Policy ST18: Affordable Housing on Development Sites May 2019

NORTH DEVON AND TORRIDGE LOCAL PLAN 2011-2031 PRACTICE NOTE 1 Policy ST18: Affordable Housing on Development Sites May 2019

th v1.1 | 14 May 2019

v1.1 | 14th May 2019 v1.1 – Added clarification to Appendix A with respect to the different definitions of Designated Rural Areas that are applicable for affordable housing thresholds vs 'local connection' and 'stair-casing' restrictions. If you have any queries or questions relating to this document please get in touch using the details shown below: Torridge District Council North Devon Council Riverbank House Lynton House Bideford Commercial Road EX39 2QG Barnstaple EX31 1DG

[email protected] [email protected]

01237 428700 01271 388288

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NORTH DEVON AND TORRIDGE LOCAL PLAN 2011-2031 | PRACTICE NOTE 1

North Devon and Torridge Local Plan 2011-2031

Practice Note - Implications of the revised NPPF1

Application of Policy ST18: Affordable Housing on Development Sites

Executive Summary

Introduction

A. A revised National Planning Policy Framework (NPPF) was published in July 2018. This included changes to affordable housing policy that will impact on the Councils’ approach to seeking affordable housing on development sites, as currently set out through the North Devon and Torridge Local Plan (NDTLP).

The Revised NPPF

B. The most notable changes to the NPPF are to:

i. amend the national development thresholds that determine whether affordable housing on development sites may be sought;

ii. require a proportion (10%) of housing on major developments to be for affordable home ownership unless an alternative approach is justified (acceptable circumstances stated); and

iii. amend the definition of affordable housing to encompass further housing tenures/ products.

Affordable Housing on Development Sites

C. Having considered the above the Councils will adopt the following stance in respect of seeking affordable housing on development sites:

i. Recognising the provision to do so in Policy ST18 of the NDTLP, the thresholds for seeking affordable housing on development sites in Clauses (1)(a) and (b) of Policy ST18 in the NDTLP will be set aside, rather applying those thresholds provided through paragraph 63 of the revised NPPF:

o Outside of “designated rural areas” (see appendix A) affordable housing will be sought on-site at a level of 30% from housing developments of 10 or more dwellings or where the site has an area of 0.5 hectares or more, irrespective of the number of dwellings proposed.

o In “designated rural areas” (see appendix A) affordable housing will be sought on-site at a level of 30% from housing developments of 6 or more dwellings or where the site has an area of 0.5 hectares or more, irrespective of the number of dwellings proposed.

1 National Planning Policy Framework (NPPF); Ministry of Housing Communities & Local Government (MHCLG), July 2018

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ii. The provision stipulating that only financial contributions towards affordable housing will be sought on sites in designated rural areas is set aside. In “designated rural areas”, affordable housing will now be sought on- site from qualifying developments of six or more dwellings and on sites of 0.5 hectares or more; rather than previously only being sought in the form of a financial contribution;

iii. The starting point is now an expectation for on-site delivery from all qualifying development, with off-site delivery or provision through financial contributions of broadly equivalent value to be negotiated only where it can be demonstrated that on-site provision is not possible or appropriate.

iv. Applying the enabled exemption, the requirement in the NPPF (para. 64) for 10% of homes to be available for affordable home ownership on major developments will not be applied; considering that doing so would prejudice the ability to meet the affordable housing need of specific groups across northern Devon. The starting point for the tenure split sought for affordable housing will remain unaltered from the requirements of clause (7) of Policy ST18 in the NDTLP (75% Social Rented/ 25% Intermediate); and

v. The approach to the calculation of appropriate sales values (and associated discount) for affordable home ownership will not change in light of changes to the definition of affordable housing in the revised NPPF.

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NORTH DEVON AND TORRIDGE LOCAL PLAN 2011-2031 | PRACTICE NOTE 1

North Devon and Torridge Local Plan 2011-2031

Practice Note - Implications of the revised NPPF2

application of Policy ST18: Affordable Housing on Development Sites

Introduction

1. The Planning and Compulsory Purchase Act 2004 (PCPA) at s38(6) requires that if regard is to be had to the development plan for the purpose of any determination to be made under the Planning Acts the determination must be made in accordance with the plan unless material considerations indicate otherwise.

2. A revised National Planning Policy Framework3 (NPPF) was published in July 2018 with changes to policy relating to the provision of affordable housing. With national planning policy being a material consideration in decision taking, it is necessary to consider the implications of these changes, particularly with reference to the implementation of relevant policy in the North Devon and Torridge Local Plan 2011-2031 (NDTLP) which has been prepared to accord with the provisions of the previous NPPF4. This guidance note reviews the points of change in national policy from the previous to revised NPPF and how such will be taken into account by North Devon Council and Torridge District Council when determining relevant planning applications.

