Stalled housing developments and reworking Planning Obligations

An RTPI network has helped to inform the institute's response to a DCLG consultation on renegotiating section 106 deals, says Andrew Matheson.

Housing schemes: affordable requirements can stall development
Housing schemes: affordable requirements can stall development

The Royal Town Planning Institute and Chartered Institute of Housing (CIH) planning for housing network recently held a meeting to look at a Department for Communities and Local Government (DCLG) consultation on earlier renegotiation of section 106 obligations.

The consultation has provoked both concern and sympathy for the government's policy dilemma: how do you get stalled housing schemes - of all types - restarted?

As long ago as 2009, the RTPI networks facilitated a series of discussions across England on the issues around planning obligations within section 106 agreements that no longer seemed viable in the tougher economic circumstances. These highlighted a wide range of ways that obligations could be renegotiated to improve viability, such as deferred sales of land freeholds, retimed payments and rephased development.

But even now in 2012, it is clear that many housing schemes remain stalled. In some instances, this is despite the related section 106 agreement having been renegotiated.

The DCLG consultation appears to focus on the notion that obligations to provide affordable housing within approved projects are the main hurdle to reviving housing construction. But bringing together the network members' experience, it was apparent that financing problems were the more pervasive issue. Furthermore, in many areas, the provision of a greater amount of affordable housing had been identified as a key element in the wider, local growth strategy.

Most of those at the meeting who work for local authorities had already renegotiated section 106 agreements and they could not see any objection in principle by their councils to extending these further. However, there was a concern that central government is severely limiting local flexibility in those renegotiations.

Also of concern was the apparently diminishing number of ways of providing affordable homes, even though the National Planning Policy Framework makes it clear that councils have a duty to ensure a suitable range of local housing.

Despite recent announcements of extra money to fund new affordable housing and bring empty homes back into use, the programme that is supported by national housing and regeneration quango the Homes & Communities Agency has been reducing in size.

Public data shows that the number of affordable housing starts in England slumped 68 per cent between 2010 and 2011 to 15,698 in total. There is therefore good sense in local authorities seeking to do as much as possible to protect affordable housing provision agreed through section 106 - often at no public cost - even if that involves funding essential infrastructure via other means. One attendee noted that their authority had borrowed to fund infrastructure, while holding developers to their affordable housing commitments.

The event informed the RTPI and CIH submissions to the DCLG consultation. Both incorporate suggestions as to criteria that ought to be adopted and satisfied before existing section 106 deals might be reopened at developers' request.

The RTPI's four suggested criteria are: the developer must be able to demonstrate that the development will proceed if the obligation is waived or relaxed; the developer must show that viability has been reviewed within the terms of the existing agreement before some second party alteration is to be examined; the application process should be supported by a viability analysis or other material that provides a clear and compelling reason for relaxing the obligation and all of this material should be open for public review, scrutiny and challenge; and, if an obligation is relaxed, then the developer will be obliged to accept within the amended agreement review provisions that allow the obligation to be reviewed again if the developer fails to start, is materially delayed or if the viability analysis turns out to be wrong.

The last of the criteria was felt to be vital if the government's stated aim of kick-starting stalled housing schemes is to be achieved.

Andrew Matheson is a network manager for the RTPI. The RTPI submission to the DCLG consultation can be seen at www.rtpi.org.uk/knowledge/consultations. For more on the planning for housing network, see www.rtpi.org.uk/housing.


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