Kimberly Barrett, founder of Keep Milton Green recently gave a deputation to Portsmouth City Council calling for greater local transparency on why property developers aren’t including affordable housing in their developments. Here she expands on her deputation to explain why the Council needs to make sure developers are making the appropriate contributions to affordable housing in Portsmouth. Additional reporting by Sarah Cheverton.
This country is facing a housing crisis. Rising rents, homelessness, benefit cuts, house prices soaring and stagnating wages are all contributing factors to a growing need across England for more affordable homes.
Portsmouth is no exception and the city has a profound need for affordable housing, which means housing aimed at people who cannot afford to rent or buy housing supplied by the private sector, such as council houses, homes provided by housing associations, or part-rent part-buy homes.
Speaking on Sunday Politics South in February 2016, Portsmouth City Council leader Donna Jones illustrated the city’s needs when she told viewers there was a 7 year waiting list for council housing in Portsmouth. A year and a half later, Tuesday 17th October 2017, and I was at a meeting of full council to make a deputation about affordable homes, following a motion proposed by Liberal Democrat councillors Steve Pitt and Ben Dowling.
The motion aimed to improve local transparency on housing development in Portsmouth, in particular, to shed some light on the use of ‘Economic Viability Assessments’ or EVAs by property developers. A recent report from national homelessness charity Shelter described EVAs as being ‘used by developers to reduce numbers of affordable homes in order to offer higher bids for land up-front and guarantee high returns for themselves.’
The motion from Cllrs Pitt and Dowling included the following:
It has become clear that there are companies who are openly boasting in their promotion, that they can help developers to avoid paying Section 106 monies and making appropriate levels of affordable housing provision.
These companies produce what are known as Economic Viability Assessments or EVAs, in order to demonstrate that developers are not making sufficient profits to enable councils to insist on full 106 or affordable housing contributions.
This issue has caused concern among councillors across the political spectrum in the city, along with notable contributions from both members of the public and party activists of different hues.
So why was I there to support the motion?
I run Keep Milton Green, am part of the Milton Forum and the Milton Neighbourhood planning team and I have been fighting for policy changes to enable more affordable housing in the area for many years. As a community, we are doing our utmost to create and protect a sustainable area whilst facing large-scale development. To combat this and to protect our ward, we are creating the city’s first neighbourhood plan, something we are all incredibly proud of and which we hope will be adopted and implemented next year.
Affordable homes are very important to our community: providing social balance, giving local people a chance to get their foot on the housing ladder, and providing much needed social housing for those in real need.
Over the years, I have made deputations at planning committees regarding housing developments in and around my area. Each time I have raised the issue of viability assessments and their impact on the creation of affordable housing and to my frustration, I and others have been widely ignored. Developers have continued to avoid providing the required percentage of affordable homes (between 20-30% of units on that development site) and in each case, have used a viability assessment to do so.
Viability assessments are often used to state that a developer has paid too much for land and as a result, including affordable housing in a development will eat into their profits and make the project ‘non-viable’. As a result, the developer argues in their EVA, they cannot provide affordable housing onsite or make a financial contribution via Section 106, which is the mechanism councils use to secure community benefits like affordable housing, transport and funding to expand education and health services. Without this, Shelter argues, ‘an area can struggle to cope with its growing population, and the existing community is less likely to support new housing.’
Allowing developers to avoid contributing to affordable housing deprives residents of much needed homes, but the damage extends beyond that. The council and residents are left to foot the bill, for example by paying out more housing benefit or for hotels when residents find themselves in homeless in emergency situations.
So what can be done?
New Forest District Council recently implemented a number of changes to address the impact of EVAs and ensure affordable housing needs are better met. These include:
- Occupation of affordable housing is restricted to local people who must live, work or have strong connections to the area
- The level of affordable housing requirements has increased from 35% to either 50% or 40% (depending on the location)
- Viability assessments are published and the district valuer provides an independent assessment of viability at the developer’s expense (not that of local taxpayers)
Public access to EVAs is important. In Portsmouth, as in many other areas across the country, EVAs are often deemed commercially sensitive and cannot be accessed by the public. In addition, viability assessments are often not provided to councillors until the day of the planning meeting, making it hard for councillors to make an informed decision.
