DISTRICT LOCAL PLAN

Interim Affordable Housing Policy and Guidance

June 2015

0 | Page CONTENTS

1. Background 2

2. National and Local Policy Context 3

3. Definition of Affordable Housing 7

4. Interim Affordable Housing Policy 8

5. Calculating the amount of Affordable Housing 9

6. Local Affordable Housing Need 12

7. Rural Affordable Homes 14

8. Delivering the Affordable Homes 16

9. Design and Layout of the Development 18

10. Planning Procedures 19

11. Contacts and Publications 21

APPENDICES

Appendix 1: Plan Illustrating Designated/Non-designated Rural Areas 22

Appendix 2: Worked Examples 23

Appendix 3: Effect of Vacant Building Credit 24

Appendix 4: Financial Contributions: Worked Examples 26

Appendix 5: Development Appraisals 27

Appendix 6: Sub Areas and Parishes 29

1 | Page 1.0 BACKGROUND

1.1 The Local Plan for Harrogate District currently consists of the Harrogate District Core Strategy (February 2009) and the Harrogate District Local Plan (2001, Selective Alteration 2004, Saved Policies 2007).

1.2 With regard to local planning policies for affordable housing, the adopted Harrogate District Local Plan includes Policy H5 and the adopted Core Strategy includes policy HLP3: affordable housing on rural exception sites. The Council is now working on a new Local Plan which when adopted will replace both the adopted Harrogate District Local Plan and the Core Strategy.

1.4 On 28 November 2014 the Government issued a ministerial statement setting out proposed changes to national policy in relation to Section 106 planning obligations, along with corresponding new National Planning Policy Guidance (NPPG). Further changes were made to the NPPG in March 2015. Together these changes have impacted upon the application of existing affordable housing policy within Harrogate District.

1.5 Until the new Local Plan is in place, this Interim Policy sets out a target and thresholds for affordable housing provision across the District reflecting the most up to date evidence base in terms of affordable housing need and viability and reflects the recently published national planning guidance.

1.6 This Interim Policy:

x Will be used for development control purposes in respect of negotiating affordable housing and will be given significant weight in the determination of planning applications across the District, with no weight given to Policy H5 of the Existing Harrogate Local Plan and HLP4 of the adopted Core Strategy. x Provides guidelines and procedures to explain how adopted Core Strategy Policy HLP3 is implemented. x Explains the mechanisms that will be used to deliver and manage affordable homes to ensure that they continue to be available to households in housing need in the future.

2 | Page 2.0 THE NATIONAL AND LOCAL POLICY CONTEXT

National Planning Policy Framework

2.1 The National Planning Policy Framework (NPPF) (March 2012) sets out national planning policy for delivering sustainable communities, including the delivery of affordable housing.

2.2 The NPPF emphasises the importance of:

x Delivering a wide choice of high quality homes, widening opportunities for home ownership and creating sustainable, inclusive and mixed communities. Where the need for affordable housing has been identified, this need should be met on site, unless off- site provision or a financial contribution of broadly equivalent value can be robustly justified and the agreed approach contributes to the creation of mixed and balanced communities. Policies should be sufficiently flexible to take account of changing market conditions over time; x Planning housing development in rural areas to reflect local needs, particularly for affordable housing, including rural exception sites where appropriate, having a clear understanding of housing needs in the area. x Assessing the full housing needs of the area through the preparation of a Strategic Housing Market Assessment, working with neighbouring authorities where housing market areas cross administrative boundaries; and x Good design as a key to creating sustainable development and contributing positively to making places better for people. High quality and inclusive design is vital for all developments.

National Planning Policy Guidance (NPPG)

2.3 In November 2014 changes were made to national policy in respect of Section 106 planning obligations, setting out specific circumstances where contributions for affordable housing and tariff style planning obligations should not be sought, as follows:

x Contributions should not be sought from developments of 10-units or less, and which have a maximum combined gross floor space of no more than 1000sqm. Within designated rural areas, local planning authorities may choose to apply a lower threshold of 5-units or less. No affordable housing or tariff-style contributions should then be sought from these developments. In addition, in a rural area where the lower 5-unit-or- less threshold is applied, affordable housing and tariff style contributions should be sought from developments of between 6 and 10-units in the form of cash payments which are commuted until after completion of units within the development.

This applies to rural areas described under section 157(1) of the Housing Act 1985, which includes National Parks and Areas of Outstanding Natural Beauty and other designated rural areas1.

1 The designated rural areas within Harrogate District are set out within Statutory Document no. 2098 (in force 7th Sept 2009): http://www.legislation.gov.uk/uksi/2004/2681/schedule/made and illustrated on the plan at Appendix 1.

3 | Page x Affordable housing and tariff-style contributions should not be sought from any development consisting only of the construction of a residential annex or extension to an existing home.

x Vacant Building Credit - The new guidance states that where a vacant building is brought back into any lawful use, or is demolished to be replaced by a new building, the developer will be offered a financial credit equivalent to the existing gross floor space of relevant vacant buildings when any affordable housing contribution is calculated. Affordable housing contributions may be required for any increase in floor space.

Further changes and additions to National Planning Policy Guidance, March 2015

2.4 On the 26 March 2015 the government made further changes to NPPG, in order to clarify how the Vacant Building Credit should be applied. The changes made were as follows:

x An addition has been made to the guidance published in November, stating that local planning authorities should not seek section 106 affordable housing contributions, including any tariff-based contributions to general infrastructure pots, from developments of Starter Homes. Local planning authorities will still be able to seek other section 106 contributions to mitigate the impact of development to make it acceptable in planning terms, including addressing any necessary infrastructure.

2.5 The NPPG goes on to clarify the process for determining the vacant building credit (introduced in the November 2014 NPPG) as follows:

Where there is an overall increase in floor space in the proposed development, the local planning authority should calculate the amount of affordable housing contributions required from the development as set out in their Local Plan. A ‘credit’ should then be applied which is the equivalent of the gross floor space of any relevant vacant buildings being brought back into use or demolished as part of the scheme and deducted from the overall affordable housing contribution calculation. This will apply in calculating either the number of affordable housing units to be provided within the development or where an equivalent financial contribution is being provided.

