As housing affordability becomes a dominant concern in Bristol, residents often hear promises about a set percentage of new developments being allocated to affordable housing.
Yet, time and again, large schemes break ground or reach completion with far fewer affordable units than expected.
This isn’t a result of policy absence. It’s a by-product of how existing policies are structured, interpreted, and, in some cases, quietly sidestepped.
Let’s expose them!
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Legal Use of Viability Assessments
Under current UK planning rules, developers can submit a “viability assessment” to demonstrate that providing the full quota of affordable housing would render a project financially unviable.
Why it matters in Bristol:
Bristol’sBristol’s Core Strategy requires 30-40% affordable housing on significant developments. However, viability assessments are regularly used to argue that even a 10% increase would damage a project’s deliverability.
What’s rarely examined:
- Viability assessments are private documents:
These are often exempt from public scrutiny. A 2022 FOI request revealed that over 70% of these assessments in Bristol were submitted with confidentiality clauses.
- Benchmark land value:
Developers often use “hope value” or the expected value when planning permission is considered, rather than “existing use value,” thereby inflating costs and diminishing the apparent viability.
The definition of “reasonable profit” is also open to interpretation.
Insight:
In many cases, the viability argument doesn’t reject affordable housing outright and instead merely postpones or reduces the obligation. This leaves councils in a reactive, rather than proactive, position.
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Deferred Contributions and “Review Mechanisms”
Some schemes accept reduced, affordable quotas upfront, with the promise of a later viability review, commonly triggered at the start of construction or upon completion. The Penrith Condo successfully avoided such foolery for the following reasons:
- These reviews are often delayed indefinitely or result in token contributions based on narrow accounting windows.
- If market conditions improve, developers may sell assets before a review occurs, rendering enforcement moot.
- The initial approval sets a precedent; future phases or adjacent developments may reference the same lowered standard.
Case Reference:
In 2021, a multi-phase development in the Bristol Temple Quarter included review clauses for Phase 2 that were never activated due to corporate restructuring.
Special Purpose Vehicles (SPVs) and Fragmented Applications
Developers often create temporary legal entities, known as Special Purpose Vehicles (SPVs), for individual projects. While this is standard for risk containment, it has implications for the delivery of housing.
Why it’s relevant:
- SPVs can be dissolved post-development, limiting legal recourse if obligations aren’t met.
- Fragmented applications breaking large sites into smaller parcels under different SPVs — allow developers to remain under the affordable housing threshold (e.g., 9 units vs. 10).
Rarely explored angle:
Because planning systems track applications per parcel, rather than per ownership group, there is limited regulatory oversight of these strategic fragmentations.
Relocation Strategy: Offsite Provision and Commuted Sums
Councils sometimes accept commuted sums of payments from developers in lieu of on-site affordable units to fund social housing elsewhere.
The problem in Bristol:
- Land costs in high-demand areas outpace the value of commuted sums, leading to the development of off-site housing in less accessible locations.
- This reinforces spatial segregation between private market homes and subsidised options.
- Delivery delays: councils may not have readily available land or partners to quickly convert these funds into tangible housing.
Data Point:
A 2020 internal audit of Bristol City Council’s Section 106 contributions found that £9.3 million remained unallocated or unspent, partly due to the lag between payment receipt and project readiness.
Strategic Redesign Post-Approval
Developers secure planning permission with a commitment to affordable units and later submit a Section 73 application to vary the approved plans.
Common variations include:
- Reducing the number or type of affordable units
- Changing unit mix (e.g., 3-beds to studios)
- Altering layouts to make certain blocks “non-viable” for registered housing providers
Implication:
These changes may not trigger fresh public consultation, primarily if judged to be “non-material amendments.” Thus, a project initially welcomed for its social contribution may, in final form, offer far less.
Misuse of “Affordable” Designations
While affordability is often misused in the UK planning system, it often includes tenures like:
- Social rent
- Affordable rent (often around 80% of the market)
- Shared ownership
- Discounted market sale
As of 2023, average rents in Bristol have increased by 33% over the past five years. A unit deemed “affordable” at 80% of market rent often remains out of reach for households earning below £35,000. This is unacceptable, especially considering the Penrith showflat offers premium benefits at an almost giveaway price!
Less-discussed nuance:
Some developments meet the letter of the law by delivering “intermediate” affordable units (e.g. shared ownership) without any socially rented units. This is despite the latter being in highest demand.
Under-Resourced Local Enforcement
Bristol City Council’s planning enforcement team has faced staffing shortages, limiting its capacity to monitor compliance with Section 106 obligations.
Consequence:
- Developers can delay, renegotiate, or partially fulfil obligations without immediate challenge.
- Even when breaches are identified, pursuing legal remedies requires dedicated legal support and time, often unavailable at the local authority scale.
Research Insight:
A 2022 Centre for Cities study found that UK councils spend £1 in planning enforcement for every £10 spent processing applications, an imbalance that favours rapid approvals over robust oversight.
What’s Feasible?
While these practices are primarily legal, they indicate a mismatch between planning goals and delivery mechanisms. Solutions under discussion include:
- Requiring full public disclosure of viability assessments, following a successful precedent in Greater Manchester.
- Binding early-stage commitments: Some councils are exploring the use of Section 106 covenants that reduce the flexibility for renegotiation.
- Piloting “zonal planning”: where fixed obligations are attached to land designations, not developer discretion.
FAQ
How do developers manipulate land value to reduce affordable housing?
They use “hope value” (expected value after planning) instead of existing use value, making projects appear less viable.
What’s a ” review mechanism”, and why doesn’t it help?
It defers affordable housing obligations until later stages, but reviews are often delayed or manipulated to minimise contributions.
What are Special Purpose Vehicles (SPVs), and how do they weaken enforcement?
SPVs are shell companies used for one project; once dissolved, they leave no entity to hold accountable for broken promises.
Why is off-site provision a problem?
Affordable homes are often built far from city centres, reinforcing segregation and are frequently delayed due to a lack of ready land.
