Affordable Housing (Conversion of Commercial Property)

Vicky Ford Excerpts

1st reading
Wednesday 22nd February 2023 Commons Chamber

[Vicky Ford (Chelmsford) (Con)]

I beg to move,

That leave be given to bring in a Bill to make provision to enable local authorities to establish planning obligations relating to affordable housing in respect of the conversion of commercial property to residential use; and for connected purposes.

In my Chelmsford constituency, there is a shortage of affordable housing. Around 360 families are currently housed in temporary accommodation, and this is an all-time high. Locally, many new homes have been built. In the Chelmsford City Council area, around 1,000 new homes have been built in each of the last five years. When a new development of over a threshold of 11 homes is built, our local authority applies an affordable housing obligation of 35% of the housing. As a result, many hundreds of new affordable homes have been built each year in the Chelmsford area. In fact, across the country since 2010, Government-backed schemes have helped over 829,000 households to purchase a home. This is a massive achievement by successive Conservative-led Governments. Despite that, however, in areas such as Chelmsford, the demand for affordable homes is outstripping the number of new affordable homes being built.

New homes are also created when an office block, shop or other commercial property is converted into residential homes, such as flats, but these conversions follow the permitted development route, and there is no ability for the local authority to apply an affordable housing obligation. Entire office blocks can be converted into luxury flats without providing any affordable homes at all. The purpose of this Bill is to enable local authorities to apply an affordable housing obligation to conversions of commercial property to residential use. That would not be a top-down, blanket rule set by Whitehall. It would be up to each local authority to decide whether it wished to apply an affordable housing obligation to conversions in its area, and what percentage to use.

Some developers may argue that requiring them to make a proportion of the housing affordable could make the conversion of a building financially unviable, or lead to delays, but decisions would be subject to bespoke local negotiations on each individual property—negotiations between the local authority and the developers on a case-by-case basis—which would allow concerns to be resolved locally.

Looking back over the past few years, it is clear that giving this power to local authorities could make a substantial difference to meeting affordable housing needs. In the area covered by Chelmsford City Council, between March 2013 and March 2022, commercial-to-residential conversions resulting in 1,419 residential units were approved; and 1,292 of those units were above the affordable housing threshold. If Chelmsford City Council had been able to apply the same affordable housing percentages to commercial-to-residential conversions that it applies to new-build homes, it could have released 453 new affordable homes in our area alone.

This is not just a local issue. The Local Government Association has informed me that it estimates that there are almost 95,000 households in temporary accommodation across the country. It has repeatedly raised concerns about permitted development rights allowing developers to convert premises into houses without having to provide any affordable housing. It estimates that more than 20,000 affordable homes have been “lost” as a result of the inability to apply affordable housing obligations to office-to-residential conversions under permitted development since 2015. That is based on an assumption that councils could have applied a 25% affordable housing requirement on conversions in that time period.

Local councils are also concerned that pressures on affordable housing could continue to rise due to factors such as landlords moving out of private rental markets, and a rise in the cost of living. Furthermore, across the UK many households have warmly welcomed Ukrainian families into their homes. Many of those host-guest relationships remain extremely firm, but some of those families may need access to more affordable homes of their own. Looking forward, it is likely that we may see increases in conversions of commercial property, especially office blocks, to residential use. Since the pandemic, more people have been working from home, and commuter numbers have not risen back to pre-pandemic levels. Fewer commuters means fewer office workers, more empty offices, and more potential demand for office-to-residential conversions.

In advance of presenting this Bill, I spoke to the National Housing Federation. It told me that given the need for affordable housing, councils should be able to negotiate for affordable housing as part of office-to-residential conversions. It said:

“It is also vital that all homes delivered under permitted development rights are of decent quality, safe and connected to local amenities.”

In some parts of the country, there have been concerns that permitted development conversions have not always delivered decent-quality, safe homes. I agree that homes should be decent and safe, and those issues need to be addressed, but as a ten-minute rule Bill must be targeted in scope, this Bill will not specify qualitative standards. This targeted Bill will focus on enabling the local authority to apply a quantitative obligation. I recognise, however, that when a local authority is able to open up discussions on the quantity of social housing to be delivered, that is likely to enable it also to open up wider discussions with developers on other issues, such as quality.

There are debates about what constitutes “'affordable housing”, and what the optimal mix is of homes for rent versus homes to buy. For example, if Chelmsford City Council had applied the same ratios that it applied to new-build properties to the 453 notional affordable homes, that could have resulted in 325 more rental properties and 128 more shared-equity and first homes for buyers. My view is that residents benefit from the stability of owning their own home, and I would like to see more effort made locally to help renters transition to becoming homeowners, but that is a bigger debate, and in this targeted Bill, I do not intend to address the question of what the ideal blend of affordable homes would be. There are also concerns about the permitted development regime, including about the contributions made to local infrastructure, but again, for simplicity’s sake, I do not intend to deal with that in this targeted Bill.

