by BRegs Blog Admin 20 Jan 2016
We resume our series of practical posts intended to explore interesting comments received from readers and offer practical solutions to frequently asked questions. This post is no 28 in the series- see the full list of previous topics below.
The BRegs Blog are preparing a series of post to give readers guidance on this and invite comment and submissions from readers. The BRegs Blog received this comment from a reader regarding Social Housing provisions “Part V” required for multi-unit housing developments:
“I had a horror story from a colleague earlier.
He has one housing scheme ready to lodge for planning, but cannot. Why? It’s the recent Department of the Environment [DECLG] circular issued on Part V Housing. It used to be that when you lodged an application this started the process for making an agreement for the Social and Affordable housing in the scheme.
But the DECLG last year issued a circular, the effect of which is that all the local authorities are now requiring developers to have Social housing sorted before lodging the planning application and the agreement included as a planning condition. This has several nefarious effects.
- You have to get the Council planners, roads people, valuers and your legal team round the table at the same time. Delay. This will put additional pressure on Local Authorities in the short term.
- Then you have to get an agreement with them. This brings forward legal costs.
- Then you must submit details of the agreement, including sensitive commercial information, onto the public file as part of the planning application. This will put developers’ costs and professional fees on the web.
- This is the second hurdle and a huge one. This is really commercially sensitive information because cost and sales prices are of interest to my competitors.
- Then third hurdle: If you then get a Permission for (say) 40 apartments having applied for (say) 50, your calculations are all wrong and you have to start again!
- If you are unhappy with the planning condition relating to social housing you appeal to an Bord Pleanala, causing further delay.
- In larger schemes the construction can’t even start on the show house. If there are 10 or more houses or apartments, the entire scheme falls into this trap.
This is utterly mad. There is huge expenditure of time and therefore money to deal with this; and, worse, the forced release of commercially sensitive info in the public domain. This is yet another [DECLG]-created reason for the total collapse in developer housing. No wonder there’s a housing crisis in this country!
Has anybody worked out some costs on this? So I tell my clients, BC(A)R construction costs, BC(A)R phasing completion costs, BC(A)R defensive specification costs, BC(A)R Design, Assigned and Ancillary Certifiers’ costs, Planning negotiation costs, legal fees and development delay funding costs. And all I am is the bearer of bad news. Has anybody done any cost estimate of this whole fiasco?”
My clients keep asking me “Does the law really say that?” “Are the planners insisting on this?”. My reply is “Yes, that is what the planning validators are insisting on”.” [edits by BRegs Blog]
The revised “Social Provision” Part V process is more involved than noted in the reader’s comment. Given the complexity of the Planning process and timescales this effectively means agreeing Part V in advance. If a detailed Part V proposal is not included then it’s not a valid Planning Application. Part V submissions must include calculations for land, site, construction, development costs, profit etc. All submissions will be in the public domain.
It would appear that Local Authorities may be invalidating planning applications if the Part V Social Housing proposals aren’t in place even though the guidelines are not yet available.
Certainly significant planning delays are being experienced by developers who are ready to build social housing, due to the application of this requirement. Points to remember:
- Site cost or “Established Use Value” is on the date the Planning Permission is granted, not the date of the purchase of the land (is not be open market value).
- The costs in any Part V proposal must include everything- developers should ensure that there is adequate provision for the unseen costs like construction inflation, professional fees and BC(A)R certification and testing (see 2).
- The legal agreement will be conditioned in planning and must be in place before lodging a Commencement Notice.
- There is a provision old Part V agreements/ planning permissions (20% social & affordable on four or more units) to be negotiated down to 10% social on 10 or more units. However this only applies in the case where a Commencement Notice for the scheme was not lodged before 1 March 2014.
- The critical issue is that Part V agreements cannot be negotiated once a Commencement Notice has been lodged, and many architects and planners are unaware of this.
Part V and BC(A)R Costs
Industry has concentrated on BC(A)R professional fees and not the other more significant costs such as phasing carry costs and defensive specifications (see 1). Part V costings submitted at pre-planning stage should include realistic assessments of these BC(A)R total costs (see 4). There is no recourse to reimbursement later on and Part V agreements cannot be negotiated once projects have commenced and professionals will need to stand over cost and fee advice to clients.
The BRegs Blog are preparing a series of post to give readers guidance on this and invite comment and submissions from readers.
See Department of the Environment (DECLG) Circulars 24/2015 and 28/2015 on costs : Part V Guidance to be published, however none publicly available to date.
Topics mentioned above:
- Value-engineering, defensive specifications and BCAR SI.9
- BC(A)R SI.9 has added + 5% to Residential Costs | SCSI / DKM
- LGMA Multi-unit “call-out” Dec 2014:
- What do Building Control Regulations cost for a typical apartment?
Other Posts in this series:
NOTE: This series of posts is not meant to undermine or be in opposition to any professional advice from registered representative bodies: rather it is to offer additional technical aids to those that find themselves in the position of having to deal with SI.9 in its current form. As with all information posted on the Bregs Blog we urge all practitioners to check with their respective professional bodies before assuming any roles or duties under Building Control (Amendment) Regulation (SI.9 of 2014). We hope to post a number of these practical posts and list in one area, so home owners, SME’s and professionals can drop in and click on a particular topic to get summary information that may be useful to them while working under the new regulations.