The existing floor space of a vacant building should be credited against the floor space of the new development. For example, where a building with a gross floor space of 8,000 square metre building is demolished as part of a proposed development with a gross floor space of 10,000 square metres, any affordable housing contribution should be a fifth of what would normally be sought.

2.6 Further additional guidance in relation to the application of the credit is provided as follows:

The vacant building credit applies where the building has not been abandoned.

The policy is intended to incentivise brownfield development, including the reuse or redevelopment of empty and redundant buildings. In considering how the vacant building

4 | Page credit should apply to a particular development, local planning authorities should have regard to the intention of national policy.

In doing so, it may be appropriate for authorities to consider:

x Whether the building has been made vacant for the sole purpose of redevelopment. x Whether the building is covered by an extant or recently expired planning permission for the same or substantially the same development.

North Sub-Regional Housing and Homelessness Strategy 2012

2.7 The Sub-Regional Housing and Homelessness Strategy sets out the strategy for housing and homelessness in and North Yorkshire to 2015. This document is under regular review. It identifies a high level of housing need and high average house prices in Harrogate District.

2.8 The first Strategic Priority of the Strategy is to enable the provision of more affordable homes by:

x delivering more affordable homes, ensuring that these homes are of an excellent quality, are efficient and represent good value for money; x increasing the availability of land for affordable housing; gaining a better understanding of the housing markets in North Yorkshire and the alternative delivery mechanisms they can offer; and x continuing to target the re-use of unused second homes and other empty properties.

2.9 The Strategic Priority recognises the need for more homes that are affordable to local people. This is to be delivered through the provision of additional affordable homes, by exploring more innovative ways to make existing market homes more accessible to those on lower incomes and by making better use of unused and vacant homes.

Draft York, North Yorkshire and East Riding Housing Strategy 2015 – 21 (February 2015)

2.10 Work is currently underway on the Draft York, North Yorkshire and East Riding Housing Strategy 2015 – 21, which was published for consultation in February 2015, with formal approval scheduled for July 2015. The draft strategy highlights housing supply and affordability as key issues and seeks to deliver the North Yorkshire and East Riding Local Enterprise Partnership (NYER LEP) Growth Deal Priorities, which are to:

1. Support housing and employment growth ambitions by investing in major strategic development sites in , , Middle-Deepdale in Scarborough and creating over 4,000 new homes 2. Double house building (compared to 2012-14 building rates) and triple delivery of affordable housing 3. Deliver local strategic housing priorities and outcomes in response to priorities identified in the SEP and Local Growth Deal Implementation Plan, including work on older persons and rural housing 4. Get up to date Local Plans in place, deliver effective strategic planning by working together and across boundaries, and ensure delivery of housing in Local Plans.

5 | Page 2.11 A key priority set out within the draft is to increase the supply of good quality new homes across all tenures and locations.

The Local Context

2.12 It is important that everyone living in the Harrogate District has the opportunity of a decent and affordable home. The Council is committed to helping local people who cannot afford to buy or rent homes on the open market in the District. To this end, the Council’s Corporate Priority ‘Supporting our Communities’ looks to ensure that people’s housing needs are addressed. The availability of affordable housing is a key issue for the Council to address as it impacts upon the retention of skills and talent in the District and has a major influence upon the local economy and quality of life.

2.13 Average house prices within Harrogate are significantly higher than national and regional averages. The Harrogate District Strategic Housing Market Assessment 2015 (SHMA) includes an assessment of affordable housing need, the results of which provide clear evidence of the need to increase the supply of affordable housing across the district. Overall, the SHMA analysis identifies a net deficit of 7,100 affordable homes in the period from 2014 to 2035, equating to a requirement for 339 additional affordable homes per annum.

2.14 Further details about affordable housing need in the district are provided in the SHMA, which is published on the Council’s website (www.harrogate.gov.uk/planningpolicy).

2.15 The Council’s own stock of land that is available for affordable housing is virtually exhausted. Therefore, in line with national policy, the Council is seeking to deliver the Corporate Priority by requiring developers to provide affordable housing within new schemes across the district.

2.16 This Interim Policy supports the delivery of Core Strategy Objective 9 - to maximise the provision of homes for local people, with particular priority given to affordable housing and the Council’s Corporate Priority of supporting our local communities by seeking to address people’s housing needs.

6 | Page 3.0 DEFINITION OF AFFORDABLE HOUSING

3.1 Affordable housing is defined in Annex 2 of the NPPF. It is social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market. Eligibility is determined with regard to local incomes and local house prices. Affordable housing should include provisions to remain at an affordable price for future eligible households or for the subsidy to be recycled for alternative affordable housing provision.

Social rented housing

3.2 Social rented housing is owned by local authorities and private registered providers (as defined in section 80 of the Housing and Regeneration Act 2008), for which guideline target rents are determined through the national rent regime. It may also be owned by other persons and provided under equivalent rental arrangements to the above, as agreed with the local authority or with the Homes and Communities Agency (HCA).

Affordable rented housing

3.3 Affordable rented housing is let by local authorities or private registered providers of social housing to households who are eligible for social rented housing. Affordable Rent is subject to rent controls that require a rent of no more than 80% of the local market rent (including service charges, where applicable).

Intermediate housing

3.4 Intermediate housing is housing for sale and rent provided at a cost above social rent, but below market levels subject to the criteria in the Affordable Housing definition above. It can include shared equity (shared ownership and equity loans), other low cost housing for sale and intermediate rent, but not affordable rented housing.

3.5 Homes that do not meet the above definition of affordable housing, such as “low cost” market housing, may not be considered as affordable housing for planning purposes.

