Tuesday 4 June 2013

East Devon and affordable housing: November 2012

The District Council has engaged with the Vision Group for Sidmouth on the key issue of housing. 

On 5th November last year, Cllr Jill Elson, Cabinet Member for Sustainable Homes and Communities, addressed the VGS Futures Forum at a meeting to consider 
“Housing and Jobs: how to address the real need in the Sid Valley”:

“The Government [has] changed Housing Finance for those Authorities like East Devon who still own their housing. The receipts from Housing rents is in a ‘ring fenced’ account and used to have to pay £6 million to Government per annum to repay the ‘National Housing Debt’ whereas we had to borrow £84 million to buy ourselves out of this arrangement which means we now pay £3 million interest per annum over 30 years. The income from rents (EDDC Collection rate of 99.65%) is used to maintain our 4300 homes but also allows us to use an amount to ‘add’ to our stock. 
“We have built 17 homes and bought ‘off the shelf’ 11 homes, as an example of the future. In these new homes we are charging ‘affordable rents’ which means they are 80% of ‘market’ rents but still within the Housing Benefit guidelines. 
“You will note in the new Local Plan, now out for consultation, that we are requesting a ‘sum of money’ per new development/every single one to provide ‘affordable homes’ which I hope your group would support. 
“It must be remembered that ‘affordable home’ is for all age groups and that the main aim of the Local Plan is to have balanced communities.” 

In the open debate which followed, further points were raised:

> There is general consensus in Sidmouth of the value of ‘mixed development’, a model supported by Cllr Jill Elson with respect to the redevelopment of Port Royal, for example. 

> The trend is moving towards working from home and ‘hot desking’, thus reducing the need for more office-space (cf: Local Plan).
> Defining a ‘balanced community’, gathering information, eliciting creativity, tapping into local expertise – these could all be channelled through a Neighbourhood Forum.
> FF/VGS could play the role of ‘flagging risky ideas’ – research into affordable energy/fuel poverty, over/under occupancy of homes, care of elderly, feasibility of pedestrianisation...
> The viability of the Sidmouth’s hotel sector should be recognised as a ‘gem’ and taken into consideration in planning decisions.
> Sidmouth’s employment is concentrated in tourism and servicing retirees in their homes; start-up units and training are needed on a small scale to support new projects; the example of Honiton’s ‘micro-hubs’ of retirees helping youth to set up in business...
> Sidmouth needs to look to its long-term challenge of caring for the elderly (cf: presentation to and resolution from STC 5th November). 

In a follow-up email to Cllr Jill Elson, District Officers replied in red to points raised:

Firstly, it is clear that the plight of those without adequate housing needs to be addressed (Yes to Homes is a campaign from the National Housing Federation - Yes to Homes http://www.housingvoice.co.uk/downloads/Volume_2.pdf page 30) and it is to be commended that the District Council is concerned about housing future generations of local families (http://www.eastdevon.gov.uk/facing-up-to-the-planning-challenge.pdf).

It is also to be welcomed that, within current central government policy guidelines, the District Council is pushing hard to see the maximum number of affordable housing provided by developers (http://www.eastdevon.gov.uk/rpt_dmc_090310_09.2093.mful.pdf page 8). Councillors have been very keen to ensure that any new housing ‘should help in some ways to relieve the situation of local people not being able to afford to live in the local area.’ (Town planners back affordable housing for Sidmouth - News - Eastern Daily Press)

However, whilst there is an obvious need for more housing which local people on average incomes or below can afford to rent or buy and that the District Council has made it clear that its priority is to meet those needs, it is also obvious from cases elsewhere in the UK that, under the current business climate, builders are able to claim that they cannot afford a 40% affordable home quota. To quote a social housing website: ‘The Financial Times has today reported the plans will allow house builders to reduce the proportion of affordable homes they provide… The brokers will work with councils and developers to renegotiate section 106 agreements. These often require builders to produce affordable housing alongside private homes, but developers argue tough economic times mean terms agreed before the recession can make schemes unviable.’ 

House building stimulus planned for September | News | Inside Housing

It is with this in mind that I would like to ask you:

> At reception at Knowle, I noticed recently that the screen is notifying visitors that, out of 1,120 new homes being built at Cranbrook, 300 will be affordable. Again, whilst it is commendable that the District is seeking to provide such opportunities for local residents, this figure does nevertheless fall below the 40% threshold. Would you be able to confirm this? And would you be able to confirm the projected ‘final’ figures for affordable housing at Cranbrook (out of a total of 6,000)? The difference between the figure stated (300) affordable homes will be predominantly made up by another form of affordable housing. This other form of affordable housing is known as ‘affordable by design’ at the time this definition was consistent with the affordable housing policy/ affordable housing definitions , bearing in mind Cranbrook negotiations started at least ten years ago . Things have moved on since then. This affordable by Design element adds 10% to the 30% of traditional affordable housing, 40% in total.

> From the attached document outlining house-building numbers in Sidmouth, it again appears that, amongst the over 500 recently built or currently planned in Sidmouth as of 2006 (http://www.eastdevon.gov.uk/edlpevidence0107.pdf page 7), the number of affordable homes planned for by the District Council is well below the 40% target. I have attempted to gauge the exact numbers of affordable housing built in the last six years, but cannot verify every single development. Would you be able to confirm the percentage of affordable housing built within this time frame? The proposed Plan intends to seek different percentages of affordable housing in different areas. For example in Sidmouth it is proposed that we seek 50% affordable housing on site and Exmouth only 25% this position reflects land values and as a consequence viability. It is hard to state the affordable housing percentage of every scheme developed over the past 6 years without undertaking a lot of work. It is fair to say that on the whole we have secured 40% on all schemes that trigger the affordable housing requirement.


