F I F E C O U N C I L

Environment and Development Committee 20th January 2005 Agenda Item No.

DRAFT SUPPLEMENTARY GUIDANCE ON AFFORDABLE HOUSING

1.0 INTRODUCTION

The purpose of the report is to seek members’ approval for Draft Supplementary Planning Guidance on affordable housing, as a basis for public consultation.

2.0 BACKGROUND

2.1 Approval was given by the Environment and Development Committee on 6 September 2004 (Agenda Item 6) for the Council’s overall approach to addressing the need for affordable housing through the planning system. The basis for this approach lies in the Local Housing Strategy for Fife (LHS), which covers the period 2003-08.

2.2 The new Consultative Draft Structure Plan, “Fife Matters” contains a broad strategic policy on affordable housing. This will be published for consultation in February 2005. There is however a need for a more detailed approach and this is being provided by supplementary guidance. This guidance will also be published for public consultation in February 2005 (see appendix 1). Comments will be sought from a wide range of interested individuals and relevant organisations. This feedback will then be used constructively to adjust and strengthen the guidance. The detailed guidance and the Development Plan will be complementary.

Fife Housing Needs and Affordability Study

2.3 The primary reason for undertaking the Housing Need and Affordability Study was to update previous work carried out in 2000 thereby ensuring an ongoing and reliable assessment of housing need in Fife. The results provide the robust evidence required to underpin a number of Council strategies on affordable housing.

2.4 Given the complex nature of the housing market, a systematic and comprehensive approach is required to identify housing needs and ensure that survey results are robust. Consequently, the selected consultants, Arneil Johnston, were asked to base their approach on best practice guidance ‘Housing Needs Assessment Guidance (1998)’ produced by the Department of the Environment, Transport and the Regions (DETR).

2.5 The approach adopted by the consultants, involved a face-to-face survey of just over 2,400 households to establish baselines of housing need and of the ability of households to resolve their need in the market based on their income. The results of this survey were validated and contextualised against a range of other information sources such as census data and GRO projections. This, together with analysis of other information such as house price trends, costs of housing, supply and availability of social rented properties etc. allowed overall shortages or surpluses of affordable housing to be established and projected to 2016, which is midway through the consultative draft Structure Plan period.

2.6 The final study report will be available online at www.fifedirect.org.uk . Key results are summarised below. The Study found that Fife has and will continue to have a very substantial need for affordable housing. The total shortfall of affordable housing across Fife is 10,832 units, equating to 7.2% of all existing households. This represents a considerable increase compared with the previous study carried out in 2000. Although there are differences in approach between the two studies, this increase undoubtedly reflects steeply rising house prices and a very active housing market in recent years.

2.7 The overall shortfall is projected to rise to 11,033 units by 2009 and fall to 10,658 units by 2016. It can be seen therefore that the need is projected to remain relatively stable over time. The table below illustrates the level of need at the present time for the four proposed housing market areas (HMAs) in Fife. All four areas now show shortfalls of provision as follows.

HMA HOUSEHOLDS IN NEED, % OF TOTAL HOUSEHOLDS

• CUPAR 576 5.0
• ST. ANDREWS 2,304 11.8
• KIRKCALDY 3,388 5.3
• DUNFERMLINE 4,564 7.1

2.8 The need is most pronounced in the St. Andrews HMA where 1 in 8 households has a net housing need, followed by the Dunfermline HMA where 1 in 14 households has a net housing need. In the Kirkcaldy HMA 1 in 19 households are in need whilst 1 in 20 households are in need in the Cupar HMA. At a Locality level, the disparity in the level of housing need demonstrated is considerable being most evident in St Andrews (22.9%), Dunfermline (20.5%) and Inverkeithing (20.1%). The two Localities with the most significant surpluses are Methil (2.5%) and Benarty (4.8%). Given the gross level of need established at a Fife level, it is clear that the profile of the housing stock in these areas does not provide an effective response to housing need or aspiration.

A briefing event for Members was held on 18th January 2005 to dovetail with Committee dates. A more comprehensive report on the Housing Needs and Affordability Study will be considered by the Adult Services Committee on 21st January 2005.

3.0 DISCUSSION

The detailed or supplementary, guidance covers a range of topics including policy justification, categories of provision, mechanisms for securing affordable housing, contributions from non-residential development, quality of affordable housing, retention of housing as affordable and the importance of partnership working.

