Planning for Affordable Housing

Specific planning mechanisms or levers able to be used for inclusionary housing can be grouped loosely within three categories: (1) to protect existing sources of low-cost housing under pressure from gentrification or redevelopment; (2) to promote or enable affordable housing in the market; and (3) to produce dedicated sources of affordable housing for low and moderate income groups to rent or buy.

Affordable housing products, housing need and government subsidy (Source

Fig. 11.1 Affordable housing products, housing need and government subsidy (Source: Milligan et al. 2010)

A range of planning and related approaches and mechanisms have emerged in different jurisdictions in relation to each of these categories and the key housing problems requiring attention, in particular, local or regional housing markets. Summarised in Table 11.1, and discussed further below, these approaches address a range of objectives from boosting overall supply, through to securing dedicated accommodation for low- income groups.

Land and Housing Supply Levers

Insufficient land for housing development is obviously associated with affordability pressures in high demand locations. Even when adequate supplies of land have been allocated (or zoned) for housing development, there can be a failure to take up these opportunities. This can be due to many reasons—landowners ‘holding out’ for a higher price; difficulties in assembling large parcels due to prevailing patterns of land ownership; inadequate infrastructure or locations which are expensive to service; and even a drop in the market which makes recently acquired sites unviable until demand rises again. In response to these issues, land and housing supply levers aim to enable a steady release of development opportunities to the market.

For such levers to be effective, there must be a demonstrable shortage of potential development sites, and an underlying demand for housing which is not being met. Land provided must be located in areas where existing or potential demand is focussed. This may be areas of under-utilised capacity within established urban limits or in selected new release locations. Undertaking a land audit of existing and potential residential land (across private and public ownership) is usually integral to the strategic land use planning process (and potentially for local housing strategies if undertaken), although the frequency and efficacy of such assessments vary across jurisdictions. Land audits may also be undertaken by public sector agencies in relation to their own holdings, with identified land then able to be developed and released or used for affordable housing projects.

Table 11.1 Planning strategies and mechanisms for protecting, promoting and producing new affordable housing

Strategic objective

Approach/mechanism

Increase overall housing supply

Land audit

Government dedication/acquisition of land Land development or renewal authority Land development incentives/penalties Planning and funding of infrastructure

Reduce barriers to affordable housing development

Audit of existing planning controls to identify barriers Revising development controls so they permit diverse housing types, in as many locations as possible Faster approval processes for preferred housing developments

Specific mechanisms to override local barriers to affordable housing (for instance, 'as of right' development entitlements for affordable housing)

Preserving and offsetting the loss of low-cost housing stock

Social impact framework for assessing impacts of development which might affect demand for affordable housing

Preserving particular house types at risk (e.g. restrictions on redevelopment, flexibility for rehabilitation/ replacement development)

Assistance for displaced residents

Encouraging new affordable housing in the market

Incentives for diverse and lower-cost housing development, or for mixed affordable/market housing developments

As 'of right' for flexible housing forms, such as accessory/'garden' dwellings, or dual occupancy dwellings

Fast track approval for affordable housing meeting defined criteria

Secure new dedicated affordable housing

Fee discounts (e.g. discounted application fees and/or infrastructure contributions)

Voluntary or mandatory negotiated agreements for affordable housing provision (to include affordable housing when land is rezoned/allocated for housing development, or when planning permission is granted following a variation of prevailing rules)

Inclusionary zoning—mandatory contributions for all identified development in the zone Impact fees—a mandatory contribution to offset the impact of development on affordable housing

Source: derived from Gurran et al. (2008)

In some jurisdictions, government or quasi-government authorities will take responsibility to acquire land in locations where growth is expected to occur. Development corporations have been used for this purpose in the UK. Although rarely used to facilitate housing development, land acquisition provisions exist in most planning legislation. These provide one option for ensuring that sites in preferred locations are able to be assembled for coordinated development, or for the provision of essential infrastructure needed to service new housing schemes.

Land development penalties can, in theory, ensure that housing development opportunities are taken up in a timely way. Penalties for withholding residential land once rezoning or permission for development is granted include imposing higher local property taxes or rates, or by instituting time limited zonings and planning permissions. Ireland has introduced strict ‘use it or lose it’ provisions which include a higher land tax scheme for undeveloped sites in priority growth areas (Department of Environment 2014). To ensure that developers actually complete projects once they have been formally commenced, time limited rezoning and development permissions should be supported by enforcement provisions which might even extend to land acquisition if projects stall beyond a certain threshold time period. It is not clear how effective these approaches can be in all circumstances, particularly when markets are volatile. Public ownership of development land gives more levers of control over phasing, for example, through disposal under building licence rather than freehold disposal.

 
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