Affordable Housing Supplementary Planning Document (SPD)

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5. Delivery of Affordable Housing

5.1 The Council will expect the provision of affordable housing for sites above the policy thresholds to be provided on the proposed development site. The Council also expects that affordable housing should be provided without any form of public subsidy.

5.2 Affordable housing will be expected to be delivered on new build sites and when buildings are converted to a residential use or where a change of use is made from any residential use with shared facilities (such as bed-sit accommodation, or a care home) to independent residential units with separate facilities. Units may also be created when a private dwelling is converted into flats. The policy will apply in these circumstances to any net increase where the resulting number of units is above the threshold.

5.3 Negotiation with the applicant will be undertaken to confirm the final mix of affordable housing types/tenure. In schemes over 15 units, affordable housing should be provided in more than one single parcel. The affordable housing mix on any site should normally be "pepper potted" throughout the scheme in groups, the size and location of which should be discussed and agreed with the Council.

5.4 The affordable housing provision should proportionally reflect the dwellings provided on the overall scheme, however this should be informed by the latest assessment of local market conditions, housing need and shortages to determine the most appropriate mix.

5.5 Proposals that, in the opinion of the Council seek to under-develop or split sites into smaller land parcels in order to avoid providing affordable housing on site will be refused planning permission unless a proportionate number of affordable units are provided.

5.6 The Council has an ongoing need for affordable housing for wheelchair users. In accordance with Policy DM12; 95% of affordable housing should meet a minimum of Building Regulations Part M4 Category 2 and 5% of affordable homes should meet Part M4 3 (2) (b) or Part M4 3 (2) (a) as agreed with the Council in accordance with identified need. Further information regarding specialist residential accommodation, will be provided in the Self and Custom Build and Specialist Housing SPD.

Calculating Number of Affordable Units

5.7 Allocations within the Local Plan are expected to comply with Policy DM8 which requires 30% affordable housing for developments of 10 or more dwellings.

5.8 The number of dwellings to be provided as affordable housing in any one instance will be calculated by rounding up to the nearest whole number.

5.9 The affordable housing mix should be no less than 80% affordable rent or social rent and no more than 20% as other affordable tenures including shared ownership and other routes to home ownership. Regard will also be had to the requirements of paragraph 65 of the NPPF and the Colchester affordable housing need.

5.10 The affordable housing provision applies to the total number of dwellings across the development; it does not only apply to the part of the development above the relevant threshold.

5.11 Examples of calculating the number of affordable houses is outlined in Table 1 below.

Table 1 – Affordable Housing Calculation Examples

Policy Reference

AF Requirement

Total Units

Calculation

Affordable Units Required

DM8

30%

6

6 X 30/100 = 1.8

2

DM8

30%

30

30 x 30/100 = 9

9

Off Site Affordable Housing and Commuted Sums

5.12 In exceptional circumstances the Council may accept that on-site provision is not appropriate, for example where there is a proposal that includes a significant proportion of studio-flats or bed-sits, which do not meet affordable housing needs.

5.13 In these circumstances, the provision of affordable units elsewhere will only be acceptable where each of the following are met:

  • An alternative site or sites have been identified which would enable affordable housing provision that matches what would have been provided on the original site and is appropriate to the identified local housing needs to be met;
  • The alternative site(s) can deliver the off-site provision in an appropriate timescale and in an appropriate locality elsewhere within the Borough;
  • The off-site affordable housing provision is deliverable prior to the on-site market development being completed;
  • The number of affordable units will reflect the benefit the applicant gains through using 100% of the site for market housing compared with on-site affordable housing is provided; and
  • The off-site provision will be in addition to the affordable housing that would normally have been required for the alternative site.

5.14 In circumstances where the Council accepts that the provision of affordable housing cannot be provided on site and an alternative site is not available or acceptable to the Council, the applicant will be required to pay a commuted sum (financial contribution) to the Council to be spent to provide affordable housing elsewhere in the Borough.

5.15 The level of payment in the form of a commuted sum will be based on the difference between the open market value for a similar size and type of property in the same area; and the transfer price paid by the registered provider. When calculating the appropriate commuted sum, the mix, ratio and type of dwellings will also be taken into account as if the units were to be provided on site to ensure that this as far as possible accurately replicates the cost of provision on site. See Table 2 below for example calculation.

Table 2 – Commuted Sums Example Calculations

Dwelling Type

Open Market Value

Transfer Price

Commuted Sum

Two Bedroom Flat

£220,000

£135,000

£85,000

Three Bedroom House

£340,000

£170,000

£170,000

Please note figures will be updated to reflect current house values at the point of adoption of this SPD, due to the current housing market situation

Viability

5.16 Developers should factor prospective planning obligations and contributions as well as other predictable development costs into land price negotiations. The provision of affordable housing will have an impact on the value of land for residential development, but this in isolation will not generally result in the development being uneconomic when compared to existing use value.

5.17 Paragraph 2 of the viability section of the Planning Practice Guidance (PPG) outlines that "policy requirements, particularly for affordable housing, should be set at a level that takes account of affordable housing and infrastructure needs and allows for the planned types of sites and development to be deliverable, without the need for further viability assessment at the decision making stage". As such, the Council does not expect viability to be an issue at the decision-making stage for allocations within the Local Plan, as sites are expected to have been proven deliverable through plan making. Further viability assessments should therefore not be necessary to support a planning application.

5.18 Where there are concerns about viability, applicants are encouraged to consult with the Council at an early stage, to consider how any such constraints and barriers to delivery can be reduced.

5.19 A viability assessment evidencing the identified level of housing need, financial viability or deliverability, will be expected as part of any residential planning application where a policy compliant level of affordable housing is not included. In accordance with paragraph 58 of the NPPF, all viability assessments will be made publicly available via the planning portal as part of the documents submitted in support of a planning application. The assessment will be scrutinised by the Council's approved viability assessor, at a cost to be borne by the applicant, and form part of the decision-making process in accordance with national planning policy and guidance.

