To define ‘future proofing’ in relation to affordable housing secured through the planning system

To outline the options for future proofing and discuss their relative strengths and weaknesses

This workshop will help disseminate the recommendations in Ark’s report

HCA – Investment and Planning Obligations – Responding to the Downturn

Atlas Guide Topic Papers

T.1.1.1 Developing a Strategy for Addressing Stalled Schemes

T.1.2.3 Financial Appraisal and Viability in the Planning Process

T.1.3.1 Reviewing Section 106 Agreements

T.1.3.2 Contingent Deferred Obligations

• A1 FIXED CONTRIBUTION

[A2 Fixed with deferred contribution]

• B1 OPEN BOOK REVIEW

[B2 Open book with overage agreement]

• C1 AUTOMATED REVIEW (CLAWBACK)

[C2 Automated with escalator provision]

STRENGTHS

Balances provision across the scheme

Easy to define external subsidy Clear cut obligations where

sites sold on by land promoters

WEAKNESSES

Heavily reliant on quality of initial negotiations

One party could suffer dependent on changes in market conditions

Re-plans or value engineering only benefit developer

Fixes the contribution of affordable housing at a level below policy but above what is viable currently.

STRENGTHS

Helps promote delivery in short term

Possible to reach compliant levels eventually

WEAKNESSES

Imbalance in distribution of affordable housing

As A1 but contribution steps up to agreed levels over time.

STRENGTHS

Transparency Partnership approach Responsive to market

conditions Can reduce intensity of initial

‘haggling’

WEAKNESSES

Most developers will resist open book approach

For LPA could result in affordable % going down

Review is time consuming and provokes argument

Is there sufficient incentive for developer?

Open book review of relevant data at appropriate intervals to determine affordable housing provision by phase.

STRENGTHS

More incentive for developer to optimise outturns and co-operate

WEAKNESSES

Does not maximise affordable housing provision

Usually links to an agreed minimum level of contribution

As per B1 but any ‘super profit’ is shared by both parties

STRENGTHS

Simplified review Reliance on verifiable data Lower costs than open book

review

WEAKNESSES

Difficult to agree formula Indices may not relate to

scheme characteristics Tends to ignore impact of

infrastructure and abnormals

Bases review on movements in agreed indices. Clawback is usually overage based.

STRENGTHS

Improves clarity on what will be provided assuming certain changes

Simplifies review process even further

WEAKNESSES

Even more complexity in initial negotiations

As for Clawback but with additional affordable contribution stepped dependent on changes in indices.

Delivering Positive change on behalf of our clients for the benefit of their customers