Justin Cartwright
Chartered Institute of Housing
Developer contributions
for affordable housing:
Lessons learnt from England
Justin Cartwright
Chartered Institute of Housing
General principles of best practice: England
1. Standardised charges / formulae
“… adoption of good practice, such as standard charging is statistically related to
achieving more planning agreements and higher value obligations.”1
“Publishing … the methods for estimating contributions … should make it
possible for most applicants to estimate the likely cost … Such transparency
should help to inform developers … when considering purchasing land, and help
simplify and speed up the negotiation and agreement of obligations.”2
1. Crook et al (2010), The incidence, value and delivery of planning obligations in England in 2007-08 p. 62
2. DCLG (2006), Planning Obligations: Practice Guide p. 20
www.cih.org
General principles of best practice: England
1. Standardised charges / formulae
Example – percentage contribution of plots
 Housing association builds / purchases property on contribution plot(s)
 Removes the obstacle of social housing providers competing with private
sector to secure land
 Contributions in England are “statistically related to average land values”1
Levy on landowners
1. Crook et al (2010), p. 72
www.cih.org
General principles of best practice: England
1. Standardised charges / formulae
Example – Hertsmere Borough
•
The threshold that applies for affordable housing


1 hectare or 25 dwellings (gross) or more in the main settlements of Borehamwood, Bushey, Potters bar
and Radlett; Or
0.5 hectares or 15 or more dwellings (gross) in that part of Elstree not within the Green Belt.
•
Qualifying sites allocate in the region of 25% of all dwellings or land for affordable
housing
•
The difference between the cost of development and price paid by the
HA considered to be a planning contribution from the developer
•
Informed by local information
www.cih.org
General principles of best practice: England
1. Standardised charges / formulae
How do you determine a standardised formula?
 Realistic rates based on viability evidence not policy objectives1
 Takes into account land value2
 Carry out impact assessment of rates on development3
? Viability models are limited in many ways, but may be the best available
way to analyse what level of planning gain is viable4
1.
2.
3.
4.
Burgess et al (2013), The changing delivery of planning gain through Section 106 and the Community Infrastructure Levy, p. 17
DCLG (2006), p.14
Ibid, p. 35
Burgess et al (2013), p. 17
www.cih.org
General principles of best practice: England
2. Specialist contributions team
• Standardised formulae are important but shouldn’t be rigid
without regard to local and individual circumstances and
contexts
• Local land and housing markets should interplay with policy
through negotiating practice
www.cih.org
General principles of best practice: England
2. Specialist contributions team
• English councils rate ‘employing dedicated contributions officer’ as second
most important factor in changes to number and value of obligations1
• Negotiating officers produce significantly more agreements and delivery of
direct payment obligations; but fewer obligations in number and value2
• Monitoring officers produce more agreements; and direct payment
obligations in number and value. Monitored schemes more likely to deliver
obligations in full3
1. Crook et al (2010), p. 8
2. Ibid, p. 68
3. Ibid, p. 9
www.cih.org
General principles of best practice: England
2. Specialist contributions team
What skills does the team need?
 Negotiation skills
 Project management skills
 Co-ordination skills
 Communication skills
 Technical skills
 Legal skills
www.cih.org
General principles of best practice: England
2. Specialist contributions team

Centralised policy and practice function

Eliminates variations in policy and practice across the region

Affords continuity to developers regarding who they negotiate with and
how, regardless of where they build in the region

Allows the negotiating team exposure to a critical mass of negotiations
which facilitates upskilling

