The Act introduced a new procedure to enable developers to apply for affordable housing requirements in planning obligations to be modified, removed or replaced where they render a development economically unviable.
High Peaks Council granted outline planning permission in September 2013 for developer J W Swindells Limited's (JWS) proposals to build 28 homes on a former quarry and landfill site in Derbyshire. A planning obligation was agreed requiring a provision of 30% affordable housing but the developer applied to the Council five months later to have the requirement removed under the new rules. When the Council failed to determine the application, JWS appealed to the Planning Inspectorate.
In a decision dated 25 July (6-page / 94 KB PDF), planning inspector Phillip Ware said that the developer had failed to demonstrate that the scheme would not be viable with the agreed affordable housing provision. The inspector preferred the Council's "clear and detailed report" in relation to viability of the proposed development, agreeing with the Council's valuation methods and concluding that "[JWS'] construction costs are in excess of that justified by the balance of evidence".
The Council's figures for construction costs were nearly £350,000 lower than those estimated by JWS. Ware criticised the developer's reliance on "a quotation for remediation work which could not be broken down into its constituent elements and which was itself based on a ten year old study" and its inclusion of clean up methods that were "unusual and more costly than would normally be the case".
The Inspector could also see "no convincing justification" for the level of contingencies estimated by the developer and "no persuasive reason" for its assumption that a full external management team would be required for the development.
"Overall there are substantial areas where the Council's evidence, presented in accordance with [government guidance], demonstrates that the scheme, including the affordable housing element, has the potential to be viable," said the inspector. "This leads to the conclusion that the appeal should be dismissed."
Ware also concluded that, were he to accept the developer's assessment that only a development with no affordable housing would be viable, with an estimated return of 3%, "it is hard to accept that the development would go ahead at such a very low profit expectation".
"The [government guidance] explains that the objective of the process is to deliver more housing and incentivise developers to start building," said the inspector. "In this case there is nothing to suggest that allowing the appeal would secure this objective. On that basis, adopting [JWS'] assessment, there is no justification in principle for allowing the appeal as it would not bring the scheme to a level of viability such as to enable the development to go ahead."