PAPER D

Purpose : For Decision

Meeting :       REPORT TO CABINET

Date: 6 MARCH 2007

Title: POLICY COMMISSION BLUE PAPER ON AFFORDABLE HOUSING

REPORT OF THE CABINET MEMBER FOR ASSETS, PLANNING AND HOUSING

IMPLEMENTATION DATE: 16 March 2007

PURPOSE

1. To agree one of the options set-out in this report, in relation to the Policy Commission for Care, Health and Housing’s Blue Paper on ‘Affordable housing – low cost homes for Island people’.

OUTCOMES

2. The purpose of the Blue Paper was to make recommendations that will improve the provision of affordable housing and low cost homes for Island people.

3. The purpose of this report is to ensure the recommendations made by the policy commission inform the work to develop a Housing Strategy for Affordable and Low Cost Housing on the Island.

BACKGROUND

4. The Policy Commission’s recommendations were as follows:

I. To confirm that the Council accept and are comfortable with the new definitions of ‘affordable housing’ and ‘low cost market housing’ as set out in Planning Policy Statement 3 and “Delivering affordable housing” These definitions have been set by Central Government through Statutory guidance

Response: We welcome this recommendation.

II. To develop detailed planning policies on low cost market housing to meet the needs of Island residents. This is a requirement under PPS3 and ‘Delivering affordable housing’ guidance.

Response: We welcome this recommendation.

III. To carry out further work to assess the viability of setting up a Housing Trust. This should include homes with a continuing discount. This recommendation has been developed in response to consultation exercises undertaken across the Island with private developers who want to provide affordable housing.

Response: We want to explore this option further. A Housing Trust may be a complicated way of addressing this. We are considering the possibility of the LA developing a range of funding support to enable Island people to purchase low cost homes.

IV. The Council investigates the feasibility of introducing a tiered tariff system for affordable housing to compliment the current threshold system. Any tariff system should be based on value rather than the number of units and should apply in all circumstances. This recommendation has been developed in response to consultation undertaken with private developers and a site visit to Milton Keynes Council

Response: We accept the need to work within the approved planning regulation and give developers a standard guideline to which they can respond. We need to apply the thinking to all developments but be flexible to make best use of the available sites to achieve the accommodation required.

V. That any changes to existing affordable housing policy thresholds brought    in as part of the Housing and Employment Development Plan Document    should be phased in over a minimum of six months and involve    consultation with developers and other stakeholders. The    recommendation of a six month minimum is suggested as a response to    developers informing us that they need time to plan development viability    and financial appraisals for the purchase of land.

Response: We agree with the spirit of this recommendation but feel that the six months timescale may be restrictive and need further clarification.

VI. That the Council develops design statements/specifications for large developments (the definition of ‘large’ to be determined) to set out the Council‘s vision for particular development sites. This recommendation is included as a result of talking to other councils in the South of England and large developers. The issue is to make it clear to major developers what we want from the beginning as part of a planning consent.

Response: We welcome this recommendation.

VII. Neighbourhood Involvement Workers should be funded by developers as   a condition of planning, for large (the definition of ‘large’ to be determined)   developments. The role of these workers would be to bring residents   together in order to encourage the building of sustainable communities,   rather than just houses. This recommendation builds on a site visit to East   Hants DC who seek to ensure that developments fund a community   liaison officer for up to three years after a development is started.

Response: We welcome the principal of this recommendation but do not support insisting on it. Such workers are likely to emerge in such projects and actually need to be in place (as in the Pan Urban Regeneration Project) long before the developer is identified.

VIII. To ensure that the provision of affordable housing and low cost market housing is maximised on large sites. The definition of ‘large’ is yet to be determined but for example: Council owned land at Pan. However, development of sites must have a sympathetic approach to the environment, quality of life and sustainable community issues.

Response: We welcome this recommendation except for the definition of large sites as we believe this applies to all sites.

IX.  That the Housing Department seeks to increase the level of investment for affordable housing brought to the Island through bids for innovation funding, e.g. the Housing Corporation’s Innovation and Good Practice grant programme

        Response : We welcome this reccomendation.

X.         That specific policies are developed for affordable and low cost market  housing in rural locations.

Response: We particularly welcome this recommendation as we recognise the need to give greater attention to rural development.

