Elected Member Briefing Note 2022, Issue 46
About this briefing note
Report by: Barbara Renton, Executive Director, Communities
Date: 10 November 2022
Subject: Affordable Housing Overview
Responsible Officer: Andy Saum, Housing Strategy Team Leader
Publication
This Briefing Note will be published on the Council's website following circulation to Councillors.
Details
Purpose
The purpose of this briefing is to provide Elected Members an overview of what is affordable housing.
Briefing information
Introduction
This Policy Briefing Note provides an overview of what affordable housing is and how the planning system supports the Scottish Government's commitment to increasing the supply of affordable housing through the Perth and Kinross Council Affordable Housing Policy.
Through the national Housing to 2040 Strategy affordable housing incorporates the ambition for everyone to have a safe, good quality and affordable home that meets their needs in the place they want to be. We will meet this through our draft Local Outcomes Improvement Plan and Corporate Plan which set priorities for the Council and Housing Association partners to identify the importance of delivering new affordable homes.
Definition of Affordable Housing
A recent definition through Scotland's Draft Fourth National Planning Framework defines affordable housing as 'Housing of a reasonable quality that is affordable to people on low incomes. This can include social rented, mid-market rented, shared-ownership, shared equity, housing sold at discount (including plots for self-build), self-build plots and low-cost housing without subsidy.'
Housing Need and Demand Assessment (HNDA)
The HNDA provides the assessment of housing need and demand across all tenures. It provides the Council the analysis of the housing market area level and a clear understanding of the operation of the housing system as a whole. It provides evidence to inform our policies about the level of affordable housing required, including the need for different types and sizes of affordable homes.
Local Housing Strategy (LHS)
The LHS provides the strategic direction to tackle housing need and demand and informs future investment in housing and related services across the local authority area. It includes housing supply targets covering all tenures, which have been informed by the HNDA. Housing supply targets includes affordable housing as well as market housing and cover new housing supply, replacement housing, empty properties to be brought back into use and conversions.
The LHS covers a 5-year period, in line with development plans. At present our LHS review is currently underway (to be brought to Committee January 2023) and our revised strategy will cover the period 2022 - 2027.
Local Development Plan (LDP)
The LDP sets out the scale and distribution of affordable housing required for a Housing Market Area (HMA) and outlines what is expected from prospective developers. The LDP includes the 25% figure appropriate to all HMA within PKC, which is justified by the HNDA.
Affordable Housing Demand
The Council's approach to seeking particular affordable housing tenure types is determined by local housing needs evidence. PKCs ambitions through the Affordable Housing Supply Programme (AHSP) is to:
- Increase housing supply across all tenures to meet the needs as highlighted in the HNDA 2022.
- Increase the choice of housing available through the delivery of different tenures to those on low incomes.
- Create places where people want to stay, in sustainable mixed tenure communities, of a high energy standard.
- Through SPP, the planning system contributes to increasing the rate of new homes by identifying more land for the provision of a range of housing, including affordable housing in the right places.
Affordable Housing Tenure
Social Rent - This is housing provided at an affordable rent and managed by an RSL (Housing Association, Housing Co-op), Local Authority or other housing body regulated by the Scottish Housing Regulator.
Shared Equity - This is where the owner pays the majority share in the property that is delivered by the RSL or by PKC (normally between 51-80%) and the remaining share (20-49%) is held under a shared equity agreement by the Scottish Government. No rent is paid on the share held by the Scottish Government. The owner owns (100%) of the property outright until sold, death or tranching up. See short videos of how the New Supply Shared Equity and Open Market Shared Equity Scheme operates:
Mid-Market Rent - This is where rents are below market rent levels within the area. The difference in PKC rents compared to LHA levels are shown in Table 1.
Local Housing Allowance rate 2022-23 (weekly) | Perth & Kinross Council rent 2022-23 Terraced home used (weekly) | Difference between LHA and PKC rent (weekly) | |
|---|---|---|---|
| 1 bed | £92.05 | £71.47 | +£20.58 |
| 2 bed | £115.07 | £77.05 | +£38.02 |
| 3 bed | £149.59 | £82.63 | +£66.96 |
| 4 bed | £205.97 | £88.21 | +£117.76 |
Rural housing
The Council has allocated resources to identify opportunities for new affordable housing in all rural areas across Perth and Kinross, current activity is focused throughout Highland Perthshire where a lack of affordable housing is particularly acute.
The Rural Housing Fund (RHF) is available specifically for Affordable Housing projects in rural areas. In the current period to 2026, £25 million is available to fund rural projects, which is open to community-led projects, landowners and private/charitable sector organisations. This fund is not open to Councils. We have increased resources and are focused on maximising RHF investment in our rural communities in the current period to 2026.
Our Role in Affordable Housing
We have a key role in determining the nature and extent of housing need and demand, developing affordable housing policy, securing affordable housing contributions from developers, and bringing forward our own resources to deliver new affordable homes and supporting affordable housing provision form our partner RSLs.
Close working between our Housing and Planning teams is essential in ensuring close alignment between the LHS and the Local Development Plan.
Affordable Housing Funding
The Scottish Government provides funding (Subsidy) to support the provision and improvement of affordable housing.
Other funding to assist with the delivery of affordable housing is obtained through the use of Council Tax 2nd Homes funds, prudential borrowing, the use of Commuted Sums and through the Rural Housing Fund.
Delivery of Affordable Housing
Through the PKC Affordable Housing Policy, we work with RSLs and developers in order to ensure a common and shared understanding of the policy and its implications. RSLs and developers contribute information such as an understanding of market conditions and the financial viability of different approaches. Collaboration helps to speed up the development process and assist in securing subsidy and developer contributions.
Development Management
Pre-application discussions are a requirement for PKC which assists in avoiding delay in the subsequent stages of development management. This includes discussions about the number, type and tenure of affordable housing required for a particular site.
Planning Conditions and Planning Agreements
Provision of land for affordable housing may need to be the subject of a planning condition, particularly where a proportion of a site is to be made available for on-site provision of affordable housing. A Section 75 agreement may be necessary, for example where a phased commuted sum is to be negotiated to enable off-site provision or to ensure retention of affordable units.
Additional Means of Delivering Affordable Housing
Alternative means of delivering affordable housing is considered by PKC. This includes:
- Identifying plots for affordable self-build dwellings.
- Compulsory purchase powers to support the delivery of new supply and regeneration.
- Making appropriate surplus PKC owned land or buildings available for affordable housing, either individually or as a package of site disposals.
- Working with third parties to assemble sites for affordable housing such as other public agencies with large land holdings who may be able to identify opportunities to convert surplus properties in their ownership or develop new affordable housing. Development Trusts may also have a role in assembling land.
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