Small sites exemption generates inevitable conflicting decisions

It was bound to happen. The Government’s decision to re-impose a ten unit threshold, below which contributions towards affordable housing should not be sought, was always controversial. Local Planning Authorities were certain to seek ways around it and planning by appeal was the predictable result. As was the emergence of appeal decisions which are almost entirely at odds. Here are two.

At Dimsdale Drive in Enfield (APP/Q5300/W/16/3146563), where three homes were proposed, the Inspector eventually dismissed the appeal on grounds unrelated to affordable housing but, he noted that:

“The proposal does not make provision for a contribution towards affordable housing provision and, as such, it would be contrary to DMD Policy DMD2 and CS CP4. However, the WMS and subsequent updating of the Guidance is a material consideration and an up to date statement of Government policy stating that such contributions should not be sought, to which I give considerable weight. Thus, I conclude that the absence of a section 106 planning obligation and contributions towards the provision of affordable housing do not weigh against the proposal in this instance.”

That’s pretty clear – I have a conflict between a local policy and more recent national guidance which the Government has been to the Court of Appeal to create and I give precedence to the national guidance.

But, meanwhile, in South Cambridgeshire at an inquiry into a proposal for eight homes, on land south of Kettles Close (APP/W0530/W/16/3142834), the Inspector found that:

“Having regard to this material consideration I find that the WMS needs to be addressed alongside local policy. The local evidence of affordable housing need is substantial and therefore I attach significant weight to this consideration. I regard Policy HG/3 as being compatible with the Framework in that it acknowledges development viability considerations in decision taking and would not impose a level of planning obligation that would prevent development coming forward. In addition I have also had regard to the Council’s development appraisal presented prior to the hearing, which the appellant did not challenge, that no evidence was presented to suggest that the level of affordable housing sought would make the development unviable and the appellant’s subsequent offer to provide three affordable units. On this basis I find that the proposal would be in line with Policy HG/3 and that were I to allow the appeal this matter could be dealt with through an appropriate planning condition or obligation.”

In effect, there is no conflict between the national guidance and the local policy because the local policy makes reference to viability (as it is required to do with the framework) and the viability of this specific scheme is would not be compromised by the imposition of the affordable homes.

The Inspector at Enfield seems to have accepted that new national guidance, which had emerged from extensive legal wrangles about the extent to which it could trump local policy, should trump older local policy. The Inspector at South Cambridgeshire, takes the view that a local policy takes precedence in any instance where the local policy is willing to take site viability into account. The problem with the latter point of view is that all local policies take viability into account. They are required to do so by the oft quoted paragraph 173 of the NPPF. Any policy which does not do so would be in conflict with the NPPF and, hence, out of date. The implication of the South Cambridgeshire decision is that the change to the NPPG should have no effect in any case at all.

The Court of Appeal did recognise that, however the WMS was phrased, there might be exceptions, where an affordable housing contribution could be sought from a small site because exceptions are implicit in the concept of guidance. However, an exception to the guidance where substantial evidence of need has been identified and where viability is taken into account amounts to an exception in all cases.

One can see how this situation arose. The Kettles Close scheme was in the greenbelt and the appellant was therefore compelled to make the case that “very special circumstances” existed, which should justify the release of the site. Under those conditions, he might have been keen to offer the affordable housing even in a case where it was not actually required, as a way to improve the overall planning balance. Affordable housing is still an important benefit, even if it is not required by policy. But the fact remains, that this decision undermines the single virtue that the small sites exemption possessed – clarity.

The Government was perfectly aware that, if local authorities were unable to seek affordable housing from small sites, then they would be missing out on the opportunity to secure some much needed affordable homes. Since that is a bad thing, it is obvious that this was not its motivation in introducing the threshold. The motivation was that the number of small developers in this country and the quantity of new homes they deliver has collapsed. The Government considered that they needed support and encouragement. It also took the view – clearly identified in the consultation and also in the submissions to the Court of Appeal – that affordable housing contributions, as well as the cost and uncertainty that viability assessments entail, hit small developers particularly hard. In exempting small sites from contributions, the Government was clearly trying to “grow the pie” by resisting the temptation to grab a larger slice of a shrinking one.

With this decision, that certainty disappears and is replaced with still greater risk. Developers in a great many areas will encounter policies on affordable housing which predate the change in the PPG. Since it is now essentially impossible to know how much weight to attribute to these policies, it is yet more difficult for them to know how much they should pay for land. And, of course, paying too much for land by failing to give the proper amount of weight to affordable housing policies will, almost by definition, be given very short shrift in a viability negotiation.

A fine mess.

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