How much do EVAs really affect affordable housing in Portsmouth?
Here are just a few examples of housing developments in Portsmouth where residents directly lost out on affordable housing for local communities:
For me, the loss of 81 affordable homes from the development of the former Kingston Prison shows the damage of EVAs most clearly. In the Council’s Planning Report for this development, the City Development Manager writes that owners City & Country ‘stated that there will be no affordable provision as it is not viable.’ Using an EVA to make their case, the developers stated they had paid too much for the land, which made the cost of the development too high to include affordable housing in line with Council requirements. Yet when we submitted a Freedom of Information request, we discovered that the developer was estimating a profit of at least £10 million.
On their final consultation report, City & Country state that ‘Whilst viability has impeded our ability to provide full planning contributions, there are a number of other benefits that are likely to flow from the regeneration of the Former Kingston Prison’, citing a report from English Heritage (now Historic England) in 2010 on the benefits of regenerating ‘heritage assets.’
Since the government introduced changes to the planning system in 2012, an entire industry has sprung up to provide EVAs that ‘help developers get out of paying for affordable housing at all scales of development’, as reported by The Guardian in 2014. In Portsmouth and the surrounding area, there are companies who exemplify this trend.
For example, Fareham-based company S106 Affordable Housing states on its website:
The client submitted a planning application to develop 38 units in Portsmouth. Planning was granted by the local authority however, 12 affordable housing units were requested. In order to challenge the level of affordable housing, we were appointed to produce a viability assessment. Our findings concluded that the requested units were not financially viable for the client. We saved our client £462,674.
And the trend continues. In Milton as I write this, a planning application has been submitted to build 9 units, with only 1 unit required to be affordable housing. The developer has already stated they cannot afford to provide that 1 affordable home. Despite this, the developer is so confident planning will be approved, they are already advertising the flats for sale on property websites such as Rightmove and Zoopla, also stating the flats are already under construction and a show home will be ready in March 2018.
The bottom line is that developers have a legal requirement to provide affordable housing and the use of EVAs is currently denying the city housing our communities desperately need.
So what can be done?
We need viability assessments to be made public and an independent valuer should look at each assessment.
But most of all, we all – residents, council officers, councillors and MPs – need to push harder to ensure developers provide affordable homes.
And there’s hope we can do exactly that. The motion set out a 5 point plan:
- Consider offering a ‘fast-track’ planning service to applications which deliver 30%, or more, affordable housing, to incentivise this behaviour by developers.
- Require any planning application which does not meet the affordable housing requirement, contained in the Portsmouth Plan, to submit an Economic Viability Assessment which must be fully public and will be published online alongside the other planning application materials.
- Require such Economic Viability Assessments to be in a standard form, to be agreed by Portsmouth City Council, to aid understanding and comparison by members of the planning committee and the public.
- Consider a threshold approach to internal review of Economic Viability Assessments, whereby large applications would be reviewed by external experts to ensure the accuracy of the assessments, especially around residual land values and assumed sales rates.
- Employ ‘clawback’ mechanisms as standard when large applications cannot comply with the affordable housing thresholds, to ensure that any subsequent improvement in viability is accompanied by an appropriate increase in the affordable housing provision.
I am delighted that every councillor at full council agreed to support Cllr Pitt and Cllr Dowling’s motion. This is the first step to bringing more affordable housing into our communities.
Perhaps what is even more encouraging to those of us who are actively involved in our communities is the cross-party work this motion exemplified, with Liberal Democrats and Labour in agreement. I’d like to see councillors of all affiliations put residents and communities before party politics more often.
The housing developments listed above brought 479 new homes to Portsmouth, and under Council requirements 144 of these – 30% – should have been affordable housing. The use of EVAs reduced this to 6 affordable homes, equating to 1% of the total housing provided.
In a city like Portsmouth, this is a shocking and shameful scandal. I look forward to watching Portsmouth City Council address it, and to seeing all our communities benefit as a result.
The writer would like to thank the following people for their help and support: Jerry Brown, Cal Corkery, Councillor Steve Pitt and Councillor Ben Dowling.