Memorandum by Southwark Council (AFH 66)
The following is based on the experience and
observations of Southwark Council Housing and Planning staff who
are engaged in work associated with the development of affordable
housing in the borough.
Within this response, we have outlined Southwark's
current position to the questions raised by the Select Committee,
and have suggested changes to policy implementation that could
help provide more affordable homes.
1. DEFINITION
OF "AFFORDABLE"
1.1 In Planning terms the Council would
welcome clearer guidance regarding the definition of "affordable",
and of housing need. Under Circular 6/98 both of these definitions
are required to be assessed on an individual Local Planning Authority
(LPA) basis. In London, at least, this has led to confusion, with
a variety of different methodologies used and, on occasion, has
allowed local political concerns to override the need for more
affordable homes. This has hindered the production of affordable
housing through the Planning system. In London, there is a need
for individual Local Planning Authorities to ensure that they
are working in a co-ordinated way to address housing needs.
1.2 Consequently Southwark would welcome
the establishment of clear regional or sub-regional Planning frameworks
for London to define these questions. Individual LPAs would then
be able to implement affordable housing policies locally on the
basis of agreed methodology. This would give LPAs and private
developers more certainty, and focus attention on delivery.
1.3 In terms of Southwark's current approach,
affordable housing is defined for planning purposes as:
— rented accommodation provided by
the Council or housing associations. Before the introduction of
rent restructuring the Council had used the Housing Corporation's
rent caps as a pragmatic definition of an affordable rent level.
There is concern about the implications of rent restructuring
for affordability and therefore the planning policy still assumes
rent levels based on the rent cap regime;
— shared ownership or shared equity
which caters for households with incomes of £23,000 or less.
2. THE SCALE
AND LOCATION
OF THE
DEMAND FOR
AFFORDABLE HOUSING
2.1 There is significant demand for affordable
housing throughout Southwark. The Housing Requirements Study of
1998 indicated a need for a further 2,894 to 3,887 units per annum.
2.2 The Housing Register currently stands
at 15,036 households.
2.3 It is anticipated that demand for affordable
housing in Southwark extends beyond just those households who
are currently experiencing housing need within the borough.
2.4 Experience of the Housing Corporation's
Homebuy scheme (as well as surveys conducted as part of the Housing
Requirements Study) suggests that Southwark residents seeking
relatively more affordable home ownership tend to move to boroughs
to the east of Southwark such as Greenwich and Bexley. The extent
to which this reflects aspirations rather than a pragmatic choice
based on cheaper house prices is not clear.
3. THE QUALITY
OF AFFORDABLE
HOUSING
3.1 The Council has calculated that 48 per
cent of its stock is decent; in 2000 3.7 per cent of Council stock
and 2.2 per cent of RSL stock in Southwark was calculated as being
"unfit".
3.2 Figures are not currently available
for "decency levels" in housing association stock in
Southwark.
4. THE ADEQUACY
OF THE
EXISTING SUPPLY
AND THE
AMOUNT OF
RESOURCES AVAILABLE
4.1 Approximately 50 per cent of the housing
stock in Southwark is affordable. This proportion continues to
diminish, mainly as a result of Right to Buy (currently running
at c. 1,000 sales per annum). Turnover of lettings is also decreasing,
further reducing opportunities for households needing rehousing.
4.2 For 2002-03 the Housing Corporation
has allocated over £25 million of Social Housing Grant in
Southwark. The Council expects to allocate up to £5 million
of Affordable Housing Fund (ie planning gain monies from "section
106" agreements) in 2002-03. Three per cent of the Council's
Housing Investment Programme for 2002-03 will be used to create
new units through the London Housing Partnership.
5. THE EXTENT
TO WHICH
PLANNING GAIN
CAN FUND
THE LEVEL
OF AFFORDABLE
HOUSING REQUIRED
5.1 In practical terms Southwark follows
the principle of "Additionality" in the way it seeks
to fund affordable housing coming via the planning system. Under
this approach affordable homes provided as a consequence of planning
policy are normally built without public subsidy, thus these units
can be seen to have been provided "in addition" to those
coming from public subsidy.
5.2 This approach has been tested by judicial
review at London Borough of Tower Hamlets and supported by the
"Affordable Housing in London—Spatial Development Strategy
Technical Report One—July 2001" (otherwise known as
the "Three Dragons Report"). A quarter of London boroughs
use additionality.
5.3 The wider application of additionality
could provide significant benefits in providing more resources
for affordable housing provision, as well as more certainty to
housing developers. The Sub-Committee is urged to examine the
opportunities that this approach might provide for the delivery
of more affordable homes.
