The scheme also means developer’s will benefit financially from the relaxation of the rules as it negates the need to contribute towards Section 106 Agreements, the method in which Council’s secure funding contributions towards infrastructure, such as highways, affordable housing, schools, healthcare, etc or include affordable housing, enabling projects which wouldn’t have normally stacked up financially become viable.
The Department for Communities and Local Government (DCLG) has granted 17 Local Authorities exemption from the controversial scheme to enable empty commercial properties to be converted into residential use without planning permission.
Commercial properties, even when empty, create a higher revenue stream through property taxes compared to residential buildings, and so this is most likely why Council’s up and down the country have been reluctant to adopt the scheme fully.
However, Birmingham City Council applied and failed in its efforts to preserve key districts it had identified as economically important and will now have to comply with the new rules, which came into effect at the end of May 2013.
This is good news because in Birmingham 18 per cent of commercial property is standing empty, compared to 12 per cent nationally. And with a reported 26,000 people sitting on its housing waiting list and an estimated 80,000 new homes required over the next 20 years, the new Government initiative will provide a much needed housing boost Birmingham so badly needs, removing the unnecessary pressure being placed to build 10,000 new houses on the Sutton Coldfield green belt.