The Secretary of State said that changes to policy would mean developers will have “no way to wriggle out of” affordable housing obligations.
Robert Jenrick MP spoke about the government’s proposed planning reforms at a keynote speech on the final day of the Chartered Institute of Housing’s Housing 2021 conference in Manchester.
Under the new proposals, Section 106 agreements would be scrapped and replaced with a single, consolidated levy.
This has proved controversial and some local authorities are worried that without S106 payments – developer contributions intended to mitigate against certain impacts on existing communities – funds for providing certain services and improvements will dry up.
However, Jenrick moved to allay those fears, claiming that reverting to a single infrastructure levy would give councils more control over developer contributions.
“This [levy] places all of the cards in the hands of the council,” he said. “They can set [the levy] up at the same level of funding they’re receiving today through S106 and CIL, or higher.”
Jenrick also suggested that developers in cities like Manchester and London might have to pay more in the future.
“In areas of higher land values, I suspect councils will go higher, perhaps significantly higher…ensuring that money goes to affordable housing, and wider investments in infrastructure and the public good.”
He added that the consolidated levy would provide additional transparency for all parties in the planning process and “end the debate on viability”.
“In all bar the most exceptional circumstances, the most complex sites, it would be very clear what the developer has to pay, there will be no way to wriggle out of it,” he said.
Under the current system, S106 agreements can be paid in lieu of providing affordable housing if the developer claims it would make a scheme unviable – developers then pay contributions so that councils can provide affordable housing elsewhere.
However, some commentators criticise those developers that claim providing affordable housing within their schemes would make them unviable, insisting they should adhere to the planning policies set out by each council.
Criticism is also levelled at local authorities for not enforcing their own policies that require developments to include a certain level of affordable housing.
In Manchester, for example, that level is 20% but often developers building schemes in the city centre end up providing no affordable housing, falling back instead on S106 agreements.
Jenrick said councils should take a “harder line” on this but fell short of criticising developers accused for hiding behind the viability argument.
“New development is essential to funding affordable housing,” he said.
“Around half of the affordable housing in this country is funded through developers’ contributions. So it is those newest developments of all kinds, including the most luxurious, that are providing the funding that ultimately pays for the new affordable housing.”