BITC Rural Housing 5yr Review

HRH The Prince of Wales's Affordable Rural Housing Initiative Moving forward: Further guidance for landowners, businesses and communities

Introduction T

his guide is the final one to be produced as part of HRH The Prince of Wales’s Affordable Rural Housing Initiative (ARHI), which was launched in June 2003 by His Royal Highness jointly with the Duke of Westminster, with the aim of engaging the private sector in the delivery of affordable rural housing. Led by Business in the Community (BITC), the Initiative has been a partnership with the Countryside Agency (now the Commission for Rural Communities), the Housing Corporation (now the Homes and Communities Agency), the Country Land and Business Association, Hastoe Housing Association, the Duchy of Cornwall and The Prince‘s Foundation for the Built Environment.

sector involvement; and in gathering and disseminating good practice.

It has focussed on identifying those areas where business could assist in the provision of more affordable rural housing, in particular through access to finance, providing land, making better use of existing property, ensuring the design of high quality developments and providing professional support. It has concentrated on raising awareness of the potential role of the private sector – both to business and to those involved in the delivery of rural housing; identifying the barriers to greater private

Much in the original publications is still relevant, but this guide updates, where necessary, the previous publications to take account of changes since they were produced, especially in the policy and operating context, and showcases some of the achievements of the ARHI that have supported the delivery of high quality, well designed rural affordable housing. As such, it provides ideas and a guide for those who wish to become more involved in the provision of rural affordable housing, from individuals to companies, parish councillors to local communities, local authorities to housing associations etc.

Equally, it shows the importance of all these interests working together.

Four guides have been produced: > Affordable rural housing: An opportunity for business > Making use of empty space for affordable rural housing > Developing new affordable rural housing > Creating a sense of place: A design guide In addition, an interim report was produced in February 2006, as a contribution to the Government’s Affordable Rural Housing Commission.

The document also marks the end of the ARHI in its present form. From June 2009, responsibility for taking forward work on affordable rural housing will move from Business in the Community to The Prince’s Foundation for the Built Environment.

The guide has been written by Jo Lavis, Rural Housing Solutions, James Hulme of The Prince’s Foundation for the Built Environment and Kathleen Dunmore, with support and input from a number of organisations featured in the guide.

June 2009

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Executive Director, Commission for Rural Communities

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High quality design

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Community engagement

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Sites supply

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Funding rural affordable housing SECTION

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The challenge now is to getRussell, them built.

Graham

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Policy background and changes

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From the outset, the Initiative was ahead of its time in demonstrating that well designed and affordable houses should be an essential part of any rural place wishing to have a sustainable future.

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Where next?

Sponsors and partners

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A key aim of the Homes and Communities Agency is for people to live in homes they can afford, in places they want to live. Nowhere is this aim more apt than in rural areas, where the on-going supply of new and affordable homes is a major factor in ensuring the well being of local communities and families who want to continue living and working where they were brought up and have ties. I am sure that this guide will be a useful tool in helping to air the issues surrounding rural housing and in accelerating the delivery of new homes.

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Sir Bob Kerslake Chief Executive HCA

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Policy background and changes POLICY CONTEXT An overview of the key policy and structural changes introduced over the last five years to support high quality affordable housing in rural areas. Further details on these changes are provided in the relevant sections of the report.

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01 Policy

background and changes

Better funding for rural affordable housing

Picture courtesy of Hastoe Housing Association

National programme

Over the last five years or so the lack of affordable housing and its impact on the social and economic fabric of rural communities has received considerable attention. To identify ways of improving the supply of good quality affordable homes and jobs in rural areas, the Government set up the Affordable Rural Housing Commission (ARHC)1, followed by the Matthew Taylor2 Review.

The two reports called for a more positive approach to rural development in national, regional and local policies. They made a number of recommendations on changes to planning policy, improved funding for rural affordable housing, better resourcing to assist local authorities to deliver rural homes and jobs, and assistance for communities to be more involved and supportive of rural affordable housing schemes. Together these have led to a sea change in the approach of Government to development in rural areas, most recently articulated in its positive response to the Matthew Taylor report3.

Positive planning policies for rural affordable housing The principal watershed was Planning Policy Statement 3 Housing (PPS3)4. It requires planning authorities to take a positive approach to providing housing, including affordable housing, in villages and market towns. Through a series of policies it emphasises the need for well designed housing and requires that, in considering sites for housing, planning authorities should take account of the contribution that growth can bring to meeting social, economic and environmental needs of small rural communities.

At the same time, the Government has reinstated a national target for the delivery of rural affordable housing in villages of less than 3,000 population. Over the period 2008-11 there is a commitment to deliver 10,300 new affordable homes in these smaller communities and regional targets to improve delivery in settlements with populations between 3,000 and 10,000.

Thus, the Government has gone some way to meeting the need identified by the ARHC as 11,000 homes per annum in settlements of less than 10,000 people.

However, at the time of writing, the national rural target is being revised to reflect the current economic situation.

1. Report of the Affordable Rural Housing Commission (2006) http://www.defra.gov.uk/rural/pdfs/ housing/commission/affordable- housing.pdf 2. Living Working Countryside: The Taylor Review of rural economy and rural affordable housing (2008) http://www.communities.gov.uk/ documents/planningandbuilding/pdf/ livingworkingcountryside.pdf 3. The Government Response to the Taylor Review of rural economy and rural affordable housing (2009) http://www.communities.gov.uk/ documents/planningandbuilding/ pdf/1184991.pdf 4. Planning Policy Statement 3: Housing http://www.communities.gov.uk/ documents/planningandbuilding/pdf/ planningpolicystatement3.pdf

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Promoting sustainable rural communities and positive community engagement

Homes and Communities Agency and Tenants Services Authority Recent changes mean a radical shift in the way Government invests and regulates affordable housing. In 2008 the Homes and Communities Agency was set up to replace the funding role of the Housing Corporation and the regeneration work of English Partnerships, with the stated mission of ‘creating the opportunity for people to live, work and enjoy life in places that they desire and that they can afford’5. It has significant powers and resources for investment, land assembly, improving practice and increasing the skills of those responsible for delivery. To achieve this, it has entered into a dialogue with local authorities, and partners from the private and housing association sectors, in what it calls a ‘single conversation’.

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Under the same legislation the Tenants Services Authority (TSA) was established with a single goal, ‘to raise the standard of services for tenants’. It will set standards for provision, particularly around tenancy terms, rents, tenant involvement, financial viability, governance and contributions to sustainable communities. By 2010 it will be responsible for all affordable housing, whether provided by local authorities or housing associations. Private landlords too will be able to register as providers of social housing.6

The common thread of all these changes is a drive to promote sustainable development.

Integral to this is the creation of sustainable communities. To fulfil this ambition local authorities have been vested with additional powers and responsibilities, including working more closely with other public and private sector interests through Local Strategic Partnerships (LSPs).

At the heart of much of this activity is the greater role given to local communities to shape policy, deliver services and own assets, supported by a raft of measures and resources to help communities take advantage of these new roles.

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01 Policy

background and changes

The impact of the recession and credit crunch – challenge and opportunity Rural areas do not operate in a vacuum; they too are experiencing the impact of the recession and credit crunch. Despite the economic downturn, a recent report by the Commission for Rural Communities7 showed little improvement in rural areas in affordability of market housing, fewer opportunities for lower income households to buy or part buy a home, and increasing need for social rented housing.

Market supply is stalling and few affordable homes are now coming forward.

However, there are also opportunities. The supply of rural social housing is helped by greater flexibility in HCA grant funding. Small developers are using their land banks to deliver affordable housing as a means to stay in business. Local authorities are increasingly looking at innovative ways to meet today’s needs and to be in a strong position when the market recovers.

5. An Introduction to the Homes and Communities Agency (2008) http://www.homesandcommunities. co.uk/public/documents/HCA%20 Corporate%20Brochure.pdf 6. Tenants Services Authority; About us http://www.tenantservicesauthority.org/ server/show/nav.13702 7. Commission for Rural Communities Recession Impacts on the Economies and Communities of Rural England: Report 5 (March 2009) http://www.ruralcommunities.gov.uk/ files/rural%20recession%20intelligence %20rpt%20march09.pdf

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The CLA has long been involved in the provision of rural housing. The reasons are twofold.