5.20 Where it is demonstrated that the scale of affordable housing provision and other policy burdens would result in the proposed development not being financially viable, the Council may consider a lower contribution, in exceptional circumstances only.

Exceptions to Affordable Housing Policy

5.21 Certain forms of residential accommodation will not be subject to the provision of affordable housing or a financial contribution towards it. These will include care homes, hostels, student housing, residential schools and colleges (where the accommodation is directly linked to educational facilities on site) and military housing, provided that the proposed accommodation does not fall within use class C3 and, that a planning condition is to be imposed limiting the accommodation to these specific users. The provision of any of these forms of residential accommodation will not count towards the overall provision of affordable housing in the Borough. Any self-contained use class C3 units (dwelling houses) provided as part of these proposals will be expected to comply with the affordable housing requirements.

5.22 Replacement single dwellings will not need to make provision, unless additional dwelling units above the thresholds are being created. Where additional units are being created, then the affordable housing calculation will be applied across the whole site to the net increase in dwelling numbers where policy compliant.

5.23 Extensions to existing dwellings will not need to make a contribution; unless separate units of accommodation with their own facilities, above the thresholds, are being created and this is not for use by a dependent relative of the occupants of the main dwelling.

Rural Exception Sites

5.24 Policy DM8 supports affordable housing development on rural exception sites. However, these must be sites that are contiguous with or adjacent to existing village settlement boundaries and address a local need that has been robustly demonstrated by way of a local housing needs survey and development is supported by the Parish Council on behalf of their residents.

5.25 The Rural Community Council for Essex (RCCE), an independent charity, employs a Rural Housing Enabler who works with rural communities, providing independent advice and support, acting as a facilitator and helping them through the process of providing affordable housing. The Rural Housing Enabler has the appropriate level of expertise to carry out a Local Housing Needs Survey, that will establish how many people in the parish need housing and the most appropriate tenure. This information is needed to support a planning application for rural exception housing.

5.26 The Council encourages all applicants proposing affordable housing on rural exception sites to work with a registered provider that supports the work of the Rural Housing Enabler employed by the RCCE. These registered providers have experience in delivering affordable housing in rural areas and work within an agreed framework.

5.27 To inform the prioritisation and allocation of dwellings in rural areas, the survey analysis should identify types of local connection that households in housing need have within the Parish.

5.28 The Local Housing Needs Survey should be up to date and reflect the current needs of the area. A Local Housing Needs Survey which predates the planning application by five or more years will not be considered adequate to support a development proposal.

5.29 It is expected that the proposed dwellings will all remain permanently available to local people on low incomes who cannot afford market housing. Proponents of the scheme (developers/landowners/housing associations etc.) will need to enter into a Section 106 Agreement with the Council to ensure they remain permanently available to local people on low incomes.

5.30 The dwellings will be allocated to persons with a local connection to the Parish who are in need of an affordable dwelling and are unable to obtain a property on the open market.

5.31 The mechanism for allocating the dwellings will be specified in the S106 Agreement. This will prioritise applicants with a local connection in the first instance and will be agreed between the Local Authority and the Parish Council on a scheme by scheme basis.

5.32 In order to ensure that the units remain permanently available as affordable housing, on each occasion that it is necessary to reallocate any of these units, the procedure for allocation will follow the same principles set out above. In the instance where there is no need within the Parish, this will be cascaded to an adjoining Parish within the Borough.

5.33 In order for the Council to assess if an open market element of a rural exception site is justified, any proposal including this must also provide a robust, independently prepared and audited viability assessment of the proposed development. The extent of the funding gap to be bridged in order for the proposal to be viable, including the income from cross-subsidy generated through open-market sales, that will assist in creating the additional scheme revenue that can fund the affordable housing on the site without requiring additional public subsidy, should be clearly set out. As outlined in paragraph 5.18 above, the assessment will be scrutinised by the Council's approved viability assessor, at a cost to be borne by the applicant, and form part of the decision-making process in accordance with national planning policy and guidance.

Vacant Building Credit

5.34 Vacant building credit was introduced to promote development on brownfield sites. It allows the floorspace of existing buildings that are to be redeveloped to be offset against the calculations for section 106 affordable housing requirements. It applies to any building that has not been abandoned and is brought back into any lawful use or is demolished to be replaced by a new building.

5.35 The PPG explains that existing gross floorspace (assuming it has not been abandoned) should be credited against that of the new development. Where there is an overall increase in floor space in the proposed development, the local planning authority should then calculate the amount of affordable housing contribution or provision required from the development as set out in their local plan on the basis of that additional floorspace.

5.36 The example given in the PPG is as follows: 'where a building with a gross floorspace of 8,000 square metres is demolished as part of a proposed development with a gross floorspace of 10,000 square metres, any affordable housing contribution should be a fifth of what would normally be sought'.

5.37 For example, the revised affordable housing calculation for a proposal of 60 dwellings including 4,500sqm proposed gross internal area, where the existing vacant gross internal area is 3,000sqm equates to a 33% difference. This would result in the requirement of 6 affordable dwellings (the remaining 54 units would be market dwellings).

5.38 For wholly residential schemes, the total proposed gross internal area will be the area of all dwellings. Where flatted development is included within the development, the proposed gross internal area will include all communal and circulation areas. For mixed use schemes, the proposed gross internal area of the proposed residential elements will be included.

5.39 Where the revised affordable housing sought does not result in whole numbers, the number of affordable dwellings will be rounded up to the nearest whole number to achieve the required percentage provision (see paragraph 5.37 above).

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