Appendix 1 to DPP27/2007 Housing Issues and Options Discussion Paper Introduction The discussion paper sets out the issues relating to housing policy and evaluates the different options for tackling the issue by listing their advantages and disadvantages. Issue A How do we deliver enough homes to meet our overall housing requirement? Why is it an issue? We have to meet the draft South East Plan requirement of 5,200 homes in East Hampshire District by 2026. This figure may change. The Panel Report into the examination of the draft South East Plan recommends that 7,700 homes are delivered by 2026: the extra 2,500 to be solely for Whitehill/Bordon. Furthermore, the Government may increase this figure. PPS3 requires us to identify land for the new homes that we are required to deliver in our Development Plan Documents (DPD). Our Annual Monitoring Report (AMR) must show enough housing sites that will meet the housing requirement for five years. We are presently carrying out a Strategic Housing Land Availability Assessment (SHLAA). A SHLAA identifies potential housing sites within the district to help decide where we will locate new homes to meet our housing requirement. The housing allocations in the adopted Local Plan are only up to 2011. At the moment the Local Plan relies on windfalls to help meet the requirement in addition to allocating sites. PPS3: Housing says that we need to be more certain how and where housing development will meet our housing requirement. It states that we can not rely on windfall sites to do this. Some of our existing allocated sites in our Local Plan are not being developed for housing. Increased delivery of homes means that more affordable homes will be delivered on appropriate sites to meet housing need. Different types and sizes of homes are required to meet both housing demand and housing needs and help create mixed communities. If we fail to deliver the homes that are required we will not benefit from the Housing and Planning Delivery Grant. How can we tackle this issue? A1) Allocate more land than is necessary by East Hampshire to meet the housing requirement in the South East Plan Allocating more land for new homes on deliverable sites than is required in our Development Plan Documents will enable us to overcome a shortfall of housing if some of the allocated sites do not come forward. Deliverable sites are those that are in suitable locations and are available for building within the first five years of the DPD because there are no constraints on them. If we do this we will need to decide how much we should over allocate housing sites. In the past an over allocation of 10% was considered good practice. Advantages It will allow us to have greater control over the timing and nature of development because delivery is not relying on just a few sites. It increases the likelihood of housing, affordable housing and a mix of different types and sizes being delivered if an allocated site doesn’t come forward. It allows for flexibility for the market to adapt to different types and sizes of sites if the market changes. It allows us to benefit from the Housing and Planning Delivery Grant. Disadvantages It will be hard to control development coming forward earlier than anticipated. More housing could be built than is actually needed to meet our housing requirement in the South East Plan. This could create pressure on the infrastructure. A2) Use a reserve housing mechanism Another option is to allocate reserve sites so that if allocated sites and windfalls don’t come forward to meet the housing requirement for the first five years of the plan, we can release these reserve sites to make up the shortfall. This differs from the current reserve site mechanism in the adopted local plan that operates on a county wide basis. These are only released if monitoring showed that the County as a whole is not meeting the housing requirements of the County Structure Plan. A new reserve site mechanism would be solely controlled by East Hampshire District Council. Advantages Will provide an incentive to landowners of allocated sites to build their sites. This is a good example of plan, monitor and manage. There is greater control over housing completions to ensure that we meet the housing requirement. The District Council retains control over the mechanism of releasing sites. It allows us to benefit from the Housing and Planning Delivery Grant. Disadvantages It will require the allocation of greenfield land as reserve sites. A3) Introduce a policy to replace allocated sites that have not been built Although we have identified suitable sites in our local plan some of these are not being developed. The reasons why developers are not building new homes on these sites vary and sometimes it is not explained to us. The Government has made it clear however, that it is our responsibility to ensure that sites are delivered. At the moment sites that are allocated in our local plan for housing remain on the allocations list for the whole plan period. We could introduce a policy that replaces sites from the allocations list that have not been started within three years of the DPD being adopted. It is likely that if such a policy is to be introduced, the mechanism for removing sites will be through the Annual Monitoring Report. Advantages It will provide an incentive to landowners of allocated sites to build their sites. This is a good example of plan, monitor and manage. It allows us to benefit from the Housing and Planning Delivery Grant. Disadvantages It does not take account of a market collapse which may stop sites being built. It may result in lower standards of development as landowners will need to deliver housing quickly. A4) Compulsory Purchase allocated sites Where an allocated site is not coming forward, another option is that the Council could carry out a compulsory purchase order on the site to