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Affordable Housing Affordable Housing Strategy Update 2007/8 Strategy update 2007/8
Contents
Chapter 1 Introduction 2 .............................................................................................................................................................. Chapter 2 Changes in the policy context. 4 ............................................................................................................................................................... Chapter 3 Evidence of need what has changed 6 ............................................................................................................................................................... Chapter 4 Targets for affordable housing 12 ............................................................................................................................................................... Chapter 5 Securing affordable housing - delivery mechanisms 13 ............................................................................................................................................................... Chapter 6 MSP Affordability Strategy 17 ............................................................................................................................................................... Chapter 7 Allocations policy for new intermediate 18 housing achieved through the planning system. ............................................................................................................................................................... Chapter 8 Monitoring 19 ............................................................................................................................................................... Chapter 9 Conclusion 20 ............................................................................................................................................................... Appendix 1 Detailed needs assessment table for Salford 21 ............................................................................................................................................................... Appendix 2 Action plan 22
Introduction
This document supplements and updates Salfords Affordable Housing Strategy -Part of the bigger picture : affordable housing in Salford 20061 . The previous strategy was well received and was used to support the development of the councils Housing Planning Guidance, which was adopted in December 20062 . The strategy was also quoted in Parliament in a debate about affordable housing. (Hansard 17 January 2007 Column 285WH)3 . Since Salford published the 2006 Affordable Housing Strategy there have been a number of changes in government policy, the housing market and the citys information base. This Affordable Housing Strategy update is intended to respond to these changing factors. Within the strategy update we set out the policy changes that have taken place since 2006, such as the publication of Planning Policy Statement 3 (PPS3): Housing, the Housing and Regeneration Bill and the Housing Green Paper. Salfords Housing Needs Assessment was carried out in 2007 and this found a need for 674 affordable dwellings per annum. Within this strategy update we set out the tenure mix that will be needed to meet this need, and the sizes of properties required. We have also updated our findings on house prices and their relationship to income, affordable housing supply and consider the issue of key worker need. This document also sets out the different mechanisms and products that the city council will use in order to ensure that there is an adequate supply of new affordable housing that is appropriate to the needs of the citys residents.
Trends in affordability measured using the ratio of lower quartile house price to lower quartile earnings. Number of affordable homes delivered. Number of households in temporary accommodation. PSA 20 is a national target which will be delivered through a variety of mechanisms. As a housing partnership we must assess both how we will deliver the aims of PSA 20 and measure the indicators.
Regional policy
The emerging Regional Spatial Strategy (RSS) for the Northwest of England provides a framework for growth and development across the region, and it is anticipated that it will be finalised later in 2008. Policy L5 states that: Plans and strategies should set out requirements for affordable housing and the location, size and types of development to which these apply Along with an indication of the type, size and tenure of affordable housing required.
Affordable housing is social rented housing and intermediate (including low cost home ownership) housing for sale or rent, that will be available to households who cannot afford to rent or buy houses generally available on the open market. This will be calculated on the basis of the relationship between average household incomes in Salford and market values of appropriate property sizes within Salfords housing market. There will be provision for the home to remain at an affordable price for future eligible households, or if a home ceases to be affordable, any subsidy should generally be recycled for additional affordable housing provision.
Local policy
This Affordable Housing Strategy update relates to other strategies and documents produced by the city council. In particular reference should be made to the: Housing Strategy Private Sector Housing Strategy Empty Homes Strategy Housing Planning Guidance Development Control Implementation Note: Affordable Housing Core Strategy (currently in development) Manchester and Salford Pathfinder Growth Points Expression of Interest Local Area Agreement (LAA) Sub-regional Multi Area Agreements
The needs assessment analysis shown in the table below indicates that there are net shortfalls for one, three and four bedroom properties and surpluses of two bedroom homes. The table also suggests that the shortage relative to supply is also greatest for four or more bedroom accommodation. Dwelling size Need Supply TOTAL Supply as % of need 1 bedroom 1,857 1,277 580 68.8% 2 bedrooms 995 1,261 -266 126.7% 3 bedrooms 535 395 140 73.8% 4+ bedrooms 219 0 219 0.0% TOTAL 3,607 2,933 674 81.3%
The needs assessment data was analysed to show how much of the housing need could be met either by intermediate (priced between a social rent and market entry) and by social rented housing. The study found only a very small fraction, about 10% of the housing need can be met by intermediate housing. This is because those in housing need in Salford are on much lower incomes than the national and regional averages, and cannot afford anything more than the social rented dwellings. This means that only 67 intermediate housing dwellings are required while 607 social rented homes are needed.
