Affordable rent, affordable targets and viability - Public forum - Planning Advisory Service (PAS)
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Affordable rent, affordable targets and viability
The introduction of the 'affordable rent' tenure may seem an arcane housing matter, but it could have implications for those working on CS affordable policies. That is because, other things equal, the higher rents mean in principle that RSLs could afford to pay quite a bit more for affordable units, improving viability. However it is surely intended that the higher rents should generate additional funding for affordable provision. This can be achieved in either of two ways: 1. Ensuring that the extra the RSL could afford to pay is not in fact paid, but captured to fund provision elsewhere, OR:. 2. Allowing the RSL to pay it, but increasing the target to reflect the improved viability. (Otherwise there would be no funding for additional housing at all). Which of the two is it? The second option could considerably disrupt the LDF programme so seems unlikely. HCA's recently published Framework doesn't appear to clarify the issue to any great extent.
I don't know if this just muddies the waters further, but my Housing Strategy colleague understands that affordable rent homes do not currently fall within the affordable housing definition set out in PPS3 (though he thinks that the Government is planning to change the PPS3 definition so that they will). Can anyone shed some more light on (i) whether affordable rent homes do or do not fall within the PPS3 AH definiton? (ii) is the Government planing to change PPS3 again ?
Valerie, the Government has proposed changes to the PPS3 Annex definition at http://www.communities.gov.uk/publications/planningandbuilding/pps3annexconsultation There is an insightful article on this for London Boroughs at http://www.futureoflondon.org.uk/2011/03/11/is-the-affordable-rent-model-in-london-viable/ which may also be useful.
What's everyone's interpretation of the new definition? Maybe I'm missing the point, but I don't see much difference between affordable rented and intermediate. The definition of intermediate allows for rents higher than social rented housing and the affordable rented product is proposing rents higher than social rented housing. Therefore, surely they should just change the definition of intermediate to include affordable rented and negate the need for this new paragraph.
Steve, at first glance it does sound that intermediate rent and affordable rent are one and the same thing. I think the confusion stems from the level of rent that is charged. Intermediate rent is set at "...rents above those of social rent, but below market...rents". Affordable rent is set at "...a rent of no more than 80 per cent of the local market rent" (PPS3 Annex B, June 2011). However, there is a subtle difference. It relates to how they are allocated. Intermediate rent is typically offered to key workers or first-time buyers through products such as "Rent to HomeBuy". Affordable rent, on the otherhand, is only let to "...households who are eligible for social rented housing" - i.e. those on a housing register. To help you keep the distinction clear in your mind, think of affordable rent as merely a new form of social rented housing. So...now that the definition has come into effect, is anyone leading the way on updating their Affordable Housing policies? Has anyone yet managed to secured a proportion of affordable rent on a scheme? Our SPD currently splits our 30% target evenly (50/50) between social rent and intermediate affordable housing. Our recent SHMA recommends a new tenure split to take account of affordable rent, but we are conscious of undertaking economic viability work to investigate what can be delivered, and also speaking to our RSL and Housing Strategy colleagues to understand their ability to deliver social rented housing in future. I would be interested to hear how people are approaching this.....