7 | Page 4.0 INTERIM AFFORDABLE HOUSING POLICY

The CouncilIn Harrogate,will negotiate for the provision and ,of an element plus non-designated of affordable ruralhousing areas on developments, as follows:

x In Harrogate, Knaresborough, Ripon and non-designated rural areas2: - On proposals of 11 or more dwellings, or where any net increase in floor space exceeds 1000sqm gross internal area (GIA) - 40% of the proposed dwellings should be affordable and provided on-site3.

x In Designated Rural Areas4: - On proposals of 6 to 10 dwellings, or proposals where any net increase in floor space exceeds 1000sqm - 40% of the dwellings should be affordable and provision will be required by payment of a commuted sum of broadly equivalent value. - On proposals of 11 or more dwellings - 40% of the proposed dwellings should be affordable and provided on-site.

Where vacant existing buildings are being demolished or converted, the target provision will be reduced by the relevant floor space5.

Provision of affordable housing is subject to viability. On schemes falling short of the target it will be for the applicant to clearly demonstrate the reasons for a lower affordable housing contribution.

In very exceptional circumstances if robustly justified it may be appropriate to take a commuted sum on sites above the on-site threshold where doing so would meet wider planning or housing objectives.

Suitable arrangements will be made to ensure that the affordable homes provided under this policy are available initially and successively to eligible households unless these restrictions are lifted, in which case any subsidy will be recycled for alternative affordable housing provision.

Note: The Council will not seek Affordable housing:

- On proposals of less than 11 units and less than 1000sqm (net increase) in Harrogate, Knaresborough, Ripon and in non-designated rural areas. - On proposals which are 5 units or fewer and have a maximum combined gross floor space of no more than 1000sqm (net increase) in Designated Rural Areas

2Non-designated rural areas: areas outside rural designated areas and urban areas as defined by the Development Limit within the Local Plan. 3 As supported by the Councils Affordable Housing Economic Viability Assessment, September 2010 and subsequent update Affordable Housing Viability – Brief Review, April 2014. 4 The designated rural areas within Harrogate District are set out within Statutory Document no. 2098 (in force 7th Sept 2009): http://www.legislation.gov.uk/uksi/2004/2681/schedule/made and illustrated on the plan at Appendix 1. 5 The existing floor space of any vacant buildings brought back into any lawful use or demolished for re- development. An explanation of what constitutes a Vacant Building for the purposes of Vacant Building Credit is defined at paragraph 5.3 of this document.

8 | Page 4.1 A series of worked examples are included at Appendix 2 to illustrate the implications of this policy.

9 | Page 5.0 CALCULATING THE AMOUNT OF AFFORDABLE HOUSING

5.1 The Council will base the amount of affordable housing on the gross developable area of the red line site boundary on a planning application. The gross developable area will exclude major distributor roads and existing private driveways. It will include access roads within the site, car parking areas serving the development, children’s play areas and other areas of open space and landscape areas. In mixed developments incorporating other non- residential uses (e.g. a school, crèche and offices) the area will be measured around the housing site and its access roads.

Vacant Building Credit

5.2 In line with national policy, a financial credit, equivalent to the existing gross floor space of any vacant buildings brought back into any lawful use or demolished for re-development, will be deducted from the calculation of any affordable housing contributions sought from relevant development schemes. This will not apply to vacant buildings which have been abandoned.

Vacant Building Definition

5.3 The ministerial statement highlights the requirement for consistency between the Community Infrastructure Levy (CIL) and the application of the Vacant Building Credit. As such, our approach to defining what constitutes a vacant building is consistent with the CIL Regulations. For the purposes of Vacant Building Credit a building is not vacant if: 1. Its use is authorised by a planning permission granted only for a limited period. 2. It is a building into which people do not normally go, or into which people go only intermittently for the purpose of maintaining or inspecting machinery (for example, an electricity sub-station); 3. A part or all of it is occupied; and 4. It has been occupied for more than six months within the period of three years ending on the application date.

5.4 The methodology for calculating affordable housing where a Vacant Building Credit6 applies is set out at Appendix 3.

Commuted sums

5.5 On sites where a commuted sum is required, the amount payable will be the cash equivalent of the affordable housing target. The methodology for calculating commuted sums is set out in Appendix 4.

5.6 Where the Vacant Building Credit applies and where the target floor space cannot be converted into a whole number of appropriate affordable units (having regard to the types and sizes proposed), a commuted sum will be payable in respect of any “surplus” floor space.

5.7 Government guidance states that, in the interests of creating mixed and balanced communities, affordable housing should be provided on-site and integrated with the market

6 Paragraphs 2.3 – 2.6 define the Vacant Building Credit.

10 | Page housing wherever possible. However, in exceptional circumstances where there are sound planning reasons and it can be robustly justified, it may be acceptable to take off-site provision or a commuted sum of broadly equivalent value in lieu of part or all of the affordable housing provision on a site. As with commuted sums payable in respect of any qualifying site, this is calculated as the difference between the market value of the affordable housing target provision and the equivalent approved transfer prices. Where a commuted sum is payable but the full amount of affordable housing is not viable, what surplus is available (following an agreed Development Appraisal) will be payable in its entirety as the affordable housing contribution.

5.8 Commuted sums will be used to deliver affordable housing elsewhere in the district and improve or make more effective use of the existing housing stock for affordable housing purposes.

Scheme Viability

5.9 In 2009, the Council commissioned Adams Integra to carry out an Economic Viability Assessment to consider the impact that various levels of affordable housing would have on the deliverability of residential developments in different parts of the district. This work was published in 2010 and has informed the setting of affordable housing targets and thresholds. The Adams Integra study indicates that schemes would be viable and deliverable at these affordable housing proportions under most market conditions. This work was updated in 2014 and confirms that viability overall has improved since publication in 2010. Nevertheless, the Council recognises that there may be instances where scheme-specific viability is affected by factors such as unforeseen high abnormal costs or a downturn in the property market.

5.10 Where an applicant considers that the viability of a scheme is compromised, they must submit a Development Appraisal to the Council. The Appraisal should include all known costs, current site value and projected valuations of the scheme (guidance on development appraisals is set out at Appendix 5). Appraisals will be considered by the Council’s Valuation Surveyor and treated in the strictest confidence. There will be a fee for this work and the current scale of fees is also set out at Appendix 5. Where it can be demonstrated that viability is affected such that it compromises the delivery of the scheme, the Council will reduce the amount of affordable housing so as to make the scheme viable.

