Affordable Housing Statement Proposed Development at 68 Half

Affordable Housing Statement

Proposed development at 68 Half Moon Lane, London, SE24

Prepared for The Dulwich Estate

January 2017

Contents

1 Introduction 3 2 Background 4 3 The Site 5 4 Planning Policy Considerations 6 5 The Proposed Development and Approach to Affordable Housing 9 6 Conclusion 11

1 Introduction

BNP Paribas Real Estate has been commissioned by The Dulwich Estate (“the Applicant”) and in conjunction with the Dulwich Almshouse Charity, to prepare an Affordable Housing Statement (‘AHS’) in accordance with local and strategic planning policy in support of the planning application for the proposed Almshouse development (“the Proposed Development”) at 68 Half Moon Lane, London, SE24.The Site is located within the jurisdiction of the London Borough of Southwark (“the Council”).

The planning application seeks permission for:

“Construction of a new almshouse comprising twenty flats and communal areas.”

The Council’s Validation Checklist for major applications document sets out the Council’s requirement for the submission of ‘an executive summary which outlines the key conclusions being drawn from the appraisal for the lay reader’. This AHS has been prepared in accordance with this requirement to assist the Council in the determination of the planning application.

This AHS is structured as follows:

■ Section two provides background information on the Applicant;

■ Section three sets out a description of the site and its location;

■ Section four outlines the planning policy considerations;

■ Section five sets out details of the proposed development and the approach to addressing affordable housing policies and delivery; and

■ Section six outlines our key conclusions being drawn.

This AHS should be considered alongside the other documents submitted in support of the planning application, including but not limited to Daniel Watney’s Planning Statement, BNP Paribas Real Estate’s Financial Viability Assessment and Pollard Thomas Edwards’ Design and Access Statement. A full list of the application supporting documents can be found in the Planning Statement.

2 Background

The proposed new Almshouse will be owned and operated by the Dulwich Almshouse Charity which is a Beneficiary of The Dulwich Estate and approximately 43% of its income is derived from The Dulwich Estate. The way in which the Almshouse Charity has been structured has changed over past four hundred years, however the Dulwich Almshouse Charity became an independent charity in 1995.

The objectives of the Dulwich Almshouse Charity are “to relieve beneficiaries in cases of need, hardship or distress by the provision and maintenance of almshouses and otherwise as the Trustees think fit. Beneficiaries must be inhabitants of the Charity’s area of benefit [which primarily is Southwark] who are not less than 60 years of age in conditions of need, hardship or distress.”

Edward Alleyn, a successful actor-manager and entrepreneur purchased the Manor of Dulwich in 1605. Some year later he decided to create a charitable Foundation in Dulwich. The original beneficiaries were twelve poor scholars and six poor brothers and six sisters. The foundation stone was laid in 1613 when six almshouses were built on either side of Christ's Chapel. The present almshouses, Edward Alleyn House, which are all on the east side of the Chapel, facing Dulwich Park, date from reconstruction in 1739 and enlargement in 1866. For a considerable number of years, the Dulwich Almshouse Charity has been discussing the need to replace Edward Alleyn House with fit for purpose homes.

The 16 existing almshouse flats (although only 14 are currently in use, with two being too small to meet modern occupiers needs) are constrained in size (some being bedsits) and each has stepped access, narrow doorways, and limited natural daylight. The flats are on two floors with no lift and provide no access to wheelchair users. Being a listed building the flats are not suitable for further adaptation to meet the needs of residents as they age and develop impaired mobility. There is no communal meeting room to promote social interaction so important for the older population in reducing isolation. The Almshouse Charity’s Warden organises social events for residents and other elderly members of the community but these currently have to be hosted in the Vestry of Christ’s Chapel.

The Proposed Development is a long awaited opportunity for the Dulwich Almshouse Charity to provide accommodation that is suitable to the needs of its ageing residents – fit for purpose, lifetime homes. This scheme promotes choices of independence (with the benefit of a resident warden) and sociability for the residents and the community, providing secure and safe accessible homes and gardens. This planning application therefore meets the Charity’s brief and objectives: to provide new fit for purpose almshouse accommodation for those individuals in need.