Firstly, landowners and their businesses feel part of the rural community and take a long term view on the sustainability of rural communities. They therefore appreciate the pressures a worsening shortage of suitable housing and jobs puts on rural communities, and wish to see improvements in the supply of both, for long term community benefit.

econdly, housing, S jobs and transport are three essential ingredients in the success of sustainable rural communities.

Rural businesses will not succeed if employees with the appropriate qualifications or experience are deterred from joining and staying at these businesses by a lack of suitable housing.

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Henry Aubrey-Fletcher, CLA President

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Sites supply How can the private sector, charities and the public sector contribute to the supply of sites for affordable housing, to the benefit of their needs, as well as meeting a wider social imperative? > Will my site gain planning permission? > Will I receive a realistic price? > How can land owned by private, public or charitable organisations be provided for affordable housing?

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02 Sites supply

Will my site gain planning permission?

There are three planning routes for delivery of rural affordable housing:

Allocated sites Identified in Development Plan Documents and generally providing a mix of market housing for sale and affordable housing.

Allocated rural exception sites Small sites in or adjoining villages identified and allocated in Development Plan Documents, which only provide affordable housing to meet local housing needs in perpetuity.

Non allocated or windfall rural exception sites Small sites in or adjoining villages that would not normally be considered suitable for development, but are given planning permission where the development meets a proven local housing need in perpetuity.

On both types of rural exception site, the housing can only be occupied by people who have a family, residency or employment connection with the locality. The affordable housing remains as such in perpetuity and will not be sold on the open market. These requirements are usually secured through a Section 106 Planning Obligation which runs with the land1.

PPS 3

PPS 3: Housing, places specific requirements on regional and local planning authorities to support the provision of affordable housing in rural areas.

This includes > Planning authorities should aim to deliver high quality affordable housing that contributes to the creation and maintenance of sustainable rural communities in market town and villages > They should adopt a positive and pro-active approach which is informed by evidence, with clear targets for the delivery of rural affordable housing (Paragraph 30).

In deciding on suitable locations for development local planning authorities should take account of > The need to provide housing in rural areas, not only in market towns and local service centres but also in villages in order to enhance or maintain their sustainability.

In small rural settlements, they should consider the relationship between settlements so that growth > Supports informal social support networks > Assists people to live near their work and benefit from key services > Minimises environmental impact and, where possible, encourages environmental benefits. (Paragraph 38).

Where viable and practical > Set site thresholds that trigger affordable housing contributions below 15 dwellings and set different proportions of affordable housing to be sought for a series of site-size threshold across the plan area (Paragraph 29) > Allocate sites solely for affordable housing, including a rural exception site policy to be used specifically in smaller rural communities (Paragraph 30).

Which policies affect whether my site is suitable for affordable housing?2 Through national guidance, Regional Spatial Strategies (soon to be Integrated Regional Strategies), Local Development Frameworks and, ultimately, planning permissions, planning authorities are required to support the use of land to meet social, economic and environmental needs.

National policy Planning Policy Statements (PPS) set out the national framework for planning to which regional and local planning policies and planning permission decisions must adhere. The most relevant to the provision of affordable housing in rural areas are PPSs 1, 3 and 73.

1. Circular 05/2005: Planning Obligations http://www.communities.gov.uk/ documents/planningandbuilding/ pdf/147537.pdf 2. The statutory definition of social and affordable housing is provided in the Housing and Regeneration Act 2008 3. PPS 1: Delivering Sustainable Development http://www.communities.gov.uk/ documents/planningandbuilding/pdf/ planningpolicystatement1.pdf PPS 1 supplement: Planning and Climate Change paragraph 25 http://www.communities.gov.uk/ documents/planningandbuilding/pdf/ ppsclimatechange.pdf

PPS 3: Housing paragraphs 29, 30, 38

PPS 7: Sustainable Development in rural areas paragraphs PPS 7: Sustainable Development in rural areas paragraphs 1, 2 and 3 http://www.communities.gov.uk/ documents/planningandbuilding/ pdf/147402.pdf

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Š Natural England. Photographer Mike Williams

Local policy An area’s planning policies for rural affordable housing are set out in the Core Strategy, which is part of the Local Development Framework, and Development Plan Documents that set out in detail which sites are allocated for development; what size of development will be required to make an affordable housing contribution; the proportion of affordable housing that will be sought; and a detailed policy for rural exception sites.

Allocated sites providing a mix of market and affordable housing or 100% affordable housing For a site to be considered for development, it must be capable of providing the type and tenure of housing set down in local planning policies. If it is to provide market and affordable housing, it has to be allocated in the local planning authority’s five year land supply, which is managed to ensure a continuous five year deliverable supply. If a site which is allocated in the five year supply does not come forward for development, it could page

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be de-allocated, with very limited prospects of being considered suitable for future development.

Identification of possible sites for market and affordable housing is done through a Strategic Housing Land Availability Assessment (SHLAA), which the local planning authority will use to inform its decision on which sites to allocate for housing; where in general an affordable housing contribution will be required; and which rural sites to allocate solely for affordable housing. Involvement of landowners in the SHLAA is critical. Unless they put forward land through this process, a site will not be considered for allocation for development, (although the SHLAA in itself does not confer allocation).

Non-allocated or windfall rural exception sites Local planning authorities are encouraged to take a more proactive approach to identifying and bringing forward rural exception sites in villages where they have decided not to allocate any land for housing.4

Some local authorities are already doing this by using the SHLAA to identify possible non-allocated or windfall rural exception sites, to trigger a discussion with the landowner for the site to be used solely for affordable housing to meet proven local needs.

More commonly, non-allocated or windfall rural exception sites are put forward by landowners, sometimes on the back of a local housing needs survey, sometimes opportunistically.

To be considered suitable, they have to be capable of providing housing that meets the proven local housing need, and are economically viable.

The landowner also has to be willing to enter an agreement to secure the housing as affordable in perpetuity.

4. The Government Response to the Taylor Review of rural economy and rural affordable housing (2009) http://www.communities.gov.uk/ documents/planningandbuilding/ pdf/1184991.pdf

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Will I receive a realistic price?

Viability Testing Whether a site is suitable for affordable housing depends on economic viability. That is whether the costs and income from a development will result in a land price attractive enough for the landowner to release the site and the local authority to gain the type and tenure of housing that is needed.

Case study Viability testing in the Yorkshire Dales National Park In the Yorkshire Dales National Park, viability assessment was used to test the viability of allocating sites for 100% affordable housing. It was recognised that such sites would never be considered for market housing, but their use for housing development would raise ‘hope value’, with the landowner expecting some

£15,000 per plot. The standard viability assessment was applied to 100% affordable housing sites to establish a residual land value which was then compared with the benchmark value. This established whether the residual value would be sufficient incentive for the land to be released, or what level of public grant would be needed to bring it to the benchmark value.

This approach could also be used for valuing non-allocated rural exception sites. Following

The underlying principles of a viability assessment are that costs are deducted from revenue to arrive at a net residual value. Scheme costs assume a profit margin to the developer and include such items as professional fees, finance costs, marketing fees and any overheads borne by the developer. Affordable housing is a cost to the scheme in terms of build costs, but also provides revenue from rent, sales of equity and possibly grant funding. Section 106 and other requirements constitute a cost.

Clearly, a site is highly unlikely to proceed where the costs of a proposed scheme exceed the revenue. But simply having a positive residual value will not guarantee that development will happen. The existing use value of the site, or indeed a realistic alternative use value for a site (e.g. commercial), will also play a role in the mind of the landowner in deciding whether to bring the site forward for housing.

uplift above agricultural value and some non-developmental uses, such as pony paddocks.

Using valuation evidence of sites sold for market housing with an affordable housing contribution and those for non-development use, plus discussion with local land agents, a benchmark valuation was defined in this case

the viability assessment, the Yorkshire Dales National Park decided to call for sites that would provide 50% affordable housing and 50% local needs housing and after a successful call for sites they are now assessing which ones are suitable for allocation.

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Case Study Water sector pilot

How can commercially, publicly and charity owned land be made available for affordable housing?

Commercially owned land Many businesses own land in rural areas with potential for development for affordable housing and which could generate a financial return for the business. However, the sale of land for affordable housing may not achieve the maximum possible market price, but could have significant benefits for companies by enhancing reputation, improving local stakeholder relationships and addressing social decline which might impact negatively on recruitment and retention of employees and the local economy.

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In 2006, as part of the Affordable Rural Housing Initiative, ten water companies agreed to work together, with the support of BITC. The plan was to examine their property portfolios to identify sites suitable for rural affordable housing. In doing so, they shared experiences and expertise and looked to promote high quality design and the efficient use of energy and water.

