Student accommodation vs Affordable Housing for rent

Briefing notes on:

Student accommodation vs Affordable Housing for rent

 Planning background

 It is worth pointing out that planning is not as straightforward as it appears to be – and the upperhand seems to be the control of developers. It’s a capitalism system!

Planning Committee can’t refuse applications just because they don’t like them…need to be on planning grounds, contained within planning policy documents.

The main one is the National Planning Policy Framework [NPPF] introduced by Tory-led coalition in March 2012 – designed to make the planning system less complex and more accessible – and vastly simplify the number of policy pages about planning.

Paragraph 11 of the NPPF states: “Planning law requires that applications for planning permission must be determined in accordance with the development plan unless material considerations indicate otherwise.”

Key to the NPPF paragraph 14: “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> More often than not, they seek planning permission for what they want to sell [4- or 5-bed detached houses] rather than what Exeter needs more of [1-, 2- or 3-bed homes]. And until thy think they can sell these properties, they often “land bank”.

If Planning Committee turn down applications for spurious reasons, they may be overturned by the Planning Inspectorate – prefer decisions to be made at local level, rather than a beaurocrat in Bristol or beyond.

Student Accommodation

Whether we like it or not, the University is expanding – and ECC has little or no control of increase in student numbers.

And these students need to be housed somewhere.

In 2007, ECC introduced a Supplementary Planning Document [SPD] which aimed for the provision of as much purposed-built student accommodation [PBSA] as possible to reduce the impact on the private sector housing.

The SPD sets out 9 principles relevant to consideration of proposals related to the University. The relevant principles are as follows:
– ECC will expect 75% of additional student numbers attending the University to be accommodated within purpose-built accommodation.
– ECC will seek the provision of as much purpose-built student housing as possible to reduce the impact on the private sector housing market.
– ECCrecognises that relatively high density managed accommodation on appropriate sites will need to make a significant contribution to meeting future [student housing] needs.
– ECC favours provision of further student accommodation in the following general locations:- City Centre – St David’s Station/Cowley Bridge Road area and more intensive use of the Duryard Campus, with some provision of the Streatham Campus.

In addition, ECC issued Supplementary Planning Guidance on Student Accommodation Development in Residential areas in 2008. The guidance noted that changes of use from family dwellings to student occupation was likely to have most impact upon the character and balance of a community because of the loss of other age groups as well as the introduction of more students. It is proposed to restrict further student accommodation in all these forms in areas where there is considered to be an over concentration of students.

The guidance introduced proposals that require planning permission may take the following forms:
• New developments, extensions or conversions into student hall accommodation
• Construction, extension or changes of use to HMO accommodation.
• New dwellings, conversions or changes of use to dwellings that have an internal design that may be intended for student occupation.
• Extensions of existing dwellings where there is evidence of occupation by students

And from 2014, ECC introduced an Article 4 Direction, to limit excessive concentrations of student Houses in Multiple Occupation [HMO] in some wards to avoid adverse impacts upon those areas.

One of the biggest benefits that come with PBSAs is that they reduce pressure on the existing housing stock.

There is an outline planning application for a new PBSA on East on the University of Exeter Streatham Campus [ECC Planning Application 16/1232/01]. The application is for 1300 units of student accommodation.

If these students where to be accommodated in HMO, this would need some 260 houses [assuming 5 students to a house] – that’s the equivalent to 2 Victoria Streets taken up to house these 1300 additional students. By delivering this PBSA we prevent that happening – allowing local families to have homes, or even freeing up existing HMO to be used by single private renters under the age of 35, who are only entitled to housing benefit at the shared accommodation rate

Like private developments being delivered by volume house builders, PBSA do generate profit for the developer. And what a profit!

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

One of the problems we face is that planning applications for PBSA seem to hit the pages of the Express & Echo precisely to cause outrage – well I say pages, its mainly for the benefit of social media, where it’s known as click-bait which it turn earns money for the Echo.

With PBSA, ECC Planning Committee are able to impose conditions on the development – most notably in regards to the need for a management plan, which often takes the forms of: “Members noted that a Management Plan for the day to day operation of the Student Accommodation was required to be implemented by way of a legal agreement”.

PBSA in the city centre are close to the clubs, pubs and other entertainment on offer in Exeter, and students returning home cause little or no disturbance to local residents – one of the problems arising out of PBSA on the University campus  is the transient noise of students returning home after a night in the city centre.

Social Housing

“Offering affordable housing choices whilst building and supporting communities”.

Unlike many local authorities, ECC is a stock-holding authority

ECC current has a housing stock of around 5,000 properties – and housing associations in the region of 3,000.

In 2013, ECC took out £56m loan to buy this our own stock under a scheme known as self-financing. The aim was to give us control over our own destiny.

But it’s not quite working out like that – we knew that we would still have to retain Right To Buy.

When we bought the properties, we had to submit a business plan.  At the time, the Govt insisted that the plan set out a formula for rent increases over 10 years – 1% over CPI for 10 years. However, last year reneged on that promise with provisions in the Welfare Reform and Work Act 2016, which requires registered providers of social housing in England to reduce social housing rents by 1% year on year for 4 years from a frozen 2015 to 2016 baseline.

Initially this seems a good deal for tenants – but what it means for ECC is that £8m will be lost from Housing Revenue Account [HRA] – money lost for planned maintenance and emergency repairs, but most importantly for building more social housing.