Southwark’s Housing Strategy to 2043 identifies that the number of people aged 65 and over is projected to increase by 63% (or 14,000 people) between 2012-2032, the highest growth in the south east sub-region. This is echoed by the South East London Strategic Housing Market Assessment from 2014, which identifies aging as the main feature of future population change in this area. The 2014 SHMA describes that Southwark has a below average supply of elderly-focused accommodation.

In terms of preferences, Southwark’s Housing Requirements Study from 2008 indicates that after bungalows, sheltered housing or local authority / housing association owned, elderly housing blocks are most likely to be considered by respondents as they grow older. Living with family or residential care are the least considered options. Key housing data published by Southwark in 2012/13 indicates that there are currently just 1,146 sheltered housing units in Southwark. With an anticipated increase of 14,000 over 65s by 2032, additional sheltered housing is urgently required to accommodate this growth. To secure a good quality of life into older age, it is clear that these preferred types of accommodation must be considered to meet this growing need.

Southwark has published the ‘Older people’s housing delivery plan: Southwark Housing Strategy 2009 -2016’ which sets out how this need will be met. The Strategy identifies a growing demand for sheltered housing, with a void rate of just 2.85% in local authority sheltered housing.

The Strategy also sets out that Southwark faces significant cuts in funding from central Government. As a result, the budget for social care needs to achieve savings in the order of over £8 million.

This places a significant burden on LB Southwark to provide this urgently needed sheltered housing for its growing older population. It follows that intervention from the private sector and third party organisations is therefore essential if this growing demand can both be met and reconciled with clear preferences (i.e. sheltered housing) to ensure emotional and physical wellbeing. Such interventions (including the scheme proposed by this planning application) must be recognised.

As we have described, the planning application site has previously been identified as suitable for residential development and presents a good opportunity to deliver much needed sheltered housing. This would relieve LB Southwark as the local authority from the cost of delivering a quantum of units and reduce pressure on their housing list.

3 The Site

The 0.32 Ha (0.8 acre) Site is located on the south western corner of the junction of Half Moon lane, Beckwith Road and the A2214 (East Dulwich Grove) within the London Borough of Southwark. The area is predominantly residential with local shops located opposite the site along Half Moon Lane and the Judith Kerr Primary School located immediately to the west of the site.

The Site originally formed part of a wider site comprising the former James Black Institute, constructed by King’s College London as its plant science department laboratory building to the west (occupied by the Judith Kerr Primary School since 2013) and adjacent ‘garden’ land. The ‘garden’ land is proposed to be separated from the building and surrounding land as part of the planning application and forms the subject Site.

The Site benefits from good amenities and is ideally located for an Almshouse development, being situated opposite local shops and a GPs surgery and pharmacy located close by with further shops and services located in Herne Hill. The site is well served by public transport with bus stops located on Half Moon Lane and North Dulwich and Herne Hill railway stations located 0.2 miles east and 0.5 miles west of the site respectively.

4 Planning Policy Considerations

This section of the AHS provides an overview of the key national and local planning policies that guide the delivery of affordable housing. We would highlight that Daniel Watney’s Planning Statement, submitted as part of the planning application, provides a comprehensive review of the planning policy context in relation to the Development of the site.

4.1 National Policy and Guidance

The National Planning Policy Framework (“NPPF”) (adopted in March 2012) provides the national context for affordable housing delivery and sets out Central Government’s housing policy objectives. It must be taken into account in the preparation of local and neighbourhood plans, and is a material consideration in planning decisions. Paragraph 14 identifies that, “At the heart of the National Planning Policy Framework is a presumption in favour of sustainable development, which should be seen as a golden thread running through both plan-making and decision-taking.”

