Stockton-on-Tees Borough Council

Affordable Housing Provision

Overview

Stockton on Tees is a borough of wide contrasts: a mixture of busy town centres, urban residential areas and picturesque villages. In 2010 the borough had 81,000 households, which is expected to rise to 93,000 by 2026*.

The housing stock in the borough is diverse with substantial new development in some areas and in others high concentrations of older terraced housing. 72% of the housing stock is owner occupied, 11% is in the private rented sector and 17% is socially rented ^.

The Council is committed to delivering a range of affordable housing to meet the identified needs of the borough. This includes both general needs and supported housing for those with specific needs.

As set out in the Core Strategy, affordable housing provision within a target range of 15% - 20% will be required on schemes of 15 dwellings or more and on development sites of 0.5 hectares or more. The Core Strategy also details the Councils average annual target for the delivery of affordable housing which is 100 new affordable homes per year to 2016, 90 affordable homes per year for the period 2016 to 2021, 80 affordable homes per year for the period 2021 to 2024. These targets are minimums, not ceilings.

This section provides guidance and information on affordable housing requirements to developers of housing sites and on how the Council aims to implement its affordable housing target and will ensure consistency of approach in negotiating affordable housing provision in that context. 

Housing Need

The Council is committed to understanding its local housing market and the current and future needs of its residents and undertakes regular assessments to ensure it has a comprehensive understanding across all tenures. The current local housing strategy and Strategic Housing Market Assessment (SHMA) ensures that the identified needs are met in a planned way.

The Strategic Housing Market Assessment (SHMA) is an important piece of work that reviews the overall picture of housing in the Tees Valley, which incorporates Stockton and our neighbouring local authorities (Middlesbrough; Redcar and Cleveland; Hartlepool and Darlington). It assists the Council and its partners in developing an understanding of how the housing market works and assists with strategic decision making.  

The Councils current SHMA, published in 2009, identified an annual shortfall of 866 affordable dwellings. The distribution across the borough of the identified requirements is set out below.

Stockton affordable housing mismatch: Annual figure 2007/08 to 2011/12~

A map of the sub-areas is available.

The SHMA is currently being updated and the annual affordable housing shortfall figures will be updated on publication.

Additional information is available on the identified affordable housing need in rural areas of the borough in the Rural Housing Needs Assessment 2010.

Affordable Housing Definition

Affordable housing includes social rented, affordable rented and intermediate housing, provided to specified eligible households whose needs are not met by the market. Affordable housing should:

• Meet the needs of eligible households including availability at a cost low enough for them to afford, determined with regard to local incomes and local house prices.
  Include provision for the home to remain at an affordable price for future eligible households or, if these restrictions are lifted, for the subsidy to be recycled for alternative affordable housing provision'.

Source: DCLG: Planning Policy Statement 3: Housing June 2011 

Affordable Housing Tenures

Social rented housing: usually owned and managed by a Registered Provider (RP). The Council currently operates an Affordable Housing Partnership Framework, details on the framework and the RPs meeting the standards can be found in the Housing Standards section below.

• Affordable rented housing: new tenure operational from April 2011. Rents will be set up to 80% of the open market rents.
• Shared Ownership: the occupier buys a proportion of equity in the property and rent is charged on the equity retained by the RP or developer. The purchaser has the opportunity to staircase up when they can afford to do so.
• Shared Equity: this tenure differs from shared ownership as no rent is paid to the RP or developer on the percentage of equity retained by them. There is no ability for the occupier to staircase up.
• Market Discount: Homes are offered for sale with a discount for the purchaser so the purchaser buys the whole home at a reduced rate.
• Rent to Buy: Rent is paid on the new property for a fixed period after which there will be the option to buy.

Housing Standards

Promoting sustainable living is key to the Boroughs contribution to mitigating against and adapting to climate change. All new residential developments will achieve a minimum of Level 3 of the Code for Sustainable Homes up to 2013 and thereafter a minimum of Code Level 4.

For all major developments, including residential developments comprising 10 or more units, at least 10% of total predicted energy requirements will be provided, on site, from renewable energy sources.

New developments proposals will need to: 

• Be designed with safety in mind, incorporating Secure by Design and Park Mark standards as appropriate
• Incorporate 'long life and loose fit' buildings, allowing buildings to be adaptable to changing needs. By 2013, all new homes will be built to Lifetime Homes standards

Additional detail can be found in the Core Strategy Policy 3: Sustainable Living and Climate Change.

To achieve consistency in the development quality and management standard of affordable housing in the borough, the Council has introduced an Affordable Housing Partnership Framework (AHPF) for Registered Providers.

The standards contained within the AHPF cover a Registered Provider's performance regarding housing management, customer service, development and their role as a strategic partner contributing to agendas such as homelessness and anti social behaviour. It is not a legally binding document but is in place to promote transparent and effective partnership working with the ultimate aim of meeting the housing needs of both current and future residents of the borough.

Developers are encouraged to work in collaboration with one or more Registered Provider which are members of the Affordable Housing Partnership Framework which encourages good standards of housing development and management.

