What next for social and affordable housing scheme?

The Department of Local Government and the Housing Agency are reviewing social and affordable housing provisions in the Planning and Development Act 2000 and are inviting submissions by September 27th.

Part V of the Act was a mechanism which allowed the “betterment value” from a grant of planning permission for residential development to be captured for the benefit of the community in order to increase the provision of social housing. It delivered 15,114 residential units from 2002-2011 (62.1 per cent affordable and 37.9 per cent social). This represented 3.8 per cent of all dwellings, excluding one-offs, delivered over 2002-2011.

Over the same period some 44,654 social housing units were constructed of which Part V contributed about 13 per cent (5,721 units).

The development industry viewed Part V as difficult and inefficient. Agreement between developers and local authorities over Part V provisions, for example, was supposed to be reached within eight weeks but in some cases took over two years.

A detailed analysis of Part V*, prepared by consultants DKM and Brady Shipman Martin, discusses whether we should abolish or suspend it; amend it; or create a different mechanism to deliver its benefits; and asks should any new mechanism be based on capturing betterment value for the community from planning permissions.

The study suggests that the objective of delivering mixed tenure and social integration should remain in place while the alternative to abolition or suspension of Part V is to continue to use the current method of capturing an obligation to provide social housing from developers via planning permissions, either by way of financial payment or otherwise, such as delivery of units or land.

The consultants reviewed how Part V-type legislation worked in other countries. For example, the most common system of capturing an element of betterment to support social and affordable housing in England is by way of “Section 106” agreements.

Contribution
Under this model, the extent of social housing is made on the basis of an assessment of the financial viability of a scheme with a contribution towards the social housing element. There is no standard agreement or assumptions on costs, profits or other valuations.

The contribution to social housing may be in the form of constructed units, land or a financial contribution that can act as a capital subsidy to housing production or leasing.

In each new urban development in Spain, a minimum of 30 per cent of the land must be used for protected housing. In the Flemish region of Belgium, a recent decree established that in each new private estate development (consisting of more than 10 houses/50 apartments) at least 20 per cent has to be social housing, and 40 per cent if the land belongs to the public sector.

For anyone professionally interested in property development, planning or housing policy, page 87 of this document is a must. For the less committed the nine-page executive summary of what is a very complex set of issues will get you by.

*http://iti.ms/1fg4PiF