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Justin Cartwright Chartered Institute of Housing

Justin Cartwright Chartered Institute of Housing. Developer contributions for affordable housing:. Lessons learnt from England Justin Cartwright Chartered Institute of Housing. General principles of best practice: England. 1. Standardised charges / formulae.

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Justin Cartwright Chartered Institute of Housing

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  1. Justin Cartwright Chartered Institute of Housing

  2. Developer contributions for affordable housing: Lessons learnt from England Justin CartwrightChartered Institute of Housing

  3. General principles of best practice: England 1. Standardised charges / formulae “Publishing … the methods for estimating contributions … should make it possible for most applicants to estimate the likely cost … Such transparency should help to inform developers … when considering purchasing land, and help simplify and speed up the negotiation and agreement of obligations.”2 “… adoption of good practice, such as standard charging is statistically related to achieving more planning agreements and higher value obligations.”1 • Crook et al (2010), The incidence, value and delivery of planning obligations in England in 2007-08 p. 62 • DCLG (2006), Planning Obligations: Practice Guide p. 20 www.cih.org

  4. General principles of best practice: England 1. Standardised charges / formulae • Example – percentage contribution of plots • Housing association builds / purchases property on contribution plot(s) • Removes the obstacle of social housing providers competing with private sector to secure land • Contributions in England are “statistically related to average land values”1 • Levy on landowners • Crook et al (2010), p. 72 www.cih.org

  5. General principles of best practice: England 1. Standardised charges / formulae • Example – Hertsmere Borough • The threshold that applies for affordable housing • 1 hectare or 25 dwellings (gross) or more in the main settlements of Borehamwood, Bushey, Potters bar and Radlett; Or • 0.5 hectares or 15 or more dwellings (gross) in that part of Elstree not within the Green Belt. • Qualifying sites allocate in the region of 25% of all dwellings or land for affordable housing • The difference between the cost of development and price paid by theHA considered to be a planning contribution from the developer • Informed by local information www.cih.org

  6. General principles of best practice: England 1. Standardised charges / formulae • How do you determine a standardised formula? • Realistic rates based on viability evidence not policy objectives1 • Takes into account land value2 • Carry out impact assessment of rates on development3 • Viability models are limited in many ways, but may be the best available way to analyse what level of planning gain is viable4 • Burgess et al (2013), The changing delivery of planning gain through Section 106 and the Community Infrastructure Levy, p. 17 • DCLG (2006), p.14 • Ibid, p. 35 • Burgess et al (2013), p. 17 www.cih.org

  7. General principles of best practice: England 2. Specialist contributions team • Standardised formulae are important but shouldn’t be rigid without regard to local and individual circumstances and contexts • Local land and housing markets should interplay with policy through negotiating practice www.cih.org

  8. General principles of best practice: England 2. Specialist contributions team • English councils rate ‘employing dedicated contributions officer’ as second most important factor in changes to number and value of obligations1 • Negotiating officers produce significantly more agreements and delivery of direct payment obligations; but fewer obligations in number and value2 • Monitoring officers produce more agreements; and direct payment obligations in number and value. Monitored schemes more likely to deliver obligations in full3 • Crook et al (2010), p. 8 • Ibid, p. 68 • Ibid, p. 9 www.cih.org

  9. General principles of best practice: England 2. Specialist contributions team • What skills does the team need? • Negotiation skills • Project management skills • Co-ordination skills • Communication skills • Technical skills • Legal skills www.cih.org

  10. General principles of best practice: England 2. Specialist contributions team • Centralised policy and practice function • Eliminates variations in policy and practice across the region • Affords continuity to developers regarding who they negotiate with and how, regardless of where they build in the region • Allows the negotiating team exposure to a critical mass of negotiations which facilitates upskilling • Provides a ‘one-stop-shop’ approach which some councilsin England have found helpful in improving delivery1 • Team must be informed by local information and evidence • DCLG (2006), p.31

  11. General principles of best practice: England Summary A working developer contributions policy for affordable housing is one that uses standard rates that are realistic and based on viability; take into account land value; and have an emphasis on housing provision over commuted sums (where increasing social housing supply and tenure mix are policy goals). These rates should work together with professional and efficient negotiation informed by local information and evidence, where one goal is achieving the right balance between social and intermediate (co-ownership) tenures. www.cih.org

