KEY LEARNING POINTS
- By proactively engaging with local landowners it is often possible to facilitate opportunities for affordable serviced building plots
- Waiting lists or registers are a good way of gauging the level of local demand; they can also help when it comes to the allocation of any opportunities that are brought forward
- The full cost of purchasing the land, site servicing, marketing, legal and other administration costs can be recovered when the plots are sold
German councils routinely facilitate affordable building plots as part of their normal planning and administrative functions.
Councils typically service a site by working with local contractors and designers; they then sell plots to people on a local waiting list at a fixed price. All costs are recovered.
Sites are carefully selected to ensure they link to existing built up areas. The plots need to be reasonably level (to keep building costs down) and in sustainable locations so they are attractive to local families.
Design Codes are prepared for each site and linked to a development plan to provide certainty. This also reduces the resources a council needs to devote to determining applications. The Design Code is kept deliberately ‘light’ to allow people architectural freedom, and reduce design costs.
Although the council works with investors or developers to make housing land available it prefers to bring plots forward itself as it has more control over the timing, pricing and who plots are sold to.
This is a good example of how small rural authorities can proactively release affordable plots for local people to build their own homes. The approach benefits local landowners and has minimal impact on council resources.
Oberleichtersbach is a small rural authority with just over 2,000 inhabitants, located in the district of Bad Kissingen in northern Barvaria, about 120km north east of Frankfurt. The authority is part of the administrative community of Bad Brückenau and includes the small town of Oberleichtersbach and the villages of Unterleichtersbach, Bach, Breitenbach, Mitgenfeld and Modlos.
ASSEMBLY AND DISPOSAL OF BUILDING PLOTS TO MEET LOCAL DEMAND
The council is experiencing high demand for suitable building plots as it is a desirable rural area and local people are leaving the community because they cannot find suitable housing. It has therefore established a ‘first come first served’ waiting list to meet demand. There are currently 21 people on the list.
The Mayor in Oberleichtersbach (Herr Muth) is very proactive and is leading a council drive to identify new areas for development to meet the local demand. He feels the facilitation of plots supports local community cohesion and promotes sustainable, well-designed housing at affordable prices.
Although the council has explored opportunities to provide plots within existing settlements, the areas that are being released are mostly on the edge of settlements. This is because there are few development opportunities within settlement boundaries - and land that is available is in private ownership and often not released for new housing.
Since 1993 the council has delivered about 75 plots across seven areas. The examples that follow are typical.
ELLER IV EXPANSION
The “Eller IV” development lies on the south-western edge of Oberleichtersbach and is a further expansion of an area bounded by Eller Strasse. It follows on from an earlier phase of 24 plots that was facilitated by the council in 2005 and 2006.
Eller IV is about 2.1ha in size and provides 20 new plots. Collectively these can accommodate up to 36 detached homes on plots of about 760 sq m. Green space (0.13ha) is also included. Sixteen of the plots are in council ownership. The council has appointed a local contractor on a standard design and construction contract to service the site.
Many small rural councils in Germany bring forward a steady stream of affordable building plots on small sites by working with local landowners. This is a good example of how small rural authorities can proactively release affordable plots for local people to build their own homes. The approach benefits local landowners and has minimal impact on council resources.
For the purposes of this Toolkit we have made the following definitions:
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No. Units 75 plots across seven sites since 1993
Proactive political leadershipCouncil leaders in Germany often champion the provision of affordable building plots – they recognise that this can reduce rural depopulation and also helps to sustain the local economy. Many Mayors see it as part of their normal planning and administrative functions
The site was identified for expansion in early 2013 in response to local demand for plots. It is located outside the built-up area and was previously agricultural land owned by the council and local farmers. To enable the development the council changed the land use zoning plan (FNP) following due process. This included a public consultation to rezone the area from agricultural land to low density residential development. The site was considered a suitable candidate for development as it was a natural extension of the Eller III area and it ‘rounds off’ the south western edge of Oberleichtersbach.
