The decision of Holgate J in Rectory Homes Limited v Secretary of State for Housing, Communities and Local Government. Case Number: CO/4682/2019 helpfully highlights the point that the Use Class debate for ‘Housing with Care’ developments has in some circumstances become an unnecessary distraction and irrelevance (noted previously). Unless the development plan policy for affordable housing expressly refers to C2 or C3, whether a development properly falls within C2 or C3 is not determinative of whether or not affordable housing needs to be provided (the position is the same for CIL, as it too depends on the wording of the CIL charging schedule).
In this appeal all parties agreed that the 78 unit ‘Housing with Care’ scheme would fall within the C2 Use Class (even if each unit had its own front door and had between 1 to 4 bedrooms). However, the key question was whether or not the scheme was still required to provide 40% affordable housing because the 78 units were still “dwellings” even though they came with care. The Defendant’s Inspector and Holgate J both concluded that they did and that there was a requirement to provide 40% affordable housing subject to viability. It is worth noting that no viability arguments were made to justify why the developer, Rectory Homes Limited, was not seeking to provide 40% affordable housing in the event that the housing with care units were found to be “dwellings” to which policy CSH3 of the South Oxfordshire Core Strategy applied.
The key findings of Holgate J were:
- “policy CSH3 does not use the word “dwelling” as a term restricted to the C3 Use Class. The policy makes no reference, expressly or by implication, to the Use Classes Order at all” (para 47)
- “Where the units in an extra care scheme physically amount to dwellings, it really does not matter what alternative language a developer chooses to describe them. They still remain dwellings” (para 63)
- “… there is no reason why a C2 development or scheme may not provide residential accommodation in the form of dwellings. That possibility is not precluded by the operation of the C3 Use Class and its interaction with the C2 Use Class” (para 65).
Whilst this decision will, at first glance, be seen as disappointing to many housing with care developers, there are some positives that can be taken from it including:
- it offers a recent Court endorsed example of a housing with care scheme that falls within Use Class C2 despite having some of the hallmarks that LPAs and the Mayor assert as representing C3 development, i.e. independent dwellings (some up to 4 bedrooms) with communal facilities and only 1 x 65 year old resident being required to need and have a minimum of 2 hours of personal care per week;
- it makes clear that it is the wording of the affordable housing policy itself as to whether or not a development has to provide affordable housing. If the policy says developments falling within Use Class C2 are exempt from having to provide affordable housing then this decision does not change that;
- if the affordable housing policy does not exclude C2 schemes then housing with care schemes should expect to provide policy compliant levels of affordable housing, subject to viability and a viability argument should be made (and can be won).
- a new planning category/use class (i.e. C2R) for housing with care is not the answer. Instead, energy should be focussed on lobbying the Government and LPAs to properly recognise the benefits of housing with care and plan for them with CIL and affordable housing at an appropriate viable rate if not exempt entirely.