5.11 The 40% affordable housing target applies to the gross number of dwellings proposed. Buildings to be converted, redeveloped or replaced will therefore be included, (including single dwelling replacement schemes) but existing dwellings proposed to be retained, refurbished or extended will be excluded from the calculation. However, as highlighted above, a financial credit, equivalent to the existing gross floor space of any vacant buildings brought back into any lawful use or demolished for re-development, will be deducted from the calculation of any affordable housing contributions sought from relevant development schemes. This will not apply to vacant buildings which have been abandoned.

Sub division of sites

5.12 To avoid the site being sub-divided, the affordable housing target will be based on the number of homes on the composite or naturally defined area. Planning applications for development which forms part of a more substantial proposed development, on the same or adjoining land will be treated as an application for the whole development. This also applies

11 | Page if the development is proposed in phases, with later phases having to fulfil affordable housing requirements from previous phases, if this has not been adequately provided for.

Agricultural/forestry worker’s housing, Service Family Accommodation and permanent self-catering accommodation

5.13 Proposals for agricultural/forestry worker’s housing, Service Family Accommodation and permanent self-catering accommodation which are capable of normal residential use7 will be treated as applications for dwellings and provision of affordable housing will therefore be required.

Care and Retirement Accommodation

5.14 Institutional care homes and nursing homes fall within Use Class C2 (Residential Institutions) of the Use Classes Order and are not subject to affordable housing provisions. However, sheltered and retirement housing, including self-contained apartments linked to care (e.g. Extra Care or Assisted Living) fall within Use Class C3 (Dwelling houses) and as such will be expected to provide 40% affordable housing (subject to viability).

5.15 In the case of self-contained apartments linked to Extra Care provision, the affordable housing target will generally be met by way of a financial contribution. In exceptional circumstances there may be instances where on-site provision would contribute to or meet the affordable housing target.

7 Normal residential use means that there are no physical reasons why the property cannot be occupied as a normal residential dwelling

12 | Page 6.0 LOCAL AFFORDABLE HOUSING NEED

6.1 When determining planning applications, the Council will negotiate affordable housing provision to meet the overall needs for the district. However, with regard to occupancy, priority will be given to those with a connection to the immediate sub area before moving out to the district as a whole (for a full list of sub areas please see Appendix 1).

6.3 In terms of the District as a whole, the SHMA has identified:

x A split in affordable housing need of 24% intermediate affordable housing (which includes shared equity/ownership, discounted homeownership and intermediate rent) and 76% affordable rented housing. x A need for a mix of house sizes but with a focus on smaller properties. x A recognition that larger family housing can help release the supply of smaller properties.

6.4 When negotiating the mix of homes to be provided on any one site, the conclusions of the SHMA will be considered alongside details of households currently on the Housing Register in the local area. Priority will be given to those households on the Register who have a local connection to the sub area in the first instance. For rural exception sites coming forward under Policy HLP3, priority will be given to those eligible households which have a local connection to the parish in which the site is located. Whilst the SHMA indicates that smaller general needs housing is mostly required, the Council will also wish to ensure that a sufficient supply of larger family housing is provided to help free up smaller properties.

6.5 When developing the layout and design of a development it is important to ensure that the affordable homes are of an appropriate size and quality. Size and quality standards are set by the HCA and are subject to review. All affordable housing is expected to meet HCA standards as a minimum. The current (July 2014) recommended floor space for various sizes of homes is as follows:

x 1 bedroom flat8 - 57 sqm x 1 bedroom house - 60 sqm x 2 bedroom house - 70 sqm x 3 bedroom house - 85 sqm x 4 bedroom house - 100 sqm

6.6 The approximate split in affordable tenure should be 70% affordable rented to 30% intermediate housing. Affordable housing should be provided in units as close as is practicable to the following proportions:

x 15% - 1 bedroom units x 60% - 2 bedroom units x 25% - 3/4 bedroom units

8 Only acceptable where the market units include flats also; and then in the same proportions.

13 | Page 6.7 This is broadly in line with the SHMA which recognises the need for smaller properties but also acknowledges the role which delivery of larger family homes can play in releasing supply of smaller properties for other households.

6.8 To qualify for an affordable home, a household must have an identified housing need and meet at least one of the local connection criteria that form part of the Council’s Scheme of Allocation. The local connection criteria are:

x Current residency and for the previous two years in the local area or x Previous residency in the local area (for a continuous period of at least 10 years) or x Close family ordinarily resident in the local area (for a minimum period of five years previously) or x Permanent employment in the local area

6.9 A legal agreement between the landowner, Council and Registered Provider will be used to ensure that the homes are retained as affordable and only occupied by eligible households in housing need, upon every future re-sale or re-let. Alternatively, if restrictions are lifted (e.g. where a tenant has a legal right to purchase the home), the legal agreement will ensure that secure arrangements are in place to recycle any subsidy for alternative affordable housing provision.

14 | Page 7.0 RURAL AFFORDABLE HOMES

Rural Exception Sites

7.1 Rural exception sites are small sites on the edge of rural settlements to be developed solely for the provision of affordable housing for local people. These sites would not normally be considered suitable for housing development. Whilst the value of exception site land is more than agricultural value, it is significantly less than open market housing land. Historically exception sites have been delivered by Registered Providers, who acquire the land and develop it for affordable housing. This traditional route remains an important way of supplying rural affordable housing. Alternatively, landowners and private developers may build affordable homes on exception sites subject to restrictions as set out below. The enhanced land value which may result is intended to incentivise landowners to bring sites forward for affordable housing.

7.2 On privately developed exception sites, 50% of the homes will be retained by the developer for affordable sale (or rent) to eligible households at a maximum of 80% of market value. A restrictive covenant will ensure that this discount and eligibility criteria are retained in perpetuity. The remaining 50% of homes will be sold on completion to a nominated Registered Provider at the Council’s approved affordable Transfer Prices. Affordable homes built and sold (or let) by private developers on exception sites are called Rural Discount Homes.

