Housing White Paper is an opportunity tackle homelessness with reforms to deliver genuinely affordable homes

Sarah Rowe, Senior Policy Officer

30.01.2017

Increasing the supply of homes affordable to people on the lowest incomes, including working households on the national living wage, is essential if we are to reverse recent rises in homelessness. The causes of homelessness are complex, but it is clear that an accessible supply of low cost housing must be part of the solution.  While the Government’s strong commitment to tackling homelessness is welcome, this commitment needs to extend to tackling structural deficiencies in the way new housing is delivered, and particularly the way the country provides more homes that are actually affordable to people on low incomes.

Research recently published by the Royal Agricultural University, Reading University, Kingston University and Ramidus Consulting has highlighted one such deficiency – the way that recent reforms to English planning policy have undermined the delivery of affordable housing.

An aspiration to create a presumption in favour of sustainable development and thus increase the overall supply of new homes lay at the heart of the Coalition Government’s post 2011 planning reforms. The reforms changed the way decisions are made about the number of affordable homes to be provided in new housing developments through so-called Section 106 agreements. This new report shines a light on the “complex” and “obscure” viability appraisal process that lies at the heart of the revised system. It confirms evidence of flaws in the viability assessment process highlighted by the House of Lords Select Committee on National Policy for the Built Environment in February 2016.

The new research also illustrates the vicious circle that has emerged as developers have a perverse incentive to pay an inflated price for land, ignoring councils’ planning policy targets for affordable housing, and then argue that this makes affordable housing provision unviable.   Together the changes have made it hard for even the best equipped local planning authorities to defend the case for affordable housing. Crisis is one of a number of homelessness charities invited to discuss the impact of these changes on affordable housing supply with London council planning officers in 2016. These discussions highlighted for us the damaging impact of recent planning policy reforms on councils’ ability to ensure new housing developments include affordable housing.

This latest academic report illustrates that the cumulative impact of changes to the planning system since 2012 has been to redistribute the benefit of rising residential values disproportionately into the hands of landowners at the expense of providing appropriate levels of affordable housing for the community. So despite increases in London residential land values of 145% between 2009 and 2015, annual affordable housing delivery in the capital has fallen by 37% over the same period.

At a time of rising homelessness it is deeply disappointing that the supply of new affordable housing delivered through Section 106 agreements in London is evidently well below the levels that could have been achieved. The Mayor of London’s draft Affordable Housing and Supplementary Planning Guidance seeks to tackle the problems outlined above. But this is not just a London problem. There has been a dramatic decline in the output of affordable housing nationally through Section 106 since the peak of 2008/09 when 38,000 homes were delivered; by 2014/15 only 17,000 new affordable homes were provided in this way.

Crisis urges the Government to reflect on the evidence from the latest research as it finalises the planning reforms to be included in the forthcoming Housing White Paper. In her “shared society” speech earlier this month, the Prime Minister confirmed that the White Paper will tackle the increasing lack of affordability. It is to be hoped that this will reverse the damage to the supply of affordable housing inflicted by the previous raft of planning reforms, ideally as part of a wider portfolio of measures to improve the balance between the price landowners receive for land and the benefits of new development for the wider community. This would be clear evidence of a real commitment to a shared society.