S106 Agreement Affordable Housing

When it comes to affordable housing, a term that often comes up is s106 agreement. But what exactly is a s106 agreement and how does it relate to affordable housing?

A s106 agreement, also known as a Section 106 agreement, is a legally binding contract between a local council and a developer. It is a planning obligation that can be put in place to offset the impact of a new development on the local community.

In the context of affordable housing, a s106 agreement can be used to require a developer to provide a certain percentage of affordable housing units within their new development. The exact percentage varies depending on the local council and the specific development, but it is typically between 20-40%.

The agreement will also lay out the specific details of the affordable housing units. This includes the number of units, the size of the units, and the rental or sale prices. These units are typically reserved for individuals or families who meet certain income criteria, ensuring that they are genuinely affordable for those who need them.

So why is a s106 agreement important for affordable housing? Without it, developers may not have any incentive to provide affordable housing units, as they may be more profitable to sell or rent at market rates. This can lead to a lack of affordable housing options in the area, which can have a significant impact on low-income individuals and families.

However, s106 agreements are not without controversy. Some argue that they can slow down the development process, as negotiations between the developer and the council can take time. There are also concerns that developers may pass on the costs of providing affordable housing to other buyers or tenants, making housing even less affordable for those not eligible for the affordable units.

Despite these potential drawbacks, s106 agreements remain an important tool in ensuring that new developments are inclusive and provide much-needed affordable housing units. By working with developers, local councils can help to create sustainable and diverse communities that benefit everyone.