7.3 For rural exception sites coming forward under Policy HLP3, no more than 12 dwellings will normally be permitted on any one site. This is in the interests of promoting mixed and sustainable communities and minimising the impact of development upon the village and its landscape setting.

7.4 Completed homes are allocated to local people nominated by the Council from its Housing Register. Eligible households include family members or employees who live or work locally and meet the qualification criteria. For rural exception sites coming forward under Policy HLP3, priority will be given to those households which have a local connection to the parish in which the site is located before moving out to neighbouring parishes and the district as a whole. Whilst a Section 106 legal agreement will set out restrictive covenants on local connection for all the affordable homes, Rural Discount Homes will be further protected by the terms of the lease between each successive eligible occupier and the Registered Provider who retains an equity stake in the property and a financial interest in the wider development and who will oversee and certify eligibility and occupation.

7.5 The size (floor area) of Rural Discount Homes is restricted, both to reflect their intended role as starter homes for local households and to aid affordability. Typically they will be two- bedroomed homes of 70 sqm but on larger schemes, some three-bedroomed houses may be included (up to 90 sqm).

7.6 A well as allowing greater choice over occupation, the inclusion of Rural Discount Homes should return a greater land value to the landowner in most rural areas. In those parts of Harrogate District that have lower house values, the split between Registered Provider owned dwellings and Rural Discount Homes may be altered in favour of Rural Discount Homes, subject to the assessment of the viability of the proposal by the Council’s Valuation Surveyor. Rural Discount Homes will only apply to rural exception sites adjacent to

15 | Page settlements where opportunities for mixed market and affordable sites are limited and in order to help deliver the affordable rented and shared ownership homes on half the site.

7.7 Any proposals for exception sites should be discussed and agreed with the Council’s Principal Development Officer prior to submission of a planning application. Consultation with the Parish Council and the involvement of a nominated Registered Provider to be nominated by the Council will be required from the outset as well as evidence of local housing need.

16 | Page 8.0 DELIVERING THE AFFORDABLE HOMES

8.1 In order to ensure that a set of common standards will apply across the affordable housing sector as required by the Housing and Regeneration Act 2008 and to meet the definition of affordable housing set out in the NPPF, it is expected that all affordable homes (including intermediate housing for sale or rent) will be delivered in partnership with a Registered Provider9. The “Regulatory Framework for Social Housing in from April 2012” published by the HCA sets out the regulatory standards that Registered Providers will be required to meet in the provision and management of social housing. In order to become registered, housing associations and other organisations established to provide affordable housing will have to demonstrate to the HCA’s satisfaction that they can meet the economic and consumer standards specified in the Regulatory Framework. They will have to demonstrate that they have agreed processes in place for the setting of rents, the management of tenancies and maintenance and repairs. Furthermore their lettings policy must be fair, transparent and efficient; and they must have an agreed process to ensure long-term affordability of the homes or, should restrictions be lifted, for example where a tenant has a legal right to purchase the home, that secure arrangements are in place to recycle any subsidy for alternative affordable housing provision.

8.2 The process of registering providers enables the HCA to verify that the provider satisfies the requirements set out in the Regulatory Framework. The Council considers it important that appropriate arrangements are in place to deliver, manage and maintain new affordable housing, and it will therefore expect that providers will be registered with the HCA.

8.3 The Council will only accept the delivery of affordable housing through non registered providers in exceptional circumstances. To be acceptable, non-registered providers will have to demonstrate to the HCA’s satisfaction that they can meet the standards set out in the Regulatory Framework. Further details of the Regulatory Framework for Social Housing in England can be viewed on the Homes and Community Agency website on: http://www.homesandcommunities.co.uk/ourwork/regulatory-framework

8.4 Irrespective of the affordable housing tenure, a nominated Registered Provider (or on occasion, the Council) will purchase completed homes from the developer at Transfer Prices which are reviewed and agreed periodically in consultation with Registered Providers and the HCA. Transfer Prices are set to ensure that the future homes are affordable to those in housing need and are derived from house price and affordability data contained within the SHMA.

8.5 The SHMA demonstrates that that around a quarter of households in affordable need can afford an equity stake of up to £80,500. The figure of £80,500 has been calculated on the basis of the income required to access market housing (£23,000) multiplied by 3.5 to reflect a typical mortgage multiple. The lower quartile dwelling price in the district (averaged across all types Q1-Q2 2014) is £162,500. Using this approach accords with the NPPF which states that affordability should be relative to local incomes and house prices.

8.6 This equity stake represents approximately a 50% share in an average entry-level property. The typical intermediate sale property is currently a two-bedroom house of approximately 70sqm. Consequently, the appropriate transfer price payable by a Registered Provider for a

9 On occasion the Council may deliver affordable homes

17 | Page house of this type and size is £77,000/£1100psqm GIA (allowing for the purchaser’s ability to pay the Registered Provider’s on-costs).

8.7 The flat rate of £1100psqm will apply to all other agreed property sizes up to a maximum of 90sqm for a 3-bed property or 100sqm for a 4-bed property. Where affordable flats are delivered, the transfer price is £1050psqm GIA (not including common parts). The lower price reflects the purchaser’s liability for service charges.

8.8 Currently, the Government is consulting on a Nationally-Described Space Standard which includes sizes considerably in excess of those currently adopted. Should the new Standard become mandatory, the price of £1100psqm will be retained but maximum transfer price caps may have to be introduced.

Partnering Arrangements with Registered Providers

8.6 The Council has well established working relationships with a number of Registered Providers who have a good track record of delivering new homes and responsive local management and who work with the Council to meet shared objectives for sustainable communities. The Council will nominate a partner Registered Provider to acquire and manage affordable homes on mixed tenure sites and exception sites having regard to a number of factors including the location of their stock holdings and financial capacity. It may also acquire and manage properties itself. Applicants should contact the Principal Development Officer (Housing) to discuss the arrangements for delivery of the affordable homes and agree the partner Registered Provider.

