Saturday, 10 June 2017

"Stop highly profitable developers gaming the system" >>> "Reduce the power of viability assessment studies and give councils the hard cash to start building houses again."

The EDW blog today points to the latest report from the Campaign to Protect Rural England - with a suitable comment on the immediate context: 

Difficult times, as the recent housing minister Brandon Lewis (author of a book on how to win marginal seats) yesterday lost his marginal seat.

“CPRE: Give councils cash to build homes and stop developers playing the system” | East Devon Watch


Firstly, there is the unease over how the 'viability' of housing projects is manipulated by developers:
Futures Forum: Pressure on developers to publish viability appraisals (May 2017)
Futures Forum: "Viability assessments conclusively prove that we cannot rely on developers to build affordable housing." (June 2015)
Futures Forum: "Some developers use viability reports to wriggle out of building more 'affordable' housing." (July 2015)
Futures Forum: When is a development 'viable' or not? (February 2015)

Because 'viability' is what exactly what you want it to be.

For example:

Port Royal (as set out in the Scoping Study's project brief - which will include 20 housing units):

A Scoping Study could otherwise be described as an options appraisal. Its purpose is simply to set out the options which are potentially viable for an area such as Port Royal.

Futures Forum: Plans for Port Royal: anticipating a Regeneration Board >>> Councils approve project brief for ‘Scoping Report for the eastern end of Sidmouth’ >>> press release (September 2016)

Knowle (as explained by Planning Officers to PegasusLife's agents):

Turning to the issue of affordable housing the newly adopted policy of the East Devon Local Plan (Strategy 34) sets out a target of 50% affordable housing for residential development in Sidmouth. The presumption is that such affordable housing should be provided on site. As a result we will be seeking on-site provision of affordable housing in this case. We appreciate that the provision of your mandatory well-being care and support package is likely to be unviable to a registered provider...
You should also note that Strategy 34 is predicated on ensuring that developments are viable and so in the event that you believe that our requirements are unviable we are willing to consider a suitable robust and independent viability assessment. Our usual practice is to obtain an independent appraisal of such viability information through the District Valuer.

Futures Forum: Knowle Relocation Project: How to classify the proposed development: as C3 housing or as C2 care home? (October 2016)


Secondly, there is the push to allow local authorities to borrow to build:
Futures Forum: A solution to our housing problems: more social housing, denser cities, and properly planned new suburbs (February 2017)
Futures Forum: A solution to our housing problems: Get local councils and housing associations to build more homes (February 2017)
Futures Forum: A solution to our housing problems: allow councils to borrow to build (November 2016)
Futures Forum: East Devon and affordable housing: November 2012

There are some clever alternatives:
Futures Forum: A solution to our housing problems: sell council land for £1

But there are also some not-so-clever ideas too:
Futures Forum: District Council sets up its own Local Housing Company
Futures Forum: District Council local housing company >>> "the ‘huge risk’ in speculating on the property market"

Here is the CPRE report:
Developers renege on affordable homes as countryside faces housing crisis - Campaign to Protect Rural England

And here is an overview from the Public Finance site:

CPRE: Give councils cash to build homes and stop developers playing the system

Anthony Barej 8 Jun 17

The next government must give councils cash to build homes and stop developers using the planning system to get out of building affordable homes, a rural charity has said.

A report from the Campaign To Protect Rural England said homebuilders are using ‘viability assessments’ to force through developments with minimal affordable housing.

This way developers can increase their profits, the CPRE pointed out. The organisation said developers are “gaming” the planning system, which allows them to draw up an assessment to show a development is no longer financially viable with the number of required affordable homes.

Local authorities grant planning permission to applications on the condition that a certain number of affordable homes are built but these can be overturned by a viability assessment study.

Many councils' targets of achieving 35 to 40% affordable homes per development are being routinely missed because of this, the report out on Tuesday stated.

Paul Miner, planning campaign manager at CPRE: “If we don’t change things this will just get worse. The next government must reduce the power of these viability studies, stop highly profitable developers gaming the system and give councils the hard cash to start building houses again.”

Miner said you have to “look at those developers who continually use shady tactics to renege on promises to build affordable homes and new community infrastructure. These are often the promises that win them permission in the first place.”

This is affecting the number of homes built in rural areas, the CPRE said.

In 2011-12, 35% of homes built were affordable in rural areas. This has dropped to just 16% in 2015/16 – a year in which Department for Communities and Local Government figures show councils built only 1,890 homes across the country. CPRE’s research also shows that five of the 15 most unaffordable districts outside London have met their most recent lowest affordable housing target.

Andrew Whitaker, planning director at the Home Builders Federation, said: "The private sector currently provides around 40% of all affordable homes built in this country via cross subsidy from private sales. Local authorities should ensure they do not set unrealistic affordable housing targets which prevent developments from coming forward at all."

The Local Government Association has before called for the government to allow councils to be able to borrow more money to build more housing, as has the Communities and Local Government committee.

CPRE: Give councils cash to build homes and stop developers playing the system | Public Finance

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