ensure that development takes place. Advantages The threat of Compulsory Purchase may be an incentive to developers to build the housing on the site. It will allow our housing partners to be involved in developing the site. It will ensure that we will not be forced to find alternative sites to replace a site not coming forward. It allows us to benefit from the Housing and Planning Delivery Grant. Disadvantages Compulsory Purchase is an expensive and lengthy process and in itself does not guarantee that housing on the site will be delivered. It is also a complicated process as we would need to work in partnership with a developer who would be happy to acquire the land. A5) Increase the density of new housing development The local plan states that within settlement policy boundaries housing development should be between 30 and 50 dwellings per ha. In areas which are close to local facilities, services and public transport, the policy allows a density of over 50 dwellings per ha. An option is to increase the density of new development so that over 50 dwellings per ha is acceptable for the whole of the settlement and not just confined to town centres. This would increase the amount of homes being delivered. Advantages It reduces the need to have to find greenfield sites to meet our housing requirement. It improves sustainability as it allows more people to live in town centres. It will increase the delivery of affordable housing because site size thresholds for providing affordable housing will be exceeded more often. It helps meet our target of meeting 60% of new housing on previously developed land. Disadvantages Higher densities can have an adverse impact on rural villages. It can result in overcrowding as there is less space for people to live in Social tension can be created as people have to live in close proximity to each other. It could have an impact on the character and amenities of the surrounding area. It could put pressure on existing infrastructure. Imposing high density targets is meaningless on small sites. Issue B How do we increase the overall delivery of affordable housing? Why is it an Issue? The Housing Market Assessment has shown that we need 670 affordable homes per annum if we are to meet housing need. Even if all housing that is required by the South East Plan each year was built as affordable homes this would still not be enough to meet the demand. Many people can not afford to live in the district which prevents the creation of mixed communities. The average price of a house now costs over 8 times the average annual salary. How can we tackle this issue? B1) Increase the percentage of affordable housing required on appropriate sites. The draft South East Plan recommends that 35% of all new housing should be affordable housing. The Housing Market Assessments for Central and South Hampshire both recommend that the percentage should be 40%. At the moment on sites for new housing development that are above the site size threshold our local plan seeks 35% of the housing to be affordable. Advantages More affordable housing will be delivered, in line with the aims of the Housing Green Paper. It is a simple method to understand. An increase to 40% will be consistent with other local authorities in Hampshire. An increase to 40% will mean the same approach for both the South Hampshire and Central Hampshire sub regions. Disadvantages A higher requirement may affect the viability of the site therefore stopping homes being built. No work on the viability of increasing the percentage above 35% has yet been completed. Contributions to the provision of other infrastructure requirements may suffer if the housing scheme is to remain viable. Social tension can be created between different income groups. B2) Ask for affordable housing on smaller sites than existing? At the moment our local plan states that affordable housing is required on a site for housing development that is: a) 15 homes or more, or 0.5 ha or more and in a settlement of more 3,000 population; b) 5 homes or more, or 0.15 ha or more, in a settlement of 3000 and less. Our policy in the local plan for building new homes concentrates development in existing built areas. Sites within built up areas are usually infilling development and the reuse of existing sites. The sizes of these sites are mainly very small. This means that the number of occasions the site size thresholds are exceeded to secure affordable housing is limited. Furthermore some developers have been submitting applications just below the site size thresholds set out in the local plan to avoid providing affordable homes. An option to increase affordable homes is therefore to lower or even remove the site size thresholds so that sites smaller than those set out in the local plan will have to provide affordable housing. The following are the advantages and disadvantages of this option. Advantages More affordable housing will be delivered on smaller sites increasing the overall delivery of affordable housing. Where there are no site size thresholds there is an opportunity for getting affordable housing contributions where it is not practical to have just one affordable housing unit. It will increase delivery in the rural areas. Disadvantages It may affect the viability of the site therefore stopping the homes being built. The time and effort in negotiating on very small sites may stop developers wanting to develop the site. Where there are no site size thresholds it may not be practical to have just one affordable housing unit. B3) Adopt a sliding scale A “sliding scale” would introduce a range of thresholds where a different amount of affordable housing would be required depending on the size of the site. The Council has long seen this as a good way forward. However, it is important that this option is compared with other options for increasing the delivery of affordable