Planning Advice Note: PAN 74 Affordable Housing
ANNEX
The following examples are provided as illustrations of what has been achieved to date by several local authorities and include elements of better practice.
BETTER PRACTICE EXAMPLE A
AIDING DELIVERY OF AFFORDABLE HOUSING:
RURAL PARTNERSHIP FOR CHANGE AND 'LOCAL HOUSING DEVELOPMENT FORA'
Introduction
The Rural Partnership for Change Highland Pilot (RPfC), established by the then Minister for Housing and Communities in 2000, was given the remit of looking at new and innovative ways of addressing the shortage of affordable housing in rural communities. The pilot focused on three key strands of work: identifying areas of housing-related stress; developing and implementing sustainable solutions; and learning lessons to apply to community planning and single housing planning processes.
Developer/partners
The partnership was actively promoted by Highland Council, the former Scottish Homes and local housing associations and trusts. The role of planning has been fundamental, particularly as the Highland Structure Plan gives priority to affordable housing and the need to find practical solutions. Planning information and the experience and knowledge of local planning and development control officers are seen as key to identifying need and developing potential solutions.
Outputs
The RPfC established six local housing development fora across Highland, bringing together those involved in developing housing, including housing agencies, community planning partners, planners from both the development control and development plan teams, and representatives from the Scottish Rural Property and Business Association, SEPA, SNH, Scottish Water and local economic agencies. Individual developer representatives have been invited to discuss particular projects. The purpose of the fora has been to facilitate joined-up working and take a proactive approach to identifying development solutions to local problems.
The Local Housing Development Fora focus on identification of housing investment priorities, early identification of the most suitable and economic sites for affordable housing and overcoming any development constraints. They also inform the preparation of local plans. One of the main benefits of the fora is to enable discussion and sharing of information between RSLs and the planning authority to help avoid housing associations undertaking abortive work on sites which are not appropriate for housing development.
For further information about the Rural Partnership for Change and local housing development fora, contact Allan Maguire, Highland Council, 01463 702528
BETTER PRACTICE EXAMPLE B
ABERDEENSHIRE COUNCIL APPROACH TO PLANNING AND AFFORDABLE HOUSING:
NEGOTIATING DEVELOPER CONTRIBUTIONS
Introduction
The Aberdeenshire Local Plan (finalised version August 2002) included an affordable housing policy which states that 'All development, and in particular housing development, can support a strategy to provide more affordable housing'. This has allowed the authority to seek affordable housing contributions from both residential and non-residential developments. The Council appointed a planning gain co-ordinator to coordinate negotiations with developers.
Implementation
Having one member of staff dealing with developer contributions has the advantage that there is an experienced point of contact within the Council, and developers are encouraged to begin discussions with the planning gain co-ordinator before buying land. This helps to speed up negotiations on individual developments and ensure that Section 75 agreements can be concluded as swiftly as possible.
The Council's policy sets an average percentage contribution to affordable housing to be provided on residential sites, the percentage varying from settlement to settlement depending on need within each area. Developers are encouraged to enter into discussions with Communities Scotland or an RSL operating in the area of the development. Alternatively the developer may provide the required percentage of the serviced developable land for the Council or its agents to develop for affordable housing. A further alternative is for the developer to make a financial contribution equivalent to the housing land value on which the required amount of affordable housing would be built. These funds are then used to help provide affordable housing within Aberdeenshire.
With non-residential developments the Council uses a formula to calculate the affordable housing requirement based on floor area and expected occupancy. Contributions are therefore related both to the scale of the development and the expected number of employees, with high occupancy uses such as supermarkets expected to make larger contributions to affordable housing than low occupancy uses such as warehouses. Contributions are in the form of commuted sums, using the standard figure applied to affordable housing contributions from residential development. These are targeted at supporting delivery
Outputs
Aberdeenshire Council has had some success in applying the policy to commercial development as well as residential development and recently concluded agreements for commuted sums for affordable housing from a supermarket in Fraserburgh, a warehouse development in Peterhead and an industrial development in Portlethen.
For more information on the approach taken to negotiating developer contributions in Aberdeenshire, contact Stuart Robertson, Planning Gain Co-ordinator, Aberdeenshire Council Tel 01330 825518
BETTER PRACTICE EXAMPLE C
CITY OF EDINBURGH COUNCIL APPROACH TO PLANNING AND AFFORDABLE HOUSING: PROCESS OF POLICY DEVELOPMENT
Introduction
City of Edinburgh Council (CEC) introduced their affordable housing policy in response to a critical shortage of land for affordable housing. In 1999 the Council commissioned a housing needs assessment, published in 2000, which provided evidence that significant housing needs were not being met (note that this pre-dates the introduction of local housing strategies). Because of the strength of the Edinburgh housing market, housing associations were finding it increasingly difficult to secure sites for new development. Evidence from the housing land audit demonstrated that despite strong house building activity, completions in the social rented sector were declining. Meanwhile, a number of major redevelopment opportunities were coming forward including a potential 10,000 new dwellings at the North Edinburgh Waterfront. The Council was keen to ensure that these new developments would include an element of affordable housing.
