Amount paid by developers instead of building trebles to £67m
Councils cut cash deals in place of new homes
The amount of cash accepted by councils from developers in place of of new affordable homes has nearly trebled in two years.
An Inside Housing survey using freedom of information requests to 161 English councils reveals 74 authorities accepted £67 million of ‘commuted sums’ paid in lieu of affordable homes on development sites in 2011/12. This compares with 51 councils [out of the same 161] accepting £28.9 million in 2010/11 and 39 councils accepting £23.4 million in 2009/10.
The figures show authorities are increasingly accepting developers’ arguments that it is not viable for them to include affordable housing in schemes in the current economic environment. This is despite it being a planning condition, known as a section 106 obligation.
Councils insist commuted sums are ring-fenced for affordable housing elsewhere, but it is feared the cash may not always be collected properly or may be used for other purposes. There are also warnings that commuted sums could lead to fewer affordable homes being built, and prevent the creation of mixed-tenure communities.
The Homes and Communities Agency estimates 29,000 homes were built through section 106 in 2010/11.
Brendan Sarsfield, chief executive of 20,000-home association Family Mosaic, said: ‘The message we are getting is that during these difficult times, housing is once again not being prioritised.’
Keith Exford, chief executive of Affinity Sutton, said: ‘The purpose of section 106 is to help local authorities ensure a range of housing needs are met in their communities. I believe in mixed income developments rather than the ghettoisation of poor people.’
Cameron Watt, head of neighbourhoods at the National Housing Federation, said commuted sums usually provide fewer affordable homes than onsite provision and that councils should wait for the market to improve.
‘This will allow the original section 106 expectations to be met or, where necessary, let councils negotiate a lower number of onsite affordable homes rather than accept a commuted sum,’ he said.
A spokesperson for Hackney Council, which accepted a commuted sum of £4 million for a scheme at Broadgate, near London’s financial district, last year, said: ‘There are high-value areas of the borough where an alternative to onsite provision could be beneficial in realising a greater amount of affordable housing.’
The value of commuted sums accepted by Camden Council in north London increased from £65,000 in 2008/09 to more than £3 million last year. A spokesperson said this was due to the authority seeking extra housing when non-residential properties were extended.
‘Typical examples are where an existing hotel or offices want to extend upwards and because it may be physically impossible or unviable to incorporate housing onsite, an offsite solution may be accepted,’ he said.
A Communities and Local Government department spokesperson said it was up to councils to meet local housing need.
In numbers: commuted sums
FINANCIAL YEAR NUMBER OF COUNCILS VALUE
2011/12 74 £67m
2010/11 51 £28.89m
2009/10 39 £23.4m
2008/09 44 £42.2m