housing. The “sliding scale” set out below was the option felt most appropriate for the Council to adopt based on the current policy of providing 35% affordable housing at 15 dwellings or more. If we choose to have a higher percentage of 40% then we would need to revisit the sliding scale. Number of Amount of affordable Equivalent % Dwellings homes required contribution of approved on the development site (site size threshold) 5 1 20% 6 1 17% 7 2 28% 8 2 25% 9 2 22% 10 3 30% 11 3 27% 12 4 33% 13 4 31% 14 4 29% 15 or more 35% Advantages: It is simple to understand There is not just one threshold so that it allows for different amounts of affordable housing to be provided on different sized sites so that the impact on the viability of the development is gradual. It allows for affordable housing to be provided on sites in the larger settlements smaller than we could get before. It stops developers applying for housing just below the site size thresholds to avoid providing affordable housing. Disadvantages It has implications for the smaller rural settlements with a population below 3,000. If it is to deliver more affordable housing in these settlements then we would need to start the sliding scale below 5 dwellings. B4) Have different affordable housing percentages and site size thresholds for different settlements. The need for affordable housing differs from area to area. An option therefore is to have higher percentages and lower site size thresholds for affordable housing in those settlements that have the greater need. The Housing Market Assessment for Central Hampshire considers that it is likely to be possible that up to 50% affordable housing could be achieved in settlements less than 3,000 because housing development in these areas is more viable. If we think that having a sliding scale for the district is the best way of increasing the delivery of affordable housing an option could be to have a different sliding scale for different settlements of the district. Advantages It will ensure that need is met where there is greatest need. Disadvantages It will be difficult to understand and administer. It could stop sites being built in areas where low house values will make schemes unviable. Issue C How do we meet the specific needs for affordable housing in rural areas? Why is it an issue? There are fewer sites for housing development to provide affordable homes in the smaller settlements. House prices are generally higher in rural areas compared with the larger settlements. People who have a local connection with rural villages can not afford to live in them. A mixture of different types of people living in rural villages is being lost There have been problems with finding rural exception sites. How can we tackle this issue? C1) Continue with our existing policy of rural exception sites. At present we have a policy in our local plan that is an exception to normal policy as it allows for a site that is solely for affordable housing to be built outside a settlement policy boundary. In order to be allowed the development has to meet certain criteria such as it meets a proven need and that the homes will only be for those who have a local connection. Advantages The policy is familiar to users. Schemes are community lead and not imposed. Disadvantages Not enough affordable housing sites are being delivered. It relies on sites being suggested as the issue arises rather than a co- ordinated strategic approach. Hope value is attached to sites. It takes time for exception sites to be delivered – usually three years. The distribution of exception sites for villages is not equal. Some villages have a number of sites whilst others that need affordable homes do not have any. C2) Allocating sites solely for affordable housing within and outside rural settlements The reason for not enough rural exception sites being delivered varies but this may be because landowners are reluctant to release sites solely for affordable housing needs because they think they can get open market housing on it or that there is local opposition to the affordable housing site. Therefore an option is to allocate sites in Development Plan Documents solely for affordable housing in and outside those settlements where need is clearly proven in addition to having a rural exception sites policy. Advantages A search for sites will be co-ordinated through the DPD process which involves public scrutiny. Greater certainty that sites will be developed when allocated. Suitable locations could be found for development rather than relying on sites being put forward by owners that are not appropriate. Unlike exception sites the Council has more control over their development through plan, monitor and manage. Disadvantages Sites may take a long time to get through the process. Landowners may be even more reluctant to release their sites as they will feel that if a site can be allocated for affordable housing then it could be allocated for market housing in the future. It will be difficult to bring forward in and outside settlements where allocations for market housing have been made. Not community led C3) Allowing a mixture of market housing and affordable housing on sites outside rural settlements. One of the reasons why exception sites solely for affordable homes are not coming forward is because the development is not financially attractive to persuade landowners to release their land. Some Councils have introduced a policy to allow development to include both market and affordable in or adjoining a settlement so that the market housing would cross subsidise the affordable homes. Advantages There is more incentive to the landowner to release the site for building. A better social mix is created on the site. It is more acceptable to local communities than a development just for affordable housing. It provides finance for affordable housing, therefore