Development Plan

3. In determining the need for development proposals to contribute to the delivery of affordable housing, the starting point for both North Devon Council and Torridge District Council are the provisions contained in the adopted development plan; the principal relevant component of which in this case is the North Devon and Torridge Local Plan 2011-2031.

North Devon and Torridge Local Plan 2011-2031

4. The NDTLP was adopted by North Devon Council and Torridge District Council through resolution at meetings of their respective Full Councils on the 29th October 2018.

5. Policy ST18: Affordable Housing on Development Sites of the NDTLP provides the policy basis for seeking affordable housing on development sites in northern Devon. The adopted policy seeks affordable housing provision on qualifying sites in accordance with the Written Ministerial Statement (HCWS50) which was published in November 2014.

6. The publication of the revised NPPF in July 2018 has altered the national provisions on the provision of affordable housing on development sites. This has introduced discrepancies between the policy requirements of the NDTLP and national planning

2 National Planning Policy Framework (NPPF); Ministry of Housing Communities & Local Government (MHCLG), July 2018 3 Ibid. 4 National Planning Policy Framework (NPPF); Department for Communities and Local Government (CLG), March 2012

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policy in respect of the affordable housing thresholds and the definition of affordable housing. It is therefore necessary to consider the Government’s revised policy position on the delivery of affordable housing and how such will impact on the implementation of Policy ST18.

National Planning Policy Framework

7. The Government published a revised NPPF on 24th July 2018, the provisions of which are required to be taken as material considerations in determining planning applications with immediate effect5. The revised NPPF introduced a range of policy changes with respect of affordable housing, some of which are not reflected in the provisions of the NDTLP. The principal elements of change are set out below:

Paragraph 63 has superseded the WMS (HCWS50) and effectively altered the thresholds at which affordable housing can be sought in both urban and designated rural areas. The paragraph sets out that:  the general threshold for being able to seek affordable housing on development sites will now be aligned to a definition of “major development”, as set out in the glossary to the NPPF; embracing housing schemes that provide 10 or more dwellings and/or are on sites of 0.5 hectares or more; and  the opportunity to adopt a lower threshold in designated rural areas is retained (at 5 dwellings) however the restriction for these smaller rural proposals to only contribute to the delivery of affordable housing through financial contributions is removed; enabling on-site delivery.

Paragraph 64 introduces a requirement on major housing developments that:  where affordable housing is to be provided, 10% of the homes are expected to be available for affordable home ownership: o unless this would exceed the required level of affordable housing in the area; or o significantly prejudice the ability to meet the identified affordable housing needs of specific groups.

Annex 2 of the NPPF, the Glossary makes changes to the definition of affordable housing, broadening the range of tenures so that it now includes: affordable housing for rent (both social and affordable), starter homes, discounted market sales housing and a range of home ownership options, with the latter two ownership options required to be at a price equivalent to at least 20% below market value.

Implementation of Policy ST18 taking account of the revised NPPF

8. Following adoption of the NDTLP it is the Councils’ intention to provide further guidance on affordable housing delivery through an Affordable Housing SPD. As an interim measure and to ensure a consistency of approach in decision making the following is provided to give clarity to the implementation of Policy ST18 in light of changes to national planning policy on this matter.

5 Paragraph 212, National Planning Policy Framework (NPPF); MHCLG, July 2018

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9. The implementation of Policy ST18 (1) will be impacted by the amended thresholds set out in paragraph 63 of the revised NPPF. Clause (1) of Policy ST18 as set out in the adopted NDTLP reads:

(1) Affordable housing provision will be required on residential development proposals on the following basis, with the thresholds for the provision of affordable housing applied unless changed in national policy or guidance: a. Proposals for 11 or more dwellings, or for the provision of greater than 1,000 square metres (gross internal area) of residential floorspace irrespective of the number of dwellings, will be expected to provide on-site delivery of affordable housing equal to 30% of the number of dwellings (gross) on site: and b. In rural areas designated under 157 of the Housing Act 1985, including the North Devon Coast Areas of Outstanding Natural Beauty, proposals for 6 to 10 dwellings will be expected to provide a financial contribution of broadly equivalent value to providing on-site affordable housing equal to 30% of the number of dwellings (gross on site). c. If the requirement for affordable housing thresholds is removed from national planning policy or guidance than clauses (1)(a) and(1)(b) above will no longer have effect and all residential development proposals that provide for a net gain in open market housing will be required to provide affordable housing equal to 30% of the number of dwellings (gross) on site.

