Agenda item

(Director of Planning and Economic Development) To consider the attached.

The Panel received a report from Mr N Richardson, Assistant Director of Planning and Economic Development, regarding Section 106 Agreements and Affordable Housing.

Section 106 of the Town and Country Planning Act 1990 allowed a local planning authority to enter into a legally binding agreement or planning obligation with a land owner/developer over a related issue. The obligation was often termed a “Section 106 Agreement.”

Section 106 Agreements could act as a main instrument for placing restrictions on developers, often requiring them to minimise the impact of their development on the local community and to carry out tasks providing community benefits.

Such agreements were sought when planning conditions were inappropriate to ensure and enhance the quality of development and enable proposals that might otherwise have been refused to go ahead in a sustainable manner. They were not used to take a share of the developer’s profits into the public purse, nor were they used to gain a benefit that was unrelated to the development.

Affordable Housing

Affordable Housing was required where a certain threshold (15 dwellings or more or where the site was 0.5 hectare or above) was reached in a single development proposal where the population of the settlement was greater than 3,000 people. The requirement in this case would be 40% of all houses would be affordable and the only way to secure this was through a legal agreement. In smaller settlements outside the Green Belt, up to 50% would be sought.

Negotiation became more complex and delayed the determination of planning applications, when community or off-site affordable housing contribution was sought. The Council had no formulae or standard charges worked up and requests made at planning committee meetings were sometimes interpreted as a take of the developer’s profit and therefore not necessary or reasonable in planning terms. An affordable housing contribution should cover the difference between the value of a residential unit on the open market and the amount a housing association could pay for it to charge affordable rents. An evaluation was needed for each unit and a development appraisal based on a cash flow of a housing association managing the units over 30 years netted back to the present value.

Performance for the Year 2010/11

There were 7 Section 106 Agreements concluded between April 2010 and March 2011.

Benefits negotiated through the year provided:

(1)        A total of £703,400 to be received into the public purse;

(2)        In the region of 6 affordable housing units;

(3)        Various highway improvements at the developer’s expense; and

(4)        Parish Council facilities

Benefits actually realised through the year have provided:

(5)        A total of £545,512 received into the public purse;

(6)        165 affordable housing units;

(7)        Improvements to public transport facilities at the developer’s expense;

(8)        Various highway works at the developer’s expense; and

(9)        Town Centre improvements

The Future

Essex County Council had been working on proposing a “standard charge” for development within the county. This meant, for example, that for every new dwelling granted permission, they may require a standard sum of money to be paid into the public purse to cater for increased use of libraries, roads, education facilities etc. They have recently produced a “Developer’s Guide to Infrastructure Contributions” and within this, there were formulae and standard charges/tariffs relevant to county services. It was sensible for this Council to adopt a similar approach, that on qualifying developments a standard sum be required to cover the increased use of leisure facilities, waste collection, affordable housing, town centre enhancement, public car parking etc. Such a policy would need to be adopted within the emerging LDF.

RESOLVED:

That the Section 106 Affordable Housing report be noted.