With additional support from Hastoe HA, they worked with parish councils, Rural Housing Enablers (RHE) and registered social landlords to assess local need and appraise the general appropriateness of any potential sites.

During the initial pilot stage, 15 potential sites were identified, of which, to date, one has been developed and a further two have good prospects . Together they will provide more than 12 new affordable homes.

The pilot study raised the profile of affordable rural housing within the water industry and clearly demonstrated that water companies could contribute positively, but that the identification of the right sites and understanding of the rural

development process is a long, slow process. The pilot showed that good progress was made where water companies still had a good stock of land and where there was top-down support for the project at board level.

Having annual targets linked to affordable housing and defining any projects in business plans gave them more profile and the input of external experts on rural housing issues was also invaluable. The participating water companies shared their feedback, collated lessons learned and debated wider rural issues.

Looking to the future, the project concluded that the results could well be relevant to other industry sectors, but that, before any preliminary work was carried out, an initial audit of their landholdings in or adjacent to village boundaries would be essential. Ideally, this would be complemented by access to sound advice on rural housing matters.

Charity owned land Some potential sites are owned by charities and by religious groups, including Church of England owned glebe land.

Housing Justice has recently produced a guide, Faith in Affordable Housing5, which demonstrates how such sites can be brought forward. It offers practical guidance which will assist such groups to reconcile concerns for justice and morality with pragmatic objectives of meeting the duties of trustees and maximising returns. It also addresses the misunderstanding that, on using surplus church land or buildings for affordable housing, churches are under obligation to obtain ‘best price’ as set out in Section 36 of the Charities Act 1993. Trustees are generally required to take advice from a suitably qualified surveyor and achieve the best

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Case study Belbroughton, Worcestershire – Worcester Diocese Through the sale of glebe land the Church has helped provide 15 – two and three-bedroomed houses for rent and low-cost home ownership, including seven properties where the resident can only purchase 57% of the open market value. Occupancy is restricted to people with a local connection, defined and implemented through a Section 106 agreement. terms reasonably obtainable, or dispose of the property to another charity at less than market value on the basis that such disposal is in fulfilment of the purposes of the charity.

This has often been interpreted to mean that these obligations are only achievable on rural exception sites, because they offer a value above agricultural use and, therefore, demonstrate the ‘best price’ obtainable by the charity for leasing or selling the land.

However, guidance on public benefit recently issued by the Charity Commission indicates that it is possible to dispose of an asset at a price that allows for the pursuit of charitable aims, such as affordable housing, as long as this can be justified within the general aims of the specific charity. This opens up the possibility of using other sites and properties held by the churches.

‘It is recognised that charities whose aims include advancing religion can have very broad aims and that there might be an overlap with other charitable aims such as the advancement of education or the prevention or relief of poverty. Where charities whose aims include advancing religion carry out other such aims as a genuine expression of that religion there is no need to include these activities as separate aims.

‘Charity Commission, ‘The Advancement of Religion for the Public Benefit, 2008, Section G3.

5. Faith in Affordable Housing – Housing Justice (2009) http://www.fiah.org.uk/

The last affordable housing in the village was built in the 1960s, but the lack of affordable housing for younger residents prompted the parish council in 2002 to contact the Worcestershire Rural Housing Enabler. With his support they carried out a village housing needs survey that identified 18 people with an immediate affordable housing need.

At this time there was a moratorium by Bromsgrove District Council on new developments and this was their first rural exception site. Joint working between the RHE, parish council and the local authority identified the most suitable site as glebe land owned by the Church. The RHE approached the Church’s land agent, who is also Chair of the Glebe Land Investment Committee, resulting in negotiations for sale of the land with Nexus, which is part of West Mercia Housing Group. The negotiations were based on a valuation method developed by the Rural Housing Enabler, which set a benchmark rural exception site value of £15,000 per plot.

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The development was funded with a mix of public grant provided by the Housing Corporation and private loan raised by West Mercia Housing Group and was completed in 2007.

To ensure the homes reflected local style, the architect of the earlier scheme worked closely with the housing association architect. The properties are designed with roof trusses which allow for the conversion of the roof space into a habitable living.

The development also provided a new footpath which links up with an existing footpath to the school.

Throughout the process the scheme has been supported by the community, the church and the local authority.

“West Mercia Housing Group was delighted to work in partnership with Humbert of Worcester, the agent for Worcester Diocese Board of Finance on the Belbroughton housing project. Releasing Church of England land for affordable housing has

benefited the local community in Belbroughton and we look forward to the opportunity to work with the Church of England again on future collaborations.” Jason MacGilp, Executive Director, Development & Regeneration.

Following the success of Belbroughton, Worcester Diocese asked the Rural Housing Enabler to examine all the land sites held by the diocese to identify potential sites suitable for development as rural exception sites. Through site visits and meetings with the respective local authority development and planning staff a short-list has been produced. This has been reported back to representatives of the Glebe Land Investment Committee and now further soundings are being made with vicars in the relevant parishes.

Learning points > The Church can achieve a valuable income and meet its social responsibility obligations through the way it manages its land and property portfolio

HRH The Prince of Wales and The Duke of Westminster on a visit to the village of Aldford in Cheshire in March 2009, where they viewed a potential site for an affordable housing scheme in the village

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> RHEs can play a vital role supporting the community and assisting churches to maximise social and financial benefits from their assets > Clear local planning policies for rural affordable housing and local connection criteria reduce delays between needs identification and the homes being built > A good and continuing partnership between the church, housing association and community is central to a scheme’s success.

Publicly owned land The power for such disposals is set out in Section 123 Local Government Act 1972. It permits councils to dispose of land at less than best consideration where the purpose for which the land is to be disposed is likely to contribute to the achievement of the promotion or improvement of economic, social or environmental well being of their area. Circular 06/03: Disposal of Land for Less Than Best Consideration promotes the freedom of local authorities to exercise discretion in their disposal of their land. Specific consent is not required from the Secretary of State for any disposal of land where the difference between the unrestricted value and the price for which the land to be disposed is less than £2 million.

It also offers guidance on the circumstances under which local authorities may dispose of land for ‘best consideration’ as long as this is consistent with their duty of trust in a way which is accountable to local people.6 The use and benefits that arise from the application of these powers is demonstrated in the case study on Danby and Castleton.

6. http://www.communities.gov.uk/ documents/planningandbuilding/ pdf/462483.pdf

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Should I sell the site or retain an interest in and control of the properties?

The decision on the form of land disposal and continuing control of a site will be determined by the individual’s or business’ motivation for being involved, the nature of their business, any covenants on the use of the land, whether they have the interest of capital to undertake the construction of the homes, and whether they have the interest or skills to manage the properties in the long term.

Case study Castleton and Danby – North Yorkshire This case study demonstrates how affordable housing can be provided by landowners and local authorities leasing and gifting land to housing associations, as well as the benefits of strong community support and a proactive planning authority.

In 2005, a survey by the Rural Housing Enablers (RHE) identified a need for 39 new affordable homes in the next five years in the Danby Group Parish area. This was confirmed by the District Housing Needs survey the following year. With the support of the RHE, the Parish Council and the wider community identified two potential sites, one in Castleton and the second in Danby.

Castleton and Danby are two villages in the Danby Group Parish. They are situated in the North Yorkshire Moors National Park, which is responsible for housing and planning within the Borough of Scarborough.

Developed as one contract by Sanctuary Housing Association, between them the two sites will provide twelve new affordable homes offering two and three bedroom accommodation with rent ranging from £73 to £78 per week.

The site in Castleton was owned by the local authority. Initially a sale price was agreed with the Council of £5,000 per plot, but additional road improvement requirements increased costs to a point where this was no longer viable. Using powers in Section 123 of the 1972 Local Government Act, the local authority agreed to gift the land to Sanctuary. In doing so, they responded to the

Borough’s corporate priority to provide affordable housing, as well as its affordable housing task force’s recommendation to allow release of landholdings at a reduced capital value in certain cases to support the provision of affordable housing.

In Danby, the site is owned by the Dawnay Estate, which in the past had provided land for a surgery that adjoined an existing Sanctuary scheme and the proposed site. Recognising the high quality of the housing and management service Sanctuary provides and aware of the level of housing needs, the Estate agreed to lease the land to the housing association on a 125 year lease with the value of the lease being based on the £5,000 a plot price set by the Homes and Communities Agency (HCA) (formerly the investment arm of the Housing Corporation).

