Policy 3.12 Negotiating affordable housing ...

Policy

Planning decisions and LDF preparation

A  The maximum reasonable amount of affordable housing should be sought when negotiating on individual private residential and mixed use schemes, having regard to:

a  current and future requirements for affordable housing at local and regional levels identified in line with Policies 3.83.10 and 3.11 and having particular regard to the guidance provided by the Mayor through the London Housing Strategy, supplementary guidance and the London Plan Annual Monitoring Report (see paragraph 3.68)

b  affordable housing targets adopted inline with Policy 3.11,

c  the need to encourage rather than restrain residential development (Policy 3.3),

d  the need to promote mixed and balanced communities (Policy 3.9),

e  the size and type of affordable housing needed in particular locations,

f  the specific circumstances of individual sites,

g  resources available to fund affordable housing, to maximise affordable housing output and the investment criteria set by the Mayor,

h  the priority to be accorded to provision of affordable family housing in policies 3.8 and 3.11.

B  Negotiations on sites should take account of their individual circumstances including development viability, the availability of public subsidy, the implications of phased development including provisions for re-appraising the viability of schemes prior to implementation (‘contingent obligations’), and other scheme requirements.

C  Affordable housing should normally be provided on-site. In exceptional cases where it can be demonstrated robustly that this is not appropriate in terms of the policies in this Plan, it may be provided off-site. A cash in lieu contribution should only be accepted where this would have demonstrable benefits in furthering the affordable housing and other policies in this Plan and should be ring-fenced and, if appropriate, pooled to secure additional affordable housing either on identified sites elsewhere or as part of an agreed programme for provision of affordable housing.

Supporting text

3.70  Achievement of a borough’s affordable housing target in a particular year should not constrain maximisation of affordable housing output on individual proposals – the target applies for the term of the Plan.

3.71  In estimating provision from private residential or mixed use developments, boroughs should take into account economic viability and the most effective use of private and public investment, including the use of developer contributions. To expedite the planning process, developers should engage with a registered provider prior to progressing the scheme and secure from them a commitment to provision.  In doing so, they should require the provider to identify the resources it is bringing to the scheme and demonstrate that the proposed affordable housing provision makes optimum use of the resources applied in terms of Policy 3.12, and provides the range of affordable rents indicated in the London Housing Strategy. Developers should provide development appraisals to demonstrate that each scheme provides the maximum reasonable amount of affordable housing output.  Boroughs should evaluate these appraisals rigorously, drawing on the GLA development control toolkit[1] and other independent assessments which take account of the individual circumstances of a site, the availability of public subsidy and other scheme requirements. Boroughs are encouraged to review and bring forward surplus land in their own ownership to maximise their contribution to affordable housing provision, including the provision of land to registered providers on a nil cost or discounted basis[2]. The Mayor will provide further detailed guidance on the practical application of this policy.

3.72  The Mayor seeks to maximise affordable housing output and expects developers to make the most effective use of available affordable housing resources to achieve this objective. Exceptions to the use of the full amount of available public investment to maximise output should be limited to circumstances where:

  • on the highest value sites, at least the maximum level of affordable housing which would normally be achieved with public subsidy can in fact be achieved by funding entirely from development value
  • some circumstances where ‘cascade agreements’ are put in place to address uncertainties over the level of grant and amount of affordable housing to be delivered
  • types of provision which comply with the definition of affordable housing but are subsidised in other ways such as directly through discounted land sale, or indirectly if they offer exceptional benefits which on balance justify departures from some normal planning requirements.

Supplementary guidance will be provided on these exceptional circumstances.

3.73  The Mayor wishes to encourage, not restrain, overall residential development. Boroughs should take a reasonable and flexible approach to securing affordable housing on a site by site basis. This Plan makes clear that affordable housing provision is a particular priority when securing developer contributions (Policy 8.2).

3.74  Affordable housing provision is normally required on-site. In exceptional circumstances (where a robust justification can be demonstrated for on-site provision being inappropriate in terms of the policies in this Plan) it may be provided off-site, for example as part of a land use ‘swap’. Where neither of these options is appropriate a cash in lieu contribution ring fenced, and if appropriate ‘pooled’, to secure efficient delivery of additional affordable housing on identified sites elsewhere may be accepted.  These exceptional circumstances include those where it would be possible to:

  • secure a higher level of provision
  • better address priority needs, especially for affordable family housing
  • secure a more balanced community
  • better sustain strategically important clusters of economic activities, especially in parts of CAZ and the north of the Isle of Dogs where it might be part of a land ‘swap’ or ‘housing credit’ (Policy 2.11).

Given the strategic importance of maximising affordable housing development in London, the Mayor does not consider it appropriate for boroughs to use cash in lieu of on/offsite affordable housing for any other purposes than maximising the delivery of additional affordable housing.

3.75  In making arrangements for assessing planning obligations, boroughs should consider whether it is appropriate to put in place provisions for re-appraising the viability of schemes prior to implementation. To take account of economic uncertainties, and in respect of schemes presently anticipated to deliver low levels of affordable housing, these provisions may be used to ensure that maximum public benefit is secured over the period of the development.

3.76  The design and quality policies in Policy 3.5 apply in full to affordable housing provision. The Mayor has published more specific guidance[3] on this stressing the need for affordable housing to be integrated with the rest of the development and have the same external appearance as other housing.

[1]     Affordable Housing Development Control Toolkit. GLA

[2]     ODPM. Circular 6/2003. Disposal of Land for Less than Best Consideration. ODPM, 2003

[3]     Mayor of London. Housing SPG. GLA 2012