A council planning committee will today decide whether to approve proposals to reduce the number of affordable homes provided in a new housing development – proposals that have been “strongly objected” to by local parish councils.
Eden District Council’s planning committee will meet this morning, and one item on the agenda is a proposal from developer Story Homes to reduce the number of affordable homes it is set to build on land east of The Thorpe, Greystoke, west of Penrith.
Story Homes plans to build 40 homes on the site, and a Section 106 legal agreement drawn up as outline planning permission was granted for the location in 2017 required that 30 per cent of the homes built there be classed as affordable.
This means that if 40 homes are built, 12 would be sold at 60 per cent of their open market value.
However, after an appraisal from Story Homes as to the financial viability of the development, the company has applied to Eden District Council to amend the number of affordable homes required, following the conclusion that “significant abnormal build costs” means it cannot deliver the project with 30 per cent of the homes sold below market value.
The firm is instead proposing that four of the homes are sold at the below market value level.
Eden planning officers have described the development as “disappointing”, but have advised planning committee members to approve the amendment to the agreement, noting that it has been demonstrated “the scheme has viability issues”, and that existing planning policy does provide for amendments of this nature in order to maintain the viability of developments.
However, both Greystoke and Dacre Parish Councils have “strongly” objected to the proposal from Story Homes.
“The original application was presented to the parish council, with the affordable housing element and level being a huge positive for the parish, to allow people with the correct links to the area purchase housing at an affordable price,” stated a response to the proposals from Greystoke Parish Council.
“The latest application makes a mockery of the whole scheme” of providing affordable homes as part of larger developments, the response added.
Local affordable housing is in “dire need”, according to Greystoke Parish Council.
Dacre Parish Council endorsed these objections, adding: “If the developer is unable to undertake the development on the originally approved grounds then the development should not commence.
“To reduce the amount of affordable housing so significantly is a threat to the ongoing viability of this community.”
Story Homes has outlined to Eden District Council that its Greystoke development requires “abnormal costs”.
Eden planning officers have outlined in a report prepared for today’s planning committee meeting that the ground conditions of the site present particular challenges for the development, to the extent that the “abnormal costs” the development would require means the project cannot deliver the proposed homes within the accepted profit margin.
“The industry standard developer profit is agreed to be between 15 and 20 per cent” of the gross development value, Eden planning officers explain.
It has been calculated that delivering the scheme with the previously agreed number of affordable homes would yield a developer profit of 14.37 per cent, which Eden officers describe as “slightly below the level most reasonable developers would consider to be an acceptable profit level”.
Abnormal build costs are also compounded by the rising costs of construction, forecast to continue as a result of ongoing pressures on “production methods and supply chain demands” owing to Covid-19 and Brexit.
But if four affordable homes are delivered as part of the scheme, the gross development value of the project is revised upwards to 17.14 per cent.
Eden District Council’s Housing Officer has concluded that “although this is higher than the 15 per cent that Story Homes are targeting, I would still consider it to be a reasonable (and not excessive) profit level”.
Eden planning officers stated in their report for committee members: “Officers recognise the angst and frustration that applications such as these can generate.”
However, they noted that the council’s own Local Plan, which guides the council’s approach to development in the district, “rightly recognises that some sites can be more costly to develop and in cases where such is considered so, the requirements of affordable housing contributions can be altered”.
Eden District Council’s planning committee, which is composed of elected councillors, will consider the matter and the council officer recommendations at this morning’s meeting.