Brief history of development of the policy
In light of the housing needs assessment and estimates of new housing demand expected to emerge between 2000 and 2010, CEC concluded that an additional 9,000 affordable homes were needed by 2010. A draft policy on affordable housing was published in November 2000 which required that a proportion of units within new housing developments should be for affordable housing. There was a period of consultation with stakeholders over the period to February 2001, following which some changes were made to the policy, including the possibility of off-site provision and commuted sums in exceptional circumstances.
The policy was finalised in October 2001, and tested at inquiry on the North East Edinburgh Local Plan (NEELP) alteration. The Reporter's findings on the inquiry were received in summer 2002, after which the Council made further amendments to the policy. The second NEELP public inquiry took place in early 2003. Following this the Council was able to proceed to adoption of the policy.
The Council also prepared a separate detailed Guidance Note on implementing the policy. This set out the mix of affordable housing which the Council seeks to achieve. It also defines the different types of affordable housing tenure the Council would accept, specifies the criteria for being given priority for affordable housing and provides advice on the availability of subsidy and the level of commuted sums.
Planning agreements
On sites to which the policy applies, the Council and the individual developer enter into a Section 75 agreement. Planning agreements have been used for example to specify the number of units within the larger development to be developed as discount sale dwellings for affordable housing. The agreement specifies that the proprietors will make reasonable endeavours to market the discount sale dwellings to eligible occupiers for an agreed period of time, forwarding details of interested parties to the Council for approval. If by the end of this period missives have not been concluded with an eligible occupier for each of the discount sale dwellings, the developer is entitled to notify the Council and then dispose of any remaining units on the open market. Planning agreements have also been used to deal with subsequent sale of the discounted dwellings, regulating the future disposal of any dwellings which are initially sold at less than market value.
Outputs
The planning authority has observed a gradual acceptance of the policy among developers, with an increasing number of planning applications being submitted that already include an affordable component. Recent figures (late 2004) show that over 2,500 new affordable homes had been secured through the policy since its initial introduction in 2000, with more than 1000 additional units anticipated through pending planning applications, achieving on average around 16 to 18% affordable units on eligible sites to date.
Conclusion
The successful introduction of this policy is largely due to genuine joint work between the Council's planning authority and housing department, and the policy being grounded in thorough research and information on the dynamics of the housing market and housing development finance. The Council also attached great importance to the quality of consultation, recognising the potential impact of the policy on the activities of developers and social housing providers.
For more information on CEC's affordable housing policy, contact Stephen Hall, City of Edinburgh Council, 0131 469 3598
BETTER PRACTICE EXAMPLE D
MILLER HOMES / LOTHIAN HOUSING ASSOCIATION DEVELOPMENT AT GREAT JUNCTION STREET/CABLE WYND, LEITH:
BROWNFIELD SITE DEVELOPMENT INCLUDING AFFORDABLE DWELLINGS
Site
The site is the former Scotmid building on the corner of Great Junction Street and Cable Wynd in Leith. Miller Homes entered into a joint venture with Scotmid to redevelop the site for a mixed residential and commercial use. The Council's affordable housing policy (see Better Practice Example C) required that the joint venture company provide part of the site for affordable housing as a condition of the planning consent for the units for market sale on the site and the affordable element was the subject of a Section 75 agreement.
Scotmid-Miller approached a number of housing providers including Lothian Housing Association (HA), with a view to transferring the land for 10 units at nil value. Lothian HA (a wholly owned subsidiary of Castle Rock HA) entered a partnership with Scotmid-Miller to provide the affordable units, agreeing to complete the affordable housing element within the timescales for the overall private housing completion. The site for the affordable dwellings was transferred to Lothian HA in August 2003; construction commenced in September 2003 with completion in October 2004.
Construction
The scheme incorporates car parking at ground floor level with flatted residential development above, facing onto the site boundaries, and creating a landscaped deck in the space to the rear. The main part of the site developed by Scotmid-Miller comprises 77 flatted dwellings for sale and commercial space. Although two separate planning permissions were granted for the market and affordable elements, the design of the entire site aims to create continuity of external layout.
Given this proposed layout and design, it was clear that a coordinated construction programme for the affordable and market elements would be beneficial. Lothian HA agreed to enter into a direct building contract with the same contractor developing the rest of the site for Millers. This helped to avoid delays to the delivery of the market housing.
Funding sources
There was no subsidy available through the development programme to deliver social rented housing on this particular site. Lothian HA was therefore selected to provide mid rent tenure with no grant funding. Although Lothian HA is not a registered social landlord, the Council approved its status.
A small amount of additional funding was required to assist the affordable element of the project. This was provided through a commuted sum from another housing development where an affordable housing contribution had been required but was not provided on site. The final costs of the affordable housing project within the Great Junction Street development are estimated at £710,000. £660,000 has been raised by Lothian, using existing financial arrangements with Dunfermline Building Society, with the remaining £50,000 contribution through the Council.
