A blog about planning, planning law and planning policy

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The information on this blog is not intended to be advice, legal or otherwise. You should not rely on it and I do not accept liability in connection with it. If you do have a planning law question on which you would like advice, seek legal advice from a suitably qualified solicitor. Specific advice should be sought for specific problems.

Affordable housing in the Growth and Infrastructure Bill

I   promised to comment further on aspects of the Growth and Infrastructure Bill.  The first part I want to look at is the parts on affordable housing.  They allow for the variation of affordable housing requirements if the development is “not economically viable”.

The provisions allow for more than one application to be made and in the case of the first, if the affordable housing requirement makes the development not economically viable, the LPA is obliged to make a variation to make the development economically viable.  The determination of the LPA may not, in the case of the first application, make the “obligation” more onerous in its application to the applicant than the unmodified “obligation”.  In the case of second and subsequent applications  the determination can be more onerous but must still not make the development economically unviable.

There is to be a right of appeal.  If the Secretary of State decides to modify the obligation he must also determine that, if the development has not been completed within three years, (a) his modification ceases to have effect and (b) the development may not be completed until there is a new agreement on affordable housing between the applicant and the LPA.

That last part strikes me as strange.  Firstly, what about large developments which take much longer than three years to complete?  Secondly, if the LPA and the applicant can’t agree, the development will come to a standstill.  Thirdly (and this can be sorted out with a suitable amendment) what happens if the original applicant has sold and isn’t on the scene three years on?

Let’s also think about the phrase “economically viable”. What does that actually mean?  There is provision for the Secretary of State to issue guidance, so perhaps that will help. Then how is that test applied?  New section 106BA(3) says that if the affordable housing requirement makes the development not economically viable the variations must be made. But how do we tell if the AH requirement is the cause, rather than for example the price to be paid to the landowner?

Lastly, there is a problem with the use of the phrase “planning obligation”.  In section 106, a planning obligation means the individual promises in the planning agreement. This is quite clear from s.106(9) which says “A planning obligation may not be entered into except by an instrument executed as a deed…”.  But in the new sections in the Bill the phrase planning obligation is used to mean the deed.  I haven’t had time to work out the effect of this, but it is going to lead to confusion.  The CIL regulations have a provision restricting the number of planning obligations which can contribute to a piece of infrastructure.  When I was chair of the Law Society’s Planning Law Committee I checked with DCLG’s lawyers that they really meant the individual obligations and not the deed. They confirmed that to be the intent, which is correct, so it is unfortunate to go the other way in this Bill.  But hopefully it can be rectified during the Parliamentary process.

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