Affordable Housing Supplementary Planning Guidance 2003 -
Continued
6 Delivering affordable housingunder development plan
policies
Involvement of Registered Social Landlords
6.1 Developers will be encouraged to work with Registered Social
Landlords (RSL) to provide affordable housing. RSLs are obliged to
have open and fair policies for allocating tenancies based on
housing need.
6.2 Developers are encouraged to seek an RSL partner from the
Council’s Joint Commissioning Partnership at the earliest
opportunity. They should ensure that proposals for affordable
housing provision meet the requirements of the RSL, who should
preferably be party to any Section 106 agreement.
6.3 The implementation of development plan policies should
ensure that the affordable housing is provided in such a way that
it is economically viable for the RSL, is genuinely affordable to
those in housing need and represents best value in the use of
public funds. The Council, therefore, seeks to achieve the
affordable housing to be provided at a price that requires no
public subsidy. This will allow Housing Corporation and Council
social housing grant to be invested to meet specific housing needs
and other costs over and above those normally expected for
affordable housing through these policies. The mechanism for
providing affordable housing units will usually be design and build
(i.e. the developer will enter into a land transfer and subsequent
build contract with the RSL). Costs will be calculated according to
the prevailing Housing Corporation total cost indicators and grant
rates
(Appendix 1 refers).
Timing of affordable housing provision
6.4 The affordable housing provision to be made available on a
site should be an integral part of the development. Where a
development is to be provided in phases, it may also be appropriate
for the affordable housing element to be phased. Affordable housing
will be negotiated at the outline as well as the detailed planning
application stage. In cases where the potential developer of the
site is unknown or the developer does not have a partner RSL,
Section 106 agreements will be negotiated to provide for an
agreement for the affordable housing to be ready and available for
letting prior to the occupation of a specified number of general
market units.
Occupancy controls
6.5 Where a landowner/developer proposes to develop and manage
the affordable homes without the involvement of a RSL, planning
obligations will be sought to ensure that the occupancy criteria
set out in planning policies are complied with and the houses
provided are occupied only by people in local housing need.
Use of Planning Obligations
6.6 Planning obligations and/or conditions will be sought to
ensure that affordable housing is secured in accordance with this
guidance.
6.7 Circular 6/98 (paragraphs 21 and 22) states that where a
requirement for an element of affordable housing is appropriate, it
should be provided as part of the development. However, where the
local planning authority and the developer both consider it is
preferable that a financial or other contribution should be made
towards the provision of an element of affordable housing on
another site, they should ensure that arrangements will actually
result in the provision of affordable housing. In the light of this
advice, the Council will only accept financial contributions
towards the provision of affordable housing on an alternative site
exceptionally and in the following cases.
- Where the number of general market dwellings on the site would
result in the provision of only 1 or 2 affordable homes which may
cause housing management problems for a RSL.
- Where the type of development proposed is such that it is not
considered appropriate to make on-site provision. Examples might
include the conversion of listed buildings, elderly persons’
schemes or particular developments which are likely to result in
high service charges to future occupiers.
- Where the site is not accessible by foot/cycle to local shops
and facilities and is not well served, nor has the potential to be
well served, by public transport. (As all housing sites should be
accessible to local facilities, this is likely to apply only to
those sites subject to outstanding planning appeals where the
Council may wish to negotiate for affordable housing provision on a
without prejudice basis).
6.8 When considering whether or not to accept financial
contributions in lieu of on-site provision, the Council will take
account of any other current proposals for affordable housing
provision in the same area.
6.9 The level of financial contribution sought will be
equivalent to the contribution that would have been made on the
site. Financial contributions will be calculated in the same way as
on-site provision so that affordable housing can be provided on an
alternative site without the need for public subsidy.
Mortgagee-in-possession clauses
6.10 Where a local authority seeks to secure occupancy controls,
lenders of private finance often require the RSL to negotiate for
the inclusion of clauses in planning obligations which would enable
the lender to dispose of the property on the open market, as a last
resort, if the RSL is in financial difficulties. Such clauses are
known as mortgagee-in-possession clauses. Mortgagee in possession
clauses will only be acceptable as part of S106 agreements if the
RSL has demonstrated that it requires one.
