Wednesday, August 22, 2012

DCLG - Stalled Housing Developments

The DCLG states that "expert brokers will spearhead a fresh drive to get stalled housing deals up and running and builders back on moth-balled sites."

According to the release, Communities Secretary, Eric Pickles, "is concerned that too much development is being stalled because of economically unrealistic agreements negotiated between councils and developers at the height of the housing boom. This results in no development, no regeneration and no community benefits at all when agreements are no longer economically viable."

The deals, known legally as Section 106 agreements, require developers to make a financial contribution to the community or provide housing, amenities or infrastructure as part of their planning permission.

Teams of intermediaries will now offer a free-of-charge advice and support service to councils and developers and will be available to help kick-start renegotiations of these deals to stop them being a barrier to getting building underway.

Brokers will begin work immediately with an initial wave of councils which are keen to address obstacles that are preventing development in their area before working with other councils around the country. The experts will:

• provide technical expertise to unlock negotiations

• act as go-betweens in disputes

• offer access to a range of support services.

The Government is today also launching a consultation that proposes giving developers the option to ask councils to renegotiate Section 106 obligations if they were agreed prior to April 2010. Currently these obligations cannot be renegotiated for five years once a council refuses a request for voluntary renegotiation by a developer.

Communities Secretary, Eric Pickles, said:

"Tackling problems with stalled development is essential to getting builders back on moth-balled sites and building the homes we need. There is huge potential in sites to boost local economies and we simply cannot afford to have them lying idle because of earlier agreements that are no longer viable.

"The support and advice the expert brokers will offer is one of the many measures we have introduced to get development underway and I hope councils grab this chance to make use of the support we are offering.

"Our reforms to the planning system are already cutting planning red tape and making the system simpler and more accessible to communities and businesses. And further changes we're introducing will simplify national planning policy even more and streamline the planning application process."

Councils in Leeds, Ipswich, Corby, Swindon, Ashford, Gloucester, Kirklees, Carlisle, Northumberland and Durham will the first to benefit from the support offered by the expert brokers and will identify key stalled sites they want to see back up and running.

Opening up the renegotiation process further will provide another new opportunity to help get developments back on track, provide affordable housing and bring wider benefits for communities.

Ministers are clear that any renegotiations of Section 106 agreements will not remove the developer's obligation to provide critical infrastructure or other contributions to offset the effects of the development, and they should not result in land banking.

Deals need to be realistic and deliverable and will take commitment from both councils and developers to ensure they are delivered swiftly. And councils need to ensure they continue to consider local decision making processes when agreeing new deals.

Teams of expert brokers, along with officials from the Department and the Homes and Communities Agency will join together to work with the councils.

Pat Ritchie, Chief Executive of the Homes and Communities Agency, said:

"As a sector we need to see as many stalled sites as possible unlocked to deliver much needed new homes. We are currently using our investment to do this through Get Britain Building, while our support in unlocking large projects in the planning system - through our ATLAS team - is highly valued by local authorities and the private sector.

"So where sites are stalled because of agreements signed under very different economic conditions, we will work with councils to help see how we can get them moving again while meeting the needs and priorities of local communities."

It is estimated that there are currently more than 1,400 housing schemes of more than 10 housing units with planning permission that are stalled and unblocking these developments is a key part of the Government's Housing Strategy.

The support and advice being offered to councils is just one of a number of measures the Government is taking to help boost development. The £570million Get Britain Building Fund is tackling the housing shortage and creating jobs and the £770million Growing Places Fund is providing local areas with flexible funding to get the infrastructure built needed to build new homes.

Today's announcement is a key step in encouraging all local authorities to consider renegotiating Section 106 agreements where development has stalled.

In March 2011, the Chief Planning Officer wrote to planning authorities asking them to review agreements. The new National Planning Policy Framework requires councils to take account of market conditions and be sufficiently flexible to prevent development being stalled.