to define ‘future proofing’ in relation to affordable housing secured through the planning...
TRANSCRIPT
To define ‘future proofing’ in relation to affordable housing secured through the planning system
To outline the options for future proofing and discuss their relative strengths and weaknesses
This workshop will help disseminate the recommendations in Ark’s report
HCA – Investment and Planning Obligations – Responding to the Downturn
Atlas Guide Topic Papers
T.1.1.1 Developing a Strategy for Addressing Stalled Schemes
T.1.2.3 Financial Appraisal and Viability in the Planning Process
T.1.3.1 Reviewing Section 106 Agreements
T.1.3.2 Contingent Deferred Obligations
• A1 FIXED CONTRIBUTION
[A2 Fixed with deferred contribution]
• B1 OPEN BOOK REVIEW
[B2 Open book with overage agreement]
• C1 AUTOMATED REVIEW (CLAWBACK)
[C2 Automated with escalator provision]
STRENGTHS
Balances provision across the scheme
Easy to define external subsidy Clear cut obligations where
sites sold on by land promoters
WEAKNESSES
Heavily reliant on quality of initial negotiations
One party could suffer dependent on changes in market conditions
Re-plans or value engineering only benefit developer
Fixes the contribution of affordable housing at a level below policy but above what is viable currently.
STRENGTHS
Helps promote delivery in short term
Possible to reach compliant levels eventually
WEAKNESSES
Imbalance in distribution of affordable housing
As A1 but contribution steps up to agreed levels over time.
STRENGTHS
Transparency Partnership approach Responsive to market
conditions Can reduce intensity of initial
‘haggling’
WEAKNESSES
Most developers will resist open book approach
For LPA could result in affordable % going down
Review is time consuming and provokes argument
Is there sufficient incentive for developer?
Open book review of relevant data at appropriate intervals to determine affordable housing provision by phase.
STRENGTHS
More incentive for developer to optimise outturns and co-operate
WEAKNESSES
Does not maximise affordable housing provision
Usually links to an agreed minimum level of contribution
As per B1 but any ‘super profit’ is shared by both parties
STRENGTHS
Simplified review Reliance on verifiable data Lower costs than open book
review
WEAKNESSES
Difficult to agree formula Indices may not relate to
scheme characteristics Tends to ignore impact of
infrastructure and abnormals
Bases review on movements in agreed indices. Clawback is usually overage based.
STRENGTHS
Improves clarity on what will be provided assuming certain changes
Simplifies review process even further
WEAKNESSES
Even more complexity in initial negotiations
As for Clawback but with additional affordable contribution stepped dependent on changes in indices.