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On both sites the properties are let to households with a local connection. This will eventually extend to any household in housing need in the National Park. Following negotiations with the Estate, an allocations process was agreed and enshrined in the Section 106 agreement. It provides assurances that the Estate will be notified of lets; however they will not be involved in the selection of residents, nor will they determine the local connection; that will be done via the parish council. Within these parameters, the local authority initially had 100% nomination rights and in the future the same criteria will be used to define who can apply for a tenancy under Choice Based Lettings.

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Learning points

Danby Parish Council has been supportive of the scheme throughout and has involved the community in the selection of sites and design of the scheme through a number of ways, including an Open Day. The RHE has supported the project and has been able to draw on a positive approach by the National Park Authority.

> Proactive parish councils with a good housing working group can help reassure residents living near the site > Successful delivery requires the parish council, planning authority and housing association to work together and be responsive to needs and concerns expressed by the community > Local authorities can use their assets and powers to release land for affordable housing > Private estates can lease sites for affordable housing and should be involved at an early stage in the pre-development process > The RHE can act as an ‘honest broker’ to overcome difficulties and bring the scheme to fruition.

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Case Study Report on the development of Galway Cottages Abbotsbury Ilchester Estates has long held to a policy of allocating accommodation for local families and workers in the villages for which it is responsible. This involves providing existing accommodation at affordable prices and promoting new build schemes.

It became clear that there was an opportunity in the village of Abbotsbury on a site within the village that had been used for low key parking and storage, and a project was launched to promote this site to provide affordable homes for single people who otherwise might not be able to afford to live in Abbotsbury.

The Estate, working with a local architect’s practice, with which we have a long and well established relationship, then began the process of preparing plans, a planning application submission and consulting all residents in the surrounding area. Residents / tenants were kept informed at all times, and the Estate worked very closely with Abbotsbury Parish Council.

The site chosen was former allotment land that was no longer used for this purpose and was then being used for parking / storage.

A planning application was submitted late 1999, but this was initially refused. However, consent was gained on appeal in June 2001 for the construction of a terrace of three, one bedroom houses, each with a small garden and a parking space, with visitor parking also available.

The scheme also accommodated improved parking for the immediate residents.

A 60 year lease was entered into with Weymouth and Portland Housing Association, who then sub-let to suitable tenants. The Housing Association also contributed to the cost of construction which was undertaken by the Estate to the Estate’s exacting design criteria and by the Estate’s own in-house building team. The Estate retains nomination rights and single people from Abbotsbury families, and those who commuted to work in the village are given priority. All maintenance is the responsibility of the Housing Association, who were also liable to repay the cost of insuring the property.

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The Prince’s Foundation has been proud of the success of programme to date, but there is still much to be done.

To give the initiative a long term future the Foundation has agreed to become the new host organisation for the Rural Affordable Housing Initiative, so that both design and delivery of much needed new homes can be addressed robustly.

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Hank Dittmar CEO The Prince’s Foundation

High quality design How the universally applicable principles of good planning, integration and aesthetic appearance can be applied to affordable housing in the rural context, highlighting that, though some aspects of good design – such as siting and orientation – need not cost more, there are additional costs if local materials or particular aspects of traditional craft are to be incorporated into new buildings. However, the additional expense will often yield dividends in reduced long term maintenance costs, as well as amplifying wider benefits of the project, or better acceptance of the scheme within the community. > What are the principles of good design? > Who needs to be involved in the design process? > How can ‘green’ technology be applied without adding to cost? > How can design respect and enhance the locality?

Picture courtesy of Hastoe Housing Association

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03 High quality design

It has long been recognised by those who build, manage and occupy rural affordable housing that a clear and well led commitment from the outset to high quality, contextual design is the best way to ensure acceptance and integration of new schemes. Most recently, this view was endorsed in Matthew Taylor’s report.1

Keep it simple!

The ARHI was keen that the promoted schemes followed principles of good design that included high standards of space provision and energy efficiency, while also being attractive and fitting into their local context. Since the publication of the ARHI Design Guide in 2005, Government policy has highlighted how new housing should be integrated with existing housing stock, create a sense of place, and that affordable housing and market housing should be indistinguishable from each other. 2 It promotes development that provides a mix of uses and tenures3.

For town sites it sets higher targets for residential density, creating a challenge for good design but also creating opportunities for more integrated layouts of affordable and market housing2.

For affordable rural housing, site assembly and planning issues mean that the best approach is to keep design as simple as possible. This allows building within reasonable cost and offers the optimum benefits to occupier, managing agent and wider community. Affordable housing is often not the place for experimentation, especially in rural contexts.

Principles of good design Fit for purpose The purpose of affordable housing is primarily to meet the needs of its residents. For this, well designed homes must anticipate changes in occupation and household structure over time, and should try to meet the future needs of older people, the disabled, and young children.

Delivery of good design is complicated by a broad range of influencing factors. Architects and clients are urged by a wide variety of stakeholders, often including funding bodies, to consider many different processes, technologies, styles, building methods and other innovations.

Enhance the village or small town setting The size, shape, position, style and detail of new housing has a profound impact on its surroundings for many years. It is therefore imperative to get it right.

Affordable rural housing should reflect, support and enhance local character and continue a tradition of good ordinary dwellings in the rural landscape. At the same time, it must meet modern building regulations, have good layout and fixtures, and anticipate future energy performance targets.

Good design is even more important on exception sites.

These are often in awkward shapes and locations but their housing should be planned to fill in gaps in the village streetline, respect existing street patterns and form or complete blocks between existing streets. New housing should above all continue the fine grain of small communities and not stand apart from it.

An integrated part of the community The design and setting of new affordable housing should be fully integrated with local openmarket housing, as well as being incorporated into the broader context of street, village and town.

Well designed affordable housing can, however, demonstrate more imaginative use of space than their open market counterparts.

This is a result of the recognition of difficult land allocation, keen budgetary constraints and long term management considerations that are not taken into account in market housing.

1. Living Working Countryside: The Taylor Review of Rural Economy and Affordable Housing (2008) http://www.communities.gov.uk/ documents/planningandbuilding/pdf/ livingworkingcountryside.pdf 2. PPS 3: Housing http://www.communities.gov.uk/ documents/planningandbuilding/pdf/ planningpolicystatement3.pdf 3. PPS 1: Delivering Sustainable Development http://www.communities.gov.uk/ documents/planningandbuilding/pdf/ planningpolicystatement1.pdf

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The design process For affordable housing, a collaborative approach to design is essential. By identifying key stakeholders and including them from the start, much time can be saved and a more satisfactory design solution achieved. Some or all of the following may be included in the delivery of rural affordable homes: > Housing provider (HA and/or developer) > Landowner > Parish council > Representatives of people needing housing > Local community representatives and residents > Local planning officers and conservation officers > Professional disciplines (architects and other design consultants) As part of the consultation process, it can be useful to conduct a characterisation study of the local area to determine what features would be appropriate as precedent for new design. Village Design Statements were pioneered by the Countryside Agency and have proved a popular local initiative in the definition of local character. More detail of these techniques is provided in Section Five on community engagement.

Local Design Guides are a very useful starting point for a characterisation study; check if there is one available for your area at district or county level.

A design guide is not a pattern book and does not lay down specific house types. It illustrates local vernacular styles, with examples of details and materials that will help a builder or architect to understand the local tradition and to produce designs compatible with it. Essex5 and Suffolk Design Guides are two good examples but many areas now have their own. page

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Case studies Bletchingdon, Oxfordshire Detailed design consideration enhances a pilot scheme from the Duchy of Cornwall A scheme for this affluent North Oxfordshire commuter village was brought forward by the Duchy of Cornwall as a direct result of the ARHI programme.

In 2004, Oxford Citizens Housing Association (OCHA) produced a Housing Needs Survey, supported by Cherwell District Council and Bletchingdon Parish Council, showing a need for up to eight houses.

A scheme with a mixture of 12 flats and houses of differing sizes was worked up in partnership with the Parish Council, to an outline design by the Duchy of Cornwall. This drew strongly upon local precedent, specifically a row of listed cottages on the other side of the village green. The new homes, without slavishly copying the old, derive certain proportions and materials choices from their eighteenth century counterparts, while meeting exacting sustainability requirements, the Duchy and OCHA committing to EcoHomes “very good� target on this occasion.