The NPPF identifies at paragraph 47 that local planning authorities (“LPA”) have to deliver a wide choice of high quality housing with the key message being “to boost significantly the supply of housing”. In order to do so LPA are required to “use their evidence base to ensure that their Local Plan meets the full, objectively assessed needs for market and affordable housing in the housing market area, as far as is consistent with the policies set out in” the NPPF. It also identifies at paragraph 50 that in formulating their affordable housing policy LPAs need to ensure that “the agreed approach contributes to the objective of creating mixed and balanced communities. [Further,] such policies should be sufficiently flexible to take account of changing market conditions over time.” This last point is further expanded upon in paragraphs 173 to 174 (viability and deliverability), which identifies that, “the cumulative impact of these standards and policies should not put implementation of the plan at serious risk, and should facilitate development throughout the economic cycle.”

Annex 2 (Glossary) of the NPPG defines affordable housing as follows:

“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 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.

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 is homes 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. These can include shared equity (shared ownership and equity loans), other low cost homes for sale and intermediate rent, but not affordable rented housing.

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.”

The National planning Practice Guidance (“NPPG”) was first published online in 2014 and is updated periodically. The NPPG adds further context to the NPPF and it is intended that the two documents should be read together.

In particular the NPPG provides further guidance where LPAs require affordable housing obligations. Paragraph 006 (Reference ID: 23b-006-20140306) in the Planning Obligation section identifies that planning authorities “should be flexible in their requirements. Their policy should be clear that such planning obligations will take into account specific site circumstances.” Further detailed guidance is provided in the Viability section of the NPPG as to the determination of individual applications “where deliverability of the development may be compromised by the scale of planning obligations and other costs” (Paragraph: 016 Reference ID: 10-016-20140306). The guidance identifies that in such instances “a viability assessment may be necessary” and “should be informed by the particular circumstances of the sites and proposed development in question”. Further, the guidance defines a site to be viable where, “the value generated by its development exceeds the costs of developing it and also provides sufficient incentive for the land to come forward and the development to be undertaken.”

4.2 Local Policy

Southwark’s statutory development plan comprises the Core Strategy (April 2011), the Saved Southwark Plan policies (2007), a number of Area Action Plans, the Adopted Policies Map, adopted neighbourhood plans and the London Plan. The Development Plan is supported by a range of evidence documents and supporting statements including supplementary planning documents.

The key policy with respect to the delivery of affordable housing in Southwark is Strategic Policy 6 (Homes for people on different incomes) in the Core Strategy. This identifies the Councils’ approach to affordable housing to be as follows:

“Development will provide homes including social rented, intermediate and private for people on a wide range of incomes. Development should provide as much affordable housing as is reasonably possible whilst also meeting the needs for other types of development and encouraging mixed communities.”

The Policy goes on to set out the Council will achieve this “by requiring as much affordable housing on developments of 10 or more units as is financially viable”. Figure 28: Affordable and Private housing requirements identifies that “at least 35% of new units must be affordable” in the subject site’s location The Draft Affordable Housing SPD (2011) sets out that where applications cannot deliver a policy compliant amount or mix of affordable housing applicants are required to submit a financial appraisal to justify to the Council’s satisfaction why the delivery of the required level of affordable housing is not financially possible.

The Core Strategy defines affordable housing as follows:

‘Affordable housing, as set out in London Plan policy 3A.8 meets the needs of households whose incomes are not enough to allow them to buy or rent decent and appropriate housing in their borough.’

The London Plan has been updated since the Core strategy was published and Policy 3.10 Definition of Affordable Housing in the London Plan Consolidated with Alterations Since 2011 (March 2016) now sets out that,

“Affordable housing is social rented, affordable rented and intermediate housing (see para 3.61), 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”

The Core Strategy goes on to set out that there two types of affordable housing:

“1. Social rented housing is housing that is available to rent either from the Council, a registered provider or other affordable housing provider. Access to social rented housing is based on need.

2. Intermediate affordable housing is housing at prices and rents above those of social rented but below private housing prices or rents. It can include part buy/part rent, key worker housing

and intermediate rent housing.”

