West Oxfordshire Local Plan Housing Consultation

Proposed Way Forward

8.21 There is a significant need for more affordable housing in West Oxfordshire. This is confirmed in the Council's Housing Needs Assessment (2011) and the Oxfordshire SHMA (2014) with estimates ranging from 220 - 274 affordable homes needed each year.

8.22 Whilst the proposed increase in the overall housing target (from 5,500 to 9,450 homes) will help to boost the supply of affordable housing by virtue of increased housing provision in general, we also need to think about maximising the efficiency of the Council's policy approach towards securing affordable housing through market-led housing schemes.

Which size of scheme will be expected to contribute?

8.23 Previous consultation responses, primarily from the development industry, have raised concerns about the use of a single dwelling threshold on the basis that it is likely to render development unviable.

8.24 However, the Council's viability evidence suggests that small-scale residential schemes are often as viable as larger schemes due to the fact that they are not required to pay other infrastructure contributions and the completed properties often attract higher sales values than volume house builders are able to achieve.

8.25 Furthermore, it is anticipated that small-scale residential schemes will continue to come forward and form a significant proportion of overall housing supply over the period of the Local Plan. Completely exempting such schemes from having to provide affordable housing would significantly reduce the ability of the Council to meet affordable housing needs.

8.26 It is therefore proposed that with the exception of self-build projects, all residential schemes that result in a net gain of one or more dwellings will be required to contribute towards the provision of affordable housing either through a financial contribution or through on-site provision.

8.27 This position will however need to be re-considered if the Government introduces a new national threshold as has been suggested.

Threshold for 'on-site' provision

8.28 A key consideration is the point at which a developer will be expected to provide new affordable housing on-site as part of the overall development mix. This decision essentially hinges on the viability of the development as the provision of affordable housing on-site has a significant effect on the gross development value of a new housing scheme.

8.29 In light of the Council's viability evidence and having regard to the Government's recent affordable housing consultation, there are two options.

8.30 Option 1 is to maintain the proposed threshold set out in the Council's most recent consultation (December 2013) whereby any residential scheme of 6 or more dwellings will be expected to provide affordable housing on-site as part of the development. Smaller schemes of 1-5 units (with the exception of self-build) will be required to pay a commuted sum.

8.31 Option 2 is to raise the threshold to 11 dwellings (having regard to the Government's recent consultation which suggests schemes of 1-10 dwellings will be exempt. Under this option schemes of 11 or more dwellings will be expected to provide affordable housing on-site as part of the development and smaller schemes of 1-10 (with the exception of self-build) will be required to pay a commuted sum.

On-site affordable housing percentage requirement

8.32 In terms of the proportion of affordable housing to be provided, the Council's most recent consultation (December 2013) suggested the following percentages having regard to the Council's viability evidence:

  • 50% in the higher value area (see Figure 8.2)
  • 40% in the medium value area (see Figure 8.2)
  • 35% in the lower value area (see Figure 8.2)

8.33 The consultation responses received acknowledged the fact that West Oxfordshire falls into different 'value areas' and that a variable approach towards the amount of affordable housing to be provided is reasonable.

8.34 Concerns were expressed about the way in which those value areas have been defined using postcode data, however no alternative approaches were put forward and sales values information is only available on a postcode basis. Postcode boundaries also offer the opportunity of being clearly defined and their use will help to avoid any doubt about whether a scheme falls into a high, medium or low value area.

8.35 Whilst it would be easier to adopt a flat rate across the District, this would be overly simplistic and would not reflect the fact that the gross development value of residential scheme in say Woodstock or Burford is likely to be significantly higher than a scheme in Carterton, Chipping Norton or Witney.

8.36 Having regard to the above, the overall need to boost affordable housing supply and the fact that schemes of more than 6 dwellings generally demonstrate a significant level of viability, it is considered that the on-site requirement outlined above ranging from 35% - 50% is reasonable and appropriate.