Under the planning system that is being legislated for in the Levelling-up and Regeneration Bill, it is intended that councils will be able to ensure that affordable housing is provided from office-to-residential conversions. That is because the infrastructure levy, which replaces section l06 negotiations, will also apply to permitted development. The Government have therefore already signalled their intention to make that change in the long run, but the Levelling-up and Regeneration Bill may take many years to implement. The need for more affordable housing is urgent; we cannot wait, and neither can households in our constituencies. The Bill would therefore introduce an ability to apply the affordable housing obligation immediately, rather than our waiting for the full new regime under the Levelling-up and Regeneration Bill to roll out. I am happy to work with Ministers to put a drop-away or sunset clause into the Bill, so that the measures that it introduces fall away once the Levelling-up and Regeneration Bill is fully implemented.

To conclude, this targeted measure will enable local authorities to apply affordable housing obligations to conversions of commercial property to residential occupancy. Local authorities would be able to apply those obligations in the manner that best suits the needs in their area. The Bill has the potential to deliver many thousands of new affordable homes for people across the country in a quick and timely manner. I commend it to the House.

Ordered,

That Vicky Ford, Mr Mark Francois, Paul Holmes, Sir Bernard Jenkin, Andrew Jones, Wendy Morton, Angela Richardson, David Simmonds, Greg Smith, Kelly Tolhurst and Dan Carden present the Bill.

Vicky Ford accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 24 March, and to be printed (Bill 251).

Northern Ireland (Executive Formation) Bill (Allocation of Time)

Ordered,

That the following provisions shall apply to the proceedings on the Northern Ireland (Executive Formation) Bill:

Timetable

(1) (a) Proceedings on Second Reading and in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall be taken at today’s sitting in accordance with this Order.

(b) Proceedings on Second Reading shall (so far as not previously concluded) be brought to a conclusion four hours after the commencement of proceedings on the Motion for this Order.

(c) Proceedings in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion five hours after the commencement of proceedings on the Motion for this Order.

Timing of proceedings and Questions to be put

(2) When the Bill has been read a second time:

(a) it shall, despite Standing Order No. 63 (Committal of bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put;

(b) the Speaker shall put the Question forthwith on any Instruction relating to the procedure for regulations under section 3(9A) of the Human Tissue Act 2004 which may be selected by the Speaker and moved by a Minister of the Crown, and the Speaker shall leave the Chair after any such Instruction has been disposed of.

(3) (a) On the conclusion of proceedings in Committee of the whole House, the Chair shall report the Bill to the House without putting any Question.

(b) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.

(4) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph (1), the Chair or Speaker shall forthwith put the following Questions in the same order as they would fall to be put if this Order did not apply:

(a) any Question already proposed from the chair;

(b) any Question necessary to bring to a decision a Question so proposed;

(c) the Question on any amendment moved or Motion made by a Minister of the Crown;

(d) the Question on any amendment, new Clause or new Schedule selected by the Chair or Speaker for separate decision;

(e) any other Question necessary for the disposal of the business to be concluded; and shall not put any other questions, other than the question on any motion described in paragraph (15)(a) of this Order.

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(7) If two or more Questions would fall to be put under paragraph (4)(e) in relation to successive provisions of the Bill, the Chair shall instead put a single Question in relation to those provisions, except that the Question shall be put separately on any Clause of or Schedule to the Bill which a Minister of the Crown has signified an intention to leave out.

Consideration of Lords Amendments

(8) (a) Any Lords Amendments to the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(b) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (a) shall thereupon be resumed.

(9) Paragraphs (2) to (7) of Standing Order No. 83F (Programme orders: conclusion of proceedings on consideration of Lords amendments) apply for the purposes of bringing any proceedings to a conclusion in accordance with paragraph (8) of this Order.

Subsequent stages

(10) (a) Any further Message from the Lords on the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(b) Proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (a) shall thereupon be resumed.

(11) Paragraphs (2) to (5) of Standing Order No. 83G (Programme orders: conclusion of proceedings on further messages from the Lords) apply for the purposes of bringing any proceedings to a conclusion in accordance with paragraph (10) of this Order.

Reasons Committeec

(12) Paragraphs (2) to (6) of Standing Order No. 83H (Programme orders: reasons committee) apply in relation to any committee to be appointed to draw up reasons after proceedings have been brought to a conclusion in accordance with this Order.

Miscellaneous

(13) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on the Bill.

(14) Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.

(15) (a) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken, to recommit the Bill or to vary or supplement the provisions of this Order.

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(c) Such a Motion may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(d) The Question on such a Motion shall be put forthwith; and any proceedings suspended under sub-paragraph (c) shall thereupon be resumed.

(e) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on such a Motion.

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(17) (a) The start of any debate under Standing Order No. 24 (Emergency debates) to be held on a day on which the Bill has been set down to be taken as an Order of the Day shall be postponed until the conclusion of any proceedings on that day to which this Order applies.

(b) Standing Order No. 15(1) (Exempted business) shall apply to proceedings in respect of such a debate.

(18) Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.

(19) (a) Any private business which has been set down for consideration at a time falling after the commencement of proceedings on this Order or on the Bill on a day on which the Bill has been set down to be taken as an Order of the Day shall, instead of being considered as provided by Standing Orders or by any Order of the House, be considered at the conclusion of the proceedings on the Bill on that day.

(b) Standing Order No. 15(1) (Exempted business) shall apply to the private business so far as necessary for the purpose of securing that the business may be considered for a period of three hours.—(Chris Heaton-Harris.)