Research into flat-rate standing charges carried out by consultancy GVA Grimley for the ODPM claims that developers could be discouraged from bringing forward smaller sites if they are forced to provide affordable homes. Latest draft revisions to PPS3 propose that authorities should be able to insist on affordable housing on sites of 0.5ha.
"The abolition of affordable housing exemption thresholds for small sites could adversely affect the economics of housing provision on such sites, whether by way of standing charges or on-site provision," the report states.
It advises that the charging rate should be set "to enable the free operation of the market at a level that does not deter the overall provision of housing in line with regional targets".
It adds that seeking affordable housing contributions from commercial developments is "only likely to be viable in high-value areas and where a direct link can be established between the development and the need for an enlarged labour supply in the travel-to-work area".
Chartered Institute of Housing head of policy Merron Simpson said authorities should be able to set their own trigger points for affordable housing contributions, provided they are below a minimum of 15 homes. "Small sites are not necessarily unprofitable," she insisted, adding that authorities need to become better at assessing site viability.
The report states that standing charges will be "feasible in appropriate cases", but warns that there are significant challenges involved in making such a regime work. It notes that few local authorities have the "skills and resources to set up a comprehensible charging system".
Reforming Planning Obligations can be viewed via www.PlanningResource.co.uk.