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How can effective negotiation with developers be ensured
(including working on larger projects)?

The first part of this question deals with general information about effective negotiation, the remainder deals in particular with large schemes, where complex issues may require additional actions and planning.

It is important to develop cross department working if the best deals are to be struck with developers - and this is often the hardest part of the process because of different disciplines and practices in some authorities. Great efforts are required to collaborate successfully and the time needed for this should not be underestimated. The best practice examples are ones where the benefits of cross department working have been recognised.

Introduction

Planning and housing case officers will usually lead the negotiation of developer contributions. However, Circular 05/2005 notes that a wider, more integrated and collaborative approach that involves relevant stakeholders, helps to ensure that a coherent and comprehensive set of proposals comes forward. The link to the circular is below:

Web link >>

The quality of the management of the S106 agreement negotiation has an impact on the time it will take, and the strain it can place on the relationship between the Local Planning Authority and developer. Above all, good project management should ensure that there is an appreciation of the overall vision and objectives for the project which in turn will impact on the overall nature and extent of contributions and determine how these are balanced against other potential benefits.

General solutions

There are a number of steps that local authorities can take to help improve project management and help ensure effective negotiation with developers:

Preparation of clear and evidenced policies These should:
Involve members in developing affordable housing policies Why?
  • This helps to ensure consistency in decision making.
Preparation and use of a formal protocol.
Setting out:
  • how the local authority will handle S106 applications,
  • which departments will be involved and
  • what stage the S106 agreement should have reached before the application goes to committee.
Early and meaningful pre-application discussion.
 The benefits of this are:
  • It cuts down on delays once the application has been submitted by enabling the key issues to be identified early and clarify both parties’ points of view.
  • It can point the developer to the authority’s policies, protocols, supplementary planning guidance and site briefs.
  • It enables difficult issues and complexities to be raised and a compromise thrashed out.
  • This is especially important for larger schemes.  See the template ‘pre planning application pro-forma’ in this section.
Use of standard clauses or agreements.
  • These provide a useful starting point in discussions with the developer,
  • It is useful if these can be brought together in a single place and made available to developers.
  • See The S 106 Heads of terms template

 

See Forest of Dean Best Practice for the protocol in dealing with s106 agreements as part of planning applications

Dealing with larger projects?

In addition to the general steps that local authorities can take to help more effective negotiation of affordable housing, there are a number of specific solutions that are relevant to larger projects:

Establish a S106 working group. This can:

  • Be particularly useful on large sites
  • Bring together those who have a financial, ownership or management responsibility
  • Ensure that the terms of a S106 are considered and agreed together
  • Add weight to the process

A Planning Performance Agreement . This can:

  • Clarify, ease and speed up the process for major planning applications
  • Provide an agreed framework between a local planning authority and an applicant
  • Commit both parties to an agreed timetable
  • Include milestones from inception to submission and beyond, including the S106 process.

The Government has published a new study, Common Starting Points for Section 106 Affordable Housing Negotiations (July 2008) which considers whether local planning authorities might secure greater levels of developer contributions to affordable housing if they set out in greater detail the assumptions they are working from. Web link >>

ATLAS (Advisory Team for Large Applications), which is part of the Homes and Communities Agency (HCA)  has produced a guide provide advice and information that can assist in the evolution and appraisal of proposals for large scale development through the planning process. Web link >> 

 

  1. How can effective negotiation with developers be ensured (including working on larger projects)?
  2. What will the developer's financial considerations be when negotiating planning obligations?
  3. How should scheme viability be assessed to ensure the affordable housing requirement on a given site is appropriate and deliverable?
  4. How should the uncertainties of grant funding be overcome in agreeing the provision of affordable housing?
  5. What is considered best practice in resolving valuation/viability disputes?
  6. When is it appropriate to use commuted sums or developer contributions for off site provision and how should they be calculated?
  7. What is considered best practice for the preparation and use of planning obligations through Section 106 agreements, to secure affordable housing?
  8. When is it appropriate to use planning conditions in securing affordable housing?
  9. Will affordable housing be a component of the Community Infrastructure Levy (CIL)?
  10. What is considered best practice in selecting and partnering with Registered Social Landlords (RSLs)?