Agenda item

At this point Councillor Wright left. This left 9 Committee members to vote on this item.

The Head of Development Management made the following points by way of introduction:-

1. The application sought full planning permission for the erection of 6-11 storey building comprised 120 Private Rented Sector residential units and 524 sqm flexible commercial floor space at ground floor level within the Enterprise Zone;

2. Officers were content with the design though it was at the limits of what was acceptable;

3. The Planning Obligations Manager stated that the key issue for this application was viability for affordable housing. He stated that the affordable housing process had been protracted as the applicant had changed their viability consultant following assessment of the original viability appraisal submitted with the application, and had been changing key inputs such as Operating Costs and Profit Margins, which would have been expected to be set at an early point in the viability process.

4. He reported the receipt of a letter overnight which confirmed that the applicant would commit to a wholly private rental scheme for at least 15 years. This period was not unreasonable and would be secured in the Section 106 agreement. Affordable Housing would be secured for 125 years as was the case for ND7.

5. The Planning Obligations Manager confirmed that it was not appropriate for the viability appraisal to take account of long term growth, as the District Valuer was very clear that this must be dealt with in the yield, which was low for this scheme reflecting that rental growth was likely. It was not possible to know future rental growth and if there was another recession there could be no growth.

6. RICS had recently consulted on the issue of how to value property purpose built for the rental sector, and this had indicated that stamp duty land tax should be included in viability assessments for Private Rental Sector Schemes. The consultation was now closed but there was no report yet to provide clarity on the matter and no timescale regarding publication of the full guidance. However, at a meeting the previous day the applicant had stated that the draft guidance was now full guidance, despite this not being the case. The District Valuer considered that she should have regard to the guidance even if only draft, and despite her not being aware of any Private Rental Sector schemes that were not being held as long term investments.

7. On this basis, the District Valuer concluded that with stamp duty land tax factored in, the development could provide 4 affordable dwellings with rents set no higher than Local Housing Allowance levels.

8. The viability assessment assumed the commercial element of the development would be sold when completed therefore stamp duty land tax would be included for this element. In this case the applicant maintained that the viability figure should include stamp duty land tax for the whole scheme despite them accepting that the residential element of scheme would not be sold but kept long term for income generation. Should the applicant dispose of the development the worth would not be known. The viability was based on a ’normal’ hypothetical developer who would sell quickly. Officers sought advice from the District Valuer who advised that their experience was that developers of Private Rental Sector schemes did not normally build speculatively.

9. The Planning Obligations Manager informed committee that the Council had previously dealt with two Private Rental Sector applications. One of which was the neighbouring site (ND7) which was by the same applicant as ND6 and which did not include stamp duty land tax. The other site (the former ambulance station) only included stamp duty land tax at a minimal rate.

10. The Committee needed to determine how much weight they gave to the draft RICS guidance which was not yet published as full guidance, and the fact that the same applicant had not included stamp duty land tax in their viability assessment to support their neighbouring ND7 Private Rental Sector scheme. . If limited weight was given to the draft RICS guidance, the consideration could be given to whether stamp duty land tax was included. Removing stamp duty land tax significantly changed the viability. The Planning Obligations Manager was not able to clearly advise either way on the issue of the weight to give the draft RICS guidance as this was a matter for the committee as decision maker;

11. If stamp duty land tax was not included 23 units (19.1% affordable housing) could be provided, 2 studios, 5 two-bed dwellings and 16 one-bedroom dwellings;

12. Councillor Stevens observed that the private rental scheme would not be sold for at least 15 years yet there would be a £1.7m deduction when sold but the price and stamp duty would not be known. He argued that lower weight should be given to the draft guidance as the outcome was not known. He also asked whether the emerging local plan could be similarly taken into account and was informed that the RICS guidance could not be compared to this as the RIC Guidance was not subject to public examination prior to being adopted. It should be viewed more in terms of a Supplementary Planning Document, which is produced, consulted on, amended and then adopted by the Council;

13. Councillor Breckels liked the scheme as it fitted in well to a mostly modern area and felt that the extra 19 units should be pursued;

14. Councillor Clarke approved of the scheme but was disappointed that the reduction in CO2 emissions did not achieve the policy requirement of 20%;

15. Councillor Brook approved of the scheme and believed that an investor would stay there for some time and therefore the stamp duty land tax should be discounted from consideration;

16. Councillor Carey asked where the policy of rental stood if L&G were taken over and asset stripped and was informed that planning permission ran with the land. Whoever purchased it would be bound by the terms of the S106 Agreement including affordable housing and private remaining for 15 years. A planning application could be submitted but this would be determined on its merits;

17. Councillor Stevens approved of the scheme and believed it should be approved with 2 conditions – that the private rental stays for 15 years or more and that the S106 agreement is based on 23 units;

18. Councillor Davies supported this and moved it formally. The Head of Development Management stressed the importance of a clear steer from the Committee as if the motion was successful the applicant could agree to sign a Section 106 Agreement or appeal non-determination. Councillor Davies confirmed the motion and it was seconded by Councillor Stevens. On being put to the vote it was:-

Resolved (Unanimously) That planning permission be granted to include the conditions set out in the report, and subject to a Planning Agreement to secure the following:

i. The provision of 23 affordable dwellings rented at no more than LHA maximum rents which is to include service charges.

ii. The requirement for a viability review undertaken on completion of the development using the same principles as that agreed for the neighbouring plot (ND7).

iii. Public transport contributions of £32,214 to upgrade bus stops on New Kingsley

Road and Avon Street plus a commuted sum of £500 per annum for the next three

years for their on-going maintenance.

iv. A contribution of £10,000 for the installation of 12 line Real Time Information

displays.

v. A Travel Plan Management and Audit Fee in the sum of £3,500 or Bristol City

Council to undertake the implementation of the Travel Plan on the applicant’s behalf for an Implementation Fee of £16,200 (£135 per dwelling).

vi. Traffic Regulation Order fees of £5,395 for proposed loading bay and temporary

parking restrictions on Old Bread Street.