The Development Viability SPD (March 2016) provides further guidance in relation to viability and identifies that, “We expect all development proposals that trigger a planning policy requirement to provide affordable housing to provide the homes at social rent and not affordable rent. Where a proposed development is not viable we may apply our planning policy requirements flexibly to ensure that the development can take place. For example, we may accept less affordable housing than the minimum required through policy.” Specific details of the methodology, information required to be submitted and process is set out in the SPD where viability is likely to be a relevant consideration in respect of achieving planning policy compliance.

5 The Proposed Development and Approach to Affordable Housing 5.1 Proposed development

The Applicant is seeking planning permission for the development of an almshouse comprising 20 one bed flats and communal facilitates (to be made available to the community) provided over ground and two upper floors. Table 3.3.1 provides a summary of the accommodation in the Proposed Development.

Table 3.3.1 Proposed Development accommodation schedule

Floor Unit Type Size (sq m) Size Sq Ft Ground 1B 2P 60 646 Ground 1B 2P 62 667 Ground 1B 2P 62 667 Ground 1B 2P 62 667 Ground 1B 2P 62 667 Ground 1B 2P 62 667 First 1B 2P 60 646 First 1B 2P 62 667 First 1B 2P 62 667 First 1B 2P 62 667 First 1B 2P 62 667 First 1B 2P 62 667 First 1B 2P 60 646 Second 1B 2P 60 646 Second 1B 2P 62 667 Second 1B 2P 62 667 Second 1B 2P 62 667 Second 1B 2P 62 667 Second 1B 2P 62 667 Second 1B 2P 60 646 TOTAL 20 1,230 13,240

The Proposed Development comprises 20 one bed almshouse flats let at, or below, social rent levels. Residents in the Dulwich Almshouse Charity almshouses pay a weekly maintenance contribution (“WMC”), which LB Southwark has accepted is fully eligible for Housing Benefit. The method of calculation is as recommended by the Almshouse Association and is made up of two elements: 1) the equivalent Fair Rent as assessed by the Rent Service; and

2) a share of the costs of the services provided by the Charity (primarily relate to the provision of a warden).

However, the WMC has been capped by the Almshouse Trustees at a limit, which equates to the maximum level of Housing Benefit i.e. the Local Housing Allowance (“LHA”). The WMC is reviewed annually and the amount charged remains at a level which subsidises the actual cost of providing this form of supported housing.

Almshouses are accepted as a form of affordable housing as they are usually operated by charities to provide low-cost housing. Given the above approach to the rental levels, the Proposed Development is affordable by reference to both national and local definitions and will be retained as such.

Notwithstanding this position, the Council has advised that at present their adopted planning policy does not recognise this as a conventional affordable housing product.

In light of this, the Applicant, in conjunction with the Dulwich Almshouse, appointed BNP Paribas Real Estate to undertake an assessment of financial viability of the Proposed Development in line with viability best practice and the approach outlined in the Council’s Development Viability SPD (March 2016). This assessment has demonstrated that the costs of delivering the scheme significantly outweigh the revenue that will be achieved through the WMC charged. The delivery of the Proposed Development relies on financial support from the Dulwich Almshouse Charity, assisted by The Dulwich Estate.

Given this position, a conventional affordable housing contribution cannot be sustained by the Proposed Development and no ‘conventional affordable housing’ as recognised by planning policy or contributions towards such housing is able to be offered as part of this application whilst ensuring that the Proposed Development is deliverable. However, the new Almshouse will deliver four additional flats to house those in need within the Borough, over the age of 60.

It should also be recognised that this specific form of housing not only meets the clearly identified need for specialist housing as we have set out, but provides other benefits for residents.

The warden managed model ensures that each resident is able to live as independently as they desire. There is no limitation on their movements and their individual apartment is secured as a conventional private dwelling would be. The warden retains the ability to access each apartment for maintenance and for the safety of residents, however beyond this, residents can choose their level of privacy. The warden is there to provide additional support when this is needed to ensure the well-being of residents is maintained and enhanced at all times.

This particular form of housing is closely aligned with the findings of Southwark's evidence base, which has identified that housing which allows independence whilst retaining a degree of support is the preference of its growing, elderly population. As described within the supporting planning statement, Southwark's housing needs study indicates that the largest growth sector is projected to be from residents aged over 65 (14,000 additional people between 2012 - 2032); this is an acute housing crisis which the proposed development seeks to address by providing the sort of accommodation that firstly increases the specialist housing stock, and secondly meets local preferences.