10. In light of the changes to national planning policy, North Devon and Torridge Councils will determine relevant planning applications having regard to the affordable thresholds set out in the NPPF, alongside the other policy requirements of Policy ST18 which remain unchanged. The legitimacy for this approach is provided by the policy itself, which indicates in clause (1) that the thresholds set out in (1)(a) and (b) will be applied to residential development unless such are changed in national policy or guidance. National policy has been changed through the revised NPPF; on which basis the Councils will set aside the affordable housing thresholds set out in Policy ST18 in preference for those provided in the NPPF. Effectively the Councils’ revised approach will be:

 Outside of “designated rural areas” (see appendix A) affordable housing will be sought on-site at a level of 30% from housing developments of 10 or more dwellings or where the site has an area of 0.5 hectares or more, irrespective of the number of dwellings proposed. The thresholds of 11 dwellings or the provision of 1,000 square metres (gross internal area) of residential floorspace irrespective of the number of dwellings, set out in Policy ST18 (1)(a) is set aside.

 In “designated rural areas” (see appendix A) affordable housing will be sought on- site at a level of 30% from housing developments of 6 or more dwellings or where the site has an area of 0.5 hectares or more, irrespective of the number of dwellings proposed. The provision stipulating that only financial contributions towards affordable housing will be sought on sites in rural areas (ST18 (1)(b)) is set aside.

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11. It is considered that the revised approach will not place an unacceptable burden on development proposals. The threshold reductions from 11 to 10 dwellings, and to take in sites of 0.5 or more, are demonstrated through the Update of the Economic Viability Assessment of Housing Development in North Devon and Torridge6 to be viable. With regard to qualifying development proposals in “designated rural areas”, the further point of difference with regard to affordable housing being provided on site as opposed to a financial contribution will be immaterial in that the financial contribution would have had to be “… of broadly equivalent value to providing on-site affordable housing equal to 30% of the number of dwellings (gross on site).” (Clause (1)(b) of ST18). In accordance with clause (4) of Policy ST18, off-site delivery or provision through financial contributions of broadly equivalent value may be negotiated where it can be demonstrated that on-site provision is not possible or appropriate.

Designated Rural Areas

12. The glossary of the revised NPPF defines ‘Designated Rural Areas’ as “National Parks, Areas of Outstanding Natural Beauty and areas designated as ‘rural’ under Section 157 of the Housing Act 1985”. For North Devon and Torridge, the areas designated as ‘rural’ are defined through Article 2 of the Housing (Right to Buy) (Designated Rural Areas and Designated Regions (England) (No 2) Order 1981.

13. In northern Devon, the extent of the ‘Designated Rural Areas’ covers the whole of the area of the two local planning authorities, excluding:

a. the parishes of Barnstaple, Bideford, Fremington and Great Torrington in their entirety; and b. the parts of the parishes of Ilfracombe and Northam that fall outside of the AONB.

14. Appendix A provides maps that show the extent of the designated rural areas in northern Devon.

Affordable Home Ownership

15. As set out above, NPPF paragraph 64 sets out an expectation that for major developments, at least 10% of homes being proposed are to be made available for affordable home ownership as part of the site’s overall affordable housing provision, subject to a range of qualifications; so long as this would not exceed the need for affordable housing and that such an approach would not “significantly prejudice the ability to meet the identified affordable housing needs of specific groups”.

16. Policy ST18 (7) sets out the affordable tenure mix that will be sought on qualifying development schemes. The tenure mix is founded on established evidence of housing need in northern Devon as contained in the Housing and Economic Needs Assessment7, which has been subject to review as part of the

6 Update of the Economic Viability of Housing Development in North Devon and Torridge; Adams Integra November 2015, Examination Document CE24 7 Housing and Economic Needs Assessment; 2016 GL Hearn, Examination Document CE21

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examination of the NDTLP.

17. Policy ST18 (7) provides that: Affordable housing will be sought initially on the basis of a tenure mix of 75% social rented and 25% intermediate accommodation, although variation may be negotiated on the basis of identified local housing need and/or development viability. The Councils’ position on this matter is that the tenure mix required by Policy ST18 (7) will continue to be sought. Adopting this approach will better enable the housing needs which exists across northern Devon to be addressed; to do otherwise will result in an increasing number of affordable housing needs being unmet.

18. The Strategic Housing Market Assessment update8 identified the significant scale of affordable housing need across northern Devon; the need for affordable housing in each district being 57% (North Devon) and 58% (Torridge) of all newly forming households. Of further consequence, evidence identifies a need for a high propensity of social rented housing9.

19. Introducing a 10% affordable home ownership requirement to the policy requirement of 30% would translate into an affordable tenure split of 33.3% home ownership / 66.6% social rented. It is clear from the evidence referenced above that the application of this requirement would result in an increasing range of affordable housing needs not being met, and that the outcome provided by a 10% home ownership requirement would significantly prejudice the Councils’ ability to address affordable housing needs. The approach would result in the provision of affordable housing that could not be accessed by the majority of households in housing need.