making it viable. Disadvantages It will result in market housing outside settlement policy boundaries. It could involve longer negotiations with landowners where they will try to seek a higher proportion of market housing on the site. C4) Introduce a rural development policy A variation to the policy of allowing both market and affordable housing in sites outside settlement policy boundaries is to introduce a policy like Test Valley’s (Attached as Appendix 2 to the Panel Report). This policy permits development for housing, employment and community facilities adjoining settlements which contains schools, shops, community hall and access to public transport and has a population of less than 3,000. Where housing is proposed it must satisfy any existing need for affordable housing in the settlement or adjoining area. If we were to introduce such a policy we would need to look at the criteria for selecting villages where rural development would be acceptable. We would also need to prescribe the amount of market housing that is acceptable on the site. Advantages There is more incentive to the landowner to release the site for building. It provides finance for affordable housing, therefore making it viable. Disadvantages It will result in market housing outside Settlement Policy Boundaries. It will not allow for affordable housing needs to be met in those smaller rural settlements that do not have schools, shops, community facilities or access to public transport. Issue D How do we make sure that the mix of new housing meets housing need and demand? Why is it an issue? PPS3 says that the mix for market housing should reflect demand and the mix for affordable homes should meet affordable housing needs. PPS3 also says that we should have a mix of housing to support mixed communities. The Housing Market Assessments says there are higher proportions of larger houses in the district when compared to the South East as a whole. There has been an increase in flats in town centres. This means that young single persons and couples are likely to live in these areas which have an impact on the areas’ community mix. The increase in flats also means that more people live in private renting in these areas. The private renting of flats has a higher turnover than other types of home so the community is less stable. The increase in flats can also have an impact on those areas that surround town centres where there are larger homes. This is because families and older couples move away from the centre to find suitably sized homes. There has been a growth in one person households but this does not imply that the majority of homes should be for small homes because people look to “trade up” to larger homes. There are high levels of overcrowding in social rented sector because these homes are smaller. There is pressure on all sizes of affordable homes including larger homes because these are the homes that are less likely to become available. The Housing Market Assessments shows that the vast majority of households who need affordable housing require social rented accommodation The concentration a particular affordable housing tenure will have an impact on the mix of housing in an area. How can we tackle this issue? D1) Continue with a general policy for a mix of housing At the moment the local plan has a general policy that states that housing development should contribute towards a range of house sizes, types and tenures that meets local housing requirements. This approach could be continued with rather than a policy that specifies the mix of housing we are looking for. Advantages It provides flexibility to adapt to changes in market demand and affordable housing needs. Evidence from the Housing Market Assessment shows that it is difficult to know what exactly is the right mix of homes for individual sites. Disadvantages It does not give certainty to developers. It could result in lengthy negotiations to agree the right mix D2) Have a policy that sets out a specific mix of homes The opposite of a general policy is one that would set out the specific mix of homes either for a specific site, specific area or for the district as a whole. Advantages It makes it clearer to developers what is required. It removes the need for lengthy negotiations to agree the right mix. Disadvantages It is not flexible to react to changed market circumstances and affordable housing needs. The Housing Market Assessment shows that it is difficult to know exactly what the right mix of housing is. D3) Set out density targets and design for new homes Another option is not to be specific about the actual types and sizes of homes we would like to see but influence them through policies that set out densities and the design of new homes. Developers have built mainly small homes where high densities have been encouraged because it makes the development more profitable. The Council could set out density limitations and design codes on specific housing sites that would influence the size and type of houses developers would need to build. Advantages It is clear to developers what mix is required. It gives the Council the ability to influence the size and types of homes on a site. The Housing Market Assessment recommends that the best way of tackling an imbalance of housing types and sizes is to influence new development rather than specify the mix. Disadvantages It is not flexible to react to changed market circumstances and affordable housing needs. It does not allow for Council to actually control the mix of new housing. D4) Allocate a range of different types and sizes of sites for new homes. A certain type and size of house are best suited to a certain size and type of site. Allocating a range of different site sizes and types will allow a range of different types and sizes houses to be built. This could help us meet specific types and sizes of homes where