Should more equal less? - Thresholds for Affordable housing

The Mayor’s draft London Plan has already proposed the policy objective of squeezing more affordable housing units out of development sites. A new policy document- ‘Thresholds for Application of Affordable Housing Requirements' - from the Mayor’s office seeks to provide the evidence on which future discussion on reducing thresholds can be debated.

Developers, funders and planning authorities all should take note of the key message – the future direction of policy on thresholds has to start from the premise that small sites matter. The report suggests that including affordable housing on smaller sites than is currently envisaged by Government guidance could increase the delivery of affordable housing without having an adverse impact on the overall supply of housing.

The report claims to see ‘no logic’ in current Government guidance which sets the threshold of 15 units in Inner London as the point at which the affordable housing requirement bites on a development (the rest of the country stands at 25 units). Instead the report promotes the need for a revised policy which would apply a uniform basis across London and the rest of the country.

The report covers the issues of policy, housing capacity in London and the economics of affordable housing provision. The authors (Nottingham Trent University, Three Dragons and Roger Tym and Partners) of the report also sought the views of house builders, landowners, housing associations and planning authorities and a summary of the conclusions make extremely interesting reading.

1.Smaller sites – those below current thresholds – are important to the overall provision of housing in London. They represent about a third of the total supply. A reduction in thresholds to a nil threshold would potentially significantly increase the affordable housing supply.

2. There are a disproportionate number of schemes which are “just below” the threshold and which avoid affordable housing requirements.

3. There is no logic in the current distinction in thresholds between Inner London (15 units) and the rest of the country (25 units).

4. Local authorities should have a clear structure and up-to-date guidance in place when negotiating affordable housing on sites.

5. Registered social landlords are generally in favour of lower thresholds.

6. Landowners and developers are generally opposed to the reduction or abolition of thresholds – they envisage difficulties in operating the policy on very small sites. Concerns have been raised that an increase in local authorities’ work that arises from negotiating affordable housing on small sites would slow the overall progress in processing planning applications, which in turn would lead to a reduction in housing provision in London.

7. Whatever policy on thresholds is adopted by Government it is critical that local authorities should be required to show that they can cope with the working implications of lower thresholds before being permitted to introduce them.

Clearly this report raises a number of important issues about how the rate of affordable housing provision can be increased. It is likely to inform discussions at the current Examination in Public of the Mayor’s draft London plan. The debate is likely to be lively. Whilst the strategic planners may see a potential pool of affordable housing, developers will be mainly concerned with the viability of individual schemes.

Copies of the report are available via the Mayor of London’s website - please click here.

If you have any queries please contact Tony Kitson on +44 (0)20 7367 3556 or at [email protected] or Alistair Watson on +44(0)20 7367 3890 or at [email protected].

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