New figures have revealed how developers in Cardiff end up paying just a fraction of the community contributions asked of them by Cardiff council.
Details of 25 developments in Cardiff show that the city initially asked for £21m but ended up receiving just £3.75m.
It means the city missed out on £17.9m that it was initially thought would be received to help fund schools, public transport, parks and other facilities as a result of the developments, which ranged from small housing schemes to major projects.
Cardiff council said the contributions - known as section 106 payments - had been reduced because otherwise the projects would not have been viable given the cost pressures on developers.
Section 106 agreements are made between councils and developers. Developers can ask for an independent assessment of the council estimate and agree a lesser amount if it is found to make their scheme unviable.
What didn't happen:
- The council asked the bus station developers for £7.5m to pay for affordable homes, schools, community facilities and even Next Bikes, but received just £1.76m.
- For the Former Browning Jones and Morris site on Dumballs Road, £2.8m was asked for towards affordable homes - but just £123,025 was given
- At Aberdare House on Mount Stuart Square, Butetown, developers were asked for £427,365.14 including £363,776 for five affordable homes but nothing was paid
- For a development in Riverside, the council asked for £270,425 but received just less than £4,000 to pay for double yellow lines
Many of the 25 developments which have agreed to make reduced payments to the council are on brownfield sites throughout the city - which are often more expensive to buy and build on than greenfield sites.
Section 106: How it works
Developers and local authorities often enter into private agreements to make planning applications acceptable.
The section 106 agreements see developers asked to pay to compensate for the impact of their proposed development - this could mean paying towards community facilities or schools, or towards affordable housing if none is provided on site.
Council officers will typically ask for the maximum amount of section 106 contributions it can based on its own planning guidance and Local Development Plan.
Developers can carry out assessments on their proposals in a bid to prove the payments being requested by the council would affect the financial viability of their plans.
These viability reports are then independently assessed by the District Valuer Services (DVS), which is the property arm of the UK Government's Valuation Office Agency.
The viability assessments and advice from the DVS is then taken into account when the planning application is being considered, which is done on a case-by-case basis.
Cardiff council said the increasing costs of land value, materials, labour costs and the decreasing value of pound sterling all have an effect on the financial viability of developments.
A Freedom of Information request asked the council to list all developments in the city where the eventual amount of section 106 money received was less than originally asked for.
During the same five year period, the council received a total of £21m from all developments of which £16m has been spent.
The developments
Cardiff bus interchange
The proposal was for a new bus station as well as 305 apartments, 10,000 sq m office space, 249-space car park.
The council asked for £7,504,185 to spend on:
- Public space around Central Square (£1,7m).
- Affordable housing (£4,679,730 towards 61 units)
- Educational facilities (£332,182)
- £477,273 for public open space
- £255,000 for community facilities
- £50,000 towards Next Bikes
- £10,000 for air quality monitoring
What was agreed: £1.76million, which will be spent on:
- £1.7m for space around Wood Street and Saunders Road
- £50,000 towards hire bikes
- £10,000 towards improved air quality monitoring
Former Browning Jones and Morris site on Dumballs Road, Butetown
Approved in 2018: Demolition of warehouse to build 206 flats and four retail units.
The council asked for £3,558,270.22 to pay for:
- 41 affordable homes (£2.8m)
- £326,102 towards public open space
- Community facilities (£174,197.22)
- £14,426 towards compensatory employment and training opportunities
- £181,795 towards school places
- £12,500 towards improving street lighting
What was agreed? £396,000
- Affordable housing (£123,025)
- £123,025 for community facilities including improvements to Butetown Youth Pavillion
- £123,025 for school places
- £12,500 towards the upgrading of five lighting along Dumballs Road
- £14,425 for employment and training opportunities
ITEC Training Solutions, Crawshay Court, Curran Road, Butetown
In 2018 a 25-storey tower of 140 flats approved under the terms described, however, a new separate application, for a 25-storey tower of 194 flats, has now been submitted.