  12. Thank youJustin CartwrightPolicy & Public Affairs OfficerChartered Institute of HousingE: justin.cartwright@cih.orgP: 028 9077 8222T: @JustinCIH and @CIHNIW: www.cih.org

  13. Justin Cartwright Chartered Institute of Housing

  14. Developer contributions for affordable housing: Lessons learnt from England Justin CartwrightChartered Institute of Housing

  15. General principles of best practice: England 1. Standardised charges / formulae “Publishing … the methods for estimating contributions … should make it possible for most applicants to estimate the likely cost … Such transparency should help to inform developers … when considering purchasing land, and help simplify and speed up the negotiation and agreement of obligations.”2 “… adoption of good practice, such as standard charging is statistically related to achieving more planning agreements and higher value obligations.”1 • Crook et al (2010), The incidence, value and delivery of planning obligations in England in 2007-08 p. 62 • DCLG (2006), Planning Obligations: Practice Guide p. 20 www.cih.org

  16. General principles of best practice: England 1. Standardised charges / formulae • Example – percentage contribution of plots • Housing association builds / purchases property on contribution plot(s) • Removes the obstacle of social housing providers competing with private sector to secure land • Contributions in England are “statistically related to average land values”1 • Levy on landowners • Crook et al (2010), p. 72 www.cih.org

  17. General principles of best practice: England 1. Standardised charges / formulae • Example – Hertsmere Borough • The threshold that applies for affordable housing • 1 hectare or 25 dwellings (gross) or more in the main settlements of Borehamwood, Bushey, Potters bar and Radlett; Or • 0.5 hectares or 15 or more dwellings (gross) in that part of Elstree not within the Green Belt. • Qualifying sites allocate in the region of 25% of all dwellings or land for affordable housing • The difference between the cost of development and price paid by theHA considered to be a planning contribution from the developer • Informed by local information www.cih.org

  18. General principles of best practice: England 1. Standardised charges / formulae • How do you determine a standardised formula? • Realistic rates based on viability evidence not policy objectives1 • Takes into account land value2 • Carry out impact assessment of rates on development3 • Viability models are limited in many ways, but may be the best available way to analyse what level of planning gain is viable4 • Burgess et al (2013), The changing delivery of planning gain through Section 106 and the Community Infrastructure Levy, p. 17 • DCLG (2006), p.14 • Ibid, p. 35 • Burgess et al (2013), p. 17 www.cih.org

  19. General principles of best practice: England 2. Specialist contributions team • Standardised formulae are important but shouldn’t be rigid without regard to local and individual circumstances and contexts • Local land and housing markets should interplay with policy through negotiating practice www.cih.org

  20. General principles of best practice: England 2. Specialist contributions team • English councils rate ‘employing dedicated contributions officer’ as second most important factor in changes to number and value of obligations1 • Negotiating officers produce significantly more agreements and delivery of direct payment obligations; but fewer obligations in number and value2 • Monitoring officers produce more agreements; and direct payment obligations in number and value. Monitored schemes more likely to deliver obligations in full3 • Crook et al (2010), p. 8 • Ibid, p. 68 • Ibid, p. 9 www.cih.org

  21. General principles of best practice: England 2. Specialist contributions team • What skills does the team need? • Negotiation skills • Project management skills • Co-ordination skills • Communication skills • Technical skills • Legal skills www.cih.org

  22. General principles of best practice: England 2. Specialist contributions team • Centralised policy and practice function • Eliminates variations in policy and practice across the region • Affords continuity to developers regarding who they negotiate with and how, regardless of where they build in the region • Allows the negotiating team exposure to a critical mass of negotiations which facilitates upskilling • Provides a ‘one-stop-shop’ approach which some councilsin England have found helpful in improving delivery1 • Team must be informed by local information and evidence • DCLG (2006), p.31

  23. General principles of best practice: England Summary A working developer contributions policy for affordable housing is one that uses standard rates that are realistic and based on viability; take into account land value; and have an emphasis on housing provision over commuted sums (where increasing social housing supply and tenure mix are policy goals). These rates should work together with professional and efficient negotiation informed by local information and evidence, where one goal is achieving the right balance between social and intermediate (co-ownership) tenures. www.cih.org

  24. Thank youJustin CartwrightPolicy & Public Affairs OfficerChartered Institute of HousingE: justin.cartwright@cih.orgP: 028 9077 8222T: @JustinCIH and @CIHNIW: www.cih.org

