Purpose-Built Student Accommodation and HMOs in #Exeter

‘We don’t want more student flats’ says the Express &Echo headline as a major initiative to upgrade Exeter’s football stadium as the plans were put on display to the public for the first time [‘We don’t want more student flats’ – Exeter City’s St James’s Park redevelopment plan divides opinionE&E, 27 July 2015].

The reason that student accommodation appears to be gettting build is due the nature of the planning process.

The planning committee can only grant plannning permission for schemes that come forward – and they have to follow the National Planning Policy Framework [NPPF] which acts as guidance for local planning authorities and decision-takers, both in drawing up plans and making decisions about planning applications.

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.

As a result developers bring forward only developments that make them money.

Contrary to popular opinion these are NOT being build by Exeter City Council, nor are they being delivered by the University – they are being developed by commercial firms, with the aim of making a profit.

And what a profit they can make. The Printworks – one of Exeter biggest blocks of student flats, 492 studio and multi-bedroom/cluster apartments on Western Way – was sold for £40 million just a year after it was completed at a cost of £16m [Huge block of 500 student flats in Exeter sells for £40 millionE&E, 16 August 2014].

Sadly,none of this profit is reinvested back into the communities that have been affected by this development. Perhaps we should investigate a version of overage – a system that allows a seller of land to share in the potential future increase in value of the land that such seller has sold. Just imagine if just a small percentage of that £24m profit could be used by ECC?

There is a perception that ECC allow each and every application for purpose-built student accommodation to be given permission. That may seem the case, because planning officers have been working hard behind the scenes making sure that only ones that meet planning conditions come forward.

And some of those planning conditions are contained within a Supplementary Planning Document [SPD] for development related to the University of Exeter  from 2007 [DOWNLOAD here : University Supplementary Planning Guidance] which outlines nine general principles  which can carry some weight as material considerations in the determination of planning applications.

These guidelines include the following:
– Seeks the provision of as much purpose built student housing as possible to reduce the impact on the private sector housing market.
-Recognises that relatively high density managed accommodation on appropriate sites will need to make a significant contribution to meeting future needs. Developments will be permitted subject to management and supervision arrangements appropriate to the size, location and nature of occupants of schemes. A standard form of planning obligation relating to management arrangements is available from the Council. The planning obligation is enforceable against owners of the land and they will be required to ensure through terms of tenancy agreements that tenants adhere to the management scheme.
– Favours provision of further student accommodation in the following general locations:
– The City Centre
– St David’s Station/Cowley Bridge Road area
– More intensive use of the Duryard Campus
– Seeks the investigation of student accommodation as a priority for use of any surplus land at St Luke’s campus.

Following a public consultation exercise, this SPD was passed by ECC’s Executive on a meeting held on 19 June 2007.

And not ALL planning applications for purpose-build student accommodation are given approval.

At the Planning Committee meeting held on 25 July 2011 , Vita Student was given planning permission to re-develop Portland House in Longbrook Street as 153 studio apartments (11/0895/03). [Exeter student homes bid set to be approvedE&E, 18 July 2011]

But that wasn’t enough for Vita – in 2013 the company sought planning permission for a further 10 flats at roof top level (13/4435/03) but this was refused by the city’s planning committee on 28 October 2013 when they felt that the extra floor would be overbearing [Planning application sought to increase size of planned student accommodation in Portland HouseE&E15 October 2013].

Vita immediately appealed to the Panning Inspectorate – but at the same time submitted a compromise application (13/4843/03), this time seeking permission for an extra 6 rooftop apartments rather than 10.

Again, this application was refused – at the meeting held on 13 January 2014 [Rooftop level student apartments in Exeter are turned down by city councillorsE&E, 14 January 2014]. Vita also appealed this decision,

While the appeal was still in progress, Vita were advertising the fact that all 161 apartments had been sold to investors [New student apartments in Exeter sell out as investors snap them upE&E, 30 November 2013].

Of course it came to pass that the Planning Inspector upheld both the appeals [Appeal A for 166 apartments and Appeal B for 162 – DOWNLOAD Decision Letter HERE].

The main objections to the proposals were unacceptably increased overbearing and overshadowing impact by reason of increased massing of the building. The Inspector’s report then considered the differences in the two schemes as opposed to the original permission.

He considered the new building would blend seamlessly with the design of the upper floors. The building, being located at the southern end of Longbrook Street, is in close proximity to a number of other tall buildings. In this context, he considered the impact of the limited additional mass created at 6th floor height to be unexceptional, with no adverse impact on the character and appearance of the Conservation Area. It therefore represented acceptable design that preserves the character of the Conservation Area and would not harm the living conditions of neighbours.

So what has all this development of purpose-built student accommodation meant for Exeter? Figures obtained by the Express & Echo reveal the number of student dwellings in the city rose from 1,495 in October 2009 to 2,975 in October 2014 – an increase of 98.99%. [Student properties in Exeter increase by 98% over five years, E&E, 10 February 2015].

But the same report also adds a quote from  a University of Exeter spokesman said: “The University is committed to reducing pressure on the city’s housing stock by accommodating more students on campus” and added that £130 million worth of new student accommodation has recently been built on its Streatham Campus to provide space for 2,600 students.

