24 June 2022
The future of affordable housing in Guernsey
House prices in Guernsey are at an all-time high, with the availability of houses at a historic low, causing great concern to many and in particular to low income families in need of affordable housing.
The Guernsey Housing Association has recently advised that there are currently more than 500 people on the waiting list for affordable housing.
Affordable housing is housing that is reserved for certain groups of people whose needs are not met by, or cannot afford to rent or buy property in, the private market. It can mean social rental housing, intermediate housing (for example partial ownership) or extra care housing and it is provided through the States of Guernsey or registered housing associations such as the Guernsey Housing Association.
One mechanism for the delivery of more affordable housing is in the Island Development Plan (IDP), which is the document that is considered when determining applications for planning permission. The relevant IDP policy for the provision of affordable housing is Policy GP11. Policy GP11 requires that proposals for new housing resulting in a net increase of 20 or more dwellings are to provide a proportion of the developable area of the site for affordable housing. The percentage contribution is between 26% and 30%, depending on how many dwellings are proposed, for example if the development results in a net increase of 30 dwellings, the proportion to be provided for affordable housing would be 30%. When the provision of land is not feasible, the applicant may be able to provide completed units or off-site provision instead.
If Policy GP11 requires a development to provide an element of affordable housing, an applicant can challenge the requirement to provide the required percentage of affordable housing pursuant to an exception relating to viability. The exception states that if the affordable housing requirements of Policy GP11 would make it unviable to proceed with the development, the affordable housing requirements may be reduced. In considering whether such a reduction should be allowed, the DPA will consider the circumstances of the particular proposal and will require the maximum percentage of affordable housing provision that is viable for the site. The DPA will also require evidence that the development would be unviable and will assess economic viability by using recognised financial viability models. This is likely to involve the applicant appointing a consultant to prepare a viability appraisal, which will assess various details, costs and values, together with profitability. Viability appraisals often result in substantial costs and lengthy delays to the grant of planning permission. The DPA may also require an independent viability appraisal.
Since adoption of the IDP in 2016, Policy GP11 has yet to be relevant to any planning application, with no land or units provided for affordable housing as a direct result of it. From this, it would appear to be clear that Policy GP11 is not achieving its intended purpose. Indeed, there has been much debate around this in recent months, with some developers and politicians claiming the policy has discouraged development and there have been calls for it to be scrapped or suspended. Others say it should be amended.
The DPA has commenced the process of reviewing certain parts of the IDP and Policy GP11 will no doubt be one of the policies reviewed. The parts of the IDP which the DPA propose to review are likely to be put to the States towards the end of this year with a public consultation in early 2023.
Any proposed amendments to the IDP will not be made quickly as they will have to go through the full statutory inquiry process (as the IDP did prior to adoption) with an independent inspector, followed by States approval.
Whilst Policy GP11 has not yet delivered land/units of affordable housing, 60 affordable homes have been permitted through other policies of the IDP. There are also applications that have been recently submitted to the DPA (which have not yet been determined) that may deliver affordable housing. These include an application for a mixed-use development at Leale's Yard, which includes proposals for more than 320 new dwellings. It is currently unknown how much affordable housing this site proposes to deliver and whether it will include the submission of a viability appraisal.
As such, Policy GP11 may at last be applied to a planning application, however the future of the policy and the requirements for certain new housing developments to include affordable housing provisions is uncertain. One thing is for sure, if you wish to make representations on any proposed amendments to the policy or other policies in the IDP, it is important to do so during next year's expected public consultation process.
An original version of this article was first published by Guernsey Property and Construction, June 2022.