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London

CIL hits affordable housing delivery

Say JLL in latest research


The Community Infrastructure Levy is having a negative impact on affordable housing delivery across the UK, according to new research from JLL Residential.
 
The first ever detailed analysis of the effects of CIL on affordable housing delivery shows a 14.5% fall in the total number of affordable homes delivered in the first 37 Local Authority areas to introduce CIL* – the planning charging system on a per square metre basis introduced in the last Parliament. This is despite a 3.6% overall increase in housing delivery in those areas.
 
Analysis of the 37 Local Authority’s Annual Monitoring Reports shows 15,509 homes were delivered in the year prior to CIL being adopted including 4,418 affordable homes. However, in the year after CIL was adopted, affordable housing delivery in the 37 Local Authority areas dropped to 3,779 homes, despite an overall increase in housing delivery to 16,068 homes.


 

Affordable housing delivery across England & Wales increased by 11.5% over the same period from 23,180 homes in 2013 to 25,840 homes in 2014. Total housing delivery increased by 8.1% from 115,090 homes in 2013 to 124,460 in 2014.
 
JLL Planning and Development Director, Mark Connell, said: "CIL has given developers the certainty of costs which has helped with delivery, however this has come at a price.
 
"It is clear either CIL rates have been too high or affordable housing targets have been unrealistic.
 
"We should be questioning CIL rates in certain areas, and its relative compatibility with the affordable housing requirements of some local authorities."
 
JLL Residential Director Alix Green said: "The research shows clearly and unsurprisingly that CIL is impacting affordable housing delivery.
 
"The stance of some local authorities, and the CIL rates they have set, provides developers with no other option but to negotiate the level of affordable housing provision.
 
"The question is, how do we respond to this?
 
"Clearly, every development has a limit as to how much cost it can accommodate before its viability is adversely affected. In the instance that one element of financial contribution is fixed - as is the case with CIL - and the only other element (affordable housing) is subject to negotiation, then clearly, the latter will suffer in some instances.
 
"There should therefore be greater scope and flexibility to amending CIL charging schedules if following adoption, an unintended negative effect occurs, such as the one this JLL research has highlighted."

Notes:
 
The Community Infrastructure Levy came into force on 6 April 2010 through the Community Infrastructure Regulations 2010.
In order to adopt a CIL, Local Authorities had to set out charging schedules which were the subject of a public consultation.
There are now 50 Local Authorities with an adopted CIL in place in England and Wales, with 37 having had the CIL in place long enough to draw at least a year of housing delivery data pre-and-post the adoption of the CIL. This research focuses on those 37 Local Authorities.