High Court finds that C2 extra care scheme not exempt from affordable housing requirements

The recent decision of the High Court in Rectory Homes Limited v SSHCLG and South Oxfordshire District Council [2020] EWHC 2098 (Admin) highlights that extra care developments within Use Class C2 are not exempt from providing affordable housing solely by virtue of falling within that use class – whether or not affordable housing is required will depend on the wording of the relevant development plan policy relating to a site.

The current Town and Country Planning (Use Classes) Order 1987 defines Use Class C2 as including use for the provision of residential accommodation and care to people in need of care (provided the use does not fall within Use Class C3) and nursing homes. Use Class C3 includes use as a dwelling by a single person or a family or by not more than 6 residents living together as a single household, including where care is provided (these Use Classes are unchanged by the recent amendments). Sometimes local authorities apply different policies to development within Use Classes C2 and C3 – in particular a quantum of affordable housing may be required for Use Class C3 schemes, but not care homes – whether or not affordable housing is required for a particular type of retirement living scheme may depend on the exact wording of the policies. In this case, the Council’s affordable housing policy CSH3 provided that “40% affordable housing will be sought on all sites where there is a net gain of three or more dwellings subject to the viability of provision on each site”. The policy makes no reference to the Use Classes Order.

On appeal, the inspector had followed the decision of the Council and refused planning permission for a “Housing with Care” development (Use Class C2) for 78 open market extra care dwellings and a communal residents centre, finding that the failure to provide a sufficient number of affordable homes as part of the scheme would cause “very substantial harm”.

Rectory Homes lodged a section 288 challenge at the High Court, arguing that the requirement to provide affordable housing was not triggered because the use of the word “dwellings” in the Council’s affordable housing policy CSH3, could only refer to a dwelling in the C3 Use Class. It was agreed between the parties that the proposed development fell within the C2 Use Class, and therefore could not fall within the C3 Use Class under the terms of the Use Classes Order.

The High Court rejected the arguments on behalf of Rectory Homes and dismissed the appeal, finding that:

• The use of the word “dwelling” in policy CSH3 was not restricted to development falling within Class C3 – the policy made no reference, expressly or by implication, to the Use Classes Order at all;
• There is no reason why a Use Class C2 development may not provide residential accommodation in the form of dwellings – that is not prevented by the Use Classes Order. Residential accommodation in Use Class C2 may have the physical characteristics of dwellings with facilities for independent existence, but their “use” may fall within Use Class C2 if “care” is provided to occupants who are in need of care;
• The interpretation of a development plan policy must depend on the language used in that particular policy and in the plan. As a general approach, unless the language of a policy expressly relies upon the Use Classes Order or that plainly appears from the policy’s context, such provisions do not provide an aid to the interpretation of the policy.

The decision highlights that in determining whether affordable housing will be required the focus should be on the relevant development plan policies rather than which use class the proposed development falls within.