Affordable Housing Targets and setting CIL Rates. - Public forum - Planning Advisory Service (PAS)
Affordable Housing Targets and setting CIL Rates.
Simon Pickstone, modified 9 Years ago.
Affordable Housing Targets and setting CIL Rates.
Advocate Posts: 104 Join Date: 22/04/13 Recent PostsHi, please could somebody just update me on the latest stance Examiners are taking in relation to the different approaches LCA's have taken in the past in terms of factoring in AH costs into viability appraisals underpinning Charging Schedules? The two approaches I am aware of essentially differ in that one approach uses the AH target set in policy whereas the other uses the 'actual' AH percentage being achieved on sites. For example, a CA may have a 30% AH target established in policy but may have only factored in a 15% AH figure into their viability appraisal when setting the CIL Charging Schedule arguing that it is more reflective of the current situation? Is there are definitive answer on this? Thanks
Charlene Jones, modified 9 Years ago.
Affordable Housing Targets and setting CIL Rates.
New Member Posts: 22 Join Date: 30/08/13 Recent PostsHi,
I think Plymouth was the last Council to get away with it in an Examiner's report, and since then some Councils have been pulled up on it (can't remember off the top of my head) - ie the viability study should assume the Core Strategy full policy - don't know how this will sit with the new consultation?
Thanks,
Charlene
Charlene Jones, modified 9 Years ago.
Affordable Housing Targets and setting CIL Rates.
New Member Posts: 22 Join Date: 30/08/13 Recent PostsPlanning Performance and Planning Contributions consultation - to limit affordable housing ask to proposals of ten dwellings or more. Solihull Council has a policy for 3+ dwellings to ask for 40% affordable housing. Consultation closed: 4th May 2014.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/295035/140320_Planning_Performance_and_Planning_Contributions_-_consultation.pdf
Simon Pickstone, modified 9 Years ago.
Affordable Housing Targets and setting CIL Rates.
Advocate Posts: 104 Join Date: 22/04/13 Recent PostsAh, I see. Thanks. My view is that CIL may well be set at a higher rate then for developments of 10 or fewer units to 'soak up' some of the additional residual value secured as a result of not having to provide for AH?
Andrea King, modified 9 Years ago.
Affordable Housing Targets and setting CIL Rates.
Enthusiast Posts: 76 Join Date: 19/08/13 Recent PostsWe've just on completed our viability assessments. We've used a baseline 25% affordable housing figure in accordance with current adopted LDF Core Strategy policy (2007), but have also considered different scenarios for affordable housing provision at 20% (which is typically what we've been achieving) and at 0%, plus also at other 5% intervals in between to help us see the relative implications in different areas of the borough and on brownfield and greenfield sites of different sizes. We're in the early stages of preparing for our new Local Plan, so in the knowledge that our current LDF policy might well change we wanted to be able to see how affordable housing policy requirements (as also informed by new SHMA) and CIL might fit together as we prepare them broadly alongside one another over the next few years, and hence what trade-offs and prioritisation there might need to be in terms of ensuring sites are still economically viable and deliverable and achieving the necessary appropriate balance.
Clearly it would seem to be unreasonable to adopt a CIL based on an affordable housing requirement different to what's required in the adopted development plan at that point in time (albeit the latter is negotiable through s106 and thus more flexible), so if you're wanting to apply a different affordable housing requirement for basing your CIL charges on, then you'll need to change the development plan policy too so they align.
Simon Pickstone, modified 9 Years ago.
Affordable Housing Targets and setting CIL Rates.
Advocate Posts: 104 Join Date: 22/04/13 Recent PostsThanks Charlene...can you just clarify for me what 'the new consultation' you refer to is? Thanks
We had our CIL exam today and can confirm that the examiner specifically stated that he wanted to be certain that CIL would not impact on the full affordable housing targets as set out in the Core Strategy. Our viability work did include the full targets as an input.
Simon Pickstone, modified 9 Years ago.
Affordable Housing Targets and setting CIL Rates.
Advocate Posts: 104 Join Date: 22/04/13 Recent PostsThanks for that Lora.
I think that all the examiners are now consistently ensuring that the full plan amount of affordable housing has be looked at when assessing viability and impact on delivery. Remeber that viability appraisals are not an exact science and that you need to look at the other evidecen of delivery. Look at the Exeter decision - which demonstrates an inspector questioning the viability evidecence.
