Federation submits its response to Belfast City Council’s draft Developer Contributions Framework
The Federation has today submitted its response to Belfast City Council's draft Developer Contributions Framework for which the consultation closes on Monday 5 November.
The consultation is available here.
Our response to it is as:
From the outset, it is critical to note that the Federation, with regard to the relevant content of the Planning Act (Northern Ireland) 2011, is not opposed to Developer Contributions in principle.
Indeed, when the Department for Infrastructure conducted a consultation exercise on its proposed Development Management Practice Note 21: Section 76 Planning Agreements in late 2016, the Federation played an active role in ensuring: the industry had an opportunity to positively comment on the proposals and; that the Department would, ultimately, publish a Development Management Practice Note which had as far as practicable the buy-in of industry.
Building on this and given concerns within the wider development community as to the process that has been undertaken within Belfast City Council with respect to the agreement of Developer Contributions thus far, it is welcome that the Council has now published a draft Developer Contributions Framework for comment.
However, on review of the draft Framework, and after significant engagement with housebuilders and the wider development community we have a number of substantive concerns which we believe must be addressed before we can give a clear view of our position on the draft or any future Framework.
Given the substantive concerns that we have, it is not possible for the Federation to give its support for the Framework as currently outlined and we look forward to engaging with the Council further on the issues below.
Approach to viability
Our principal concern is that the viability studies that the document proposes any developer would undertake are not an absolute in terms of consideration. The viability studies must be first and centre when it comes to developer contributions.
When, and in the context of the now published Local Development Plan draft Plan Strategy, the Council is seeking to incentivise a new era of development in the city, it is not going to be achieved if your approach to viability studies is that they ‘may be’ (page 61 of consultation) considered.
This will give no developer any greater certainty than they presently have as to the level of financial or other contribution that they would need to make until well into the planning process and could, therefore, render substantial amounts of proposed, positive economic, social and cultural development – all with the intent of helping the Council delivering its LDP – sub-economic.
Additionally, the industry was given to understand that, through Development Management Practice Note 21, this issue and the further points that we raise, would have been dealt with by all of the eleven councils at this stage – namely, industry would be given a clear understanding of the types and thresholds for which contributions would be sought; what kind of financial/or otherwise levels these would be at and; where exemptions may exist.
Widening the issue of viability out, the document contains no detail as to what the Council would believe an acceptable developer profit per development would be. This is critically linked to the matter of viability and more clarity must be provided before any Framework comes into practice.
Linked to the previous points, the document does not in any way determine what are acceptable land values nor is there a district valuer in place as there would be in England. When you add to the equation how the viability calculation would link in with land sold in recent years that has yet to be taken forward, you have a package of issues that need to be addressed.
Although the Local Development Plan draft Plan Strategy has now been published and is out for consultation, we question how this draft Framework could be published in advance of there being a policy context that has been consulted on and is in place? It had always been the industry’s understanding that, for any of the eleven councils, a LDP Plan Strategy would be in place before a number of policies, including potentially for Developer Contributions, would come forward.
Additionally, and in light of the LDP draft Plan Strategy now been public, we are concerned that no further guidance around affordable housing contributions is available given that these are in the LDP draft Plan Strategy.
Sums in agreements
On the theme of incentivising development, a further drawback of the proposed approach is that all financial sums within an agreement would be paid pre-commencement. This is a significant burden on developers, a burden which is not comparable with the approach to similar agreements in England where sums are paid over a phased period. We would strongly urge the Council to revisit this.
Status of Developer Contributions
The Federation’s view is that, unlike the legal agreements they are proposed as, Developer Contributions should be conditions of planning. Our rationale for this, in part, is that, when contractors are working for developers and aspects of schemes need changed, this will require an entirely new planning application. Given the potential for this risk to be transferred to the contractor as they are on-site, there is we believe a need to again address the outworkings of Developer Contributions as legal agreements.
Further, we were also given to believe that Developer Contributions would only be sought in the event that a planning condition could not possibly be feasible and that this, therefore, would be in a very limited number of cases. We are unsure from the draft Framework as to whether a Developer Contribution would now be the default option in every instance?
Request of contributions for projects not within Council’s gift
Although the Federation has, and continues to be, an active supporter of the principle of transferring further powers from Northern Ireland Executive Departments to the eleven councils, we remain unclear as to how contributions can be sought for specific public realm and other projects which are not, currently, responsibilities of the councils. While we are not questioning the concept that contributions could be used for public realm or other works, we don’t fully comprehend the legal and practical links between contributions being made for such works and the role of the Government Clients for which works they would be ultimately responsible.
Impact on other councils’ approach
While we can appreciate that it may not be of direct concern to Belfast City Council the approach that the other ten councils may take with respect to Developer Contributions, it is undoubted that as the principal economic hub within Northern Ireland, other councils will undoubtedly take a lead from Belfast on their approach to this. With this in mind, it is vital that our reasonable concerns within this draft Framework are addressed. Given the wide array of economic risks that Northern Ireland is faced with, we have got to be careful not to put yet another impediment to development and economic growth in place, an impediment which, if thought through properly, we could otherwise avoid.
Given that the industry has already been given to understand what contributions could be used towards, Chapters 6-15 provide little tangible new detail for us to provide comment on.
To provide further comment, the industry needs a much greater understanding as to the matrixes that would be used in working out what type of contribution may be required.
While we appreciate that this will be a process that further evolves with time, it cannot be that all we have at this stage is that each development would be considered on a case by case basis. There will, of course, always need to be some level of flexibility – however what is proposed currently casts too much uncertainty, and worryingly a complete lack of transparency, for developers with respect to further development in Belfast.