The government is so scared of antagonising developers that it is failing to insist on affordable homes being built.
The government has missed another opportunity to put the building of affordable housing where it belongs – at the heart of planning policy. Affordable homes that are built when developers get planning permission for a housing scheme make a vital contribution to meeting need. The government’s latest consultation on reforming the way developers work with local authorities shows the two existing schemes secured contributions from developers last year worth £4bn – and resulted in more than 43% of the affordable housing built in England in 2016/17: 18,000 homes of the total 41,530.
But its target of providing 50,000 affordable homes each year in England can be achieved only if developers continue to contribute at least the same number of affordable homes. That figure is based on the government’s commitment to provide 225,000 affordable homes during this parliament (2015-20). So it is extraordinary that when the government listed its objectives for a package of planning reforms, announced earlier this month, increasing the supply of affordable housing wasn’t one of them.
At a time when more and more people are in need of genuinely affordable homes, the statistics are sobering. Recent research by the Guardian has highlighted that only a tiny proportion of the homes granted planning permission in the past two years in some of our biggest cities have been affordable.
Contributions from developers towards local houses and infrastructure are collected in two ways: section 106 agreements, which are negotiated between developers and local authorities; and the community infrastructure levy, introduced in 2010 as a faster and more transparent way to ensure that developers make a reasonable contribution to the costs of providing necessary additional infrastructure when new houses are built.
The government has two concerns about section 106 deals. It wants reassurance that robust requirements for affordable homes are being set out in the initial agreement, and it wants to be sure that any such targets are then adhered to. It has suggested that contributions by developers might be set nationally, and be non-negotiable – but this is intended perhaps as more of a threat than a viable reform.
Making policies more open to local scrutiny could help. The revised National Planning Policy Framework (NPPF) encourages councils to agree affordable housing contributions at pre-application stage, thus avoiding contentious and confidential “viability” assessments, often done once significant work has already taken place, which frequently conclude that including affordable homes would fail to provide enough profit for the developer. But the new requirements focus firmly on home ownership and private renting. Any separate specification for what is urgently needed – building for low-cost renting by social landlords – is entirely absent.
The weakness of the new proposals will show in areas where local plans aren’t in place or where their affordable housing requirements aren’t enforced, and viability assessments are still required. New guidance calls for such tests to be done on an open-book basis – but there is nothing on how councils should challenge evidence provided by developers if they argue that a council’s affordable housing requirements are no longer feasible.
In 2013, a study of the 82 largest housing developments in 10 major cities by the Bureau of Investigative Journalism found that only 40% complied with local targets for affordable housing. And last year, Shelter research carried out in 11 local authorities across England showed that 2,500 affordable homes were lost in just one year on schemes where developers submitted viability assessments – equivalent to a 79% reduction in affordable housing compared to the levels required by council policies.
The problem is that the government doesn’t want to antagonise builders or delay developments by toughening the requirements it places on them.
The only alternative is to provide councils and housing associations with more funding to build the houses themselves. Only a massive increase in such funding could replace the developer contributions on which so much new affordable housing now depends.
Original post and comments: Guardian Housing Network