Planning & the Environment

Section 106 Affordable Housing Agreements: steps to avoid protracted negotiations

The Department for Communities and Local Government recently commissioned research into whether it would be possible to produce a common starting point for all negotiations between developers and local planning authorities for the provision of affordable housing.

Perhaps not surprisingly, the study found that a national common starting point would not be viable because of variations in housing markets across the country and in local planning authority policies and practice.

The study also identified a recurring problem familiar to many developers, of local planning authorities failing to set out clearly their affordable housing expectations in their development plan policies. This means that developers and local authorities may approach negotiations with different understandings of the policy requirements, leading to frustratingly protracted and often expensive negotiations.

Developers can themselves try to avoid some of the problems that arise during negotiations by following these pointers:-

  • ensure that you are talking from the first with the officer with responsibility for affordable housing provision
  • before negotiations commence, check with the local planning authority that you have correctly understood their requirements for affordable housing provision – don’t assume anything
  • ensure that your economic appraisal of the scheme is robust so that if viability becomes an issue you can demonstrate to the local planning authority why it would not be economically feasible to provide the proportion of affordable housing required by the policy. As a number of inspector and Secretary of State appeal decisions have shown, if a housing scheme offers other benefits and meets development plan criteria in other respects, it is still possible to gain planning permission where the affordable housing provision level would not be met provided that a robust viability case is put forward.

If you would like more advice on this issue, please contact Karen Howe.