Hi Simon,
Whilst not directly related to your original post I did want to throw in something in terms of your comment that 'My view is that CIL may well be set at a higher rate then for developments of 10 or fewer units to 'soak up' some of the additional residual value secured as a result of not having to provide for AH?'.
Please see the link below for a parlimantary debate from February on CIL charges relating to scale - and the question as to whether a charging authority would attempt to levy a higher rate on smaller sites.
http://www.publications.parliament.uk/pa/cm201314/cmgeneral/deleg1/140210/140210s01.htm
"Secondly, the hon. Gentleman raised the concern that small developments might be particularly penalised by the provision that we are introducing to allow differential rates for different scales of development. Although ultimately he will respect the fact that it is for local authorities, democratically and after consultation, to introduce their own charging schedules, my view is that the situation is more likely to be precisely the opposite. Local authorities understand that land prices are often higher for small builders and developers than for very big schemes. The viability of small projects may be much more marginal than the viability of big schemes, so I expect the differential provision to favour small builders rather than the reverse, although a particularly pusillanimous local authority could try to do what he says he fears (my emphasis)".
It seems to me that Minister would take a dim view of this approach. However, I am of the view that if affordable housing is not provided on site of up to 10 dwellings then we have little scope but to increase CIL rates - as to not do so would constitute state aid wouldn't it? If CIL is really based on viability then do we not have a duty to capture this new 'value'.
Thanks, James
Simon Pickstone, modified 9 Years ago.
Affordable Housing Targets and setting CIL Rates.
Advocate Posts: 104 Join Date: 22/04/13 Recent PostsHi James
Thanks for sign-posting to the above debate.
The CIL Guidance 2014 clearly allows setting differential rates according to scale, subject to accounting for viability of course. If a sub-10 unit development is more viable as a result of not having to provide AH then it is perfectly legitimate, in my view, to seek to claw back some of this residual value for infrastructure.
Given that setting a CIL involves a certain level of discretion i.e. striking an appropriate balance etc. I am not sure if it does have implications in terms of State Aid...it's a complex area?
Remember the 2014 Regs introduce all sorts of other 'relief' for small developments e.g. self-build exemption etc.
James, I love thway that MP's invesnt their economics as they go along! Smaller developers do indeed sometimes pay more for land but this can reflect the fact that they are buying an 'oven ready site. In contrast most large scale schemes face much larger on-site and off-site infrastructure costs. There are other factors at work too. Smaller developers don't enjoy exconomies of scale but smaller schemes don't carry the same timing risk. It is dodgy practice to pull one factor out to support a differential rate. You need to look at tyhe economics in the round. My guess is that the correct level rather depnds on what your sites are like and how many you need to see developed in order to meet your housing aspirations. Your viability study should have considered this.
Mick Beaman
[quote=James Fisher]
Hi Simon,
Whilst not directly related to your original post I did want to throw in something in terms of your comment that 'My view is that CIL may well be set at a higher rate then for developments of 10 or fewer units to 'soak up' some of the additional residual value secured as a result of not having to provide for AH?'.
Please see the link below for a parlimantary debate from February on CIL charges relating to scale - and the question as to whether a charging authority would attempt to levy a higher rate on smaller sites.
http://www.publications.parliament.uk/pa/cm201314/cmgeneral/deleg1/140210/140210s01.htm
"Secondly, the hon. Gentleman raised the concern that small developments might be particularly penalised by the provision that we are introducing to allow differential rates for different scales of development. Although ultimately he will respect the fact that it is for local authorities, democratically and after consultation, to introduce their own charging schedules, my view is that the situation is more likely to be precisely the opposite. Local authorities understand that land prices are often higher for small builders and developers than for very big schemes. The viability of small projects may be much more marginal than the viability of big schemes, so I expect the differential provision to favour small builders rather than the reverse, although a particularly pusillanimous local authority could try to do what he says he fears (my emphasis)".
It seems to me that Minister would take a dim view of this approach. However, I am of the view that if affordable housing is not provided on site of up to 10 dwellings then we have little scope but to increase CIL rates - as to not do so would constitute state aid wouldn't it? If CIL is really based on viability then do we not have a duty to capture this new 'value'.
Thanks, James
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