Affordable Housing Delivery

Open market sites

Affordable housing provision within a target range of 15 - 20% will be required on schemes of 15 dwellings or more and on development sites of 0.5 hectares or more. Affordable housing provision at a lower rate then the standard target will only be acceptable where robust justification is provided. This must demonstrate that provision at the standard target would make the development economically unviable.

Off site provision or financial contributions instead of off site provision may be made where the Council considers that there is robust evidence that the achievement of mixed communities is better serviced by making provision elsewhere.

Rural exception sites

The requirement for affordable housing in the rural parts of the borough will be identified through detailed assessments of rural housing need. The requirement will be met through the delivery of a 'rural exception' site or sites for people in identified housing need with a local connection. These homes will be required to adhere to the affordable housing definition.

Offsite Provision and Commuted Sums

Offsite Provision and Commuted Sums are only accepted in place of provision of affordable housing on a site in exceptional circumstances. If it is agreed by the Council that affordable housing should not be provided on the site the developer will normally be expected to identify and acquire an alternative site in close proximity to their main development, on which the affordable housing must be provided. Alternatively the developer might acquire suitable residential dwellings in close proximity to their main development in order to provide the affordable housing. If it is agreed that none of these options are possible, only then will a commuted sum be negotiated.

Commuted payments will be assessed using a number of elements which could include:

• Land Value
• Open Market Value of dwellings
• An estimate of Registered Providers purchase prices of affordable dwellings
• Construction costs

Commuted sums accepted by the Council in lieu of affordable housing will be spent according to the terms set down in the S106 agreement for that site and used to address strategic housing priorities.

Affordable Housing Tenure Mix

The mix of affordable housing to be provided will be 20% intermediate and 80% rented tenures with a high priority accorded to the delivery of two and three bedroom houses and bungalows. Affordable housing provision with a tenure mix different from the standard target will only be acceptable where robust justification is provided. This must demonstrate either that provision at the standard target would make the development economically unviable or that the resultant tenure mix would be detrimental to the achievement of sustainable, mixed communities.

Worked example based on a requirement for 21 units:

Tenure - depends on which area is used. Using the ratio of 80/20, it is proposed the split should be:

Bed Size - using the Yarm, Preston, Eaglescliffe housing need data it is proposed that the 21 units should be split 55% - 2 bed and 45% - 3 bed. This would be:

Tenure for the above would then be split as follows:

House Prices and Entry Level information

Research undertaken in 2008 indicated there is a range of affordability thresholds throughout the Borough. A significant proportion of households had an affordability threshold below £60,000 (36%), indicating that a substantial element of properties delivered for affordable home ownership will need to be targeted at this lower end of the threshold, with a relatively small proportion (16.2%) being delivered to meet requirements at the higher end of threshold (£100,000+). This leaves the majority of households within the central bandings, where 47.7% of households have affordability thresholds between £60,000 to £100,000. These thresholds would be used during negotiations with developers.

Affordable Homeownership Register

Stockton Borough Council operates an Affordable Homeownership Register. This is a scheme aimed at local people who would like to buy a property in the Borough on the open market, but would otherwise struggle without assistance.

It is aimed at:

• Households with a local connection who, due to affordability issues are unable to enter the housing market
• Households in redevelopment areas
• Households releasing a socially rented home in the Borough
• Homeless households
• Key workers in the Borough

The purpose of the Register is to identify households wanting to buy, and match them up to suitable properties in the location(s) they have specified.  The Council's Affordable Homeownership Team will forward details of eligible households to the Developers/House Builder who will contact the applicant direct and proceed with the sale.

The Council will only match the details of prospective purchasers from the Affordable Homeownership Register to suitable developments. The Council will not be, or become, involved in the sales process.

Allocation of Affordable Rented Housing

Affordable housing for rent delivered through a Section 106 by a Registered Provider will be available for allocation to applicants registered on the Compass Choice Based Lettings system.

How we will work with you/developers (negotiation process)

Our affordable housing requirements are clearly set out in the Councils Core Strategy Development Plan Document which was adopted in March 2010.

We will:

• Negotiate with you at the earliest stage regarding the provision of an element of affordable housing in sites proposed for residential development
• Discuss the mix of affordable housing to be provided on the site. This will be based on the housing need for the borough and the type of housing to be provided on site
• We will make available a list of the Registered Providers which meet the criteria set out in the Affordable Housing Partnership framework and have successfully applied to join the framework
• Identify households wanting to buy through the Affordable Homeownership Register and match them to suitable properties

To assist in this process we would need from a developer:

• A map showing the area proposed for development
• A description of the proposal, including proposed dwelling numbers, type and tenure
• A map showing what the site would look like after development

Developers can complete the development enquiry form to inform negotiations.

One Stop Shop

The Councils One Stop Shop is designed to give a single point of contact within the Council when considering any development work within the Borough. Asking the One Stop Shop for its opinion and advice before submitting a formal planning application will save time and money, as any potential problems will be highlighted before you submit your application. If all the problems can be ironed out before submitting an application, then your application will meet fewer objections and could be approved without too many hiccups.

Submitting an enquiry to the One Stop Shop is free, and there is no limit to the number of times you can use the service.  

* CLG Household Projections 2008 - 2026. (TVU July 2011)

^ SBC Private Sector Stock Condition Survey 2009 and EHCS 2006

~ Tees valley Strategic Housing Market Assessment 2009