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Growth and Infrastructure Bill Before Parliament October 2012

Category: News 26 October 2012

The Government has now laid the Growth and Infrastructure Bill (18th October 2012 - 'the Bill') before Parliament, and whilst this is emerging legislation at this stage and the wording may change, if enacted, it will impact directly on the way in which those subject to affordable housing obligations will be able to challenge unviable affordable housing requirements.

The key part of the Bill in respect of affordable housing is contained under Part 5 of the Bill, 'Modification or discharge of affordable housing requirements'; this introduces new sections '106BA' and '106BB' under the existing section 106B of the Town and Country Planning Act 1990.

By way of summary, under sections 106BA and 106BB anyone subject to an affordable housing planning obligation may apply (i.e. 'the applicant') to the local authority to have the obligation modified, replaced, removed or discharged. If the obligation in question renders the development economically unviable then the local authority must modify, replace, remove or discharge the obligation (see s106BA(3)(a) of the Bill). If economic viability is not an issue then the local authority can (but do not have to) leave the obligation in place without modification or replacement (see s106BA(3)(b) of the Bill).

Unfortunately, the Bill wording does not clarify whether the local authority (or the 'applicant') has the final say on whether or not the affordable housing obligation is causing the site to be unviable. Therefore, there is a chance that the current wording could lead to a degree of confusion in this regard, and that, regardless of circumstance, local authorities will refuse to acknowledge a scheme to be unviable as a result of the affordable housing requirement - on this basis the local authority would progress straight to s106BA(3)(b) of the Bill and determine that the obligation should remain in place unaltered. However, the Bill enables 'applicants' to appeal.

Where the local authority determines that an obligation is to continue to have effect without modification (i.e. presumably on the basis that the local authority has concluded that there is no viability issue), or proposes an approach that differs from that proposed in the 'application' (i.e. the approach proposed by the person upon whom the obligation is to be enforced) then there is an opportunity to appeal directly to the Secretary of State under s106BB(1).

The Bill sets out that local authorities' proposed modifications must not be more onerous than the existing obligation (s106BA(6)(b)) and, crucially, local authorities must have regard to 'guidance issued by the Secretary of State' (s106BA(8)). The content of this guidance is as yet unknown, but presumably it will have to define 'viability' to ensure that schemes are correctly identified as being viable or unviable and therefore enabling the obligation review process to commence, and, hopefully, guiding the parties involved to a satisfactory conclusion without needing to invoke the appeal mechanism.

The Bill enables 'applicants' (i.e. those subject to an affordable housing planning obligation) to 'apply' to the local authority to review the relevant obligation more than once (s106BA(4)), and it appears that there is not a limit on the number of re-applications that can be made. Any second or subsequent application is subject to a similar process as the first (as outlined above), and may ultimately end in an appeal be made to the Secretary of State.

However, s106BA(7) removes the requirement in s106BA(6)(b) - which prevents determinations from imposing an affordable housing requirement that is more onerous than the unmodified obligation - in respect of second or subsequent applications. In any event, even where determinations are more onerous, such requirements should not render the scheme unviable.

The wording at s106BA(11) indicates that regulations will be published by way of a Statutory Instrument, and that these will be able to impact on the 'form and content' of applications that can be made under s106BA(2).

It is also of note that s106BB(6) requires that where a local authority determination under s106BA of the Bill is appealed, the Secretary of State will not be given the option of discharging the affordable housing obligation, but will only be able to modify it.

Furthermore, s106BB(8) states that where the Secretary of State concludes an obligation is to be modified under s106BA(5)(a), (b) or (c) this determination will be time limited, with developments having to have been completed within 3 years of the date of the determination of the appeal (as defined in s106BB(9)).

Where completion is not achieved within this timescale then s106BB(8) sets out that the Secretary of State determination falls away, and the applicant is prevented from completing the development until agreement has been reached with the local authority on whether affordable housing is still required, and if so, how much. Any such agreement reached will then form the basis of the obligation from that point on. Presumably, unviable obligations could then be subject to the process all over again, although it is unclear whether this would be treated as a first or subsequent application.

Pioneer is able to assist with the preparation of: Affordable Housing Statements; site specific Housing Market Assessments; representations to draft Development Plan Documents and appearance at round table Examination discussions; viability modelling, evidence in respect of Planning Appeals and Expert Witness appearances. We would therefore be delighted to discuss with you how we can help to progress your schemes.

For further information on how we may be able to assist you progress your projects please contact us, and take a look at our Services Brochure.

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