[Report of the Director of Regeneration, Planning and Development. To be introduced by the Cabinet Member for Climate Change and Sustainability.]
The report seeks Cabinet's approval to publish the Draft Charging Schedule and associated evidence base documents for public consultation; and seeks that the Director for Housing, Regeneration and Planning is given delegated authority to finalise and approve the proposed Submission documents, and submit the Draft Charging Schedule for examination.
The Cabinet Member for Climate Change and Sustainability introduced this report which sought Cabinet’s approval to publish the Draft Charging Schedule and associated evidence base documents for public consultation; and sought that the Director for Housing, Regeneration and Planning be given delegated authority to finalise and approve the proposed Submission documents, and submit the Draft Charging Schedule for examination.
The Cabinet Member informed the Community Infrastructure Levy (CIL) was a charge based on the floor space of new buildings to help fund infrastructure needs arising from new development. CIL can generally be spent in any part of the borough. CIL rates were calculated based on financial viability of development. As financial values of development were different across Haringey CIL rates vary geographically to reflect this. Financial values were also why affordable housing had a big impact on CIL rates. While a private home and a social rented home cost broadly the same amount for a developer to build, a developer can sell a private home for a greater price than a social rent home. This meant that the more affordable housing the Council seeks and the more affordable the tenures are for residents, the lower the financial value of development to a developer and the less money that is available to contribute towards CIL.
The Cabinet Member highlighted that the report proposed to increase CIL rates levied by the Council in the east of the borough for residential development, build to rent and student accommodation. It also proposed to introduce a new rate for warehouse living. Until now, the CIL rate for residential development in the east of the borough had been extremely low at £15 per square metre. This report proposed increasing it to £50. In setting CIL rates the Council was required by national guidance to strike a balance between investment to support development and the potential effect on the financial viability of developments. A comprehensive review had been carried out to decide how much to increase CIL rates in the east of the borough. The proposed rates maximise financial contributions from development towards infrastructure whilst ensuring the economic viability of development and protecting the Council’s ability to secure its preferred affordable housing tenures as part of new development.
The Cabinet Member closed by noting the proposed rates were set out in a Draft Charging Schedule for consultation. They were subject to approval by an independent examiner.
In response to a question from Cllr Emery, the Cabinet Member noted that the three strategic development sites already in existence at Tottenham Hale were not affected by the higher CIL rate because the rate increase was not being applied retrospectively. Only new developments would be affected by the revised CIL rates as set out in the Draft Charging Schedule.
1. To note that following the clarifications set out in Section 8, the proposals were endorsed by Regulatory Committee for approval by Cabinet without any changes for consideration
2. To note the update on the Haringey CIL.
3. To note the next steps outlined in the report for the partial review of the Council’s CIL Charging Schedule;
4. To approve for public consultation, in accordance with Regulation 16 of the CIL Regulations 2010, the following Proposed Submission documents, prior to their submission for examination:
• the Haringey CIL Draft Charging Schedule (Appendix B) as revised and updated from the Preliminary Draft Charging Schedule;
• Community Infrastructure Levy: Eastern Haringey Viability Update Study prepared by BNP Paribas (October 2019) (Appendix C)
5. To delegate authority to the Director for Housing, Regeneration and Planning, following consultation with the Cabinet Member for Climate Change and Sustainability, to finalise and approve the Proposed Submission documents (as set out in recommendation 4), in accordance with section 212 of the Planning Act 2008 and Regulation 19 of the CIL Regulations 2010 (as amended) for submission for examination, including to:
a. make modifications to the Submission documents arising from consultation and throughout the examination, including undertaking any necessary further consultation, to ensure the legal requirements are met;
b. submit the Draft Charging Schedule, the Council’s responses to the representations submitted to the Draft Charging Schedule, and the necessary procedural and evidence base documentation, together with any proposed modifications;
Reasons for decision
In October 2017Cabinet agreed to pause a partial review of the Council’s CIL Charging Schedule to ensure that known development within Tottenham Hale was not put at viability risk. The known developments have now been issued with CIL liability notices and consequently the viability risk to them from a change in CIL rates has been mitigated. It is therefore considered appropriate to move forward with a partial review of the Council’s CIL Charging Schedule. Specialist consultants BNP Paribas were commissioned to update the Council’s viability evidence in relation to CIL rates in the east of the borough. Having regard to the updated viability evidence and BNP Paribas’ consequent recommendations, a Draft Charging Schedule has been prepared for consultation setting out the proposed changes to CIL rates in the Eastern Charging Zone. Following consultation, the next step towards implementation of the revised rates will be to submit the Draft Charging Schedule and associated documentation for examination.
Alternative options considered
The alternative options considered are:
Option 1 – To cancel the partial review. The advantage of this is it would not prejudice or restrict new affordable housing planning policies for the emerging new Local Plan and lower-rent tenures could be maximised. The disadvantage would be that CIL rates and therefore the amount of financial contributions from developers for infrastructure would remain the same and may not be maximised.
Option 2 – To publish a Draft Charging Schedule not taking into account the new Appendix C of the Council’s Housing Strategy. The advantage of this is that CIL rates and therefore the amount of financial contributions from developers for infrastructure would be higher than if the new Appendix C were taken into consideration. The disadvantage would be that the CIL rates would not be set in accordance with the latest Council preferences for lower-rent affordable housing tenures, there would be a risk that the Draft Charging Schedule would be found unsound at examination, and the increased CIL rates would prejudice and restrict new affordable housing planning policies for the emerging new Local Plan.
Option 3 – To publish a Draft Charging Schedule, taking into account the new Appendix C of the Council’s Housing Strategy. The advantage of this is that CIL rates and therefore the amount of financial contributions from developers would be increased but not to a level that would be incompatible with the latest Council preferences for lower-rent affordable housing tenures or that would significantly prejudice and restrict new affordable housing planning policies for the emerging new Local Plan. The disadvantage would be that CIL rates and therefore the amount of financial contributions from developers would not be as high as for Option 2.
Option 3 is being recommended as it will set an appropriate balance between the rates of CIL to pay for infrastructure required to support the development of the borough and the economic viability of development proposals with the same.