The local context:

5. The Isle of Wight, due to its discrete nature, has the following issues that need to be addressed:

· 18% of households on the Island are in receipt of income support: the highest proportion in the South East.

· 25% of Island residents are in receipt of means tested benefits

· 90% of Island households earn less that £23,920 with 63% earning  less than £18,200

· The average house price on the Island between July to September 2006, based on selling prices, was £206,929

· The average gross annual income for residents on the Island in 2006 was £16,162

· This would enable an average earner to afford a £60,000 property  based on a mortgage of 3.5 times income

· Typical first time buyer housing on the Island starts at £85,000

· Buy to let properties are providing a good supply of rented housing but there are issues over gaining access to rural rented housing with average three bedroom houses in Ryde renting at £610 per month compared to £795 per month in the West Wight.

· The affordability gap is even greater for many households who are much worse off than the average would suggest. An analysis of applicants on the Common Housing Register indicates an average head of household income of £6230.38. This would allow only a £21,800 mortgage. On the basis of the National Housing Federation (NHF) definition of affordability, i.e. 25% of income for housing costs, this would suggest an ability to pay of only £30 per week. In reality this means that for 90% of Island House holds using a mortgage to purchase any type of home will be extremely difficult.

National / Regional context:

6. The South East is producing only three quarters of the new affordable homes it needs each year

7. New housing market forecasts, commissioned from Oxford Economic Forecasting by the National Housing Federation, indicate that by 2011 people in the South East will be faced with an average house price of more than £322,000, nearly 40% higher than today.

8. On 26 November 2006 the DCLG launched Planning Policy Statement 3 (PPS3) and accompanied it with guidance on ‘Delivering Affordable Housing’ Both of these documents can be found at www.communities.gov.uk

9. Planning Policy Statements (PPS) set out the Government’s national policies on aspects of planning in England. PPS3 sets out the national planning policy framework for delivering the affordability and supply of housing in all communities, including rural areas.

10. Local Authorities need to plan for the full range of market housing. In particular the need to deliver low-cost market housing as part of the housing mix. Low cost market housing is no longer considered by the Government to fall under the definition of affordable housing.

STRATEGIC CONTEXT

11. The purpose of the enquiry was to:

I. To identify challenges to the provision of affordable housing on the Island, and to suggest policy solutions to overcome these challenges.

II. The Local Area Agreement sets out the aim to, “Provide healthy, safe, affordable housing accommodation according the needs of Island people, including those in rural areas and those with least housing choice” (Healthier Communities, Aim C, Goal C2)

III. A need to better communicate and promote the concept of affordable housing.

IV. To act as the core working party for the Housing Market Assessment to underpin the strategic policy framework of the Housing and Employment Development Plan Document

CONSULTATION

12. The Policy Commission worked through formal and informal meetings, stakeholder groups, a dedicated email address, consultation at a Housing Summit and through the Housing Strategy Consultation in order to develop the Blue Paper recommendations.

13. In addition to the Policy Commission’s work, views and information has been gathered as part of the development of the new Housing Strategy. This includes the Housing Summit, Housing Needs Survey and Housing Market Assessment.

14. Consultees included two other local authorities:

· Milton Keynes Council, 12 December 2006

· East Hants District council, 29 September 2006

15. Individuals seen / representations received from:

· Carol Alstrom, Isle of Wight NHS Primary Care Trust

· Barratt Homes

· Mr Morris Barton, advisor to developers

· Dr Paul Bingham, Director of Public Health, Isle of Wight NHS Primary Care Trust

· Mr Ashley Curzon, Head of Regeneration, Isle of Wight Council

· Leigh Edwards, KingsOak

· English Partnerships

· The Federation of House Builders

· Conal Grier and Isle of Wight NHS Primary Care Trust

· Glen Hepburn, advisor to developers

· Housing summit attendees (held on 6 September 2006).

· Cllr Gill Kennet, Housing champion

· Sharon Packer, Rural Housing Enabler

· Neil Payne, developer

· Martyn Pearl, Medina Housing

· Mr Christopher Scott, developer

· Mr William Smith, developer

· Margaret Wright, South Wight housing

FINANCIAL/BUDGET IMPLICATIONS

16. The annual revenue budget for homelessness contains limited resources for temporary accommodation. If the supply of affordable housing is not sufficient this may impact upon the Council’s ability to remain within this budget.