> A fundamental problem is that in such an expensive area as Sidmouth, even prices at 80% of the market price are still out of the reach of many residents, as observed by Sidmouth Town Council in its submission to the LDF process last year (http://www.eastdevon.gov.uk/sidmouth_town_council.pdf point 12): ‘National definitions of ‘affordable housing’ are not appropriate in Sidmouth and great care must be given to ensure that housing is available for all, especially local people’. Would you be able to comment? We always consider what is ‘affordable’ on all affordable housing developments in East Devon. The type of tenure, the percentage of ownership are all considered. For example, a current development in Sidmouth will be offered as an all shared ownership scheme. The percentage that a buyer can purchase reflects the high open market values in Sidmouth, in this particular case a buyer could buy home for as little as 35 / 40% of the market value and then rent the un-owned equity.

> A further basic issue is how to define ‘housing need’. Whilst it is can be argued that ‘the amount of housing proposed at Sidmouth is grossly low compared to its function and size that is likely to undermine the town’s natural growth, the provision of housing and affordable housing,’ (http://www.eastdevon.gov.uk/lp-2062-3120.pdf page 8), the question remains whether it is the market, as represented by developers and incoming population, which determines the amount of housing ‘needed’. Again, would you be able to comment? The Council seeks to provide affordable housing as defined in the National Planning Policy Framework document. Housing need is identified via the Council’s Housing Register ‘ Devon Home Choice’ this system has been adopted by most Local Authorities and Housing Associations in the South West. It determines who is in housing need and who isn’t by placing the individual in a banding, A being the highest and E the lowest. Population migration , incomes and values etc all contribute to the affordable housing picture. A Housing Market Assessment 2007 ( updated 2011) used all these elements and others to determine the local need, tenure and property types including open market homes. 

> It does appear, therefore, that in order to reach a specific number of ‘required’ housing, a considerably larger number of ‘market’ housing must be built. To quote a major house-builder:

‘The overall housing requirement of 15,000 dwellings does not meet the need identified in the Local Plan evidence base. If the overall housing requirement was increased to provide 17,000 homes to meet the identified need and 40% of this distributed to the 7 main towns, the requirement would increase by an additional 800 new homes. The residual housing requirement for the 7 main towns should therefore be increased to 3,390 dwellings (2,590 + 800).’ (http://www.eastdevon.gov.uk/lp-2062-3120.pdf) In other words, to build, say, 3,390 affordable homes in the District, a total of 17,000 should be built (although, again, the mathematics of such a calculation is difficult to fathom). Or, to put it provocatively, any housing above this ‘requirement’ would therefore be ‘surplus to requirement’. Would you be able to comment on this this? The amount of affordable housing will change if the new plan is adopted. This reflects the current difficulties in getting affordable housing delivered. In most cases our towns will only look to seek 25% affordable, instead of the current 40%. All rural areas, including Sidmouth and Budleigh Salterton will require 50% this reflects higher land values. Combine this reflection of the tough economic times and the significantly reduce amount of grant funding the outcome will probably mean a reduction in the numbers of affordable housing provided.

Many developers are unable to deliver the 40% affordable housing due to viability concerns. If it’s deemed to be the case once an assessment has taken place by the District Valuer, a reduced percentage can be negotiated. In an attempt to try and secure more affordable housing we have on a number of occasions had an ‘Overage’ clause inserted into the Section 106 Agreement. This clause provides a mechanism that allows for a any additional profit above what has been agreed with the developer and District Valuer to be shared with the Council and developer to contribute towards affordable housing in the district.

> Finally, whilst it is commendable that innovative solutions have been sought (East Devon District Council - Housing Associations; Latest News - Exeter and East Devon Growth Point;  DCH - Investing in people, homes and communities across the south west - Latest from DCHhttp://www.eastdevon.gov.uk/committee_rept_update_howarth_close_041209.pdf), to what extent has the District Council considered options other than relying on the national house-builders, such as providing local families with low-cost plots to self-build (Ashley Vale self build community, Bristol | Selfbuild Central) and encouraging ‘truly sustainable’, low-impact or zero-carbon building techniques (eg: http://www.homegrownhome.co.uk/pdfs/IsStrawBaleConstructionSuitableforSelf-BuildersinBritain.pdfUK's biggest Self Build Show | Self Build | Renovation | Home Improvements > National Homebuilding & Renovating Show 2013 > Britain’s love affair with homebuilding continues with the Homebuilding & Renovating Show returning for its 19th year)? I would be grateful if you could provide me with some idea of any longer-term visions for homes which the District Housing Department is currently developing. Thank you.

In most cases the affordable housing provided in East Devon is superior to standard built open market housing, in terms of its sustainable credentials. Affordable housing is usually constructed to at least Code Level 3 for Sustainable Homes, this also helps to ensure they are more economical to run, thus being even more affordable. We are currently working with an developer in the hope of providing Code Level 6 homes , this as far as I’m aware is the first time this type of affordable housing has been provided in East Devon.

The demand for self build homes appears to exist but remains a difficult method of housing to advance. This is due to a number of factors , funding (many mortgage company’s appear to be reluctant to lend on favourable terms.) The lack of appetite from our Housing Association partners compounded by the lack of suitable land has made this type of housing difficult to develop. This type of housing ownership isn’t where the greatest need lies, this has been identified as rented. So as a consequence most housing providers focus on this need. Perhaps self build may be more popular in East Devon once the economy improves and lenders are less risk adverse. 


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