CIL vs. the Housing Strategy?

House buildingThe Government’s Housing Strategy, launched yesterday, aims to boost record low levels of house building. The eye-catching proposal to reconsider unaffordable S106 agreements is welcome realism, but such flexibility could soon be eliminated by the Community Infrastructure Levy.

House building in England is still at less than half its peak of five years ago. The Housing Strategy offers a number of ideas, many of them helpful but small-scale compared to the size of the problem.

One measure that raised a lot of interest is re-opening old Section 106 agreements (the money developers have to pay councils for the roads, schools etc. needed to support development). The Housing Strategy says there are 133,000 homes that have been given planning permission but are not being built, partly because market conditions have changed so much that agreed S106 contributions are no-longer viable.

It says: “We will encourage action on stalled development by allowing developers to require local authorities to reconsider those S106 agreements agreed in more prosperous market conditions prior to April 2010.” The resulting appeals will be “dealt with promptly” and the Government will “encourage a flexible approach to planning obligations, to safeguard against substantial and unexpected change in market conditions”.

A consultation on this is promised shortly, but the Government is also still consulting on the Community Infrastructure Levy (CIL) regulations. As drafted these aim to make such re-negotiation pretty much impossible in future. The intention is to bring certainty by removing the element of negotiation, but the risk is that they will create a levy that stalls development when times are bad.

House building is doubly important to the economy. On the supply side we are not meeting the needs of our growing population, leaving prices out of reach of too many people. And on the demand side construction has been a major factor in the downturn in the economy.

The Government has recognised this with the launch of the Housing Strategy, but is the same thinking being applied to CIL?

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