Provides a ‘one-stop-shop’ approach which some councils
in England have found helpful in improving delivery1
?
Team must be informed by local information and evidence
1.
DCLG (2006), p.31
General principles of best practice: England
Summary
A working developer contributions policy for affordable housing is one that uses
standard rates that are realistic and based on viability; take into account land value; and
have an emphasis on housing provision over commuted sums (where increasing social
housing supply and tenure mix are policy goals).
These rates should work together with professional and efficient negotiation informed
by local information and evidence, where one goal is achieving the right balance
between social and intermediate (co-ownership) tenures.
www.cih.org
Thank you
Justin Cartwright
Policy & Public Affairs Officer
Chartered Institute of Housing
E: justin.cartwright@cih.org
P: 028 9077 8222
T: @JustinCIH and @CIHNI
W: www.cih.org
Justin Cartwright
Chartered Institute of Housing
Developer contributions
for affordable housing:
Lessons learnt from England
Justin Cartwright
Chartered Institute of Housing
General principles of best practice: England
1. Standardised charges / formulae
“… adoption of good practice, such as standard charging is statistically related to
achieving more planning agreements and higher value obligations.”1
“Publishing … the methods for estimating contributions … should make it
possible for most applicants to estimate the likely cost … Such transparency
should help to inform developers … when considering purchasing land, and help
simplify and speed up the negotiation and agreement of obligations.”2
1. Crook et al (2010), The incidence, value and delivery of planning obligations in England in 2007-08 p. 62
2. DCLG (2006), Planning Obligations: Practice Guide p. 20
www.cih.org
General principles of best practice: England
1. Standardised charges / formulae
Example – percentage contribution of plots
 Housing association builds / purchases property on contribution plot(s)
 Removes the obstacle of social housing providers competing with private
sector to secure land
 Contributions in England are “statistically related to average land values”1
Levy on landowners
1. Crook et al (2010), p. 72
www.cih.org
General principles of best practice: England
1. Standardised charges / formulae
Example – Hertsmere Borough
•
The threshold that applies for affordable housing


1 hectare or 25 dwellings (gross) or more in the main settlements of Borehamwood, Bushey, Potters bar
and Radlett; Or
0.5 hectares or 15 or more dwellings (gross) in that part of Elstree not within the Green Belt.
•
Qualifying sites allocate in the region of 25% of all dwellings or land for affordable
housing
•
The difference between the cost of development and price paid by the
HA considered to be a planning contribution from the developer
•
Informed by local information
www.cih.org
General principles of best practice: England
1. Standardised charges / formulae
How do you determine a standardised formula?
 Realistic rates based on viability evidence not policy objectives1
 Takes into account land value2
 Carry out impact assessment of rates on development3
? Viability models are limited in many ways, but may be the best available
way to analyse what level of planning gain is viable4
1.
2.
3.
4.
Burgess et al (2013), The changing delivery of planning gain through Section 106 and the Community Infrastructure Levy, p. 17
DCLG (2006), p.14
Ibid, p. 35
Burgess et al (2013), p. 17
www.cih.org
General principles of best practice: England
2. Specialist contributions team
• Standardised formulae are important but shouldn’t be rigid
without regard to local and individual circumstances and
contexts
• Local land and housing markets should interplay with policy
through negotiating practice
www.cih.org
General principles of best practice: England
2. Specialist contributions team
• English councils rate ‘employing dedicated contributions officer’ as second
most important factor in changes to number and value of obligations1
• Negotiating officers produce significantly more agreements and delivery of
direct payment obligations; but fewer obligations in number and value2
• Monitoring officers produce more agreements; and direct payment
obligations in number and value. Monitored schemes more likely to deliver
obligations in full3
1. Crook et al (2010), p. 8
2. Ibid, p. 68
3. Ibid, p. 9
www.cih.org
General principles of best practice: England
2. Specialist contributions team
What skills does the team need?
 Negotiation skills
 Project management skills
 Co-ordination skills
 Communication skills
 Technical skills
 Legal skills
www.cih.org
General principles of best practice: England
2. Specialist contributions team

Centralised policy and practice function

Eliminates variations in policy and practice across the region

Affords continuity to developers regarding who they negotiate with and
how, regardless of where they build in the region

Allows the negotiating team exposure to a critical mass of negotiations
which facilitates upskilling