5. Essex Design Guidance 2005 http://www.the-edi.co.uk/downloads/ EssexDesignGuide.pdf

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03 High quality design

The Prince’s Foundation House at the Building Research Establishment How “green” does not need to be shiny!

All providers of affordable housing in any context will be aware of the high standards of environmental performance that are now expected by funding bodies for affordability. To the uninitiated or non-specialist housing provider, reviewing the current generation of “green” schemes brought forward appears to demand a technologically led and expensive design route in which wind turbines, large arrays of photovoltaic panels, and grass roofs all play a prominent role.

Contrary to this, The Prince’s Foundation for the Built Environment is demonstrating, through a partnership with the Building Research Establishment, that the basic tenets of a low carbon building are in fact a sound and robust thermal envelope to which the good thermal mass of traditional wall/window ratios are most suited. Traditional buildings were designed for the smallest energy requirement in times before cheap energy sources became available and fuel was scarce and expensive. The demonstration house at the BRE Innovation Park has high performance Zeigel block walls, with good U-values, and a presumption towards natural materials choices that

are low impact in production and have a long life. The choices of both walling, roof and insulation materials mean that the building has a projected lifespan of 200 years.

The house is, moreover, designed to be attractive in both town and village contexts, setting a precedent for a new generation of green homes in which high energy standards are expected as the norm, and the building does not wear its Eco credentials in an overtly stylised way. Recent studies show that this approach is the most likely to bring the environmental agenda into the residential mainstream for both market and affordable sectors.

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Poundbury, Dorset Affordable housing is pepperpotted throughout new market development Poundbury is the sustainable urban extension of Dorchester, built on land owned by the Duchy of Cornwall and allocated for development by West Dorset District Council in 1989. It is the embodiment, as far as possible, of principles set out in HRH Prince of Wales’s book A Vision of Britain. The development began in 1993 and is approaching 50% completion in 2009. Keys to the 100th affordable home were officially handed over in June 2005. 20% of the first phase of development was affordable rented accommodation owned and managed by the Guinness Trust, and in subsequent phases there has in addition been a further 15% allocation of shared equity housing.

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The key design principle evidenced at Poundbury is that affordable housing is distributed evenly through the development, either as individual houses, or, more often, in small clusters and terraces. It is visually indistinguishable from adjacent private housing in the

standards of design and quality of materials used, with the same Building Code and resident stipulations applied. There are social and economic benefits to pepperpotting affordable housing. Despite there now being more than 100 units, the

management of the Guinness stock has proved relatively simple with a management office only lately being opened.

It is the view of the Guinness Trust that the distribution of their properties contributes to the cohesive, socially mixed community that now exists.

Also, through pepperpotting, the properties retain a value equivalent to the open market stock, making them a long term financial asset.

The image shows four homes recently built within the second phase of development adjacent to one of the most expensive market homes yet built (the round house). The view of the developer is that the most attractive rural buildings are normally the simple cottages built on tight budget where everything had a purpose. Fussy and expensive unnecessary detail is therefore eschewed.

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Brecon, Wales Canal side development contributes to the context of a small town Wales & West Housing Association’s development alongside the Brecon Canal has transformed a former council maintenance depot into a beautiful terrace of affordable cottages and assisted in the provision of canal turning and mooring spaces. The homes are located on a highly visible site alongside the Brecon Canal terminus opposite the local theatre. The scheme provides affordable rented accommodation for older people, and is equipped with a remote emergency warden call system.

The use of stone for property elevations and boundary treatments brought traditional craft into the construction process. The elevations carefully adapt to the canal context – single storey flats “read” as traditional two storey cottages – and the planning authority set stringent requirements in respect of style and materials, anxious to create a scheme that fitted the traditional canal-side design vocabulary.

Pooley Bridge, Cumbria

Grasmere, Cumbria

Careful design contributes to the context of a small Ullswater village Pooley Bridge is an attractive Lakeland village. In 2000, local young people approached the local authority seeking affordable homes that would enable them to remain in their own community. With the support of the local authority, community members, Parish Council, and Cumbria Rural Housing Trust, eight homes for rent and low cost sale were developed by Eden Housing Association.

Modern methods of construction in the Lake District – how volumetric construction can be adapted to the local style In 2004, South Lakeland District Council sold a pay and display car park in Grasmere to Home Housing to facilitate the development of affordable housing for local people.

The development is similar in scale and appearance to neighbouring buildings, highly visible from the road into the village. It closely follows the line of the street, parking being discreetly contained behind the homes. All those housed in the scheme are employed in the village or surrounding area and their continued presence will help to balance this remote rural community, helping to maintain and enhance local services – shops, public transport and schools.

The high rainfall in the Lakes makes construction difficult and can result in costly delays.

To speed up the construction process, Home Housing decided to use a timber frame construction with a blockwork and wet dash external leaf – a modern method of construction.

However, externally the homes were designed to match traditional neighbouring buildings with many attributes of the local vernacular, including local green slate for details as well as the roof. In this respect, savings on the structural frame meant that local materials could be afforded where they most mattered.

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Northumbrian Water is involved with two of the key building blocks for sustainable communities – land and water. We are particularly aware of the importance of thriving rural communities in the regions we serve and recognise that good quality, well designed affordable rural housing is essential for their future. That is why we support these initiatives.

”

David Alborough Property Manager Northumbrian Water Ltd

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Funding rural affordable housing How can the private sector help fund rural affordable housing and how do perpetuity arrangements affect the availability of private finance? > What funds are available for rural affordable housing? > How could I or my business invest in affordable housing? > How can I use tax planning to support the provision of affordable housing? > How can perpetuity be secured without jeopardising funding or mortgage supply?

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04 Funding rural affordable housing

How is rural affordable housing funded?

housing associations and other developers of affordable housing.

Private finance has typically come from banks and building Affordable housing generally societies but, as a reaction to uses a mixture of public finance, the credit crunch, borrowers through Social Housing Grant are now also looking to raise (SHG), and private loan, raised by funds directly from institutional the developer, usually a housing investors. Housing associations association. The public funding typically borrow against the is administered by the Homes security of their total asset base and Communities Agency (HCA)1. rather than on an individual To be eligible for funding, the scheme basis. developer has to be registered In addition, housing associations with the HCA. In addition, in will often include funding from future, anyone seeking funding their own reserves for new for social rented housing must affordable housing development. also be registered with the Tenants Services Authority (TSA)2.

Currently, housing associations and developers submit individual or packages of schemes to the HCA as part of an ongoing process known as ‘continuous market engagement’. Over the next year this will gradually change as the HCA allocate their funding to bids or programmes of schemes that meet the objectives of an area’s local investment plan. This is devised through dialogue with local authority(ies) and those responsible for affordable housing delivery, economic regeneration and development as part of the HCA‘s ‘single conversation’. It seeks to align housing investment with other activity that will ‘create opportunities for people to have a home they can afford and a place they want to live in; and places that fulfill local needs, aspirations and ambitions’3.

The amount of public funding going into a scheme varies, but never covers the total cost of development. The remainder is drawn from private loans to

remains tight, it is expected that more housing associations will look to raise funds on the bond market, although recent falls in residential property values have detracted from the attractiveness of such bonds.

However, this is in part offset by the security from the regulatory framework provided by the TSA. To date, no housing association has been allowed to fail, which has enabled housing associations to borrow at more favourable rates than private developers.

Most rural affordable housing is owned by housing associations or charitable trusts. Whilst they are not public companies, they do borrow funds on the open market and it is possible for institutional or private investors to use this route to invest in affordable housing. The private sector can engage in funding from institutional bond investment to the individual investor, either directly or through a charitable bank.

Whereas larger housing associations have the expertise and the critical mass to raise finance on an individual basis, The Housing Finance Corporation (THFC)4 issues Euro-bonds on behalf of smaller housing associations, either for an individual association or for a consortium of associations.

THFC is an independent specialist not-for-profit organisation whose board members include representatives of the HCA and the National Housing Federation.

Funds raised are used to finance development across a range of locations. THFC’s bonds are typically bought by institutional investors, such as life companies and pension funds, but there is nothing to stop a retail investor buying THFC bonds.

Private institutional investment

1. http://www.homesandcommunities.co.uk/

How could I, or my business, invest in affordable housing?

