Take A Listen (Option)
In the current state of the housing market, developers are increasingly driven by the principle of maximising profits rather than competing for customers based on the quality and sustainability of their developments. This trend is particularly evident in rural regions like Medstead, where developers are exploiting loopholes and leveraging Paragraph 11 of the National Planning Policy Framework (NPPF) to push through planning applications that would otherwise face rigorous scrutiny.
The Need for a Profit Cap Mechanism
Profit Over People:
Developers are primarily focused on maximising their profits, often at the expense of local communities. This profit-driven approach can lead to developments that strain local infrastructure, degrade the environment, and fail to meet the needs of existing residents. In many cases, developers are not competing to provide the best homes for buyers but rather to extract the most profit from the land they develop.
Impact on Local Communities:
This approach is not beneficial for the region. It drains resources from certain locations, putting undue pressure on local infrastructure and services. Communities are left to deal with increased traffic congestion, inadequate public services, and environmental degradation. For example, the rapid population growth in Medstead, which saw over a 40% increase between 2011 and 2021 due to piecemeal developments, has exacerbated these issues.
The Role of Section 106 Agreements:
Section 106 of the Town and Country Planning Act 1990 allows local planning authorities to enter into agreements with developers to mitigate the impacts of new developments. However, these agreements often fall short of addressing the full range of impacts because they do not cap the profits that developers can make. Introducing a profit cap mechanism within Section 106 agreements could ensure that a fair portion of the profits generated from new developments is reinvested into local infrastructure and community benefits.
Implementing a Profit Cap Mechanism
Local Policy Development:
To implement a profit cap mechanism, local planning authorities need to develop robust policies that set clear limits on the profits that developers can make from new housing developments. This could involve comparing the minimum profit margins for similar developments in the region and setting a cap that ensures reasonable profits while directing excess profits towards community benefits.
Utilising Excess Profits:
The excess profits above the cap should be allocated in two primary ways:
- Immediate Neighbourhood Impact: Covering the direct impact on the immediate neighbourhood, such as improvements to local infrastructure, schools, healthcare facilities, and other community services that will be directly affected by the new development.
- Investment in New Settlements: Investing in the development of infrastructure for new settlements, ensuring that these areas are equipped with the necessary services and facilities to support sustainable growth. This could include building new roads, utilities, public transportation systems, schools, and healthcare facilities in planned new settlements.
Negotiating Enhanced Contributions:
For developments outside settlement boundaries and not included in the local development plan, local planning authorities should negotiate enhanced contributions through Section 106 agreements. These contributions should reflect the additional strain on local infrastructure and the need for sustainable development.
Ensuring Compliance with Strategic Planning Policies:
Developments outside settlement boundaries should face rigorous scrutiny to ensure compliance with strategic planning policies. Enhanced Section 106 contributions should be negotiated to mitigate the impacts of such developments, particularly those leveraging Paragraph 11 of the NPPF to justify their proposals.
Implementing a Profit Cap Mechanism
Exploiting Paragraph 11:
Developers are currently exploiting Paragraph 11 of the NPPF, which provides a presumption in favour of sustainable development. This has created a window of opportunity for developers to maximize their profits by pushing through planning applications with minimal oversight. The lack of a profit cap mechanism allows developers to extract maximum profits without adequately contributing to the infrastructure and services needed to support new developments.
A Call for a Full Audit:
The planning application process requires a full audit of procedures to ensure that it serves the best interests of local communities. This audit should focus on identifying and closing loopholes that developers exploit, ensuring that all developments are sustainable and beneficial to the region.
Conclusion
The implementation of a profit cap mechanism within Section 106 agreements is crucial to ensuring that housing developments contribute fairly to local infrastructure and community needs. By introducing such a mechanism, local planning authorities can ensure that the profits generated from new developments are reinvested into the region, supporting sustainable growth and improving the quality of life for residents.
This approach aligns with the principles of sustainable development and helps manage the impacts of new housing developments on local communities. It is time to shift the focus from maximising profits to building sustainable, vibrant communities that benefit all residents.