Affordable Housing Supplementary Planning Document

Chapter 6: Viability

6.1 The Council recognises that there may be circumstances that the provision of on-site affordable housing line with the requirements of Policy H6 will influence the viability of a development. This may be due to a variety of reasons and the Council stresses the need for applicants/developers to engage with the Council at the earliest opportunity if viability is recognised as a possible issue.

6.2 Policy H6 of the Local Plan 2017 establishes the provisions in regard to approaching viability at Part 5:

5. Where the specified level of affordable housing cannot be provided, including for reasons of viability, robust evidence must be presented to justify a reduced or alternative form of contribution.”

6.3 Any application proposal which fails to meet the requirements of on-site affordable housing as maintained in Policy H6 will need to submit a viability assessment. This assessment should consider the following variables:

  • Market evidence
  • Comparable pricing
  • Housing provider arrangements
  • Developmental costing

6.4 The assessment should also consider the adjustment of value assumptions and/or profit margins to demonstrate how a scheme could be made viable, whilst maintaining compliance with the provisions of Policy H6.

6.5 If the submitted viability assessment demonstrates that issues exist, the Council may consider various options in the amending of affordable housing provision, this may include inter alia

  • Reconfiguration of tenure mix;
  • reduction in intermediate tenure levels (whilst balancing statutory requirements, i.e. First Homes provision);
  • Commuted sums.

6.6 However, these will be considered on a case by case basis, dependent on the conclusions of the applicant’s viability assessment and the needs of the City at that time.

6.7 The Council will not accept reduced provision of affordable housing on grounds of viability without appropriate demonstration of circumstances and will seek to maximise delivery of affordable housing in all cases. Receipt of alternative contribution may be accepted where other avenues have been exhausted.

6.8 The District Valuer, or an independent assessor engaged at the cost of the applicant, may also be employed to assist in engaging with the viability assessment to maximise the realistic delivery of affordable housing.

6.9 The price paid for land cannot be utilised as a consideration within any viability assessment. The same assessment cannot be used to nullify the requirements of Policy H6 nor determine the delivery of affordable housing on-site, or off-site.

6.10 Matters of viability will be entertained by the Council on the merits of individual applications, on a site by site basis. However, where proposals include the redevelopment of vacant buildings for residential use, the Council will consider reduction in affordable housing provision on the basis outlined in Paragraph 64 of the National Planning Policy Framework (2021);

“[…] where vacant buildings are being reused or redeveloped, an affordable housing contribution due should be reduced by a proportionate amount.”

6.11 This reduction of provision on the basis of redevelopment of brownfield land is also known as Vacant Building Credit as initially implemented by Ministerial Statement November 2014[1] . It is intended that by reducing affordable housing provision on vacant brownfield sites, it will encourage re-use of previously developed land over that on greenfield sites, in line with the objectives of both national and local policy.

6.12 Coventry City Council will consider reduced affordable housing provision on redeveloped brownfield sites where developers are able to demonstrate vacancy of more than 12 months. This is not applicable to buildings that have been abandoned.

6.13 The calculation in the reduction of affordable housing provision is linked to the existing gross internal floor space of the vacant building to be brought into lawful residential use or demolished to facilitate redevelopment. A value-credit, equivalent to this floorspace quantum, will be applied to the prevailing affordable housing provision required in Policy H6 to calculate the reduction in affordable housing provision provided on the redeveloped site.

6.14 In practice, the formula to calculate this credit would be as follows:

(A – B / A) * C = D

           A = Proposed residential floor space to be delivered

           B = Existing floor space of the existing building(s)

           C = Affordable Housing Requirement of Policy H6 (25%)

           D = The Reduced Delivered Affordable Housing Requirement

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