Hams homes on target

Planning, 22 August 2008

Up to 16 times the average annual income is needed to purchase a typical home in South Hams. The south Devon district faces the most severe house-price-to-wage ratio in the country outside central London.

Two years ago, the average house price in the area was £281,818 while average earnings were £17,940. More than ten per cent of homes are registered as second homes. Just to meet existing needs for locals would require building 330 affordable homes annually and more than 600 a year would be necessary to tackle the backlog and newly arising need.

No wonder then that South Hams District Council has been pushing for tough targets of at least 50 to 60 per cent affordable provision on all new residential developments. Now that its policy has been backed by an independent inspector (Planning, 15 August, p2), the council hopes that it will provide urgently needed solutions to the acute homes shortage.

Inspector Neil Pope's verdict is something of a coup for South Hams head of community regeneration Lee Bray. He has been responsible for steering the development plan document (DPD) and before it the core strategy, only the second to be found sound in England, through the statutory procedures. He says the process has been incredibly challenging, but regards it as vitally important to the area to get the policy in place.

Because of the district's predominantly rural environment, including extensive areas of outstanding natural beauty, the council cannot simply wave through market housing to generate low-cost homes. "There is little case for bringing forward housing other than developing it for affordable homes. Without high targets, it is better to do nothing at all," argues Bray.

But now the council has a firm policy basis for tough negotiations with developers and a platform to encourage landowners to come forward with suitable sites. No doubt some will baulk at the targets, which faced vigorous opposition from developers at public examination. But it is hard to argue against the council's case when it is so clearly in the community's interest.

The policy is no blunt instrument. It sets tailored targets for different types of location. So it specifies 50 per cent affordable provision in the Plymouth urban fringe, rising to 55 per cent for market towns and local centres and 60 per cent in villages. It requires all developments of two or more homes to contribute on a sliding scale (see panel).

The draft DPD has not survived the examination process unscathed, however. The council attempted to apply the policy to single homes, but this was rejected by the inspector. Pope also varied the details to give more weight to viability in line with the requirements of PPS3. He was concerned that the council might underrate the issue in its keenness to respond to the priority of tackling the shortage of affordable homes.

"Viability should be of paramount importance in the minds of those applying the provisions of the DPD. Failure to recognise this would prevent necessary affordable and open market housing being delivered in a timely manner," Pope warned. Where schemes fall short of the targets, he agreed that the onus should be on developers to justify reduced provision. "This allows for flexibility in the application of the policy while safeguarding against any attempts to undermine the plan," he maintained.

Bray believes that other local authorities across the country will be looking at his district's success with interest. "Other than national parks, we are one of the first local planning authorities to attain targets of this level," he explains. But he accepts that such policies will only work in areas where land values are high. "I hope that others will have the confidence to go down this path, but if you don't have high land value it isn't necessarily a sensible way to go."

At the opposite end of the country, Blyth Valley Borough Council in Northumberland recently lost a court battle to impose an affordable housing target of just 30 per cent, primarily because it failed to pay enough attention to viability issues. It seems that this is set to be a key test of whether such policies stand or fall.

The Home Builders Federation is not opposed to the South Hams targets because it is fully aware of the need for affordable homes in the area. But a spokesman stresses the viability point: "If targets are too onerous, they will reduce the amount of housing full stop." The body is also worried that the council has underestimated the cost of infrastructure to support new homes. It argues that around £10,000 is usually needed per property, whereas the council's viability assessment estimated £4,000.

In the end, whether this policy will change the fortunes of those locals currently being priced out of the district will be down to negotiation on individual sites and finding sympathetic landowners. But the approved policy gives the council's planners a backbone for delivery. Their achievement is only marred by unfortunate timing. They have managed to steer the policy through just as the housing market has turned into a downward spiral.

Bray says it is very frustrating and blames the long-winded planning process. "We needed to be where we are now two to three years ago," he admits. However, when the market eventually recovers, South Hams will be ready to respond with a tough set of policies to serve its key workers, low-income families and an ageing population.

AFFORDABILITY THRESHOLDS

South Hams DPD provisions

2-5 homes: 20 per cent as a financial contribution

6-14 homes: 35 per cent provision on-site

15 or more homes: 50 per cent provision on-site.