Provides a ‘one-stop-shop’ approach which some councils
in England have found helpful in improving delivery1
?
Team must be informed by local information and evidence
1.
DCLG (2006), p.31
General principles of best practice: England
Summary
A working developer contributions policy for affordable housing is one that uses
standard rates that are realistic and based on viability; take into account land value; and
have an emphasis on housing provision over commuted sums (where increasing social
housing supply and tenure mix are policy goals).
These rates should work together with professional and efficient negotiation informed
by local information and evidence, where one goal is achieving the right balance
between social and intermediate (co-ownership) tenures.
www.cih.org
Thank you
Justin Cartwright
Policy & Public Affairs Officer
Chartered Institute of Housing
E: justin.cartwright@cih.org
P: 028 9077 8222
T: @JustinCIH and @CIHNI
W: www.cih.org
Justin Cartwright
Chartered Institute of Housing
Developer contributions
for affordable housing:
Lessons learnt from England
Justin Cartwright
Chartered Institute of Housing
General principles of best practice: England
1. Standardised charges / formulae
“… adoption of good practice, such as standard charging is statistically related to
achieving more planning agreements and higher value obligations.”1
“Publishing … the methods for estimating contributions … should make it
possible for most applicants to estimate the likely cost … Such transparency
should help to inform developers … when considering purchasing land, and help
simplify and speed up the negotiation and agreement of obligations.”2
1. Crook et al (2010), The incidence, value and delivery of planning obligations in England in 2007-08 p. 62
2. DCLG (2006), Planning Obligations: Practice Guide p. 20
www.cih.org
General principles of best practice: England
1. Standardised charges / formulae
Example – percentage contribution of plots
 Housing association builds / purchases property on contribution plot(s)
 Removes the obstacle of social housing providers competing with private
sector to secure land
 Contributions in England are “statistically related to average land values”1
Levy on landowners
1. Crook et al (2010), p. 72
www.cih.org
General principles of best practice: England
1. Standardised charges / formulae
Example – Hertsmere Borough
•
The threshold that applies for affordable housing


1 hectare or 25 dwellings (gross) or more in the main settlements of Borehamwood, Bushey, Potters bar
and Radlett; Or
0.5 hectares or 15 or more dwellings (gross) in that part of Elstree not within the Green Belt.
•
Qualifying sites allocate in the region of 25% of all dwellings or land for affordable
housing
•
The difference between the cost of development and price paid by the
HA considered to be a planning contribution from the developer
•
Informed by local information
www.cih.org
General principles of best practice: England
1. Standardised charges / formulae
How do you determine a standardised formula?
 Realistic rates based on viability evidence not policy objectives1
 Takes into account land value2
 Carry out impact assessment of rates on development3
? Viability models are limited in many ways, but may be the best available
way to analyse what level of planning gain is viable4
1.
2.
3.
4.
Burgess et al (2013), The changing delivery of planning gain through Section 106 and the Community Infrastructure Levy, p. 17
DCLG (2006), p.14
Ibid, p. 35
Burgess et al (2013), p. 17
www.cih.org
General principles of best practice: England
2. Specialist contributions team
• Standardised formulae are important but shouldn’t be rigid
without regard to local and individual circumstances and
contexts
• Local land and housing markets should interplay with policy
through negotiating practice
www.cih.org
General principles of best practice: England
2. Specialist contributions team
• English councils rate ‘employing dedicated contributions officer’ as second
most important factor in changes to number and value of obligations1
• Negotiating officers produce significantly more agreements and delivery of
direct payment obligations; but fewer obligations in number and value2
• Monitoring officers produce more agreements; and direct payment
obligations in number and value. Monitored schemes more likely to deliver
obligations in full3
1. Crook et al (2010), p. 8
2. Ibid, p. 68
3. Ibid, p. 9
www.cih.org
General principles of best practice: England
2. Specialist contributions team
What skills does the team need?
 Negotiation skills
 Project management skills
 Co-ordination skills
 Communication skills
 Technical skills
 Legal skills
www.cih.org
General principles of best practice: England
2. Specialist contributions team

Centralised policy and practice function

Eliminates variations in policy and practice across the region

Affords continuity to developers regarding who they negotiate with and
how, regardless of where they build in the region

Allows the negotiating team exposure to a critical mass of negotiations
which facilitates upskilling

Provides a ‘one-stop-shop’ approach which some councils
in England have found helpful in improving delivery1
?
Team must be informed by local information and evidence
1.
DCLG (2006), p.31
General principles of best practice: England
Summary
A working developer contributions policy for affordable housing is one that uses
standard rates that are realistic and based on viability; take into account land value; and
have an emphasis on housing provision over commuted sums (where increasing social
housing supply and tenure mix are policy goals).
These rates should work together with professional and efficient negotiation informed
by local information and evidence, where one goal is achieving the right balance
between social and intermediate (co-ownership) tenures.
www.cih.org
Thank you
Justin Cartwright
Policy & Public Affairs Officer
Chartered Institute of Housing
E: justin.cartwright@cih.org
P: 028 9077 8222
T: @JustinCIH and @CIHNI
W: www.cih.org