  25. Justin Cartwright Chartered Institute of Housing

  26. Developer contributions for affordable housing: Lessons learnt from England Justin CartwrightChartered Institute of Housing

  27. General principles of best practice: England 1. Standardised charges / formulae “Publishing … the methods for estimating contributions … should make it possible for most applicants to estimate the likely cost … Such transparency should help to inform developers … when considering purchasing land, and help simplify and speed up the negotiation and agreement of obligations.”2 “… adoption of good practice, such as standard charging is statistically related to achieving more planning agreements and higher value obligations.”1 • Crook et al (2010), The incidence, value and delivery of planning obligations in England in 2007-08 p. 62 • DCLG (2006), Planning Obligations: Practice Guide p. 20 www.cih.org

  28. General principles of best practice: England 1. Standardised charges / formulae • Example – percentage contribution of plots • Housing association builds / purchases property on contribution plot(s) • Removes the obstacle of social housing providers competing with private sector to secure land • Contributions in England are “statistically related to average land values”1 • Levy on landowners • Crook et al (2010), p. 72 www.cih.org

  29. General principles of best practice: England 1. Standardised charges / formulae • Example – Hertsmere Borough • The threshold that applies for affordable housing • 1 hectare or 25 dwellings (gross) or more in the main settlements of Borehamwood, Bushey, Potters bar and Radlett; Or • 0.5 hectares or 15 or more dwellings (gross) in that part of Elstree not within the Green Belt. • Qualifying sites allocate in the region of 25% of all dwellings or land for affordable housing • The difference between the cost of development and price paid by theHA considered to be a planning contribution from the developer • Informed by local information www.cih.org

  30. General principles of best practice: England 1. Standardised charges / formulae • How do you determine a standardised formula? • Realistic rates based on viability evidence not policy objectives1 • Takes into account land value2 • Carry out impact assessment of rates on development3 • Viability models are limited in many ways, but may be the best available way to analyse what level of planning gain is viable4 • Burgess et al (2013), The changing delivery of planning gain through Section 106 and the Community Infrastructure Levy, p. 17 • DCLG (2006), p.14 • Ibid, p. 35 • Burgess et al (2013), p. 17 www.cih.org

  31. General principles of best practice: England 2. Specialist contributions team • Standardised formulae are important but shouldn’t be rigid without regard to local and individual circumstances and contexts • Local land and housing markets should interplay with policy through negotiating practice www.cih.org

  32. General principles of best practice: England 2. Specialist contributions team • English councils rate ‘employing dedicated contributions officer’ as second most important factor in changes to number and value of obligations1 • Negotiating officers produce significantly more agreements and delivery of direct payment obligations; but fewer obligations in number and value2 • Monitoring officers produce more agreements; and direct payment obligations in number and value. Monitored schemes more likely to deliver obligations in full3 • Crook et al (2010), p. 8 • Ibid, p. 68 • Ibid, p. 9 www.cih.org

  33. General principles of best practice: England 2. Specialist contributions team • What skills does the team need? • Negotiation skills • Project management skills • Co-ordination skills • Communication skills • Technical skills • Legal skills www.cih.org

  34. General principles of best practice: England 2. Specialist contributions team • Centralised policy and practice function • Eliminates variations in policy and practice across the region • Affords continuity to developers regarding who they negotiate with and how, regardless of where they build in the region • Allows the negotiating team exposure to a critical mass of negotiations which facilitates upskilling • Provides a ‘one-stop-shop’ approach which some councilsin England have found helpful in improving delivery1 • Team must be informed by local information and evidence • DCLG (2006), p.31

  35. General principles of best practice: England Summary A working developer contributions policy for affordable housing is one that uses standard rates that are realistic and based on viability; take into account land value; and have an emphasis on housing provision over commuted sums (where increasing social housing supply and tenure mix are policy goals). These rates should work together with professional and efficient negotiation informed by local information and evidence, where one goal is achieving the right balance between social and intermediate (co-ownership) tenures. www.cih.org

  36. Thank youJustin CartwrightPolicy & Public Affairs OfficerChartered Institute of HousingE: justin.cartwright@cih.orgP: 028 9077 8222T: @JustinCIH and @CIHNIW: www.cih.org

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