Commuted Sums and Affordable Housing

• A commuted sum (or payment in lieu) is an amount of money, paid by a developer to the Council, where the size or scale of a development triggers a requirement for affordable housing, but it is not possible to achieve an appropriate element of affordable housing on site.
• Government policy (within PPS3) and Policy H5 of the Waverley Borough Local Plan 2002 assumes that affordable housing will be provided on the land, which is the subject of the planning application, in order to contribute towards creating mixed communities.
• In the context of a high local need for affordable housing and limited development opportunities to meet this need, a commuted sum less preferable to direct provision of affordable homes intergrated within a development is accepted only where more direct provision of affordable homes has been explored and the Council is satisfied that is not workable given the particular circumstances.
• Where a commuted sum is to be considered, the onus will be placed on the applicant to demonstrate why it will not be possible to provide the affordable housing on site. The applicant will also need to show that other options, such as cross-subsidy between rented and shared ownership units have been considered and why they were discounted.
• The Council will usually need to seek independent scrutiny of this evidence to satisfy itself that the assumptions within it can be agreed in terms of the payment. Payment for such advice will usually be funded by the developer. The rationale for this is that the Council has a planning policy, which the applicant is seeking to not comply with, on a particular scheme. In order to assess the applicant's appraisal, if the Council needs to seek advice, it is reasonable for the applicant to bear the cost in these circumstances.
• It must be stressed that when exceptions to policy and commuted sums are accepted, the decision on whether to accept a financial contribution rather than on site provision will be the Council's.
• The money will be used to provide affordable housing on alternative sites. It is therefore appropriate that the level of the payment in lieu should relate to how much it will cost an affordable housing provider to buy land on the open market. This is consistent with the Council's approach to landowner or developer subsidy towards affordable housing provision. More details about how commuted sums are calculated and used are contained in the attached.

For more detailed information download the commuted sum guidance.PDF here

Click the link to use the commuted sums calculator

For further information please contact Alice Lean - Housing Strategy and Enabling Officer - 01483 523096

Page owner: Ben Hammond. Last updated: 30/01/2012 11:56