20. As set out above, the NPPF provides an opportunity for exclusion from the requirement for 10% affordable home ownership on major development on the basis that it would significantly prejudice the ability to meet the identified affordable housing needs of specific groups; with Paragraph 61 of the NPPF establishing that “those requiring affordable housing” are within the scope of “different groups in the community” and that their tenure requirements should be reflected in planning policies.

21. Recognising that evidence demonstrates a high level of need for the social rented tenure, the delivery of which would be prejudiced by the NPPF requirement for affordable home ownership, the NPPF’s opportunity for exclusion from the 10% home ownership requirement as part of the affordable housing mix on qualifying development sites will therefore be applied.

22. No variance in the implementation of Policy ST18 (7) is considered necessary as a result NPPF paragraph 64. The 10% home ownership requirement as part of the affordable housing mix on qualifying development sites will not be applied.

8 Northern Peninsula Housing Market Area, Strategic Housing Market Assessment (SHMA) Update Final Report; Housing Vision, 2015, Examination Document CE17 9 Tables 7.3 & 7.4, Strategic Housing Market Assessment: Torridge and North Devon Update - Final Report; Housing Vision 2012, Examination Document CE18.

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Home ownership definition

23. The NPPF (Annex 2) has revised the definition of affordable housing, increasing the scope of qualifying tenure types, significantly in respect of affordable home ownership. As indicated elsewhere the priority for delivery across northern Devon is housing for social rent. Policy ST18 (7) does however seek the delivery of 25% of affordable housing provided on qualifying sites to be at the intermediate level, within which affordable home ownership would be embraced.

24. Within the definitions of affordable housing for sale under “discounted market sales housing“ and “other affordable routes to home ownership” it is stipulated that the price should be set at a discount of at least 20% below market value with eligibility being determined with regard to local incomes and house prices.

25. Having regard to local market values, average household incomes10 and general lending practices, discounts at a level of 20% against market values would result in intermediate housing not being accessible to the local households in housing need. Development proposals on qualifying sites will rather be individually assessed, taking into account local market conditions, which may vary across the plan area.

10 The median average household income in Torridge is £28,198; CACI 2018 and North Devon £29,538; CACI, 2017

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Appendix A:

Designated Rural Areas

The Local Plan applies thresholds for the provision of affordable housing on development sites, with a lower threshold applicable if a site falls within a 'Designated Rural Area'. National planning policy establishes the extent of these designated rural areas for the purpose of applying affordable housing thresholds, defining them as 'National Parks, Areas of Outstanding Natural Beauty and areas designated as being 'rural' under Section 157 of the Housing Act.

For North Devon and Torridge, areas designated as ‘rural’ are those established for the purposes of Section 157 of the Housing Act 1985 through Article 2 of the Housing (Right to Buy) (Designated Rural Areas and Designated Regions (England) Order 198111. This Order designates the following areas as ‘rural’:

 the District of North Devon, with the exception of the parishes of Barnstaple, Fremington and Ilfracombe; and  the District of Torridge, with the exception of the parishes of Bideford, Great Torrington and Northam.

Taking account of the provisions of the NPPF alongside the content of the Order, the ‘designated rural areas’ for northern Devon are taken to extend to the entirety of the local planning authority areas for North Devon Council and Torridge District Council, excluding:

 the entirety of the parishes of Barnstaple, Bideford, Fremington, Great Torrington; and  the parts of the parishes of Ilfracombe and Northam that lie outside of the North Devon Coast Area of Outstanding Natural Beauty.

The following map shows the extent of the designated rural area across North Devon and Torridge districts, with larger scale maps focussed around:

 Barnstaple and Fremington  Bideford and Northam  Great Torrington  Ilfracombe

Note that a different basis for defining 'designated rural area' boundaries is applicable for the determination of whether 'local connection' and 'stair-casing' restrictions apply to affordable housing; defined by reference to section 76 of the Housing Act 1996 and clause 3(a) of section 1AA of the Lease Reform Act 1967.

11 Available at: http://www.legislation.gov.uk/uksi/1981/397/contents/made

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Designated Rural Area in North Devon & Torridge (excluding Exmoor National Park) NORTH DEVON & TORRIDGE LOCAL PLAN AREAS

For the purpose of assessing affordable housing on development sites. Designated Rural Area established as per the definition in National Planning Policy Framework (July 2018)

Legend Designated Rural Area

Legend Designated Rural Areas

Legend Designated Rural Area

Legend Designated Rural Areas

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Torridge District Council North Devon Council Riverbank House Lynton House Bideford Commercial Road EX39 2QG Barnstaple EX31 1DG [email protected] [email protected] 01237 428700 01271 388288