. Exceptional costs will generally be considered to be those which could not
reasonably be foreseen at the time of site purchase.
8.6 The Toolkits allow the acquisition costs of the site being tested to be entered
into the model, with the residual land value taking this into consideration. Where
the Council wishes to verify the figures submitted by the applicant it will seek
verification from its preferred verifier. Paragraph 7.5 of the DPD states that the
costs of verification will need to be borne by the developer. This will be used to
justify the Council’s decision in circumstances where there is disagreement. The
costs of verification will be as per the SLA/contract in place between the Council
and the Council’s preferred verifier. The charge will be proportionate to the
complexity of the application and the fee will be determined case by case per
application.
8.7 Toolkits can therefore be used by developers, prior to any land transactions
being made, to make a reasoned judgement on the value of land in light of future
planning obligations that the Council will require. The Council will expect developers
to have taken the effects of the Council’s planning requirements into account,
prior to securing land for development, and therefore will not readily accept claims
that a scheme is not financially viable due to the developer paying too much for
the site.
8.8 Risks to development profit, such as foreseeable contaminated land or other
groundworks issues, should be identified and costed prior to the submission of a
planning application, in order that negotiations can be made with this information
already known. However, the Council also recognises that in some very exceptional
instances there is a higher risk to a developer than normal. In these instances the
Council will discuss an acceptable level of profit with the applicants.
8.9 In respect of landowners, the Council, or its independent valuer, will give
consideration as to whether the costs, including land acquisition costs are
appropriate and not excessive to bring the proposed development forward. This
will be conducted on a site by site basis. The Council will, having consulted its
preferred independent verifier, publish and regularly review on its website data
ranges for key variables required to populate a toolkit. The key variables include
developer’s profit, build costs, uplift on existing use value, market values, land
costs and tenure balance. If data is submitted within the current ranges then the
data will be considered acceptable by the Council without the need for further
referral to the Council’s independent verifier.Affordable Housing SPD - November 2011
8
8.10 It is envisaged that the Toolkits will help speed up the negotiation and
determination of residential planning applications by formalising the reasonable
profits of developers and landowners. The Council is, however, aware that flexibility
is required in such negotiations and it will consider submissions made by an applicant
justifying any figures departing from current industry recognised costs.
8.11 In order to assist developers in assessing the possible financial implications
for small schemes the Council, in conjunction with the its independent verifier,
has compiled an ‘Indicative Contribution Table’ that can be used to estimate a
likely commuted contribution where on-site provision is not appropriate on small
sites. The sum is based on the basic property details such as property type, location
and size, using the free serviced land model. The Indicative Contribution Table
that shows current values can be found on the Council’s website:
www.bournemouth.gov.uk/AHDPD/ICTAffordable Housing SPD - November 2011
9
Appendix 1 Affordable Housing DPD Policy Adopted
December 2009
All residential development (including mixed use schemes containing residential
development) sites shall contribute towards meeting the Borough target of 40%
affordable housing. When considering individual development sites the Council
will seek 40% affordable housing provision in order to achieve the Borough target.
Where the Council has identified specific sites for residential development through
the LDF process it may be appropriate to seek a higher percentage depending on
individual site circumstances.
When assessing proposals the Council will have regard to:
Current identified local need;
The economics of provision; and
Any other individual circumstances that may be relevant to the delivery of
affordable housing on the site.
Where developers demonstrate to the Council's satisfaction that providing 40%
affordable housing in a particular scheme would not be viable the Council will
adopt the following cascade mechanism to increase site viability:
1. Seek Homes and Communities Agency grant (or other public subsidy) to achieve
the level and mix of affordable housing consistent with the policy;
2. Vary the tenure mix of the affordable component (e.g. more intermediate and
less social rented) and/ or the type of units provided (e.g. more smaller units);
3. Seek a reduction in the overall amount of affordable housing sought.
The affordable housing provision will be expected to be provided on-site unless
there are over-riding reasons why this is not appropriate. Any off-site contributions
will be secured through a planning obligation. Where off-site or financial
contributions are agreed appropriate the provision should reflect an equivalent
benefit to local affordable housing need as if it were provided on-site.
Planning permission will be subject to a planning obligation or condition to ensure
that the affordable housing remains at an affordable price for future eligible
households or, if these restrictions are lifted, for the subsidy to be recycled for
alternative affordable housing provision.
In order to deliver mixed, balanced, sustainable communities affordable housing
will be integrated with market housing and shall in its size and type reflect
identified local needs to contribute towards attaining a balanced housing market.
The tenure split in terms of social rented and intermediate housing should reflect
current local need and local circumstances.Affordable Housing SPD - November 2011 10
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