18 | Page 9.0 DESIGN AND LAYOUT OF THE DEVELOPMENT

Integration of Affordable Housing

9.1 In order to create sustainable, inclusive and mixed communities, new residential developments should be designed so that the affordable housing is well integrated within the open market housing. On larger developments of 15 units or more, clusters of between 5 and 8 affordable homes located throughout the development will be considered appropriate.

9.2 In the case of flatted developments, the affordable units should be located together in one or more separate blocks. This is to ensure that service charges, insurance etc. can be managed by the Registered Provider so that occupation of the flats remains affordable. Where the development comprises houses, the affordable homes should also be houses.

9.3 Applicants should contact the Principal Development Officer (Housing) at the pre-application stage to discuss and agree the type, size, mix, tenure and integration of affordable housing on the proposed development. This is a necessary part of the pre-application process.

Design

9.4 The Council expects affordable housing to be built to a high standard of design. In the interests of delivering sustainable, inclusive and mixed communities, the affordable homes should be indistinguishable from the open market housing in terms of style, quality of specification and finish and materials. The units should be designed to suit the affordable housing type required and any special needs of future residents (e.g. wheelchair users) and built to the HCA Design and Quality standards or replacement thereof, or such variation as may be agreed with the partner Registered Provider. For details of current standards please refer to the HCA website (www.homesandcommunities.gov.uk).

Layout Plans

9.5 For all planning applications, the location and number of affordable housing units/plots should be specified on layout plans, together with parking provision. At Reserved Matters/Full stage, details of the size and number of bedrooms within each dwelling should also be clearly marked up and different colours used to identify the different affordable housing tenures (if relevant).

19 | Page 10.0 PLANNING PROCEDURES

10.1 Developers and landowners are expected to consider the overall cost of development, including any required planning obligations and potential abnormal costs prior to negotiating on the sale or purchase of land (or an option in respect of land). To help developers make informed land purchase arrangements, the Council encourages applicants to engage in pre-application discussions on the scale and type of affordable housing provision required. The Council wishes to avoid situations where the developer purchases land without taking the requirement to provide affordable housing into account. Developers should not expect that the requirement to provide affordable housing will be waived where this has not been accounted for in the land purchase price.

10.2 Where a proposed development gives rise to a requirement for affordable housing, the applicant is required to submit an Affordable Housing Pro Forma as part of the planning application. Details of the amount, type, size and tenure of the affordable housing should be included on the Affordable Housing Pro Forma which should be countersigned by the Principal Development Officer (Housing) once the details of the affordable housing have been agreed. There is a fee for this pre-application work which must be paid prior to submission of the planning application.

10.3 The Affordable Housing Pro Forma is available to download from the Council’s website (www.harrogate.gov.uk/planning) and its submission is a Local Validation Criterion.

10.4 The Council’s affordable housing target is subject to financial viability. Where an applicant wishes to challenge the provision of the target affordable housing on viability grounds, they must submit a Development Appraisal. This should take place prior to completion of the Affordable Housing Pro Forma and submission of a planning application. For details of the information required in the Development Appraisal, please see Appendix 2 The Development Appraisal will usually be carried out by the Council’s Valuation Surveyor and a charge is payable for this work (part payable up front).

Commuted Sums

10.5 In all circumstances where a commuted sum is payable, the following condition and procedures will apply:

No more than 20% of the dwellings shall be occupied before a scheme for the provision of affordable housing has been submitted to and approved in writing by the Local Planning Authority. The scheme shall comprise:

1. The amount and timing of payment of the commuted sum and its phasing in relation to the occupancy of the market housing.

10.6 Where delivery is on site, the standard PINS condition still applies.

10.7 Commuted sums will usually be calculated at the point where payment is about to be made, i.e. prior to occupation of no more than 20% of market units where at least 5 dwellings are proposed.

20 | Page Outline applications

10.8 As it may often not be clear from an outline application how many dwellings will be built on site (or the proposed sizes of those dwellings) a standard condition will be applied to all applications where affordable housing may be required, allowing the issue to be addressed at the Reserved Matters stage. The condition will be as follows:

The development shall not begin until a scheme for the provision of affordable housing has been submitted to and approved in writing by the local planning authority. The development shall be carried out in accordance with the approved scheme. Affordable housing shall meet the definition of affordable housing in the NPPF or any future guidance that replaces it. In the case of offsite provision the scheme shall detail the means by which the provision is to be facilitated. In the case of onsite provision the scheme shall include:

I the numbers, type, tenure and location on the site of the affordable housing provision to be made which shall consist of not less than X% of housing units; II the timing of the construction of the affordable housing and its phasing in relation to the occupancy of the market housing; III the arrangements for the transfer of the affordable housing to an affordable housing provider [or the management of the affordable housing] (if no Registered Provider involved); IV the arrangements to ensure that such provision is affordable for both first and subsequent occupiers of the affordable housing; and V the occupancy criteria to be used for determining the identity of occupiers of the affordable housing and the means by which such occupancy criteria shall be enforced

21 | Page 11.0 CONTACTS AND PUBLICATIONS

11.1 If you need any advice or information on Affordable Housing policy, please contact the Housing Development team. If your query relates to a planning application, please contact Development Control on: 01423 500 600.

Principal Development Officer (Housing) Community Services Springfield House Kings Road Harrogate HG1 5NX

Tel: 01423 500600 [email protected]

Senior Planning Policy Officer Planning Policy Team Planning and Development Knapping Mount West Grove Road Harrogate, HG1 2AE

Tel. 01423 500600 [email protected]

Valuation Surveyor Community Services Springfield House Kings Road Harrogate HG1 5NX

Tel: 01423 500600 [email protected]

11.2 Useful publications include:

x Planning Practice Guidance http://planningguidance.planningportal.gov.uk/blog/guidance/planning- obligations/planning-obligations-guidance/ x Harrogate District Affordable Housing Economic Viability Assessment (Adams Integra, September 2010, updated 2014) x National Planning Policy Framework, DCLG, April 2012 www.communities.gov.uk x Regulatory Framework for Social Housing in England from April 2012 published by the HCA www.homesandcommunities.co.uk x Housing and Regeneration Act 2008 x Harrogate Borough Council Strategic Housing Market Assessment, February 2015

