Vacant Building Credit

We discuss when a building has to be vacant.

Introduced at the end of 2014 via amendments in NPPG, this policy calls for a “financial credit” which aims to allow the deduction of existing floorspace so that affordable housing contributions are only required in relation to net increases. But the policy leaves a lot of important questions unanswered.

A key question is “when does the building have to be vacant?” Some authorities are requiring vacancy when the planning application is made. Others say that the time of grant is more compelling because that is when the s.106 will be signed and its affordable housing quantum agreed to.

But in many cases, vacancy will come later in the development process and many applicants will, for good reasons, want to retain occupancy as long as possible. Is VBC denied to those developments? That question is not answered in the policy but it is helpful to look at the purpose behind it. There seem to be two strands to this.

First, the Government makes clear that the policy is intended to provide incentive to developing brownfield land. In that case, why does it matter when the building becomes vacant? In any event, for a lot of schemes there will be more economic sense in keeping buildings in use and generating income for as long as possible. There is no value in requiring demolition earlier than economically sensible if the plan is to incentivise the redevelopment of brownfield land.

The second hint is in the link being made between VBC and the CIL regime. Under CIL there is more flexibility in what is allowed by way of set off for floorspace, including carry forward between phases in a phased development. So if the plan is to have VBC mirror CIL, vacancy before planning permission is granted should not be read into the policy.

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