What did the council originally ask for: £2,522,830.78
What would the money have been spent on:
- £102,000 for improvements to Curran Road to construct a 2m
footway adjacent to the proposed development and to the junction with
Penarth Road, including dropped kerbs for cycle access, and an uncontrolled pedestrian crossing in Curran Road. - £23,959 for economic development
- £208,547 for public open space
- £91,880 for school places
- £1,872,240 for affordable housing
- £111,789.93 for community facilities
What was agreed: £411,880 to pay for:
- £102,000 towards public realm improvements on Curran Road
- £23,959 to help support and develop companies within the Butetown ward and provide further employment opportunities
- £91,880 towards new school places
- £111,789.93 towards improving facilities at the Butetown Pavilion
- 35,185.53 towards public open space
- £35,185.53 towards affordable housing
Land at Dumballs Road, Butetown
In 2017, 106 apartments were approved and the council asked for £1,885,180:
That would have paid for:
- Affordable housing (£1,599,930)
- £185,930 for public open space
- £99,320 towards community facilities
What was agreed: £100,000 to be divided:
- £65,000 for improvements to Canal Park
- £35,000 for improvements to community facilities
Former Riva Bingo, Agate Street, Adamsdown
In 2017, planning committee approved 47 flats being built on the site.
What did the council originally ask for: £767,801 to pay for:
- £667,290 nine affordable housing units
- £72,969 public open space
- £27,542 for community facilities
What was agreed: £125,000 towards affordable housing, public open space and community facilities.
Leo Abse & Cohen, Churchill Way, City Centre
In 2017, the refurbishment and extension of six Victorian properties to create 42 apartments was approved.
The council asked for £680,299 made up of:
- Affordable housing (£530,700)
- Public open space (£61,516)
- £24,612 for community facilities
- £63,471 on road improvements including the resurfacing of the carriageway within Wesley Lane, the replacement of kerbstones, drainage channels, street furniture and street lighting.
What was agreed: £125,000 to "address as a minimum the upgrading of Wesley Lane and provide an additional sum for use at the Council’s discretion."
The Wharf, Schooner Way, Butetown
In 2016, 180 apartments with cafe and a shop on the ground floor was given permission by councillors.
The requirement was for £485,370 to be split:
- £223,357 for parks and open space
- £106,728 towards either the Butetown Community Centre, or another local community facility
- £155,735 for the cost of providing or improving schools in the area.
What was agreed:
- The transfer of the Courtenay Road, Splott site to an approved social landlord for a 100% affordable housing scheme of 30 homes, before the Wharf scheme is built.
- A financial contribution of £15,000 or less towards transportation-related improvements to ensure the safe operation of the Schooner way access.
- Public realm improvements to the dockside walkway adjacent to the site, including resurfacing and lighting.
Bay Chambers, West Bute Street, Butetown
In 2018, permission was granted for an office to become 50 new apartments.
The council wanted £906,354 to pay for
- £64,000 towards loss of office accommodation
- 10 affordable housing units (£655,980)
- Community facilities (£38,242.46)
- £70,968 for public open space
- £4,755 towards bins,
What was agreed: £468,736 to pay for:
- £76,923 towards public realm and transport improvements
- £218,362 towards affordable housing
- Community facilities, £38,242 towards community facilities
- £70,968 towards public space£64,241 to offset loss of office space
Aberdare House, Mount Stuart Square, Butetown
In 2019, planning permission was given for the revelopment of car park to 27 flats and the council asked for £427,365.14 to pay for:
- £363,776 for five affordable units
- £22,502.14 towards community facilities
- £41,087 towards parks
What was agreed: £0
45-47 Drysgol Road, Radyr
Two three-storey blocks each of nine apartments and one detached four-bed house was approved in 2019.
The council asked for £346,831 to fund :
- £310,996 towards affordable housing provision
- £10,000 towards bus stop improvements
- £25,835 towards public open space
What was agreed: £0.
The Rise, Penhill Road, Pontcanna
Eight four-bed townhouses were approved in 2018 and the council asked for £286,636 towards affordable housing but nothing was paid.
27-29 Cathedral Road, Riverside
The refurbishment of buildings to provide three townhouses and 11 apartments was approved in 2018 and the council wanted £270,425.
That was to fund:
- £241,570 towards three affordable flats
- £25,005 for off-site open space
- £3,850 towards double yellow lines to protect the crossover on Hamilton Street.
What was agreed: £3,850 to fund double yellow lines on Hamilton Street.