22 | Page 23 | Page APPENDIX 1 Plan illustrating Designated/Non Designated Rural Areas

24 | Page APPENDIX 2

Worked Examples

In order to aid understanding of these changes to policy, we have prepared the following list of worked examples:

1. Designated rural sites 1-5 dwellings <1000s qm, no affordable housing

2. Designated rural sites 1-5 dwellings >1000sqm, 40% affordable housing by commuted sum

3. Designated rural sites 6-10 dwellings <1000sqm, 40% affordable housing by commuted sum

4. Designated rural sites 6-10 dwellings >1000sqm, 40% affordable housing by commuted sum

5. Designated/non-designated rural and urban sites >10 dwellings, 40% affordable housing on site

6. Non-designated rural and urban sites <11 dwellings and >1000sqm, 40% affordable housing on site

7. Non-designated rural and urban sites <11 dwellings and <1000sqm, no affordable housing

25 | Page APPENDIX 3 EFFECT OF VACANT BUILDING CREDIT

The methodology for calculating affordable housing where a vacant building credit applies is as follows:

The current gross floor space and proposed gross floor space submitted will be checked.

The existing floor space of a relevant vacant building will be credited against the floor space of the new development. For example, where a building with a gross floor space of 8,000 square metres (sqm) is demolished, as part of a proposed development with a gross floor space of 10,000 sqm, the existing floor space is equivalent to 80% of the proposed floor space. This means that the affordable housing contribution is reduced to 20% of what would normally be sought.

Example 1: scheme of 90 houses with a total Gross Internal Area (GIA) of 10,000sqm, existing empty and redundant buildings with a total GIA of 8,000sqm; Affordable Housing Target of 40% (36 homes) is reduced to 7.2 homes (36 x 20% = 7.2).

Where a commuted sum is payable, the commuted sum per square metre is calculated in the same way as in Appendix 4 below.

Where affordable housing is to be delivered on site, the appropriate proportion of the net increase in floor area is translated into the appropriate number of affordable units having regard to the development proposals and the Council’s preferred mix.

The calculation of the commuted sum is based on the market value per square metre of the proposed dwellings, as evidenced by their sale price/valuation, less the equivalent affordable housing transfer value (currently £1050 per square metre for flats, £1100 per square metre for houses). The resultant price per square metre would be multiplied by 139 in this example (see Appendix 4 below).

Example 2: A redundant workshop of 350sqm gross, in a designated rural area, is being demolished and replaced with six houses and garages of 570sqm gross. In this case the existing floor space is equivalent to 61% of the proposed floor space. The 2.4 dwelling target (as above) is here reduced to 0.94 affordable dwellings. This equates to 66sqm (70sqm x 0.94), so the commuted sum would be the price per square metre calculated as per Example 1 above, multiplied by 66.

Example 3: A redundant workshop of 750sqm gross, in a designated rural area, is being demolished and replaced with six houses and garages of 570sqm gross. In this case there is no net increase in floor space. There is therefore no affordable housing requirement.

Example 4: A small redundant industrial site with buildings of 1500sqm is being demolished and replaced with housing of 4650sqm (48 dwellings). The existing floor space is equivalent to 32% of the proposed floor space.

The target on a 48-dwelling site is 19.2 affordable homes. This target is reduced to 68% or 13 homes. Regard will be had to the proposed development. It may well be possible to achieve 13 affordable homes on site with a mix of types and sizes. Alternatively a commuted sum

26 | Page may be payable in addition to the number of affordable dwellings achievable on site. In such cases the commuted sum will be worked out as in Appendix 4 below.

27 | Page APPENDIX 4

COMMUTED SUMS: WORKED EXAMPLES

The calculation of a commuted sum is based on the market value of the dwelling in respect of which the sum is due, as evidenced by its sale price/valuation, less the equivalent affordable housing transfer value (£1050 per square metre for flats, £1100 per square metre for houses).

The difference between the two figures represents the developer subsidy. In respect of Designated Rural Areas, on developments of 6 -10 dwellings, or sites of 1-5 dwellings where the combined floor space exceeds 1000sqm, the commuted sum is equivalent to 40% of the total number of dwellings. Commuted sums will be based on the equivalent value of a typical 2-bedroom affordable house of 70sqm.

Should developers prefer to offer appropriate on-site affordable housing, this is acceptable. On sites where there is no requirement for on-site affordable housing but where developers prefer to offer commuted provision of equivalent value off site to commuted sums, this will be given consideration.

See examples below.

Example 1: Ten-dwelling scheme comprising 6no four-bedroom detached houses and 4no semi- detached three-bedroom houses. The three-bedroom homes have been sold for an average £200,000 each/£2353psqm Equivalent affordable house transfer price £1100psqm £2353 - £1100 = £1253 (commuted sum per square metre) Affordable housing contribution 10 dwellings @ 40% = 4 houses 4 x 70sqm = 280sqm @ £1253 = £350,840.

Example 2: Six-dwelling scheme comprising four-bedroom houses of 120sqm each sold for £400,000 each/£3333psqm Equivalent affordable house transfer price £1100psqm £3333 - £1100 = £2233 Affordable housing contribution 6 dwellings@ 40% = 2.4 2.4 x £70sqm = 168sqm @ £2233 = £375,144

Example 3: 10Five-dwelling scheme comprising five six-bedroom houses of 210sqm each sold for £850,000 each/£4048psqm Equivalent affordable house transfer price £1100psqm £4048 - £1100 = £2948 Affordable housing contribution 5 dwellings@ 40% = 2 2 x 70sqm = 140sqm @ £2948 = £412,720

Every proposed commuted sum payable is subject to financial viability.

10 Although only five units are proposed, the total scheme size exceeds 1000sqm, therefore affordable housing must be provided.

28 | Page APPENDIX 5

DEVELOPMENT APPRAISALS

To justify the provision of less than the target affordable housing, the Council requires a Development Appraisal to be submitted prior to submission of the planning application. The information contained in the Appraisal will only be made available to the Planning Officer and advisors such as the Council’s Valuation Surveyor, Principal Development Officer and Quantity Surveyor. It will not be placed on the public file nor made available to any third party.

