20 Jul 2018
It is no secret that the redevelopment of brownfield sites is generally beset with more abnormal costs than a typical greenfield site. This is often a major hurdle that can delay or even stymie the redevelopment of brownfield sites. It is the viability issues that stalls or prevents development, or makes such sites less attractive to the market. This is where Vacant Building Credit [VBC] is relevant and why landowners and prospective developers should think twice before demolishing existing buildings.
The recent consultations on the revised National Planning Policy Framework [NPPF] and Planning Practice Guidance [PPG] both show a clear drive and emphasis on a ‘brownfield first’ approach to new development. They set out proposed changes to how viability is considered in planning therefore VBC is a particularly topical element of the current PPG.
VBC is a national Government, PPG-derived financial incentive for the development of brownfield sites with vacant buildings. VBC does not exist in Wales or Scotland. The credit is used to offset existing floorspace against proposed, so as to reduce/ remove locally-set contributions towards affordable housing that would arise via planning obligations. Of course, the PPG is only guidance and therefore can be applied to local circumstances as a material consideration - or not, by individual councils.
VBC has the potential to help prospective developers with issues of viability, depending on a council’s own plan policies and their stance on the guidance. This blog explains what VBC is, when it does and doesn’t apply, and how it may benefit project viability.
VBC was introduced by a written ministerial statement of 28 November 2014 as an incentive ‘… to tackle the disproportionate burden of developer contributions on small-scale developers, custom and self-builders’. So why are the details of VBC not widely known? It may be because its introduction was challenged in the High Court  and the VBC guidance was subsequently – but only temporarily -withdrawn. The Government appealed the decision and it was reinstated in the PPG in May 2016. It is now proposed to be referenced in the new NPPF (currently at draft paragraph 64) which would add to its weight.
Policy and guidance on VBC is found in both the original written ministerial statement and the PPG paragraphs on planning obligations [21 to 23]. Paragraph 64 of the draft NPPF includes reference to vacant buildings offsetting affordable housing contributions, although it is not explicitly described as VBC. Local Plan policies relating to VBC are very thin on the ground; one of the few examples is in the Draft London Plan, which includes Policy H9 (Vacant Building Credit).
When VBC applies
According to the PPG, VBC is applicable in cases where either a vacant building is brought back into lawful use, or it is demolished and replaced by a new building. In either case, the gross floorspace of the relevant vacant building(s) can be used as a ‘credit’ when the LPA calculates any affordable housing contribution. Vacant floorspace can potentially offset the affordable housing requirements for any given site by a proportion relating to the quantum of existing floorspace compared to that proposed.
VBC will not normally apply if the building has been made vacant for the sole purpose of the re-development (and claiming VBC), nor if the building is covered by an extant or recently expired planning permission for the same, or substantially the same development.
Policy H9 of the draft London Plan holds the policy position that VBC is ‘in most circumstances’ not appropriate in London and unlikely to bring forward additional development. The draft policy includes criteria where exceptions might arise and VBC could be applied. For a building to be considered vacant, it has to have been vacant for a continuous period of at least five years before an application is submitted. The applicant is also required to provide evidence that the site has been actively marketed for at least two of those five years at realistic prices. In short, the draft London Plan is written to discourage the application of VBC; it is implicit in draft Policy H9 that viability is not seen as a constraint to housing delivery on brownfield sites. In the rest of England, there are - as yet - no other similarly drafted policies.
The maths: How VBC can boost viability of brownfield development
The basic calculation can be summarised with the following simple formula:
(Existing Floorspace/Proposed Floorspace)*Policy Requirement=Site Affordable Housing Requirement
The PPG includes an example at Paragraph: 022 Reference ID: 23b-022-20160519. And here is a worked example here for clarity, based on the following assumptions:
Existing gross floorspace: 15,000 sq. m
Policy affordable housing requirement: 30%
Proposed development: 352 dwellings with a total floorspace of 30,000 sq. m (representing an average dwelling size of 85 sq. m)
The difference between the existing gross floorspace (vacant buildings on site) and the proposed new build floorspace is 10,500 sq. m i.e. the proposed development would result in 10,500 sq. m more of development in this example.