The report highlighted that in the past three years the number of shared houses  – houses in multiple occupancation [HMOs] – for students  has stabilised and in some areas declined.

Recent figures show that over 260 HMO previously occupied by students are lo longer used for this purpose – that means nearly 300 properties are now being used to house young professionals who are not students, or have reverted to family homes.

ECC have taken action to limit excessive concentrations of student HMOs to avoid adverse impacts upon areas via an Article 4 Direction.

In February 2010, the previous Government announced that it proposed to create a new use class (C4 Small HMOs) to bring such uses within planning control.   This change took effect on 6 April 2010

Prior to this time, a group of 3-6 people living as a single household (such as a shared student house) was not treated as a material change of use from a Class C3 family dwelling.

In June 2010 the Coalition Government announced that it intended to retain the new Use Class, but from October it intended to treat changes of use from Class C3 to Class C4 as Permitted Development that would not normally require planning permission. If Councils wish to exercise planning control over changes from Class C3 to C4 they need to make Article Four Directions removing permitted development rights. Following a short limited consultation, the Government announced on 7 September that it would proceed with this approach and laid the regulations before Parliament

The Executive meeting of 28 September 2010 considered a report on Planning issues relating to HMOs for 3-6 students – Proposed Article 4 Direction and amended planning policy. The report sought agreement to a proposed Article 4 Direction to remove permitted development rights for such uses in parts of Exeter and to undertake further work on proposed amendments to the Council’s Supplementary Planning Guidance on Student Accommodation including further public consultation.

The results of that consutation

On 07 December 2010, the Executive received a petition from 772 residents of St James requesting that:

Exeter City Council, as a matter of urgency, implement planning policies, including Article 4 Direction, which:

1. Prevent any further conversions to HMOs, except in those streets where the existing high number of HMOs has already significantly harmed the family residential character and where, therefore, it may be in the resident’s or residents’ interest to allow further conversions;

2. Provide for all future Exeter University student accommodation in purpose-built developments on the campus itself or on discrete (individually distinct or separate) sites outside St. James’ and other established residential neighbourhoods;

3. Strengthen the residential character and community cohesion of St. James’ Ward, including the identification of sites for new familyaccommodation in order to help reverse the harmful studentification process.

The Press Notice giving notice of confirmation of Article 4 Direction under the Town & Country Planning (General Permitted Development) Order 1995 (as amended) was issued on 23 December 2010m with the Direction coming into force on 31st December 2011.

The Executive meeting on 05 July 2011 considered a report outlining results of public consultation on a draft Houses in Multiple Occupation Supplementary Planning Document.

The responses to the public consultation can be downloaded HERE and there was also a precis of comments.

With effect from 1 January 2012, the Council now resist any further changes of use to houses in multiple occupation within the area shown stippled on Plan 1, where the proportion of homes exempt from Council Tax already exceeds 20%. In other words the Council will regard a proportion greater than 20% as an over-concentration of HMO use for the purposes of Policy H5 (b).

Screen shot 2015-08-11 at 06.47.29
                                                Article 4 Direction plan 1

The area covered by the Article 4 Direction was revised in 2014 – and following a new public consultation, on 21 January 2014 the Executive consider a report and decided to adopted an amended Houses in Multiple Occupation SPD which applies further restrictions on HMOs to comprise the entire area subject to the Article 4 Direction. This involves extending the area to part of Duryard and Pennsylvania wards and two areas of Newtown ward where the proportion of Council Tax exemptions at the end of May 2013 was between 10% and 20%.

Screen shot 2015-08-11 at 10.49.58
                       Area covered by amended Article 4 Direction [from January 2014]
Student housing – council tax

I often hear comment about the fact that full-time students are disregarded for Council Tax purposes. That means a property is exempt from Council Tax  if it is wholly occupied by full-time university or college students. Student halls of residence are automatically exempt. More details from Citizens Advice website.

The reason why properties occupied entirely by students are exempt is because students, unlike other groups of people on low incomes, are not normally entitled to income related benefits, such as housing and council tax benefit.

However, the Government does recognise the need to compensate local authorities for the loss of council tax income, which would otherwise have to be borne by other local residents.

So ECC is compensated to some degree by central  government funding for the extent that it has had to grant student Council Tax exemptions and discounts. This funding is reflected in the annual local government finance settlement
which distributes Formula Grant among the various local authorities.  The trouble is the Formula Grant distribution mechanism is based on a complex formula, one aspect of which takes account of  the relative ability of different councils to raise council tax (known as “resource equalisation”).

The variation in the level of exemptions and discounts for Council Tax for students is compensated to some extent through this resource equalisation adjustment to the amount of Formula Grant allocated to each local authority, but it is not a like-for-like relationship.

The allowance for student exemptions in the Formula Grant was always based on historical date, which has no kept pace with the increase of student numbers at the University of Exeter and that tenuous link was further eroded when Formula Grant replaced by Revenue Support Grant [RSG] in 2013.

There is a strong school of opinion in local government circles that the reduction of central government funding for local authorities will significantly undermine the effectiveness of the compensation a local authority receives for student Council Tax exemptions and discounts.

Further Reading:
Exeter CAB: Exeter: Town vs Gown? The housing challenges faced by a university city in Dispatches from the front lines of the housing crisis [Citizens Advice, 16 June 2015]

 
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