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Opinion: Why section 106s are essential

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Opinion: Why section 106s are essential

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Published by Max Salsbury for 24dash.com in Housing and also in Development, Local Government, Regulation

Opinion: Why section 106s are essential Opinion: Why section 106s are essential

The news that companies are now offering builders a bespoke service to avoid their section 106 obligations is not a surprise, but it is deeply depressing, writes Alan Fraser, chief executive of Birmingham YMCA.

Section 106 of the Town & Country Planning Act (1990) places obligations on private housebuilders to contribute a broader social benefit when they develop new schemes. 

This is a progressive initiative because it recognises that in building housing, there are other facilities that often need to be provided too, and it requires housebuilders to contribute towards the cost of these.

It is also used to require housebuilders to provide additional social housing either as part of the development, or elsewhere in the area. This makes section 106 popular with local authorities because it can be used to supplement the supply of affordable homes.

However, all of these characteristics make section 106 obligations very unpopular with housebuilders because they eat into their profits.  This might be by requiring cash to be paid to the local authority for them to provide additional facilities for the community, or by requiring the builder to build social housing – which potentially lowers the value of the homes for private sale. 

As a result, we now have private sector consultancies offering to help housebuilders avoid their obligations. One website gives examples where it has saved house builders up to £400,000.

Section 106 is a key way in which we can secure support from existing communities when new housing is built in their midst.  It’s a vital plank in the strategy to ensure that much-needed affordable housing is also provided for those who cannot afford to buy their own home. It is an important recognition that building homes can have negative as well as positive impacts on communities and those who profit from building them should therefore also contribute towards offsetting any negative consequences, and make sure that we have thriving balanced communities well into the future.

In helping companies avoid their obligations under section 106, consultants are putting profits before people and failing to recognise the wider social impact of for-profit companies and for-profit housing. 

Without the provisions of section 106, housebuilders just look like greedy carpet-baggers – anxious to maximise their profits regardless of the impact on other people and those who come after them.

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