Affordable homes building in Shropshire could be hit by cost increase
Less money will be available for building affordable homes in Shropshire under plans to increase the amount developers pay towards administration fees.
Shropshire Council wants to increase the fee on its affordable housing levy from two per cent to five per cent – but that increase would come out of the money developers are already expected to pay towards the provision of low cost homes in the county.
Officials today said the increase was necessary to guarantee the future building of affordable accommodation.
Under council rules, anyone behind new open market housing is required to help meet the local need for affordable housing either by providing some as part of the development, or through a financial contribution.
Since 2009, £1.6 million of contributions have been used to help fund an additional 76 affordable homes in the county.
Administration for the delivery of affordable housing comes out of those contributions. The council wants to increase the proportion of the admin fee to five per cent from January 14.
A decision was being taken by portfolio holder for planning, housing and commissioning Councillor Mal Price today.
A report by housing officer Nick Wood says: "It should be noted that this proposed increase in the revenue means a corresponding reduction in the available capital."
In the last financial year, Shropshire Council received just over £399,000 from affordable housing payments with almost £8,000 going on admin. With a five per cent fee, the admin figure would have been almost £20,000.
So far this year the council has received nearly £265,000, raking in just over £5,000 for admin. Under the five per cent rule, that figure would be more than £13,000.
Councillor Price said: "The important thing is to support the development of affordable housing. It is crucial that we maintain the supply. The role of the team that we have at the council is vital in doing this. There are three areas where funding for affordable housing come from and the team deals with those. At the moment we have got about £1 million to invest and that team does that. Their work is vital."
Councillor Price said the rise would bring the admin fee in line with the similar Community Infrastructure Levy.
