Councils ease section 106 conditions to aid viability

Two city councils have eased section 106 planning gain arrangements with developers in a bid to kick-start work on stalled city centre regeneration projects.

Bristol City Council's central area development control committee last week agreed to free developer HDG Mansur from a requirement to build 37 affordable homes as part of the third phase of its Finzells Reach mixed-use scheme in the city centre.

An officer's report said that a viability study of the redevelopment of the former Courage Brewery site had concluded that cutting the obligations package would "make a significant contribution towards bridging the viability gap".

Meanwhile, Bradford City Council granted permission last month for a retail-led scheme without requiring section 106 payments. It said that the scheme could be unviable if developer Westfield had to pay these.

The officer's report on the scheme said it is considered to be one where "special circumstances would apply and on this basis it is recommended that it is fully justified that planning permission should be granted without any section 106 contributions as sought by relevant consultees".

In a statement in March, decentralisation minister Greg Clark encouraged councils to renegotiate section 106 agreements on schemes that had stalled due to the downturn.

But Cameron Watt, policy leader at umbrella body the National Housing Federation, said: "In limited circumstances, some degree of renegotiation of section 106 agreements might be necessary. But we have major concerns that the cumulative effect of a large number of renegotiations could be a reduction in the amount of affordable homes being built."

Tony Crook, professor of housing studies at the University of Sheffield, said that unpublished figures he has prepared show that 56 per cent of affordable homes in England were partly or wholly built using section 106 money in 2009/10.

He said: "Even in that year, well into the recession, local authorities were reaching more agreements with developers than they were in the mid-noughties."

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