Legal Update: Affordable Housing Threshold and Vacant Building Credit Policy Quashed
The recently introduced national affordable housing threshold and Vacant Building Credit have been removed from National Planning Practice Guidance (NPPG) following a High Court ruling last Friday (31 July 2015).
The controversial policy excluded housing developments of 10 units or 1,000sqm or less from the need to provide, or contribute towards, affordable housing – with a lower threshold introduced in rural areas. The Vacant Building Credit (VBC) allowed local authorities to provide a ‘credit’ equivalent to the floorspace of any vacant building brought back into use or demolished for redevelopment, which could then be set against affordable housing contributions.
West Berkshire District Council and Reading Borough Council had challenged the guidance on the basis that it would result in a loss of 21% of affordable housing contributions nationwide (contributions equating to an annual value of £693m). The High Court found in favour of the local authorities and concluded that the national policy changes introduced in November 2014 were incompatible with the statutory planning framework. The decision also highlighted failures in the consultation process and the fact that Ministers had ignored the advice of their own officials in introducing the policies.
The judge’s decision makes rather uncomfortable reading for the Department of Communities and Local Government, who attempted to quietly slip in the new threshold and VBC as a means of relieving the ‘disproportionate burden of developer contributions on small scale developers’, only for them to be quashed less than a year later.
The government has confirmed its intention to seek permission to appeal the ruling. In the meantime, this effectively means that affordable housing contributions will again be guided by Local Plan thresholds, and that the VBC can no longer be taken into account in the assessment of a scheme’s viability. So, for the time being at least, it looks like small scale developer’s have their ‘disproportionate burden’ back! If you have any queries about this decision, or would like a copy of the judgement, please feel free to contact one of the Firstplan team.