there is a lack of these. Advantages It allows for the mix of housing to still meet demand and need if the market changes because there are a range of sites. It does not rely on a few sites to create the best mix. The Council will have more control over the overall mix of housing across the district. The Housing Market Assessment recommends that the best way of tackling an imbalance of housing mix is to influence new development. Disadvantages There may not be enough sites within the district to allow us to allocate a range of different types and sizes of sites to meet housing needs and demands. Some types and sizes of homes may not be built in the location it is required. The Council may not be able to control a mix of different types and sizes of homes on individual sites. D5) Continuation of the existing approach to affordable housing relating to the split between social rented and intermediate housing The existing advice in our non statutory planning guidance is that the Council’s preferred tenure for affordable housing is for social rent. However, the mix between social rented and intermediate housing is determined on a site by site basis depending on local demand. A continuation of this policy will allow us to decide the split on a specific site when an application is submitted. Advantages It is flexible to adapt to changes to affordable housing needs. It can also be used to vary the split to ensure that the overall housing development remains viable. It allow specific site issues to be taken into account such as the level of social and private rented accommodation in the vicinity. Therefore it can help create a mixed community. Disadvantages It is not clear at the outset for developers to allow them to financially appraise schemes. It could result in long negotiations to agree the split. D6) Set a specific percentage split of social rented and intermediate housing. Any new housing development would be required to meet a specific percentage split of social rented housing and intermediate housing. The Council could vary the percentage split for different areas. Alternatively it could have different percentage split for different site sizes. The Housing Market Assessment suggests that no more than 25% of all new housing should delivered as social rented housing. Advantages It is clear from the outset what is required of developers. It avoids long negotiations to agree the split. Disadvantages It is not flexible enough to adapt to market changes. It is not flexible enough to meet local need and specific site issues. It could result in a concentration of one particular type of tenure in an area where that particular tenure already dominates. This could affect creating a mixed community. Issue E How do we designate new residential areas as Policy H9 - Areas of Special Housing Character and Policy H10 – Special Housing Areas? Why is it an issue? PPS3 and policies in the local plan encourages new housing developments within settlement policy boundaries to be built at higher densities. This has put pressure on existing residential areas for new infill housing development. This can then completely change the special character of that area. However, PPS3 also recognises that new housing development that is not right for, or does not improve the character and quality of, an area should not be accepted. Existing Policy H9 and H10 designations have been successful in protecting residential areas of a special character from infill development. The number of Policy H9 and H10 areas should be increased if we want to protect additional areas that are under pressure. The Core Strategy can set out the criteria used for designating Policy H9 and Policy H10 areas. It can not actually designate the specific areas themselves. How can we tackle this issue? E1) Use the broad principles for designating Policy H9/10 areas already set out in the adopted local plan. The core strategy could state that we are looking to increase the number of designations using the broad principles set out in the adopted local plan: second review. They are: The existing area has been developed at a low density. The homes are substantial ones set in large plots. Many of the properties are characterised by having mature trees within them. The properties make a valuable contribution to the street scene. Advantages Any new designations would be consistent with the designations in the adopted local plan. It allows flexibility to designate new areas if they meet the broad principles for designating areas. Disadvantages The principles for designating Policy H9/H10 were made some time ago and the pressure for infilling in residential areas has increased since then as higher densities and development on brownfield land has been encouraged by the government. Too many new Policy H9/H10 areas may devalue the policy if the areas that are designated are not high quality. The criteria are not specific enough and therefore may be difficult to justify new designations. E2) Specify and broaden the criteria for designating H9/H10 areas. This option would involve setting out in the core strategy specific criteria for designating H9/H10 areas. For example such criteria could include for protection: Specific existing plot sizes. Specific types and design of housing. Specific residential landscape features. Advantages There will be clear justification for designating new areas. Changing the criteria for designations allows the number of Policy H9/H10 areas to be increased to tackle the growing pressure for infilling. It allows for a range of different character areas that can be designated through the use of a range of different criteria. Disadvantages It is too prescriptive. Some areas worthy of designation may not meet the specific criteria. Specific criteria will not allow the Council the flexibility to adapt them to make new designations if they are needed.