During the last year, major housing associations, including Circle Anglia and Affinity Sutton, have issued fixed rate 30 year bonds of £275m and £250m respectively at rates of 6-7.25%. Both bonds will be used to finance development across the housing association’s portfolio. As bank lending

2. http://www.tenantservicesauthority.org/ ?gclid=CNrBv6P4tpoCFQObFQodnnv5bg 3. The Homes and Communities Agency Interim Corporate Plan 2008/09 – 2010/11 http://www.homesandcommunities.co.uk/ public/documents/Interim%20Corporate %20Plan%20231208.pdf 4. http://www.thfcorp.com/

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Picture courtesy of Hastoe Housing Association

As a follow up to work exploring new funding mechanisms for rural housing, Hastoe Housing Association, working with the British Horseracing Authority and the Racehorse Trainers Association, has developed a model which would enable private investors to invest in a specific rural affordable housing scheme. The proposed scheme at Lambourn would provide affordable housing for local people including employees in the racing industry.

A ten year bond would part fund development costs of the scheme, with the Racing Levy Board funding the land purchase and the HCA funding any shortfall. The bond would provide an annual return linked to inflation. The bond is expected to appeal to ethical investors with connections with the racing industry.

Charity Bank finances charities and other civil society organisations that address societies’ needs, with the support of depositors and investors who want to encourage a more responsible and transparent use of money. Projects supported include rural affordable housing.

Savers and investors in Charity Bank receive competitive interest rates and can be either individuals or limited companies.

have received is what funds the donation to charity. At the end of 5 years, the investor gets their original investment back in full.

The loan is secured against a bank guarantee procured by the housing association and charged to Citylife. This model offers funding targeted at a specific location or group of people.

Funds invested in Charity Bank cannot at present be allocated to specific projects, although the Bank operates a Yorkshire Deposit Bond sponsored by Yorkshire Forward, the Regional Development Agency, which lends money to charitable projects in the Yorkshire region.

Other similar location specific bonds are planned.

A national charity working with Citylife has developed a bond which provides finance on competitive terms to housing associations for capital investment and to support employment initiatives. The principle of the bond is that for every £10m raised, £7.5m is lent to a housing association at competitive rates and £2.5m is gifted to the charity. Citylife will repay 100% of the bond’s value after 5 years. The investor receives no interest and the gross interest which they would

At the moment Citylife does not offer a bond which pays a commercial rate to the investor but Citylife is working with the Community Land Trust Fund to develop a funding model which offers a real return to private investors.

Emerging initiatives A number of other options are being explored, which are not yet available to support rural affordable housing in England.

Community Investment Tax Relief Scheme (CITRS) which provides loans up to £250,000 to charities and social enterprises that tackle social exclusion, with a modest rate of return of interest plus 5%. As yet housing is not eligible for CITRS funding.

Real Estate Investment Trusts (REITs) could in theory invest in rural affordable housing.

A REIT is a tax efficient investment vehicle which can be held by institutional and private investors and can invest in any category of commercial or residential property. The HCA recently announced that it has commissioned research to explore whether REITS offer a suitable mechanism for investment in affordable housing.

Social Tax Credits – it is proposed that, in common with other existing tax credits, the social tax credit would be a fixed amount of tax relief. It would be calculated by applying an agreed percentage to the eligible expenditure to reflect the associated social benefits.

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04 Funding rural affordable housing

Scottish Rural Schemes for Rent – in Scotland the Scottish Government is piloting a scheme whereby they provide grants to landowners to provide affordable rented homes for at least thirty years. This scheme will provide up to 55% of total development costs provided specified grant levels per unit are not exceeded.

A number of conditions are attached to the grant funding to ensure fairness in the allocation of the properties and to assure high quality management.5

How can perpetuity be secured without jeopardising funding or mortgage supply?

Most affordable housing in rural areas is covered by measures to ensure that it is retained as affordable housing to meet local housing needs in perpetuity. This is a requirement of homes built on rural exception sites, and is also sometimes used on allocated sites. For many landowners too it is essential if they are to release a site at a value that reflects its use for affordable rather than market housing.

In settlements of less than 3,000 population, social rented homes provided by a housing association are exempt from the Right to Acquire. There are also safeguards in some rural areas to prevent loss to the open market of council housing where the tenant exercises the Right to Buy. For rural shared ownership housing, where the resident purchases part of the property and pays a rent on the remaining

portion, steps have also been taken to retain the housing as affordable by limiting how much of the house a resident can own – usually up to 80% of the equity.

Provisions in the Housing and Regeneration Act 2008 have clarified and strengthened the legal position. It gives the Secretary of State the power to designate areas as ‘protected’. In these areas providers of shared ownership may limit the amount of equity that can be bought, or require that the property is sold back to the provider if the resident purchases 100% of the equity and then wants to move.

Whilst various safeguards help retain a supply of affordable housing, some lenders have often seen them as fettering their ability to recover debt, should there be a default by the resident on their mortgage. This concern has been heightened during the credit crunch, making it very difficult for potential residents to secure a mortgage.

To address the twin needs of securing perpetuity and the ability to raise private loans and mortgages, guidance6 has been developed with the Council Mortgage Lenders for rural sites.

It advises on the option to use an occupancy ‘cascade’ that provides that, if nobody meeting the given criteria (which can include local connection and/or income requirements) should come forward within a specified period, the housing should be made available to a broader group of people or a wider area. This often forms a series of ever widening concentric rings around the settlement in which the scheme is located. In practice, without a clear cascade mechanism, which includes timescales, securing a mortgage will be particularly difficult, if not unachievable. A further step being taken by Government to meet lending and perpetuity requirements is the development of a standard S106 agreement.

Despite this security, some lenders still ask for a mortgagee in possession exemption clause to the Section 106 agreement, which allows them as a last resort to sell the properties on the open market to recover debt. Buy back arrangements in protected areas can help with this.

5. Scottish Government Rural Homes for Rent Guidance (2009) http://www.scotland.gov.uk/Topics/ Built-Environment/Housing/investment/ ruralhomesforrent 6. Delivering Affordable Housing – Department for Communities and Local Government para 78 ( 2006) http://www.communities.gov.uk/ documents/housing/pdf/152897.pdf

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Eden Housing Association are dedicated to supporting the sustainability of the rural economy in Cumbria through its affordable housing provision. We attach great importance to meaningful local engagement with people, organisations and businesses and pride ourselves on high quality sustainable design which is sympathetic to the environment and cost effective.

�

Paul Davies Chief Executive Eden Housing Association

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Community engagement ow can the community help to deliver successful H rural affordable housing schemes? > How can communities be involved in the provision of rural affordable housing? > What resources are available to help communities become involved? > Do Community Land Trusts offer a way forward?

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engagement © Natural England / Rob Fraser

One of the obstacles to delivering rural affordable housing is local opposition, characterised as NIMBYism.

However, communities can act as some of the strongest voices for its provision. They can make a significant contribution to ensuring a scheme is built that meets local needs, is sympathetic with local design and is successfully assimilated into the community. This was recognised by Matthew Taylor, endorsed by the Government1 and backed by the Empowerment Fund, which seeks to involve communities in housing delivery, including affordable rural housing as a priority.2 A three pronged approach is needed: first, all parts of a rural community should be involved at the earliest possible stage and their involvement maintained throughout the project; second, it is important to dispel the myths that surround affordable housing, by providing clear information on what will be provided and why, and publicising positive experience from other villages; and, finally, the housing needs to be sympathetically located and designed. A number of techniques are available to support these activities.

Village and Town Design Statements – published documents through which the community describes the character and distinctiveness of the locality which are used to establish design considerations for future development proposals.

Both will involve and often be facilitated by the local authority.

Further advice is available from Natural England.3 Parish Plans – Through broad community engagement Parish Plans set out a vision for the future of the community, outlining its unique qualities, the problems it faces and how they should be tackled through an action plan. Through Supplementary Planning Guidance, Stratford upon Avon District Council offer a presumption in favour of granting planning permission where a site that comes forward for providing affordable housing is identified by a community in their parish plan. These are known as Local Choice Sites.4 Further guidance on parish plans is available from the Commission for Rural Communities.5 Concept Statements – are a simple, clear expression of the kind of place that new development should create.