On this basis the Affordable Housing Contribution is (15,000/30,000)*30%=15%
Rather than a requirement of 106 (30%) affordable units the requirement is halved to 53
From the above calculation it can be deduced that if the floorspace to be demolished is greater than the proposed floorspace, the affordable housing contribution would be zero.
There are many other ways in which vacant buildings can affect the planning strategy. Developers and landowners would need to consider the financial burden of rates that have to be paid by keeping a vacant building on-site; the community infrastructure levy ‘in use’ requirement is another consideration.
There are also wider benefits of retaining vacant buildings on-site, while the development process is underway. One example is in relation to the consideration of visual impact. The mass or scale of an existing building can be a helpful material consideration in comparison with the proposed development. Existing buildings on-site can also provide an ‘existing’ position in terms of assessing the impact of a proposal’s traffic generation. This can help with making the case for acceptable highways impact of new development.
VBC means there can be value in keeping vacant buildings standing, until a planning application for redevelopment has been determined; this element of a site’s wider planning strategy may improve scheme viability, by reducing or removing any requirement for affordable housing.
 Written Ministerial Statement (WMS) of 28 November 2014 West Berkshire District Council and Reading Borough Council v Secretary of State for Communities and Local Government  EWHC 2222 (Admin)
15 Mar 2017
Becoming a parent for the first time in 2016 puts me proudly amongst the growing number of planners at Lichfields who have a very personal and truly cuddly reason to focus on planning for future generations.
As planners we are privileged to be able to make a genuine difference to the lives of future generations by creating great places for them to experience. Here are 3 quality projects that Lichfields has been involved with - and our little ones will be lucky enough to enjoy:
Kids Allowed nursery, Altrincham
Graded ‘outstanding’ by Ofsted, Lichfields recently prepared and managed a planning application for a new Kids Allowed nursery in Altrincham. Overcoming constraints caused by a relatively tight and irregularly-shaped site, planning permission was granted earlier this year. Near the tram, on a popular route into the city centre and surrounded by a large residential area, the new nursery is located in an accessible and ‘future-proofed’ location. It will create skilled job opportunities, provide local families with quality childcare in a conveniently located, purpose-built nursery building that has been designed to ensure an exceptional work and play environment for all children and staff. We look forward to the nursery opening its doors in 2018.
Central Library, Manchester
Children love books for the magic they create for the imagination. Parents love books for the peace and quiet that results! The Manchester Central Library is a landmark, Grade II* listed building which was recently subject to an imaginative redesign based on a high quality planning strategy and a coherent vision for what makes places great. Lichfields submitted applications for planning permission and listed building consent for the transformation of the library as part of the wider refurbishment of Manchester’s town hall complex, which is widely regarded as one of the finest groups of civic buildings in the country. Previously, only 30% of the building was open to the public. After the redesign, in consultation with English Heritage, 70% is now open. This reconfiguration of floorspace has enabled the provision of new digital features including a media lounge, alongside a café and children’s library. The proposals introduced modern design and materials, whilst retaining the heritage value of the asset. Planning permission and listed building consent for the proposals were granted in 2010 and the works were completed in March 2014. Thanks to a fantastic scheme of improvement, this development epitomises the importance of planning for helping meet the needs of future generations (click here to read more).
Indoor trampoline centre, Aintree
Keeping with my baby/toddler theme and for when the door bouncer no longer cuts it, Lichfields has been involved in securing planning permission for some ambitious and lively indoor environments for future generations. Projects include a proposal for an indoor trampoline park in Aintree with the aim of utilising a vacant building and repurposing it for future generations. Lichfields preparing a robust sequential assessment helped secure planning permission in 2016.
These very different projects all highlight Lichfields’ varied and UK-wide experience and expertise in helping to realise all manner of fun spaces, for all ages, creatively – whether for learning and play spaces in new buildings, re-using redundant or under-utilised spaces or providing for the enhanced use of historic buildings and their environs, for now and for the benefit of future generations.
Whether you share our passion for creating places for future generations, are interested in getting your hands on an inspiring mug or would just like to get in touch to discuss how Lichfields may be able to assist you with progressing your projects, please do not hesitate to contact us.
#Lichfields #FutureGenerations #Planning #GreatPlaces