The traditional affordable housing model appears to be in a precarious state, starved of its two main dependencies.
Public sector funding is currently unpredictable at best, hence the current strategies of registered providers, some of which, with mixed market/affordable housing tenures, are becoming more akin to private sector developers.
What’s more, funding via development tax - namely section 106 agreement requirements for affordable housing - is equally uncertain. There is often little flesh left for subsidising affordable housing to anything like the aspirations of local policies after site-specific infrastructure requirements have been allowed for, in addition to the Community Infrastructure Levy.
Surely the objective for local planning authorities should be to examine much more closely the true nature of housing needs and then to allow the market to respond to that need with innovative, focused products? The government’s starter homes initiative is encouraging, as are warm words about the private rented sector (PRS), but shouldn’t we go further? Particularly in London, to what extent do those coming to work in this world city require traditional permanent ‘residential’ accommodation?
The planning system is too blunt a tool. First, national and local policies largely just distinguish between market housing and different traditional forms of affordable housing. They do not recognise the roles that, for example, PRS and quasi-residential use products may play.
Second, class C of the Use Classes Order is totally out of date. It fails to grapple with quasi-residential use concepts such as hostels, co-living concepts being developed by the Collective and serviced apartments/apart-hotels, and only includes HMOs within class C4 if they contain no more than six persons.
While updating is needed to avoid recurring and expensive uncertainty, the Use Classes Order will never provide the appropriate mechanism for authorities to restrict residential and quasi-residential uses to meet their housing and planning needs. The order’s only function is to deem changes within a use class not to be development. It cannot specify that a change from one class to another, or to or from a sui generis use, amounts to development requiring permission.
The answer, in my view, is simple. The government should encourage better assessment of the true nature of housing needs; local policies that provide needs-matched solutions; and template planning conditions and section 106 obligations to define and manage these new concepts.
Simon Ricketts is a partner at King & Wood Mallesons
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