Using site evaluation that lists the landscape, social and economic attributes of a site, alongside an understanding of the needs of a community, a statement using words and pictures is produced. This provides an easily understood brief for what new development should provide in terms of use, design and layout. It allows the community the chance to express and discuss their needs, including those evidenced by housing needs surveys, and build consensus about how these can be met through development of a particular site or area.6

1. The Government Response to the Taylor Review of Rural Economy and Affordable Housing (2009) http://www.communities.gov.uk/ documents/planningandbuilding/ pdf/1184991.pdf 2. Empowerment Fund Prospectus (2008) http://www.communities.gov.uk/ documents/communities/pdf/ 1006294.pdf 3. Community level planning in and around settlements http://p1.countryside.gov.uk/Images/ Town%20and%20Village%20design%2 0statements_tcm2-31867.pdf 4. Stratford upon Avon Supplementary Planning Document http://www.stratford.gov.uk/housing/ community-1086.cfm 5. What makes a good parish Plan – Countryside Agency (2004) http://www.ruralcommunities.gov.uk/ files/CA%20199%20-%20What%20ma kes%20a%20good%20Parish%20 Plan.pdf 6. Concept Statements and Local Development Documents – Practical guidance for local planning authorities – Countryside Agency (2003) http://naturalengland.etraderstores. com/NaturalEnglandShop/product. aspx?ProductID=19da13d8-92ee-4f9d9ab6-bfb7d9196295

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Š Cressbrook Multimedia

Case study

a list of principles that would shape any future development.

These specified the type of development to meet the needs of the community, its design features, orientation and landscaping.

Hartington Concept Statement Hartington, Derbyshire The village of Hartington is in the Peak District National Park. Over many years the Parish Council has been working with the Peak District National Park Authority (PDNPA) and the Peak District Rural Housing Association (PDRHA) to try and provide some affordable housing, but previous attempts had failed. Following the offer of another potential site, Derbyshire Dales District Council organised a local needs survey which demonstrated sufficient need to prompt the PDNPA, the RHE and representatives of the communities to look at a number of sites. One of these was a large holding of land owned by Dairy Crest and now Long Clawson Dairies. It offered the potential to meet a number of needs within the community, including affordable housing.

Opening up this site was a sensitive matter and the community needed to be closely involved in shaping what should be provided. This was achieved by the local authority asking the Planning Co-operative to run a Concept Statement event, with the support of the RHE and input from the PDNPA.

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The event brought together representatives from the Parish Council, the Governors of the local school, officers from the National Park and local housing authority, the RHE, two RSLs and the general manager of the Dairy Crest creamery in Hartington.

Beginning with a walk around the creamery land, the group identified its attributes, which included aspects of local character, important views and stands of trees, its topography, a historic ridge and furrow feature, and the opportunity to plan across a number of well contained sites. They then drew their ideas of what could be accommodated onto large scale maps of the site. Attention was then given to any constraints and how these could be overcome.

All their thinking and diagrams were pulled together to define

Two draft concept statements were produced, one on how to deliver affordable housing and the second on a longer term plan with ideas on how additional community facilities might be delivered. The wider community was given the opportunity to give feedback on these proposals at an Open Event. This resulted in one Concept Statement which has two possible sites for affordable homes and delivers additional community benefits such as a cemetery and playing field.

This was followed up with a meeting with the new owners of the dairy, Long Clawson Dairy, attended by PDRHA, community representatives and the RHE. In addition the Creamery also had detailed discussions with the PDNPA. As a result, the Creamery are considering providing some of the now ex-creamery site for affordable housing. In addition they have agreed to pay for a consultant to look at possible options for the site to deliver wider community benefits for this area of Hartington which will take the Concept Statement work forward.

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Rural Housing Enablers Common to all these approaches is the ability of the community to draw on external advice and support. For many rural areas this is available through the dedicated role of an independent Rural Housing Enabler (RHE).

The RHE’s role is to assist rural communities to identify and find solutions to their housing needs. They help them to identify their needs, include them in the identification of a suitable site and the design of the scheme, and steer them through the planning and process of working with a developer, usually a housing association. An integral part of their role is to act as an ‘honest broker’ between the different interests including landowners, local authorities, housing associations and helping to build support and consensus within the community.

Community Land Trusts Different communities will have different skills, time and resources available to assist the provision of affordable housing. For most, working with a housing association will be the most suitable approach.

For others, setting up and running a Community Land Trust (CLT) is an option. In some cases the choice maybe to do a combination of both.

receiving gifts of land, schemes are more likely to stack up financially. Vesting ownership of the site with the CLT also provides assurance that the land will be secured for the benefit of the community in perpetuity.

CLTs are now defined in legislation7 and provide a way for local communities to acquire land and plan for the provision of affordable housing and services, such as workspace and community halls, which they then manage on behalf of the community. Through purchasing sites at below market value, or

There are now a number of communities that have formed CLTs and their experiences are helpfully recorded in ‘Then we will do it ourselves’8 published by Community Finance Solutions (2008). A common feature was the need for technical support and access to risk capital. The Community Land Trust Fund9

Picture courtesy of Hastoe Housing Association

now provides help: to test the feasibility of setting up a CLT; buy-in technical assistance to produce an ‘investment ready’ business plan; and provide an investment fund to cover some predevelopment costs and top up capital loans.

7. Housing and Regeneration Act 2008, Part 2, Chapter 1, Clause 79: 8. ‘Then we will do it ourselves’ Community Finance Solutions 2008 http://www.communitylandtrust.org.uk/ documents/rural_report_compressed.pdf 9. Community Land Trust Fund http://www.communitylandtrust.org.uk documents/cltf-leaflet.pdf

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Kyle Gardens – the first HILCDT scheme

Case study Holy Island and Lindisfarne Community Development Trust (HILCDT), Northumberland This case study shows what can be achieved by a very small remote community and demonstrates two models of CLT which have differing levels of housing association involvement.

In recognition of the lack of affordable housing, the community worked with the Rural Housing Enabler to explore options for meeting this need and improving the vitality of the community. Now, thirteen years later, they have built and manage seven affordable homes and a Visitor Centre and by the end of 2009 will have a provided a further four affordable family homes. All of these are available for rents between £54 and £68 per week, are designed to fit into the landscape and offer high eco-efficiency.

The high costs of development, arising from its locality, meant that the first two schemes were unlikely to attract public grants and housing associations were not interested in becoming

© HCA – Photographer Chris Henderson page

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involved. The community, therefore, decided to set up a Community Development Trust as an un-incorporated charity.

For the latest scheme, public funding was needed from the Homes and Communities Agency (HCA). To access this funding the HILCDT were required to become incorporated by means of a company limited by guarantee, demonstrate their financial viability and team up with a housing association to provide assurance to the HCA on the quality of housing

design, scheme delivery and management arrangements.

The HILCDT chose Three Rivers Housing Association who have Housing Management Accreditation.

The Trust Board includes elected community members and representatives from the Parish Council, Borough Council, Parochial Church Council, Fishermen’s Society, and Village Hall Committee.

The majority of the finance for the first scheme was raised from charitable and local authority sources, with the Tudor Trust funding 78%. This left a gap which was covered by a mortgage raised through Triodos Bank. For the latest scheme, these charitable sources were not available and public grant from the HCA will cover 28% of the costs. Through re-mortgaging, the Triodos Bank provide a consolidated mortgage for all three schemes of £350,000. This is arranged to allow for repayments to be made over 25 years at Base rate + 1.75% (minimum rate 3.5%) and rents to be kept at an affordable level. Around 10% of the annual rental income is put into a repairs and maintenance fund.

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The volunteer board has provided the management support for the seven homes provided on the two earlier schemes for the last ten years.

The new part-funded HCA units require a higher level of management service and so the Trust has entered into a formal mentoring arrangement with Three Rivers Housing Association.

The allocations policy gives priority to young islanders or those with strong island connections, and then to those unable to afford a mortgage for an island house. All have to be able to afford the rent of one of the HILCDT homes with less than a third of their income.

To avoid conflicts of interest the initial letting of the homes was supported by the local authority housing department using the Trust’s agreed allocations policy. In the future, Three Rivers Housing Association will support the selection of tenants and the issue of tenancy agreements.

Perpetuity is secured on the first two schemes through HILCDT ownership, where the lettings have to be in accordance with its charitable objectives. The latest scheme qualifies from exemption from the Right to Acquire because it is in a settlement of less than 3,000 population.

Lessons learnt > Gain support and mandate from the community and keep them informed of progress. > If an HCA grant is to be used, start conversations early with the HCA. > Develop a good relationship with the bank manager. > Choose an RSL with resources and commitment behind the good intentions. > Don’t be put off by those who say housing can only be built by “housing experts”. Community Trusts have been building and managing all manner of properties for years (centres, youth clubs, workspaces etc) – why is housing so different?