Details of affordable housing element
The affordable units consist of five 1-bedroom flats and five 2-bedroom flats forming part of the overall flatted development. The affordable units are now available for
rent - ranging from £380 to £455 per calendar month. Priority is given to people who are existing tenants of the Council or a housing association or on a waiting list for
a Council or HA home; people with a local connection, e.g. family living in the area;
or people employed in one of the public services. In each case, the properties are currently only available to people who have a salary of up to £19,300 for single people, or £24,700 for families.
Conclusion
Lothian HA now owns the completed flats and manages them according to the eligibility criteria set out by City of Edinburgh Council. Lothian HA has developed a web site called 'homeadvantage' in order to advertise these and other affordable properties, and the Council's webpage now has a link to the homeadvantage site. The project also demonstrates the practical use of a commuted sum to support delivery of dwellings which will contribute to the supply of affordable housing within the Edinburgh housing market.
BETTER PRACTICE EXAMPLE E
TULLOCH HOMES / CAIRN HA DEVELOPMENT AT DALFABER, AVIEMORE, HIGHLAND
PHASED DEVELOPMENT WITH PRIVATE HOUSING, HOUSING FOR RENT AND LOW COST HOME OWNERSHIP
Site and policy context
This development on the north side of Aviemore is an example of a private house builder and a housing association working in partnership to provide 52 affordable units, including 30 rented dwellings for Cairn Housing Association and 22 low cost dwellings for sale to first time buyers. The development has been led by Tulloch Homes Express and Cairn HA
The site comprises Phases 2 and 4 of a larger development by Tulloch Homes. The site was initially purchased by Tulloch Homes then transferred to Tulloch Homes Express Ltd. Through the Aviemore North Development Brief (February 2000), Highland Council indicated their intention to secure an appropriate proportion of plots for affordable housing. Within the overall site masterplan the Council negotiated an affordable housing requirement of 50%.
Construction
The whole development provides a mix of affordable and private housing, and the design principles have been based around integration and shared amenity irrespective of tenure. The Masterplan for the whole site indicated that the affordable housing element would be provided on the basis of 50% rented, 50% low cost home ownership dwellings. The rented properties have a district heating system, helping to address fuel poverty.
Funding sources
The housing association element of the development was funded through £1.7m Communities Scotland grant combined with £588,350 private finance raised by the housing association. Communities Scotland also provided more than £200,000 grant funding to enable the low cost home ownership dwellings to be delivered. This was in the form of GRO grant, which allowed the developer to sell at a reduced value to a set client group.
Details of affordable housing element
Phase 2 (the social rented units ) has been completed and tenants have taken up occupancy, while Phase 4 (the GRO sale properties ) is under construction in late 2004.
Munro Place, the Cairn project has been specifically designed to meet the needs of local people in Aviemore, where private rented property is very scarce, mainly as a result of the buoyant holiday home market. The Cairn project is set out in two courtyards of 15 units each, providing a mixture of flats, single and two storey housing in each. The design of the properties and the environs has reflected existing local features such as porches, roof pitches and stone walling, to blend in with the surrounding environment. All the units have full disabled access and two of units have been specifically adapted for people with special needs.
The housing for sale under the GRO sale scheme is also a mixture of 1, 2 and 3-bed units, comprising villas, bungalows and cottage flats and is designed to complement the adjacent mainstream private development, so the low cost housing blends in well in terms of design and density.
The GRO sale properties are sold at fixed prices and have been marketed by the Council to existing local authority tenants and those on their waiting list who have expressed an interest in housing to buy. The aim is to support economic development in Highland by enabling first time buyers on modest incomes, young people/families to gain access to the property market in their local area. The range of property sizes is designed to assist older people as well as people with disabilities - 2-bed bungalows have attracted interest from visually impaired and movement restricted people - accommodating a range of needs not normally addressed by the private market.
Conclusion
The project is a good example of collaborative working between Communities Scotland, Highland Council, Tulloch Homes Express and Cairn HA. The inclusion of the affordable housing element was based on housing need and shared goals, rather than strict percentages, which has resulted in a voluntary mixed development with various unit sizes which addresses the affordable and private markets. The private sales at Dalfaber have been a huge success, with resales significantly above original sales prices, making the GRO sales even more important.
GLOSSARY
Affordable housing: Broadly defined as housing of a reasonable quality that is affordable to people on modest incomes. In some places the market can provide some or all of the affordable housing that is needed, but in other places it is necessary to make housing available at a cost below market value to meet an identified need with the support of subsidy.
Demand: The market expression of the desire for housing. It is a compound of needs and aspirations and can be satisfied either by existing housing or by new housing requiring additional land provision.
Effective housing land supply: The part of the established housing land supply that is expected to be free of development constraints in the period under consideration, and will therefore be available for the construction of housing.
Established housing land supply: The total housing land supply - including both constrained and unconstrained sites. This will include the effective housing land supply, plus the remaining capacity of sites under construction; sites with planning consent; sites in adopted local plans; and other land and buildings with agreed potential for housing development.