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Wednesday, 6 April 2016

Housing Choice

Affordable housing as a concept often seems to generate more heat than light and it would be better if people were clearer about the choices involved, so I thought I would put down some thoughts.

Affordability
The present government has deliberately undermined the whole concept of affordable housing.  I think this is largely because government ministers see no value in it, and assume that everything should be dictated by "free" market forces (as if such things really existed).  A major step in this was the redefinition of "affordable" to 80% of market rent, but damage has also been wrought by the setting of social housing rents by central government.  This was true of efforts to increase Council rents, but has been affected in another way by the enforced cutting of rents by Housing Associations.

Housing Associations have been seriously undermined by effectively losing the ability to plan their businesses effectively.  Instead of being allowed to make choices around what their income should be and what it is spent on, central government is forcing a "one size fits all" approach that takes no account of local needs.  It is ironic that a Conservative government should take such an old style Soviet approach to housing.  In effectively nationalising housing associations, the government has also added to its debts, despite all the rhetoric about deficit reduction.  

Local Choices on Housing
Planning authorities of course still have choices they can make in housing developments.  In Brent I pick up a lot of talk about the 50% target of affordable homes that the Council has.  Much of this talk is fairly sterile criticism whenever the Council agrees a development with less than 50%.  This fails to take into account that the Council planners are negotiating a deal, not handing down a diktat.  If their position is unreasonable, a planning appeal may well overturn it.

What is reasonable depends on things beyond Council control such as national planning guidance, what is judged to be financially viable and the exact nature of the application.  In this context, Brent has been quite imaginative in negotiating clawback deals, as in the rejected Queensbury application, should the market situation change. 

The kind of questions that need to be asked are:

  • Is the applicant offering some alternative version of planning gain?  For instance, The Library at Willesden was paid for through the sale of housing at the back of the site.  This meant that it was judged unviable to demand affordable housing units.
  • Can the site realistically contain enough units?  If not it may be reasonable for the developer to pay for affordable housing elsewhere in the Borough.  
  • What kind of affordable housing is being provided?  The defintition of affordable housing now includes various kinds of shared ownership forms.  Are these the same as rented housing?
  • What are the mix of units in terms of size?  The market favours one or two bedroom flats, but families need larger units.  Brent has a particular shortage in this regard.  Some family units are important for the overall community mix, but the market fails to provide them.
These questions often go unasked, and debate can often been uninformed.  For instance it would be quite possible to secure a higher percentage of "affordable" units in a development by dropping requirements for family sized units.  However, in many cases that would lead to a significantly worse development.

A final factor that has entered into the equation is the likelihood of both Council and Housing Association units being sold off with government subsidy, and in  many cases then being rented out for exorbitant rents.  I get the feeling that there just isn't widespread understanding of these issues. 

UPDATE

As so often the anonymous comment (18.33) below has certainty in inverse proportion to knowledge.  The clawback arrangement over affordable housing is becoming an increasingly common, and legally defendable, way for Councils to maximise affordable housing.  Willesden Library was built as entirely marketed property because the social gain element came in the form of the new Willesden Library.  This does indeed mean the developer makes a profit, but why would a property developer sign a deal where they did not make a profit?

1 comment:

  1. The only reason Brent negotiated a reasonable clawback deal on the rejected Queensbury application was because of the shambles of the Willesden library deal which saw enormous profits for both developers and far-East property speculators and no clawback for Brent whatsoever.

    And who was responsible for that little deal eh? Oh, wait...

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