6 Conclusion

In accordance with planning policy requirements this Affordable Housing Strategy outlines the approach that the Applicant in conjunction with its Beneficiary has taken to affordable housing.

The Dulwich Estate provides approximately 43% of the Dulwich Almshouse Charity’s income. The objectives of the Dulwich Almshouse Charity are “to relieve beneficiaries in cases of need, hardship or distress by the provision and maintenance of almshouses and otherwise as the Trustees think fit. Beneficiaries must be inhabitants of the Charity’s area of benefit [which primarily is Southwark] who are not less than 60 years of age in conditions of need, hardship or distress.”

The 16 existing Edward Alleyn House almshouse flats (n.b. only 14 are currently usable) offered by the Dulwich Almshouse Charity to those in need are of a constrained size and lacking accessibility. The flats cannot meet the needs of residents as they age and become less mobile. There is no communal meeting room (one of the bedsits is occasionally used for meetings). The Proposed Development is a long awaited opportunity for the Dulwich Almshouse Charity to provide accommodation that is suitable to the needs of residents – fit for purpose and providing lifetime homes. In addition, the Charity will be able to develop further its outreach work within the community, on-site, with the benefit of the communal meeting room. The Dulwich Almshouse Charity therefore proposes to deliver a new almshouse of 20 flats, a communal meeting room and treatment room, fully accessible to wheelchair users, on the subject site to meet its charitable purposes. This scheme promotes choices of independence (with the benefit of a warden on site) and sociability for the residents and the Charity’s outreach beneficiaries in the community, in a secure and safe environment, set in landscaped gardens. This planning application therefore meets the Charity’s brief and objectives: to provide new fit for purpose almshouse accommodation for those individuals in need.

Further, as described within this Statement and the Planning Supporting Statement, there is an acute housing crisis in Southwark for specialist forms of housing. The greatest projected population growth is of residents over 65, which will give rise to significant pressure to provide suitable accommodation.

The particular form of accommodation proposed, which allows residents a good level of independence whilst being supported by an on-site warden, should be recognised as a viable and feasible way to meet part of this growing need.

The Dulwich Estate and the Dulwich Almshouse Charity fully appreciate that the Council’s adopted Development Viability Guidance requires the submission of a working model viability appraisal in all cases where a requirement for affordable housing is triggered. That is that all schemes providing 11 or more homes are expected to provide 35% affordable housing with a 70:30 split between social rented and intermediate tenure homes. These are preferably to be built on-site, but practical considerations may render this unfeasible. As such the Council would either look to secure an affordable housing contribution off-site or an in-lieu payment if viable. The Council has acknowledged that almshouses may be a form of affordable housing as they are usually operated by charities and provide low-cost housing. Given the approach to the rental levels (i.e. The Weekly Maintenance Cost has been capped by the Almshouse Trustees at a limit, which equates to the maximum level of Housing Benefit i.e. the Local Housing Allowance and only increased in line with the level of Housing Benefit) the proposed scheme is affordable by reference to both national and local definitions and it will be retained as such. The Council has identified that providing almshouses will likely affect the viability of a scheme and therefore have indicated that The Dulwich Estate/its Beneficiary the Dulwich Almshouse Charity should submit a viability assessment with its planning application to support its case.

BNP Paribas Real Estate’s viability assessment has been submitted to the Council as evidence to support the planning application for the Proposed Development. This assessment demonstrates to the Council that the delivery of the Proposed Development of 20 flats relies on funding from the Charity and The Dulwich Estate. That is, the cost of delivering the development surpasses the income that is achievable given the purposely affordable level of the Weekly Maintenance Contributions charged to residents. Given this position, a conventional affordable housing contribution cannot be sustained by the Proposed Development however the accommodation as proposed is a non-conventional form of affordable housing that meets an acute need for the Borough, and should be recognised as such.