Phased scheme, artificial subdivision or separate site?
At what point do two collocated sites become a phased scheme for affordable housing purposes?
This is a question grappled with by many local authorities in their affordable housing policy.
For example, South Downs National Park Local Plan policy SD28 notes specifically ‘Developers may not circumvent this policy by artificially subdividing sites.’
Affordable Housing Policy
Most affordable housing policies have a ‘threshold’ at which they kick in. While this is often assumed to be 10 dwellings following the NPPF’s definition of ‘major development’, many local authorities now seek contributions on 5+ or even 1+ dwelling developments. At this threshold a scheme goes from 100% open market to 50-70% open market, or requires a hefty financial contribution. Therefore, there can often be little financial benefit in a 10 unit scheme vs a 9 unit scheme.
Subdividing a larger site in two and submitting two schemes of 5 dwellings, rather than one scheme of 10 dwellings, might therefore, on the face of it appear a way of avoiding the above requirement and improving a scheme’s viability.
However, as noted, many local plans specifically allow for this by including wording allowing ‘aggregation’ of two or more collocated sites if development is coming forward piecemeal.
But this is often taken too far, misunderstood, and potentially results in contributions being sought which are not compliant with CIL Reg 122.
Whether or not a site should be aggregated with previous development in the immediate area is a matter considered at length in R (Westminster City Council) v First Secretary of State & Brandlord Limited  JPL 1066 and New Dawn Homes Limited v Secretary of State for Communities and Local Government & Tewksbury Borough Council  EWHC 3314 (Admin).
The Westminster case lays out a very specific tripartite test for considering whether such an approach is appropriate as a starting point, although other considerations may be material.
The three key core elements of such a test are:
1. Whether the two sites are in single ownership
2. Whether they constitute a single site for planning purposes
3. Whether proposals can be deemed a single development.
These tests are a starting point rather than a comprehensive definition. For example, a recent appeal noted that there must be a pragmatic consideration of whether the site in question is indeed ‘a phased addition’ or rather represents ‘an extension to the existing development’.
Reality vs Expectation
Clearly there must be a pragmatic ‘cut-off point’ otherwise all co-located development within a settlement boundary might be argued to meet the tests of phased development, which is clearly not the case.
Indeed many adopted policies recognise this, noting that time is a key factor – i.e. were the two sites applied for at the same time, or will they be completed in a ‘phased’ manner with no discernible time gap between the two.
Functionality is also a key point – including whether one scheme could come forward without the other being completed first.
These legal tests are important points to raise. While it may be convenient for local authorities to aggregate sites to enhance affordable housing contributions, this is often mistaken or misunderstood, resulting in contribution requests which do not meet the tests of CIL Reg 122.
For example, where two neighbouring sites are in entirely separate legal ownership, they have separate access and form separate planning units, and one will be completed considerably before the other in terms of timing, with the second application submitted some time after the first, then clearly they should not be aggregated – however, we have assisted said applicant in challenging a request for affordable housing contributions on the second site only. This would both fail to meet the Westminster tests of aggregation and the CIL Reg 122 tests of proportionality.
If you have a site where aggregation is an issue, please contact us today for an expert opinion and planning support.