Key workers are often seen as a major focus for affordable housing provision. Key workers include nurses, teachers, police officers and social workers. In our last strategy we found theoretical problems for key workers in our analysis. However, from the analysis carried out in the needs assessment and our own work contacting the personnel departments of key worker employers, the evidence does not suggest that key workers are a major issue for Salford at this time. There will be households within this broad group who have housing problems, but there is not much evidence that it is a major issue at present. We will continue to monitor this in the future.
Over the period 2002-2007 over 580 properties on average per annum were sold under the Right To Buy (RTB) and Right to Acquire (RTA) schemes. Over 90% were sold through the RTB scheme. Over the five-year period 2002/3 to 2006/7 a total of 2,900+ properties was sold by RTB.
10 http://www.salford.gov.uk/housing-research/mshmndsurvey.htm
Social lettings
The number of social lettings in the city has decreased from 4,898 in 2002/3 to 3,218 by 2006/7. The turnover rate of social stock has also decreased. Social lettings and turnover Salford 2002/03 2003/04 LA lettings 4054 3883 RSL lettings Total lettings Total social stock Turnover Rate Source: HSSA. 844 4898 35042 14.0 541 4424 34019 13.0
The fall in lettings is even greater than the fall in stock over the four-year period. A consequence of this is the fall in social stock is magnified even further than right to buy figures would suggest.
The table below shows the numbers of households on the housing register. 2000 2001 2002 2003 2004 2005 2006 2007 Households 3,204 6,351 3,668 8,026 8,644 11,216 12,074 9269 Source: HSSA In 2002/03 4,054 dwellings were let by New Prospect Housing Limited, however in 2006/07 only 2,831 dwellings were let. This represents a 30.2% (1223 dwellings) reduction in the number of dwellings let. The number of social housing dwellings let, including local authority and RSL properties in the area, also fell by 34.3%, from 4,898 to 3,218 properties over the same period.
Source: HIP and SAFFRON The major reason for these dramatic changes in turnover and the increase in the housing register is considered to be the increase in house prices, which occurred at the same time. This has reduced the opportunity for both existing tenants and new households to move into owner-occupation.
Increased demand for owner occupation has increased property values across the two cities over the past seven years (2001-2007). The rise in house values has exceeded rises in incomes. The effect of this is to make access to owner occupation unaffordable for an increasing proportion of the population. Mean and median house price sales (2000-2007) Median Mean 2000 48,000 57,954 2001 48,000 59,941 2002 56,995 72,576 2003 76,000 89,598 2004 95,000 114,127 2005 109,000 126,319 2006 118,000 133,692 2007 130000 138539 The scale of change has been dramatic. The cost of buying a home puts purchase beyond the means of many households who aspire to owner occupation.
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In the plan we can see house price to income (median) ratios for Salford for 2007. Using individual income data we can see that no areas have house prices at a level below five times median income. This suggests that there is now a serious affordability problem in every ward of the city.
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Summary
The 2007 Housing Needs Assessment has provided a breakdown of future affordable housing requirements, using the recommended Communities and Local Government (CLG) model. In Salford, the projected net annual shortfall is 674 affordable homes. 4+ bed properties are in the greatest need, and in areas around the centre and to the north of Salford. The growing problem of unaffordable housing has seen demand for social housing increase, with the number of households on the social waiting list increasing by 7.2% (from 8,644 in 2000 to ,9269 in 2007). The volume of affordable social stock supply has decreased every year from 2001 to 2007. By 2007, Salfords affordable housing supply fell to 36,552 (a fall of 9.8% from 2000). Housing turnover in the city has fallen from 14% to 11%. The types and size of property let in the social sector has also changed. Fewer three plus bedroom properties and houses are becoming available for re-letting. In other words families in three plus bedroom houses are staying put.
