This case involved the demolition of a detached property and associated large garages, and the erection of 10 residential flats. By erecting 10 units this project would be classed as a major development and triggers the guidance threshold for affordable housing contributions.
Dacorum Council seeks 35% affordable housing, meaning that from this development, the contribution would be 3.5 units; 3 units plus a financial contribution.
S106 Managements Financial Viability Appraisal (FVA) demonstrated a significant deficit, meaning that even without the inclusion of S106 contributions the scheme was not generating the sufficient levels of profit to provide onsite units or any offsite financial contribution towards affordable housing.
Dacorum Council then instructed their own surveyor to review the S106 Management Financial Viability Appraisal. The result of this was that the scheme was not viable, albeit not the level that S106M suggested. However, the result stood that no contribution onsite or offsite was appropriate.
Dacorum council also sought to add a Late Review Mechanism to the development, meaning that the viability of the scheme would be reviewed again once it was 75% complete. Due to our experience in this area, we were able to provide recent evidence showing that a LRM could not be requested where there is no policy in place. In this specific case, Dacorum’s policy did not include reference to Late Review Mechanisms.
As such, we were able to demonstrate that the council could not request the LRM, meaning the request was dropped and no Section 106 Agreementwas necessary.
The result was that the application was granted without the provision of affordable housing, with an indicitive saving of around £300,000.