Delivering affordable housing through Section 106: Outputs and outcomes
Obtaining affordable homes through planning gain – 'Section106' planning agreements brokered between local authorities, social housing providers and private developers – is an increasingly important strand of Government housing policy. But two reports published today by the Joseph Rowntree Foundation raise concerns about the quality of some of the housing being produced and the way that agreements are monitored, although they also confirm that most of the affordable housing numbers specified in planning agreements are being delivered.
The findings, from Northumberland-based consultant Jon Watson and a research team from the Universities of Cambridge and Sheffield, will be presented to Kate Barker, who is leading an independent review of Land Use Planning for the Deputy Prime Minister and the Chancellor.
Understanding planning gain: what works?
Jon Watson, who examined the housing provided through eight different planning agreements in Leeds and York, found that most schemes comprised 'off the shelf' purchases of homes built by private house-builders. The housing associations who acquired them had tended to be more concerned with 'doing the deal' than ensuring that the homes met quality and space standards required when receiving Housing Corporation funding.
The report also argues that RSLs were in a relatively weak position when negotiating deals because of differences in their culture and negotiating styles compared with the private sector.
Although RSLs and new tenants both reported high levels of satisfaction with accommodation acquired through Section 106, the author warns that this may mask longer-term problems caused by low space standards and poor design detailing and workmanship.
Where space standards fell below Housing Corporation Scheme Development Standards, the general policy was to under-let. For instance, RSLs might let a three-bed five-person house to a four-person household, disguising the inferior value for money being achieved.
The report recommends that:
- Local authorities should develop affordable housing policy statements that include space standards or a requirement to comply with the Housing Corporation's Scheme Development Standards.
- RSLs should devote greater attention to briefing, defining their requirements and quality control. They should also take a tougher negotiating position with developers, for example by retaining a percentage of payment until after a period during which any defects must be made good.
Delivering affordable housing through Section 106
Researchers at the Universities of Cambridge and Sheffield, led by Sarah Monk, meanwhile, looked at whether the affordable homes expected as a result of S106 agreements were being completed at the agreed levels.
Examining 39 different sites, they found the majority had been built as agreed. However, long time lags on a smaller number of large, complex sites meant that there were significant delays between giving planning permission for S106 affordable homes and completion. These were due to the delays that are intrinsic to the process of building out large residential development sites and not a result of requirements specific to affordable housing agreements.
In cases where the final outcome was not what local authority or RSL staff had expected it was mainly because the S106 agreement had not been sufficiently detailed or had not specified exactly how the affordable housing should be provided. The authors also report growing concern about the quality of housing being produced – although they argue that this is common to housing development as a whole, not just the affordable housing sector.
Occasions when developers failed to comply with their obligations to provide affordable housing under a planning agreement were rare. But the authors also note that in over a quarter of the study sites neither the housing association nor the local authority could identify the site in their records or say what the outcome of the S106 agreement had been. They, accordingly, call for better monitoring by RSLs and planning authorities.
The authors also show that an increasing proportion of all new affordable housing comes from S106 sites and now accounts for over half of the total. Hence securing more affordable homes through S106 depends heavily on the buoyancy of the housing market - which in recent years has made it both easier to negotiate agreements and to deliver the desired affordable output. A downturn in the market would make it harder, putting the output of new affordable housing at risk.