HSBC Bank, 97 Bute Street, Butetown
What was proposed: A restaurant and 16 apartments (approved 2017)
What did the council originally ask for: £263,520
What would the money have been spent on:
- £31,230 towards parks
- £232,290 towards three affordable homes
What was agreed: £0
Old Imperial Buildings, Trade Street, Butetown
What was proposed: 102 flats with ground floor shops (approved 2016)
What did the council originally ask for: £381,368
What would the money have been spent on:
- £150,596 towards parks and open space
- £59,772 towards community facilities
- £51,000 for loss of office space
- £120,000 towards works to resurface the footway and reconstruct the carriageway of Trade Street from its junction with Penarth Road up to and including the full extent of the site frontage.
What was agreed: £135,000
What will the money be spent on:
- £120,000 towards road improvements
- £15,000 to offset loss of employment land.
Penrhys Hotel, 127 Cathedral Road, Riverside
What was proposed: Conversion of hotel into 10 flats (approved 2018).
What did the council originally ask for: £201,346
What would the money have been spent on:
- £185,368 in lieu of two two bed affordable flats
- £15,978 towards public open space
What was agreed: £0
Land next to 5 Church Road, Caerau
Shops with nine apartments above was approved in 2017 and £166,881 requested to pay for:
- £20,025 for public open space
- An affordable housing contribution of £146,856
What was agreed: £0
4-6 Broadway, Adamsdown
A restaurant and 12 flats were approved and £157,206 requested to spend on:
- £18,354 for public open space
- £138,852 for two one bed affordable flats
What was agreed: £0
Land to right of 102 Pendwyallt Road in Whitchurch
Five houses were approved by planning committee in 2019 and the council originally asked for £143,318 to pay for affordable housing.
What was agreed: £0
Marine House, Mount Stuart Square, Butetown
13 apartments were approved 2017 and the council originally asked for £143,280 but £0 was agreed.
Canadian Hotel, Pearl Street, Adamsdown
Nine apartments were approved by councillors in 2018 and the council asked for £143,666 to spend on
- £2,220 towards investigating parking restrictions including extending visitor permit restrictions
- £16,186 towards open space
- £125,280 towards two affordable housing units
What was agreed: £33,346 for
- £16,186 towards public open space
- £2,200 towards transport
- £14,960 towards housing.
Richard Parfitt Associates, 18D High Street, Llandaff
A conversion of offices into nine new flats where the council asked for £154,043 to spend on:
- £13,973 towards public open space
- £140,070 towards two affordable units
What was agreed: £63,973 for:
- £50k towards affordable housing
- £13,973 towards open space
104-105 Bute Street, Butetown
Three new apartments were approved in 2019 and £62,640 requested:
What was agreed: £0
199 Newport Road, Roath
Conversion of offices into six apartments was approved in 2017 and the council asked for: £62,640 but £0 was agreed.
Uplands Mobile Ltd, 184 North Road, Gabalfa
Six new apartments were approved in 2018 and the council asked for £65,840. It would have been spent on one affordable housing unit (£62,640) and £3,200 towards a disabled parking space.
What was agreed: £46,579 to go towards affordable housing and a disabled parking space on Newfoundland Road
306 Western Avenue, Llandaff
The demolition of builder's yard and build five homes was approved in 2018
What did the council originally ask for: £105,502
What was agreed: £87,852
What the council say?
A council spokesman said: "Brownfield sites can be more difficult to develop compared to Greenfield sites, as the land value is generally higher and there can be further costs for demolition, ground works and land remediation issues from previous uses.
“This is why the target is set for 20% affordable housing on Brownfield sites, compared to a target of 30% of affordable housing on Greenfield sites.
“Many people will see a proposed multi-million development and assume there is excess profit to be made. Over the past few years, land value has increased, the cost of materials has increased, labour costs have increased and the pound sterling has decreased significantly in value. This is not a situation unique to Cardiff.
“What isn’t always known is how much it will cost the developer to buy the land, the cost of the building materials and the cost of labour to build the development, often many years after planning permission has been sought. These costs then need to be offset from the actual income they may receive when they sell the homes on the open market.
“The council will ask for the maximum amount of 106 contributions based on the policies that we have in place. What the District Valuation Service does, when matters are referred to them, is carry out an independent assessment and advise the council on the deliverability of a development, based on their assessment of land value, build costs, professional fees and site “abnormals” compared to the market value the developer will likely receive when they sell the properties.
“Each planning application is assessed on its own merits and the 106 contribution is a negotiation between the Planning Authority and the Developer.”
“What is clear is the significant number of developments which have been approved - on Brownfield and Greenfield sites - where hundreds of millions of pounds of community benefits have been secured where development viability hasn’t been challenged.”