8.37 To provide flexibility and ensure viability, the Council acknowledges that these requirements should be expressed in the form of '....up to X%'.

Affordable Housing Tenure

8.38 There are several different forms of affordable housing including social rented, affordable rented and intermediate housing. The draft Local Plan (2012) suggests that the Council's preferred tenure split for affordable housing will generally be two thirds (66%) affordable rented housing and one third (33%) intermediate housing.

8.39 The proposed tenure split was well-supported in the Council's recent affordable housing consultation (December 2013) although a number of respondents suggested that the Council should not be too prescriptive and should provide some flexibility. It is proposed that this split is retained as a general guide to the proportions of affordable housing tenures likely to be sought.

Calculation of a commuted sum towards off-site provision of affordable housing

8.40 In the Council's most recent consultation it was suggested that a commuted sum could be calculated having regard to residual land value. The following commuted sums were recommended:

Table 8.3 - Recommended Commuted Sums (December 2013)

Area (see Figure 8.2 above)

Commuted Sum

Higher value

£55,000

Medium value

£27,000

Lower value

£14,000

 

8.41 The suggested commuted sums drew criticism through the consultation on the basis that they do not take account of the size or type of market housing being proposed for example a five-bedroom house in the high value area would attract a commuted sum payment of £55,000 as would a one-bedroom flat in the same area. This is clearly inequitable and the Council accepts that further clarity is required.

8.42 It is therefore proposed that the affordable housing commuted sum will be calculated on a £per m2 basis in order to take account of the size of the market housing being proposed.

8.43 At this stage the amount payable has not been determined and will need to be worked up alongside the Council's proposed CIL charge. However, views are welcome on the principle of such an approach.

8.44 To illustrate, if the proposed affordable housing commuted sum was £100 per m2 a single 4-bed house of 100m2 would attract a commuted sum payment of £10,000. A scheme of five 4-bed houses of the same size would attract a total commuted sum payment of £50,000.

8.45 The advantage of a commuted sum worked out in this manner is that the amount payable will be clearly known so that a developer can factor this in from the outset.

8.46 Commuted sum payments for affordable housing would be put into the Council's enabling fund to help deliver new affordable housing throughout the District.

Self-Build Exemption

8.47 Because they are not built for profit, and in themselves could be considered a form of affordable housing, it is proposed that anyone wishing to 'self-build' their own home will be exempt from having to make a financial contribution towards affordable housing (subject to self-build certification).

8.48 This would be consistent with the Government's approach towards the Community Infrastructure Levy (CIL) which self-build projects are now exempt from having to pay.

Consultation Question 25) Affordable Housing

Do you agree that all schemes resulting in a net gain of one or more dwellings (except self-build) should be required to make provision for affordable housing either on-site or through a commuted sum payment?

Option Results Count
Agree
Disagree
Observation

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Consultation Question 26) Affordable Housing

Do you agree that self-build housing schemes should be exempt from having to make provision for affordable housing (subject to self-certification)?

Option Results Count
Agree
Disagree
Observation

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Consultation Question 27) Affordable Housing

Do you consider that the threshold for on-site provision of affordable housing should be set at 6 dwellings, 11 dwellings or at a different level altogether?

Option Results Count
6 Dwellings
11 Dwellings
Alternative Threshold

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Consultation Question 28) Affordable Housing

Do you agree with the proposals to seek up to 50% in the higher value area, up to 40% in the medium value area and up to 35% in the lower value area (as defined on Figure 8.2)?

Option Results Count
Agree
Disagree
Observation

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Consultation Question 29) Affordable Housing

Do you agree that in terms of tenure, the Council should generally seek two thirds affordable rented housing and one third intermediate?

Option Results Count
Agree
Disagree
Observation

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Consultation Question 30) Affordable Housing

Do you agree that the affordable housing commuted sum should be calculated on a £per m2 basis to be worked up alongside the Council’s CIL draft charging schedule?

Option Results Count
Agree
Disagree
Observation

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