The Act introduced the right for developers to apply to the local planning authority to modify affordable housing requirements set out in section 106 agreements where the requirements have made the development economically unviable.
The guidance sets out that any such application should contain a revised affordable housing proposal. The proposal should be based on "prevailing viability" and should be supported by relevant viability evidence, it said.
A developer will need to demonstrate that the current affordable housing obligation makes the scheme unviable in current market conditions, the guidance said. The revised proposal should "deliver the maximum level of affordable housing consistent with viability and the optimum mix of provision," it said.
The guidance said that a revised proposal may be based on adjustments to the tenure and mix of affordable housing, on the introduction of phasing, and on the timing and level of off-site affordable housing contributions.
Developers would not be required to provide completely new viability appraisals. A review of the original viability appraisal would be the starting point and this should be prepared in the same form using a "methodology as close as reasonably possible" to that used for the original appraisal, the guidance said.
Where a local planning authority does not agree with a developer's revised proposal, the Act allows the developer to appeal to the Secretary of State. The guidance states that the Government will consult on the procedure for such appeals "shortly". It sets out an interim procedure to apply in the meantime.
Where affordable housing obligations are revised on appeal, the modified requirements will apply for three years. The guidance states that this incentivises developers to "build out as much as possible of their scheme" within this period. It said that, if a developer was concerned about the viability of its scheme after the end of the three years, it could apply to modify the agreement again.
The guidance notes that the new procedures do not replace existing powers to renegotiate section 106 agreements on a voluntary basis.
"The application and appeal procedure will assess the viability of affordable housing requirements only. It will not reopen any other planning policy considerations or review the merits of the permitted scheme," the document said.
The new option for renegotiation was introduced by the Growth and Infrastructure Act which came into force last week.
The Government also introduced amended regulations in February allowing for developers to apply to modify or remove planning any obligations entered into before 6 April 2010. Previously, such applications could only be made in respect of agreements entered into over five years ago.
