Random Thoughts on Affordable Housing - Part 1

The following random thoughts on affordable housing should not be considered to be Council Policy nor to represent any particular interest group, professional organisation or body, but rather a brief overview, and random thoughts of the complex and often confusing subject of affordable housing.

Defining affordable housing is the first problem - one persons affordable house is not another, and what may be affordable in one part of the country may not be in another. The generally accept definition of affordability is that of a discount in the cost of the house by between 25% - 30% of market value. And, in order to keep the house affordable the discount is assumed to be in perpetuity. Given that one of the major factors in determining whether or not a house will be affordable is the price at which the land owner sells the land, demand can and often does, outstrip supply.

The type and tenure of an affordable house also needs to be considered, as this again, has an effect on the demand and supply curve. At the most basic level housing is built either for private purchase and/or rent, or for public purchase and/or rent. Therefore the same building development might have houses which are affordable both to private purchasers or renters, as well as those in ‘public ownership’ for purchase and rent owned by Registered Providers (Housing Association), Cooperatives, Community Land Trusts etc.

Other factors affecting the final house price and therefore its ‘affordability’ include; whether or not the Section 106 requirement - that is the amount required by the Local Authority or other statutory bodies towards the cost of additional infrastructure, schools, open spaces etc, the ability of purchasers to find the correct deposit and if a mortgage lender will lend. (The Section 106 is due to be replaced by the Community Infrastructure Levy (CIL) in the near future). 

Where to build, and how many houses to build exercises many local communities. In an ideal system, a housing means survey together with first preferences taken from the Housing Register (in this case Devon Home Choice) should establish the number and type of affordable houses needed in a particular community. Such a survey should therefore also include the numbers of both young and older residents who wish to remain in their community with the type of dwelling required i.e. extra care facility, flats etc. In recent years communities have  felt overwhelmed by additional housing often as a result of greater strategic planning targets rather than local need. The move towards neighbourhood planning as a result of the Localism Bill should empower local communities and encourage them to play a greater part in the process.

Local communities have also felt that Section 106 commuted sums have not returned to the community. A good neighbourhood plan will incorporate ideas for the use of such sums, and there are examples across the country where an active community involvement together with the developer and local authority bring real financial gains to a community.