Bill Carr – HCA Investment Manager, Duncan Roberts – Architect and Dick Patterson – Chairman of Holy Island of Lindisfarne Community Development Trust. © HCA – Photographer Chris Henderson

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This publication, showcasing the achievements of a hugely successful campaign, provides practical examples and ideas for both private and public sector to develop more affordable homes in rural locations.

Going forward, the role of private sector remains very important in the provision of affordable homes, but the emphasis now needs to be on the implementation of these solutions, and so we are delighted that The Prince’s Foundation for the Built Environment will continue the work in the future.

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Stephen Howard Chief Executive Business in the Community

Picture courtesy of Hastoe Housing Association

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Where next?

This is a critical time for providing rural affordable housing. The policy framework has never been so supportive, there are opportunities as well as challenges arising from the credit crunch. Now is the time for local action. Each individual and organisation has a role, whether they are involved in a private or commercial business, a public authority, a parish council or rural resident.

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Private, commercial landowners and businesses > Identify any possible sites or properties that you could sell or lease for affordable housing. > Draw on the knowledge and expertise of the RHE in your area.1 > Discuss with your local planning authority any possible sites to find out how best to take them forward. > Ask your local housing authority what type of housing and tenure of housing is needed in your community. > Gain a realistic understanding of what the site is worth. > Talk and explain to the parish council what you want to achieve from the development. > Consider whether you, or your business, could invest financial resources to build an affordable housing scheme for a modest return, which through agreements could provide homes for some of your employees.

Local authorities

Communities

> Design your Strategic Housing Land Availability Assessment and ‘call for sites’ to capture potential sites in your rural communities. > Undertake an asset management strategy and use the statutory powers available to dispose of land at less than market value in pursuit of your duty of ‘well being’. > Use PPS 3 to provide a supply of deliverable sites in all your rural communities that will provide affordable housing. > Use viability assessments to help you allocate sites that will deliver the rural affordable housing needed and identify realistic grant requirements. > Promote high quality design which responds to local character and the need to tackle climate change in ways that retain the financial viability of a scheme. > Work with rural communities, using a range of techniques, so their activities inform policy and support rural affordable housing. > Make the provision of rural affordable housing a core part of your ‘single conversation’ and local housing investment plan. > Support and work closely with your Rural Housing Enablers.

> Be proactive in finding solutions to the housing needs in your community. > Contribute to the design of planning policies for your area that will provide affordable housing in your community, don’t leave it until planning permission stage. > Use ways of engaging all your community in shaping a positive future for your village. > Draw on the knowledge and expertise of the RHE in your area. > Explore with local landowners, including the Church, whether they have sites that could be used for affordable housing and see whether you too have land or property that could be used.

It is through these actions that together we can provide the affordable homes needed in our rural communities.

1. To find out how to contact your RHE contact ACRE http://www.acre.org.uk/

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Hastoe is really pleased to have had the opportunity to be one of the partners in HRH The Prince of Wales’s Affordable Rural Housing Initiative. As a leading provider of rural affordable housing, we understand that high quality affordable housing is a vital component of thriving rural communities. New homes allow local people to stay in, and contribute to the community, often unlocking and resolving other local concerns, such as the sustainability of local schools and shops.

Sue Chalkley Chief Executive Hastoe Housing Association

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Sponsors and partners

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and partners

Duke of Westminster The Duke of Westminster is Chairman of the Grosvenor Estate which is a portfolio of businesses, rural estates and other assets owned by trusts on behalf of his family.

The largest business in the portfolio is an international property group known simply as ‘Grosvenor’. This property investment, development and fund management business operates in 17 countries and has over £12 billion in assets under management. The portfolio also includes 5 non-property businesses in north-west England and over 170,000 acres of rural land spread amongst 5 rural estates in the United Kingdom and Spain. The Duke has been a keen supporter of the Affordable Rural Housing Initiative, which he helped to launch with HRH The Prince of Wales.

Country Land and Business Association Founded in 1907, the Country Land and Business Association (CLA) is the membership organisation for owners of land, property and businesses in rural England and Wales. It promotes a living working countryside, through influencing decision makers to ensure the positive development of the rural economy.

Through its in-house professional advisory team it provides members with advice on a wide range of issues, including planning, and how they can contribute to the provision of rural affordable housing.

Homes and Communities Agency The HCA is the single, national housing and regeneration agency for England. We bring together the development and regeneration expertise of English Partnerships, investment functions of the Housing Corporation, and the Academy for Sustainable Communities, with major delivery programmes of Communities and Local Government. Our role is to create opportunity for people to live in high quality, sustainable places. We provide funding for affordable housing, bring land back into productive use and improve quality of life by raising standards for the physical and social environment. Over the current three financial years the HCA controls a budget of £17.3bn.

Northumbrian Water Eden Housing Association Duchy of Cornwall The Duchy consists of around 54,521 hectares of land in 23 counties, mostly in the South West of England. The principal activity of the Duchy is the sustainable and commercial management of its land and properties. The Duchy also has a financial investment portfolio. The properties cover everything from large farms of more than 650 hectares to small gardens, office premises to craft workshops, Highgrove House to barn conversions, along with new developments such as Poundbury. The Duchy of Cornwall is one of the key partners within The Prince of Wales’s Affordable Rural Housing Initiative and provides affordable units in a number of its developments.

Eden Housing Association is a predominantly rural Housing Association, based in Penrith, with 1800 homes in management in North Cumbria, including the Lake District National Park. It has developed over 400 homes for rental and low cost sale over the past 10 years. The Association is committed to working with communities, local Councils and local businesses/landowners to support sustainability. The Association also prides itself on high quality design which is sympathetic to the local environment and actively involving its residents. This has received recognition in HRH The Prince of Wales’ Sense of Place good design publication and his visits to the Association’s new scheme in Pooley Bridge and a scheme at Chapel Stile, which is managed for Mitre Housing Association.

Northumbrian Water serves a population of 2.6 million people in the north east of England and 1.7 million in Essex and Suffolk. The company is firmly rooted within the communities it serves with corporate responsibility as part of its normal business practice. Its commitment to those communities is demonstrated by a wide-ranging programme of sporting, cultural, environmental, educational and charitable activities. It was instrumental in helping to set up the Water Pilot which explored the conversion of redundant land for affordable rural homes. In 2009 Northumbrian Water won a Queen’s Award for Enterprise in the rarely awarded Sustainable Development category, in part for ‘its extremely impressive social and economic initiatives.’

Hastoe Housing Association Commission for Rural Communities Commission for Rural Communities (CRC) was established in 2007 to provide well-informed, independent advice to government and ensure that policies reflect the real needs of people living and working in rural England, with a particular focus on tackling disadvantage.

It does this through three key functions: acting as a strong advocate for rural communities; using evidence, analysis, and insight to provide expert advice; and by monitoring and reporting on the delivery of policies as a rural watchdog.

The CRC’s major policy programmes cover Rural Places (including Housing and Planning), Rural Economies, Rural Services, and Rural Governance.

Hastoe Housing Association was established in 1962. It owns and manages more than 3,500 high quality, affordable homes to meet local needs across towns and villages in Southern England.

It has an excellent reputation as a specialist rural housing provider. Many of its developments are on rural exception sites, carefully selected with the help and expertise of local authority partners, and often provided by local landowners or charitable trusts. These homes are built to high design and sustainability standards which reflect the character of the area. Through its Rural Resource Unit, Hastoe seeks innovative solutions to meeting housing needs in the rural context.

Princes Foundation The Prince’s Foundation for the Built Environment is an educational charity which exists to improve the quality of people’s lives by teaching and practising timeless and ecological ways of planning, designing and building.

Drawing upon practice-based learning, the Foundation teaches skills to support successful place making, plans live developments, and disseminates the lessons from proven exemplars in building successful communities, such as Poundbury. From Summer 2009 the Prince of Wales Rural Affordable Housing Initiative will become part of the work of the Prince’s Foundation.

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This publication updates advice provided in earlier guides produced under the Affordable Rural Housing Initiative.

These include more detailed of advice much of which is still relevant: > Affordable rural housing: An opportunity for business > Making use of empty space for affordable rural housing > Developing new affordable rural housing > Creating a sense of place: A design guide Web reference: www.bitc.org.uk/affordablehousing

If you would like further information regarding any aspect of this publication or on affordable rural housing design please contact James Hulme at: The Prince’s Foundation for the Built Environment Email: james.hulme@princes-foundation.org Tel: 020 7613 8500

Business in the Community – mobilising business for good.

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