100% affordable housing schemes - Public forum - Planning Advisory Service (PAS)

Due to current market conditions, we increasingly have this issue with private developers not wanting to provide the required proportion of an eligible scheme as Affordable Housing. Not exactly the same as for 100% AH schemes, but similar, and I guess we might face the same situation soon. When applicants do not propose to provide the full range of contributions, we require them to submit financial information so an economic viability appraisal can be conducted by consultants retained by the Council for that purpose. The appraisal will see if the applicant's case is valid by looking at whether their calculations are correct, are using reasonable cost estimates, are making a reasonable profit and whether a fair price has been paid for the land. If it supports the applicant's case then we can accept that our full range of requirements are not viable and try to come up with an acceptable compromise. The prioritisation of different contributions is not set out in a particular policy document, though we may do this in time.

Without wanting to get into the detailed debate about how a credit crunch somehow leads to development not needing to deliver necessary infrastructure etc. I would only accept such viability work at all if it was backed by a guarantee that the development would be delivered within a very short timeframe, say 12 to 18 months. Beyond that the viability position may look very different.

We have thought about this issue also. The advice we have received from our retained consultants is that appraisals can be conducted to account for a range of economic vibaility scenarios, and a planning permission could be conditioned accordingly. However, if a planning permission has been commenced (e.g. as little as digging some foundations) but not completed as the developer intends to wait for market conditions to change, our understanding is that it would be difficult to prove there was no intention to complete within the timescale and to make the applicant change the development at a later time. Our compromise position will be to limit the lifespan of any permission that is not in full compliance with our typical requirements to 2 years. I'd be interested in hearing whether anyone else has had different advice or has any other suggestions about how to address this problem of limiting permissions to the time horizon of the economic viability appraisal.

It is a tough issue. Limiting consent to only two years is not going to solve the problem, and very real risk, of a developer getting a better deal, digging foundations and sitting tight until market conditons improve. The only solution that immediately springs to mind is the creative use of phasing.

If you have a 100% affordable scheme why not talk to whoever is funding the RSL and insist on a performance target ie all built and handed over by a key date or some of the grant has to be refunded? Then you will know you are dealing with a developer who wants to build rather than one who is only trying to increase the value of his assett.