Wider Policy Support Context

3.2 Policy support for the provision of affordable housing stems from a number of sources including the LHS, National Guidance in the form of Scottish Planning Policy 3 “Planning for Housing”, and Fife’s Community Plan “A Stronger Future for Fife”. Affordable housing can take a variety of forms and these are briefly set out in SPP3. These include;

• Social rented accommodation
• Shared ownership schemes
• Shared equity schemes
• Low cost home ownership/discounted sale
• Mid market rented accommodation
• Housing for sale on the open market
• Self build

Whilst each may have a particular role to play, the Council’s clear focus will be on social rented accommodation. The definition of low cost housing for sale will be determined using local household income data.

At the time of writing this report, it was expected that the Scottish Executive would release a new Planning Advice Note (PAN) dealing with affordable housing early in 2005. It has not been possible therefore to reflect such advice in the consultative draft Structure Plan or, in the supplementary guidance. However once consultation has taken place on these documents the new advice will be taken into account later in 2005.

3.3 The Consultative Draft Fife Structure Plan states that at housing market area level, the following requirements will apply on sites of 10 units and above:

• Dunfermline 30%
• Cupar 40%
• St Andrews 45%

Mid Fife: sites will be required to make a contribution equivalent to 25% of their capacity to facilitate wider community regeneration.

How can affordable housing be addressed through the planning system?

3.4 The strongly preferred means of delivery will be on-site provision in the form of fully completed affordable housing. Where this is not possible, then off site provision of built units or land will be considered. As a last resort commuted sums will be sought. The calculation of such sums will be based on the District Valuer's figures. Affordable housing or equivalent contributions should be provided in phases appropriate to the development of the whole site.

3.5 On sites of between 2 and 10 units inclusive an appropriate a financial contribution towards the provision of affordable housing will be sought. Single house sites are often self build and therefore contribute towards meeting the need for affordable housing. As such they will be exempt from the need for a financial contribution.

3.6 Contributions may also be sought from non-residential development, through planning gain where such development creates a need for affordable housing. This would be relevant where, in an area of identified shortage, a development created a need for staff on modest incomes or used land which would otherwise have been appropriate for affordable housing.

3.7 The provision of affordable housing is about more than mere numbers it is also about the quality of what is provided, irrespective of tenure or type of housing. Affordable housing should take the form of a range of house types built and designed to a good standard and should blend in with the surrounding housing to make it indistinguishable.

3.8 The New Housing Needs Study has provided information on particular demographic groups such as the elderly. This will be supplemented by information from other sources in order to tailor provision to meet particular needs.

3.9 It will also be important to retain housing as being affordable. This will be achieved most easily with rented and shared ownership/equity stock. However, in terms of low cost housing for sale Section 75 agreements will be used to ensure retention.

3.10 In summary the approach being proposed represents a positive attempt to address the need for affordable housing, at least in part. Its success will be dependent on effective partnership working between all parties involved at a practical level. It is important that discussions be undertaken at the earliest possible opportunity to avoid unnecessary delays to development and to influence land values at the appropriate time. Consideration will also be given to standardising the Section 75 procedure for affordable housing in order to make it more efficient. It needs to be recognised however that the Planning System can only make a contribution to meeting affordable housing need. It cannot address in its entirety.

3.11 Detailed implementation notes will also be drawn up to address technical matters of commuted payment calculation, low cost housing for sale in relation to local household income data and to provide detailed guidance on types of affordable housing.

3.12 Finally it will be important to ensure that the Council’s approach to delivering affordable housing be kept up-to-date and appropriate and consequently annual monitoring will be undertaken. This will assist in avoiding fluctuations in the approach.

4.0 FINANCIAL IMPLICATIONS

4.1 There are costs related to publication and consultation on this document. Finance has been allocated within existing Development Services budgets. Costs are expected to be approximately £350.

5.0 LEGAL IMPLICATIONS

5.1 There are no legal implications as this is a non-statutory document.

6.0 RECOMMENDATIONS

It is recommended that Members approve the content of the Draft Supplementary Guidance on affordable housing as a basis for widespread consultation.

Keith Winter Head of Development Services Alan Davidson Head of Housing Service

Authors: David Robertson, Team Leader, Housing Service Dave Wardrope, Planner, Development Services

Date: January 2005

Ref: DSCR05.01

Background Papers Under section 50 (d) of Local Government (Scotland) Act 1973 the following background papers were relied upon to a material extent in the preparation of the support

1. Fife Council Environment and Development Committee report 6th September 2004 " Affordable Housing" agenda item 6 (www.fifedirect.org.uk)

2. Fife Council Environment and Development Committee report 1st November 2004 "Fife Structure Plan Fife Matters" agenda item 8 (www.fifedirect.org.uk)

3. Fife Council Housing Needs Study 2001.

4. Fife Council Housing Needs and Affordability Study 2004 (www.fifedirect.org.uk).

5. Scottish Executive Scottish Planning Policy 3 "Planning for Housing". (available on the Scottish Executive website www.scotland.gov.uk).