Hackney’s new local plan was adopted in July 2020, it states that it “sets out the Council’s growth strategy and an approach to managing land uses, alongside planning policies and planning guidance for places and neighborhoods".
Policy LP13 of the Local Plan sets out the expectations regarding affordable housing in the borough, this can be seen below:
As seen above, there are different requirements based on the number of dwellings proposed in a development and also various ways of delivering what is needed.
For developments providing 10+ units, the expectation is that 50% will be provided as on-site affordable housing, only in exceptional circumstances will an off-site payment in-lieu be considered, this being an equivalent monetary value of 50%. Compared to developments of 1-9 units which has the option to provide on-site contributions or a payment in-lieu.
The Hackney S106 Contribution SPD (July 2020) informs us that a financial contribution is usually expected based on schemes of 1-9 units, but depending on the location of the development will determine how the payment in-lieu is calculated. Within the City Fringe area a payment of £60,000 per unit will be expected, compared to the rest of the borough which only requires £50,000 per unit.
Affordable housing requirements are not just restricted to use Class C3 dwellings within Hackney, they also cover use Class C2 (student housing and housing for older and vulnerable people). The table below outlines the expectations for residential developments that aren’t just use Class C3:
Previous Work in Hackney
Proposed development = Convert and extend existing 6 residential units into 9 residential units. Increase the existing space to a GIA of 626.9m2.
Policy Implications/Requirements = As a development of 1-9 units, this development is expected to provide onsite provision or payments in lieu up to the equivalent of 50%.
Expectation on Affordable Housing = As a proposed development totaling 9 units, Hackney Borough Council would expect 4.5 units as affordable housing or a payment in-lieu of £50,000 per unit (£225,000).
Result = The residual site value was determined to be less than the benchmark land value, therefore resulting in a negative figure and only allowing a profit of 11.08% which is lower than the targeted 18%. The contribution towards affordable housing was dismissed as it was not deemed viable.