The information to be supplied should include the value of the completed development proposed by this application, and all costs incurred or expected to be incurred in order to achieve this value. The information should ideally include the following as a minimum guide, but may also cover other items specific to the proposed development.

Value:

x Gross internal area of houses excluding garages and conservatories. Habitable roof-space should be listed separately. For industrial buildings, supply gross internal area; for any shops or offices supply net internal area. x The value used per unit of area. Alternatively, valuations of the completed buildings. x The cost of sales or lettings, broken down into marketing/estate agents’ fees and legal fees. x Affordable housing should be shown at the transfer value to be paid by a Registered Provider (see para 8.5). x Current Use Value of the property. This means the value reflecting the existing physical state and use, which are authorised and require no consent to continue.

It may be useful to show more than one scenario.

Costs:

x Build costs. Give the gross external area multiplied by the unit cost per square metre or square foot. State whether this is a tendered sum or an estimate. x Preliminaries allowed for. State what is included. x External works where applicable. Broken down, e.g. X ms of road @ £Y per m. Include boundary treatment, landscaping, demolition and site preparation costs as appropriate. x Standard Planning Costs – Planning and Building Regulation fees, commuted sums. x Professional fees – Architects, QS, CDM supervisor etc. x Contingency allowance. x Cost of finance. Indicate the period and interest rate. x Community Benefits. If the scheme includes any exceptional benefits such as the restoration of a listed building or the provision of public open space above what is required, please state the cost of providing this. x Abnormal costs if any. What are these (e.g. contaminated land remediation) and when you became aware that there were potentially abnormal costs and what the costs are anticipated to be? x Developers Profit – the amount or percentage included. x Acquisition price as appropriate

Any other relevant items should be clearly defined and costed.

29 | Page Scale of Fees

The fee for this work is banded according to the time taken to complete the appraisal. Applicants are required to pay an initial advance. A further payment may be required once the work is complete.

x Cases taking up to five hours will be charged at £500 x Cases taking five hours and up to ten hours will be charged at £1000 x Cases taking ten hours and up to fifteen hours will be charged at £1500 x Cases taking fifteen hours and up to twenty hours will be charged at £2000. x Cases taking twenty hours or more will be charged at £2500. (In practice, few cases take more than fifteen hours to complete even when negotiations take place.)

30 | Page APPENDIX 6

SUB-AREAS AND PARISHES

The table below provides a breakdown on the composite parishes/wards contained within each of the 16 sub-areas

Sub-Area Name Parish / Ward Harrogate Harrogate11 Knaresborough & Knaresborough Scriven Scriven Ripon Ripon Boroughbridge Cundall w Leckby Ellenthorpe Humberton Kirby Hill Langthorpe Milby Newby w Mulwith Norton-le-Clay Roecliffe Skelton on Ure Thornton Bridge Westwick Knaresborough Arkendale Brearton Villages Coneythorpe & Clareton Copgrove Farnham Ferrensby Flaxby Goldsborough Scotton Staveley Walkingham Hill w Occaney Vale of York Allerton Maul. w Hopperton Cattal Dunsforth Green Hammerton Hunsingore Kirby Hall Kirk Hammerton Little Ouseburn Marton cum Grafton Thornville Thorpe Underwoods Whixley Area Burton-On-Yore Colsterdale Ellingstring Ellington High & Low Fearby Healey Ilton-cum-Pott Masham Swinton w Warthermarske Lower Wharfedale Follifoot Great Ribston w Walshford Kearby w Netherby Kirk Deighton Kirkby Overblow Little Ribston North Deighton Plompton

11 Harrogate Sub-Area includes the village of Pannal/Burn Bridge/Spacey Houses

31 | Page Sicklinghall Spofforth w Stockeld Upper Wharfedale Askwith Blubberhouses Castley Denton Farnley Fewston Great Timble Leathley Lindley Little Timble Middleton Nesfield w Langbar Newall w Clifton Norwood Weston Lower Nidderdale Birstwith Bishop Thornton Villages Clint cum Hamlets Felliscliffe Hampsthwaite Killinghall Nidd Ripley Part of Saltergate Ward Upper Nidderdale Bewerley Dacre Fountains Earth Hartwith cum Winsley High & Low Bishopside Menwith w Darley Stonebeck Down Stonebeck Up Thornthwaite w Padside Thruscross Warsill Marston Villages Bilton-in- w Bickerton Long Marston Moor Monkton Tockwith Wighill Wilstrop South Harrogate Haverah Park Pannal (Parish) Villages North Rigton Stainburn Weeton Huby Northern Villages Asenby Baldersby Bridge Hewick Copt Hewick Dishforth Givendale Hutton Conyers Marton-le-Moor Melmerby Middleton Quernhow Norton Conyers Rainton w Newby Sharow Wath Ripon South Villages Bishop Monkton Burton Leonard Markingfield Hall Markington w Wallerthwaite South Stainley w Cayton Ripon West Villages Aldfield Azerley Eavestone Grantley Grewelthorpe Kirkby Malzeard Laverton Lindrick w Studley R. & Fountains Littlethorpe North Stainley w Sleningford Sawley Skelding Studley Roger Winksley

32 | Page 33 | Page Housing Sub-Areas in Harrogate District

KEY

1) Harrogate Sub Area (includes Pannal Village) 2) Knaresborough and Scriven Sub Area 3) Ripon Sub Area 4) Boroughbridge Sub Area 5) Knaresborough Villages Sub Area 6) Vale of York Sub Area 7) Lower Wharfedale Sub Area 8) Upper Wharfedale Sub Area 9) Lower Nidderdale Villages Sub Area 10) Upper Nidderdale Sub Area 11) Masham Area Sub Area 12) South Harrogate Villages Sub Area 13) Masham Villages Sub Area 14) Northern Villages Sub Area 15) Ripon South Villages Sub Area 16) Ripon West Villages Sub Area

34 | Page 35 | Page