When we moved to self-financing, the £56m loan took us to the Govt imposed borrowing cap – Labour’s pledge to remove this cap would allow ECC to take on extra borrowing to help cover the cost of building more social housing.

Council Own Build Programme

Since coming back into power in Autumn 2010, ECC has been building council houses – not many, not enough, but at times the best in the SW and 5th in the UK.

2010
– 3 properties at Rowan House in Sivell Place, Heavitree

2011
– 18 one and two-bedroom apartments forming Knights Place, off Merlin Crescent in Mincinglake

2015
– 6 at Barberry Close off Bennett Square in Mincinglake
– 8 at Silverberry Close off Brookway in Whipton
– 6 at Reed Walk in Priory. Reed Walk, Newport Road

All of these had been developed on in-fill sites – former garage sites and similar.

Currently being built on-site now,  26 one and two bedroom apartments to provide quality housing that for elderly residents, on the car park next to Rennes House.

vaughan-road-apartments-1

Plans for the future include an £10m [with additional funding from Govt] Extra Care scheme designed to provide 50 affordable homes for residents over 55 with care needs in Millbrook Village situated off Topsham Road. These are being specifically designed to help assist people with dementia.

All of these have been or will be built to Passivhaus standard – a world leading standard in energy efficient design and construction. Means reduced energy bills for our residents – help address fuel poverty.

It is  is slightly more expensive to build to PassivHaus standard – but not too much more. And it’s a cost we think is worth bearing.

ECC have been pioneering this standard  – we were the first local authority to adopt PassivHaus, and now others now – such as Plymouth and Nowich to name but two – are following our lead.

And our expertise is being shared – ECC and major partners joined together as Exeter Sustainable Energy Efficient Developments [EXESeed] Contractors Framework to assist in the procurement of contractors to deliver energy efficient developments across the City, and beyond.

For more information on Exeter City Council’s PassivHaus programme is contained with a Low Energy Development Information Pack.

And we arenow looking at ways of retro-fitting PassivHaus – or other energy efficency measures – to our properties. On Monday 07 Novemeber, ECC’s Exectutive approved funding for an EU pilot to look at trialling such measures.

This innovated policy needs to be set against Govt’s decision to abolish the The Code for Sustainable Homes, which was announced in a Written Ministerial Statement by Eric Pickles on 25 March 2015. Now houses only need to be to BREEM Code 4 in relation to water and energy targets

Affordable housing for rent

First a few terms [from NPPF]:
– Affordable housing: Social rented, affordable rented, intermediate housing, provided to eligible households whose needs are not met by the market. Sometimes self-build housing is considered affordable housing  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 [50% of local market rent[  are determined through the national rent regime.hority 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.

ECC presses for as much affordable housing to be for social rent

ECC has a clear policy contained in Core Strategy/Local Plan [adopted 2011] for 35% affordable housing on all developments of 10 or more [initially 3 or more, but Govt changed low limit in 2013!].

This can be in the form of housing on-site or a commuted sum for such housing elsewhere in the city.

And we have a Housing Enabling Team that vigorously enforces this!

Developers try it on: over-stating costs and under-estimating profits.

McCarthy & Stone lodged an application for land next to Sainsbury in Pinhoe – said could afford total cost of affordable housing that was required by ECC. Took to appeal and independent accessor said they could. Came back with a revised offer – but still too low to be acceptable – planning permission refused, but now back talking to ECC!

And another developer said before it came before committee that it couldn’t afford any social housing as it spent too much on acquiring the land. Ended up paying ECC a commuted sum of £1m

Some figures:
In 2010/11, 108 affordable homes
In 2011/11, ECC delivered 170 affordable homes
In 2012/13, ECC delivered 26 affordable homes
In 2013/14, ECC delivered 100 affordable homes
In 2014/15, ECC delivered 80 affordable homes
In 2015/16, ECC delivered 74 affordable homes

And 254 currently being build on-site, and more in the pipeline as planning permission has been granted for them.

Threats for the future

Housing and Planning Act seems to remove requirement for affordable housing for rent –

– Starter housing for sale.

Exclusively for first time buyers aged over 23 and under 40, and for sale at 20% per cent below normal market prices. The Act creates a new duty on all local authority planning departments to promote the supply of starter homes in their area.

The Act also allows the government to set regulations requiring starter homes to be included on residential sites as a condition of securing planning permission.

 Sale of higher value vacant local authority homes

Tory manifesto set out plans to require local authorities who have retained ownership of their stock to sell higher value homes as they become vacant.

Govt may impose levy on such properties – even if LA doesn’t sell them. And levy goes to Govt to finance Right to Buy on Housing Association properties.

So much for self-financing!

– High income social tenants: mandatory rents (Pay to stay)

The Act requires local authority tenants with a higher income to pay a higher rent. Initially a ‘higher income’ will be defined as a household earning more than £31,000 per year, or £40,000 in London.

Thus a household with 2 adults and a non-dependent chlld earning the *National* Living Wage could be deemed as High Income

ECC currently deem household income of £60k as high income.

The Act requires local authorities to return any additional rental income generated by the policy (minus administrative costs) to the Treasury – again so much for sel-financing!

– Right to Buy

 All Right to Buy receipts – both from local authorities and housing associations – to be returned to Govt, so new replacement homes could, no will, be built elsewhere in the country!

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