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PPS3 now formally requires that councils make a distinction between the levels of social and intermediate housing required. Unfortunately most intermediate products such as shared ownership tend to be at the top end of the affordability range. Such intermediate housing at the top end of the intermediate range does not help many households in need. The evidence from the needs assessment is that only a small fraction (10%) of the housing need could be met by intermediate housing. Regard will be had to this in determining the most appropriate tenure of affordable housing in new developments.
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AGMA has set out plans to increasing housing supply across Greater Manchester by over 10,000 new houses per year from 2008-2016. Initial growth is planned for Salford, Manchester, Bolton and Trafford. This proposed growth level is 20% above the levels in draft RSS for the core of the city region. The city region needs to improve the quality and mix of its housing offer, rather than just increase the quantity. This is because providing accessible and appropriate housing at all levels of the market is fundamental to creating places where people want to live, and thus to delivering thriving and sustainable mixed communities.
* these figures are to be confirmed. The growth points agenda is complementary to, but not replacing, the work of the Manchester Salford Pathfinders. Their work is essential to underpin current vulnerable markets and enable market confidence to grow. Without this support, those places and communities will be left behind once again, and the objective of mixed and sustainable communities will be undeliverable in the places that need it most. By increasing the total number of homes being built in Salford we should increase the number of affordable homes available.
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Housing Planning Guidance In December 2006 the city council adopted Housing Planning Guidance. The key objectives of the guidance are to: 1. Ensure that the mix of new housing helps to build sustainable communities. 2. Ensure that the needs of all households are met. 3. To secure more sustainable patterns of development. There are specific policies on affordable housing in the guidance, and these support UDP Policy H4 (Affordable Housing) which states that: In areas where there is a demonstrable lack of affordable housing to meet local needs, developers will be required, by negotiation with the city council, to provide an element of affordable housing, of appropriate types, on all residential sites over one hectare, irrespective of the number of dwellings, or in housing developments of 25 or more dwellings The policies in the Housing Planning Guidance: Set out the proportion of affordable housing to be sought in developments above the set threshold (20%). Require the provision of affordable housing to be on-site, with off site and commuted sums provision acceptable in particular circumstances. Indicate that where there are relevant material considerations a lower proportion of affordable housing may be accepted.
Define suitable affordable housing provision as social rented housing; shared ownership; shared equity; and / or discounted market housing (in limited circumstances). Require affordable housing to be integrated into the rest of the development. State that the receipts from stair-casing from intermediate dwellings should be recycled into further affordable housing provision.
Progress to date
The requirements of the Housing Planning Guidance for affordable housing have been in place since December 2006, and the city council have been successful in negotiating the provision of affordable housing within particular developments. However there is an inevitable delay between securing affordable housing in proposed developments and its effects being seen in full (in terms of the housing actually being developed), because of the time between applications being approved and planning permissions being implemented. It is likely therefore that schemes where an element of affordable housing has already been secured will be delivered in the short to medium term. In negotiating the provision of affordable housing, the council gives consideration to the cost of providing affordable housing in terms of the impact on the viability of schemes. Where a developer considers that this should mean that a lower proportion of affordable housing should be provided the city council have held open book discussions with the developer to maximise the level of affordable housing, whilst having regard to the impact on viability.
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In order to clarify the policies in the Housing Planning Guidance the city council have produced an Affordable Housing Implementation Note which seeks to provide clarity to all those involved in the delivery of affordable housing through the planning system. In particular advice is provided in relation to: The type, size and tenure of the affordable housing required. The level of discount normally required by social housing providers to secure their involvement in schemes. Where material considerations indicate that a lower proportion of affordable housing may be acceptable. The pre application and planning application process. It is considered that the implementation note will ensure that the negotiation of affordable housing provision in new developments will be undertaken in a consistent and transparent manner, and further ensure delivery of new affordable units.