5.4 The implications of the notion of additionality
in the London context need to be looked at carefully. Though conventional
Housing Corporation funding could be freed up by adopting this
approach in high value central London boroughs, there are concerns
that that funding should not then be too focused into particular
low value areas. Such areas are often in need of major investment
into the local infrastructure to make affordable housing development
sustainable and already have levels of affordable housing significantly
above the London average of 25 per cent of all stock. All boroughs
need to be able to make a contribution to meeting London's housing
needs—not just those boroughs that have the cheapest land
or already have the most affordable housing.
5.5 Current Council policy is based on 25
per cent of private schemes of 15 units or more being affordable.
The Council is currently investigating the implications of raising
the level to 35 per cent in order to establish whether it is feasible
to raise the requirement to this level without using public subsidy.
The use of public subsidy on section 106 agreements generally
means that less public subsidy is then available for other programmes
and that the net increase in affordable housing may then be negligible.
5.6 Over 70 units of affordable housing
are due to be completed in Southwark in 2002-03 as a result of
section 106 agreements. No Social Housing Grant from the Housing
Corporation's Approved Development Programme and no Local Authority
Social Housing Grant have been used to fund these units.
5.7 Completion of over 100 such units is
currently predicted in 2003-04.
5.8 Most such units are generated through
development of affordable housing "on site"—as
part of a private development. However a smaller proportion are
completed through the Affordable Housing Fund as a result of using
commuted payments.
5.9 Any proposal to increase the level of
affordable housing sought would involve an element of "intermediate"
housing—which would include accommodation that responded
to the needs of key workers for example.
5.10 A higher percentage of affordable housing
in Southwark, if feasible, along with very robust implementation,
could lead to the generation of 200 units per annum through planning
gain. This level of units would still fall a long way short of
the numbers required. It would for example fall far short of the
number of affordable units lost each year through Right to Buy
and would currently be less than the number of homeless households
in Bed and Breakfast.
5.11 On the basis of the above, planning
gain could provide up to 50 per cent of the affordable housing
units developed in Southwark from 2003-04. This assumes that the
level of Approved Development Programme in Southwark remains roughly
consistent with that in 2002-03 and 2001-02.
6. HOW RESOURCES
SHOULD BE
BALANCED BETWEEN
SOCIAL HOUSING
AND OPTIONS
FOR OWNER
OCCUPATION FOR
THOSE WHO
CANNOT AFFORD
TO BUY
(INCLUDING SHARED
OWNERSHIP) AND
WHETHER ANY
ADDITIONAL MECHANISMS
ARE REQUIRED
TO BRING
FORWARD SHARED
OWNERSHIP TYPE
SCHEMES
6.1 In the years preceding 2002-03 the Housing
Corporation generally accepted the advice of local authorities
about the balance of investment between rented and shared ownership
accommodation. In Southwark, typically 20 per cent of the Approved
Development Programme would be earmarked for shared ownership
schemes.
6.2 For 2002-03 the Housing Corporation
has allocated funding on a more regional basis and relatively
greater emphasis appears to have been put on shared ownership.
Southwark already has over 1,000 units of shared ownership but
over 200 further units are predicted to be completed by the end
of 2003-04. The shared ownership sector is therefore likely to
increase at a faster rate than the housing association rented
sector (for which 500-600 new units are predicted by the end of
2003-04; there are currently 11,000).
6.3 The Council has reviewed the role of
shared ownership and is aware that it does not always provide
an option that is affordable. By advising housing associations
to provide units that are affordable to households with incomes
of less than £23,000 pa, this problem has largely been addressed
though it means that shared ownership cannot be developed through
Social Housing Grant in higher value areas.
6.4 Some revision of the Housing Corporation's
model of shared ownership may be necessary to achieve more consistent
affordability—though this is likely to lead to a higher
level of public subsidy being required per unit.
6.5 Over the last year Southwark has worked
with other South East London boroughs to take a more joint approach
to shared ownership. This has the potential to give households
greater choice and to target resources where opportunities for
development are best at any one time.
7. WHETHER MORE
GREENFIELD DEVELOPMENT
IS NEEDED
TO MEET
HOUSING NEED
7.1 Like most inner London Boroughs, Southwark
has very little opportunity to respond to housing need by building
on green field sites. Though there is some capacity for meeting
housing needs within the borough (this is currently being assessed)
it is likely that housing needs could only be fully met by means
of development outside the borough. However, location will be
the crucial factor in determining whether green field development
would have anything more than a marginal effect upon Southwark's
housing need.
CONCLUSION
It is hoped that the above comments assist the
Sub-Committee in its deliberations. Officers from Southwark Housing
and Regeneration Departments would be happy to provide further
input to the Sub-Committee if that is felt to be beneficial.
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