The strong case for affordable housing

Although the consultation about Planning Policy Guidance note 3 and circulars 1/97 and 6/98 is ongoing – and PPG3 may be revised – the legitimacy of affordable housing as a material planning consideration has already been significantly tested and is supported in the courts.

The current relationship between planning and affordable housing essentially dates back to the now-superseded PPG3 of March 1992. This determined for the first time that local authorities could set targets based on demonstrated housing need and try to negotiate an element of affordable housing from landowners/developers wanting to build substantial residential schemes.

It enshrined another point in law: that demonstrated need for housing in rural areas could override other policy constraints and enable small schemes to proceed.

This approach is predicated on the mix of different types of housing within a local community being a legitimate concern for planning authorities. This was tested in Mitchell v Secretary of State and Another (1994). A planning application had been made for the conversion of 20 small units into seven larger flats, in an area where more homes for single people were needed than for larger households. Eventually, the Court of Appeal decided that not only is the need for housing a well established material consideration in planning, but also that affordability may be pertinent to that need.

In two further cases – ECC Construction v Secretary of State and Carrick District Council (1994) and Wychavon District Council v Westbury Homes (2000) – the legitimacy of councils seeking an element of affordable housing from developers was tested.

Getting down to the facts

In the Carrick case the development plan had not gone through the proper consultation and inquiry process. Considerable weight had been given to the housing strategy, which had prioritised the site in question for affordable housing. There had been wide consultation on the housing strategy. But, based on the failure to provide an element of affordable housing, the High Court upheld the inspector’s refusal of an appeal.

Likewise in the Wychavon case, in the context of policies in the draft development plan, it was held that the developer was obliged to meet local needs. Although there might be circumstances in which very high-density housing might depress property prices so that affordable homes would be created in the long term, these did not apply here.

An appeal was granted because the inspector had failed to check if the shared-ownership homes were truly affordable

In the case of R v London Borough of Tower Hamlets ex parte Barratt Homes (2000) the developers tried to argue that it was unlawful for a local authority to require an applicant to contribute to meeting the existing needs of the community; there being no evidence that the proposed development would have any adverse impact on those existing needs. This argument was dismissed by the High Court.

The Tower Hamlets case and that of R on the application of JA Pye (Oxford) Ltd and Others v Oxford City Council (2002) established that it is legitimate for councils to elaborate on and update development plan policies through supplementary planning guidance. In the Oxford case, a change in the general negotiation target from “a minimum figure of 20%” to “generally seeking 30%” was deemed reasonable.

The case of Harry Rowlinson and Lynda Rowlinson as Trustees of the Linson Pension Fund v Warrington Borough Council and the Secretary of State (2002) emphasises the fundamental ability of planning authorities to attach as much weight as they choose to affordable housing in the overall balance of considerations.

The Court of Appeal supported the inspector who had felt that providing 100 affordable homes on a greenfield site with a capacity for some 200 dwellings, in the context of a substantial need for affordable housing, was sufficiently compelling to outweigh the recommended sequential approach, by which brownfield sites are given preference over greenfield ones.

The issue of the sequential approach, set out in paragraph 30 of PPG3, also arose in the recent case of Oxford City Council v the First Secretary of State and JA Pye (Oxford) Ltd (2004). In granting an appeal, the inspector was said not to have properly explained the sequential status. He had also failed to check with due rigour whether the extra shared-ownership homes were genuinely affordable.

But this does not undermine the fundamental principle established in the Warrington case. It’s just that when particular weight is attached to affordable housing, it must be clearly justified. The issue of affordability against a backdrop of generalised government advice is becoming increasingly contentious and may well be the subject of further legal challenges.