For instance, Salford has submitted a National Affordable Housing Programme 08-11 (NAHP) bid of 380 units to the Housing Corporation. This builds on previous successes of 04-06 and 06-08 programmes which delivered 421 homes and supports the work of the HMR Pathfinder. Other funding opportunities and initiatives are also sought and delivered through the lead and support approach. These opportunities arise through planning gain and use of RSLs' Recycled Capital Grant Fund (RCGF). The involvement and engagement of lead and support RSLs is facilitated through Housing Strategy and Partnerships team and RSL liaison meetings; engagement between Planning, Development Control and Housing Strategy and Policy team; and through the SSHP. Salford City Council not only works in partnership through the Salford Strategy Housing Partnership, but also with Manchester City Council, their SSHP and the Manchester / Salford Housing Pathfinder. Both councils also work closely with other councils in the sub region through AGMA (Association of Greater Manchester Authorities). As a result Manchester and Salford have led an AGMA bid to the government for growth point. Although there have been successes, the SSHP is seeking to improve the delivery of affordable housing. This includes exploiting new opportunities, establishing new policy tools, sharing knowledge and best practice, maximising private sector funding opportunities and ensuring best value. This desire is shown by the development of this document, but also by the review of the lead and support arrangements being undertaken in 2008.
In order to help deliver affordable housing and maximise the benefit of the HMR Pathfinder initiative, Salford utilises a lead and support Registered Social Landlord (RSL) approach which is currently under review. This approach uses RSLs working in selected areas to deliver strategic housing priorities funded from a range of initiatives and opportunities.
16 Historically Salford has experienced high levels empty homes (homes that have been empty for six months or longer) in the private sector. However, the number of empty homes has decreased from 5142 (7.9% of all housing stock) in 2002 to 2041 (3.6%) in 2007. The city council is currently working toward acquiring and bringing empty properties back into use and reducing anti-social behaviour (Local Public Service Agreement 2 (LPSA 2). By achieving these targets, Salford City Council will receive an additional grant, a proportion of which could greatly enhance our resources for tackling empty properties in the future. It is anticipated this funding will enable the Housing Market team to undertake further initiatives to bring empty properties back into use across the city which will include bringing between six to 12 affordable properties back into use.
Empty properties
The table and chart below illustrates the levels of affordable housing delivered since 2004 and an estimate of what is likely to be produced through the various mechanisms available.
2004/06 149
2006/08 260
The table above show that historically the city council have secured affordable housing through the National Affordable Housing programme. However it is likely that over 2008/11 affordable properties will be secured through a host of other additional mechanisms. Of most significance is that the planning system will start to deliver new affordable properties.
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Allocations policy for new intermediate housing achieved through the planning system.
The objectives of the Affordable Housing Allocations Policy are to: Ensure fair access into affordable housing Offer choice Promote access to affordable housing products and providers Ensure a fair eligibility criteria Ensure terms and conditions that safeguard the interests of affordable homes future provision Respond to local needs and local connections both now and in the future Help those applicants who are least able to afford open market values Assist the council in making best use of its rented stock Help reduce empty properties and bring them back into use Maximise opportunities for ongoing investment and re-cycling assets Reflect national legislation, whilst also being innovative in its approach to providing forms of assistance Reflect the views of providers and other stakeholders and work on an evidence base to target need Prospective applicants for housing within the city are being provided with information on affordable housing provision at the time of registration and they are sign posted to providers. The allocations policy will be published in 2008
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Monitoring
The council is required to monitor affordable housing delivery for government statistical returns and to ensure that delivery remains in line with the strategic priorities contained within regional strategies and the councils Housing Strategy. Housing completions and commuted sum contributions will be monitored in line with existing policies and procedures to ensure that all units are delivered in accordance with Section 106 agreements; comply with planning condition requirements and ensure that the standard of affordable housing is acceptable. We currently have systems in place to accurately monitor new residential development within the city on an annual basis, using information from planning permissions, building control completion notices and site visits. It is our intention to extend this monitoring to include where affordable accommodation has been secured and implemented, plus increase the frequency in which the data can be made available. It is intended that the pilot systems will start to become live from April'08 (being supplemented during 2008 by manual assessments of affordability as required), but with a longer term view that the monitoring mechanisms will be fully automatic by April 2009.