LEGAL IMPLICATIONS

17. Legal issues relating to this blue paper have been identified as follows:

The Recommendations have regard to central Government advice and to the statutory requirement for the Island to produce an Island Plan/LDF and the risks related to each recommendation are identified.

OPTIONS

18.

Option 1:  To accept all recommendations in the Blue Paper

Option 2: To accept the Policy Commission's recommendations in the Blue Paper as set out earlier in this report. This will enable us to                  progress the development of Affordable Housing and Low Cost  Housing on the Island.

Option 3:   Reject all recommendations in the Blue Paper

EVALUATION

19. The recommendations set out above ensure that the policy of the Council stimulates appropriate development across the whole range of accommodation. We need to meet a wide spectrum of housing need and need our housing, planning and estate management policies to work together to support those aims.

RECOMMENDATION

20. The Cabinet is asked to agree Option 2 as set out above.

BACKGROUND PAPERS

21. External papers:

Affordable Housing Rural Commission Report. Affordable Housing Rural Commission Report. DEFRA. 2006

Barker, Kate. 2004. Delivering stability: securing our future housing need - Barker Review of Housing Supply - Final Report. HM Treasury. Available at: http://www.hm-treasury.gov.uk/consultations_and_legislation/barker/consult_barker_index.cfm

Campaign to Protect Rural England. 2006. News Briefing - Will new Government policy deliver the homes we need where we need them? Available from: http://www.cpre.org.uk/news/view/337

Scott., Christopher. 2006. Presentation for affordable housing.

Department for Communities and Local Government. 2006. Planning Policy Statement 3 (PPS3). This can be found at Communitites.gov.uk

Department for Communities and Local Government. 2006. Delivering Affordable Housing. This can be found at Communitites.gov.uk

Email from Home Builders Federation. November 2006

GVA Grimley. 2006. Housing market assessment.

Letter from Barratt Homes. November 2006

Letter from English Partnerships. November 2006.

22. Internal papers:

Isle of Wight Council (IWC). Affordable housing stakeholder meeting – Conal Grier and Carol Alstrom. 16 November 2006

IWC. Affordable housing stakeholder meeting – Glen Hepburn. 30 October 2006

IWC. Affordable housing stakeholder meeting – Leigh Edwards, Kingsoak. 13 November 20

IWC. Affordable housing stakeholder meeting - Neil Payne (private developer). 2 November 2006 IWC.

IWC. Affordable housing stakeholder meeting – William Tudor-Smith (private developer). November 2006

IWC. Affordable housing stakeholder meeting – Rural Housing Officer. 23 October 2006

IWC. Affordable housing visit – East Hampshire District Council (peer support day). 29 September 2006

IWC. Affordable housing visit – Milton Keynes Council. 12 December 2006

IWC. Housing Needs Survey. 2006

IWC. Island Plan: Core Strategy. 2006

IWC. Isle of Wight Housing Strategy 2004 – 2009. 2004. Available form: http://www.iow.gov.uk/living_here/housing_info/IWC_Housing_and_Community_Support_services/Key_Documents/Housing_Strategy/default.asp

Isle of Wight Council (IWC). Notes of Evidence Policy commission for Care, Health and Housing. 25 October 2006

IWC. Notes of Evidence Policy commission for Care, Health and Housing. 27 September 2006:

IWC. Supplementary Planning Guidance - Affordable Housing. 2004. Available from http://www.iwight.com/living_here/planning/Planning_Policy/Supplementary_Planning_Guidance/Development_Briefs_and_Design_Guides/

IWC. Unitary Development Plan. 2001. Available at: http://www.iwight.com/council/udp/udp_2002.asp

APPENDICES

22. Appendix 1 – Policy Commission Blue Paper ‘Affordable housing - low cost homes for Island People’

Contact Point: Mark Howell, Head of Housing, tel: 01983 826061, email: [email protected]

Sarah Mitchell Director of Adult and Community Services

Councillor George Brown Cabinet Member for Assets, Planning and Housing