7 Rural exceptions schemes
7.1 In accordance with Annex B to PPG3 and Circular 6/98, Policy
HG.9 of the Bath and North East Somerset Local Plan Revised Deposit
Draft, Policy HO.9 of the Wansdyke Local Plan Deposit Draft, and
KCV 9B of the Keynsham and Chew Valley Local Plan, affordable
housing may be acceptable on small sites, within and/or adjoining
existing identified villages which would not normally be granted
planning permission for residential development. This is subject to
there being an identified local need, the affordable homes meeting
local needs in perpetuity, and provided various other criteria are
met.
7.2 The guidance on the design and accessibility of affordable
housing schemes set out in paragraphs 5.13 to 5.15 above apply
equally to rural exception schemes. It is desirable for applicants
to assess possible other sites in order to find the best location
and to assist the decision making process. Such developments are
likely to be in sensitive locations and in accordance with PPG1 –
applicants should provide a written statement setting out design
principles adopted as well as illustrative material in plan
elevation and section.
7.3 The Council prefers Registered Social Landlords to build and
manage rural exception schemes. Planning obligations will always be
sought to ensure that the occupancy criteria set out in the policy
are complied with and the dwellings are occupied in perpetuity only
by people in local housing need. Mortgagee-in-possession clauses
are inappropriate on rural exception sites, as it would be
unacceptable, in planning terms, for the affordable housing to be
sold on the open market.
8 Further information
PPG3 ‘Housing’
Circular 6/98 ‘Planning and Affordable Housing’
Regional Planning Guidance for the South West (RPG10) issued
2001
Joint Replacement Structure Plan Adopted 2002
Adopted Bath Local Plan 1997
Wansdyke Local Plan Deposit Draft 1995 as amended in 2000
Adopted Keynsham and Chew Valley Local Plan 1992
Bath and North East Somerset Local Plan including minerals &
waste policies
Revised Deposit Draft 2003
Bath and North East Somerset ‘Housing Survey 2000*
Bath and North East Somerset Housing Needs Register*
Bath and North East Somerset Housing Strategy 2000/2003*
*Available from Housing Services PO Box 3343, Bath BA1
2ZH
Appendix 1
Calculation of transfer price of units to registered social
landlord or Calculation of off-site contributions in lieu of
on-site provision
1. Justification for utilising Total Cost Indicators framework
in the negotiation of planning obligations
2. This planning guidance outlines an approach for the provision
of affordable housing on site without the need for an RSL to apply
for social housing grant to subsidise the rented or shared
ownership units provided. It also specifies that these units will
be rented or sold within the Corporation’s allowed limits. The
Housing Corporation’s Total Cost Indicators (TCI) framework ensures
that these criteria can be met.
3. TCI’s and grant rates are reviewed annually by the
Corporation to take into account land and build costs etc. Each LA
is placed within one of 14 TCI cost groups, which reflect
variations in land and build costs across the country.
4. Calculation of transfer price
5. It is suggested that developers approach the Local Authority
at an early stage to discuss the methodology and calculation of the
grant rate applicable to a particular site.
6. The Housing Corporation provides a Grant Rate Calculator in
the form of an Excel spreadsheet, current version being
HCCAL6V3.XLS. They no longer provide Grant Rate tables. Instead the
spreadsheet works out the applicable grant for each individual unit
depending on the following inputs:
- Unit location Local Authority
- Unit internal area in m2
- Unit gross multiplier derived from TCI tables
- Unit value as of January 1999
- Unit Prospective Rent
- Number of bedrooms
- Whether unit is a flat or a house
- Whether unit is new build or rehab
- Whether unit is an extended family unit, defined as 8 persons
or more with additional or duplicate facilities
- Whether unit is Supported Housing and/or Sheltered
Housing
7. Affordable rented housing dispersed throughout the
development
8. Transfer Price of completed units to the RSL =100% TCI at
the time planning permission is granted minus applicable Social
Housing Grant and Housing Corporation notional on-costs.
9. Transfer of Land (the RSL is able to build the
homes)
10. Developer will transfer free fully serviced plots to the
partner RSL plus a cash contribution equal to the level of Social
Housing Grant and Housing Corporation notional on-costs.
11. Shared Ownership
12. As for affordable rented housing above.
13. Commuted Sums
14. Payment to Bath and North East Somerset Council equals
Social Housing Grant and Housing Corporation notional on-costs
based on 100% TCI for rented housing on an agreed number and type
of units at the time planning permission is granted.