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Conclusion
Since the Affordable Housing Strategy was developed in 2006 the affordable housing situation has continued to worsen. The Housing Needs Assessment conducted in 2007 found an annual shortfall of affordable housing of 674 dwellings. This can largely only be met through affordable rented properties. The growing problem of unaffordable housing has seen demand for social housing increase while the volume of affordable social stock has decreased every year from 2001 to 2007. The social supply available to meet housing need has therefore been shrinking year on year. This problem has been amplified by a reduction of turnover in the social sector particularly in three and four bedroom homes. Clearly the problem of affordable housing cannot be met through just one approach. Instead we must use a complimentary suite of approaches. These include increasing overall housing supply through growth and regeneration: utilising the planning system; utilising empty properties and encouraging Housing Associations to develop in the city.
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Appendices
Appendix 1
Detailed needs assessment table for Salford Stage and step in calculation Notes Output STAGE 1: CURRENT NEED (Gross) 2,468 1.1 Current occupiers of affordable housing in need 1,088 1.2 Households from other tenures in need 38 1.3 Households without self-contained accommodation 1.1+1.2+1.3 3,594 1.4 Equals total current housing need (gross) STAGE 2: AVAILABLE STOCK TO OFFSET NEED 2,468 2.1 Current occupiers of affordable housing in need 2.2 Surplus stock 428 2.3 Committed supply of new affordable units 2,500 2.4 Units to be taken out of management 2.1+2.2+2.3-2.4 396 2.5 Total stock available to meet current need 1.42.5 3,198 2.6 Total current unmet housing need 2.7 Annual quota for the reduction of current need 20% 2.62.7 640 2.8 Equals annual requirement of units to reduce current need STAGE 3: NEWLY ARISING NEED 2,414 3.1 New household formation (gross per year) 56.0% 3.2 Proportion of new households unable to buy or rent in the market 1,536 3.3 Existing households falling into need 2,887 (3.13.2)+3.3 3.4 Total newly arising housing need (gross per year) STAGE 4: FUTURE SUPPLY OF AFFORDABLE UNITS 2,814 4.1 Annual supply of social re-lets (net) 39 4.2 Annual supply of intermediate housing available for re-let or resale at below market price/rent 4.1+4.2 2,853 4.3 Equals annual supply of affordable units NET SHORTFALL OR SURPLUS OF AFFORDABLE UNITS 2.8+3.44.3 674 Overall shortfall or surplus per annum Source: Salford Strategic Housing Market Assessment 2007. The order of topics in this table is different from the CLG Practice Guidance but the total content is the same.
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Resources
Officer time
Timescale
April 2008 basic system Automated by April 2009 Continuous May 2008 July 2008
Service improvement
Monitoring system for affordable housing which will ensure new affordable housing is helping to meet local need. Increase the number of units provided through the planning system. Providing choice for people who cannot afford to buy on the open market Provide a fair and transparent mechanism to decide which households who are unable to afford to buy on the open market should be nominated for affordable homes. Understand which affordable products provide best value to customers, the Housing Partnership and to partners. 380 units delivered by 2011 giving residents a greater choice of new affordable homes for rent
Monitoring arrangements
Annual monitoring
More affordable Establish indicators to homes to buy or monitor affordable housing rent supply.
Ensure negotiations with developers are consistent with the Affordable Housing Implementation Note Develop Nominations / allocations policy for affordable housing developed for sale
Urban Vision Spatial Planning Housing Strategy and Partnerships. Community Development
Annual monitoring
Annual monitoring
Analyse affordable housing products being used and develop best practice
Officer time
2009
Ensure delivery of 2008/11 NAHP bids, and develop a five year NAHP prospectus for 2011/16.
Assistant NAHP bids Director 17.8m total for (Housing Strategy) 2008/11) Officer time (S&P team, Hsg Assoc)
2008-11
Quarterly Housing Association progress meetings Quarterly reports to Housing Lead Member Customer surveys on access to housing
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Strategy and Partnerships Team Sustainable Regeneration Directorate Civic Centre Chorley Road Swinton M27 5BY 0161 922 8707 http://www.salford.gov.uk/affordable-housing-strategy.htm