At the same time the council also prepared a detailed zoning plan (B-Plan), commissioned from Büro Hahn, a local design and engineering consultant. This set out the proposed layout for the site, traffic calmed adopted access roads and accompanying green space. The loss of the agricultural land is compensated by ecological improvements on other land locally, and these costs are recovered from the plot sale prices.
To enable architectural freedom, the design specifications in the B-Plan were kept to a minimum and covered the type of housing permissible (detached/semi-detached), permissible building lines, coverage and floor space ratios, building heights (wall and pitch height), roof slopes and garage/parking space specification and access.
Demand is high. Twelve expressions of interest for plots were received before the planning process started, and 15 of the 16 council owned plots were reserved before the B-Plan was adopted.
Prices and costs
Plots are sold at fixed prices for €60 per sq m (£44) - so €45,600 (or about £33,600) for a 760 sq m plot. This enables the council to recover the servicing costs, local admin and legal charges and land registry fees of €19,300 (£14,200). The cost of the land and the servicing costs are both shown on the price list, which is made public by the council.
Pricing is set by a council committee, based on local valuations and takes into account all the contributory costs. Stamp Duty Land Tax is also payable on the land (not the end value of the house). In Bavaria Stamp Duty is currently 3.5 per cent, so for a plot of €40,000 a buyer will pay a total of €41,400.
The total cost to service the Eller IV site was €695,000 or €19,300 per plot (£14,100). This included €180,000 for access roads, €160,000 for rainwater/SUDs and €185,000 for water supply connection.
Marketing and Sales
Plots are advertised on the council’s land register and website, and on public notice boards. Expressions of interest are requested by letter or email to the council (there is no form).
Although the council keeps a list of the expressions of interest, there is no formal Register. Sales of plots are administered via the council’s estates and legal department in Bad Brückenau. Purchasers can only buy one plot, but they can express an interest in more than one plot. Council-owned plots are not available to businesses or developers.
Ownership and Legal Issues
Although councils don’t always own land when they bring plots forward, in this case the local authority owned part of the land, with the remainder owned by local farmers. To secure the site the council negotiated with the other landowners and agreed a price of €10.50 per sq m (£7.70 per sq m) to acquire the land. As part of the deal the landowners were able to extend their farm buildings, and they secured four plots that they could sell privately. No compulsory purchase was deemed necessary to assemble the land.
The council’s sales contract requires purchasers to build in two years. It also allows the council to claw-back the plot in the event of non-compliance, for disposal to another person on the waiting list. Although rare, this has happened. In these situations the owner has to pay the legal, Stamp Duty and full administration costs (set by the council at €500) of transferring the plot back; though the initial plot cost is refunded.
Site construction traffic and noise mitigation is regulated by the sales contract and planning conditions which specify the roads that can be used by construction traffic.
These plots are in the small community of Breitenbach, north of Oberleichtersbach.
The 3.3ha site provides for 0.04ha of green space and 1.16ha of developable land to create nine building plots, capable of accommodating up to 14 homes.
Local contractors appointed on a standard contract by the council have undertaken the site servicing.
BREITENBACH VILLAGE INFILL
The site was identified for expansion as part of the council’s housing land review programme. It was agricultural land that was partly owned by the council and a local farmer, whose farm complex adjoins the site.
Although the site lies on the edge of the settlement it was regarded as being closely connected to the village core and considered a suitable location given that it was almost enclosed by surrounding development.
To enable the development the council changed its land use zoning plan (FNP) which involved public consultation to designate the area for low density housing. In parallel it also prepared a detailed zoning plan (B-Plan) that was also commissioned from Büro Hahn.
HOW B-PLANS SET OUT WHAT CAN (AND CAN’T) BE BUILT
The Breitenbach B-Plan sets out the design requirements and the site layout. The hatched yellow area identifies the traffic-calmed access road; the publicly owned open space is shown green. The plan also sets out new tree planting (and trees protected by preservation orders) together with the design specifications and the agreed location of agricultural buildings. Permissible building lines are shown in blue. Development that accords with these specifications is approved. Anything that does not comply will require a special ‘departure’ planning application.
Work out all your land acquisition, servicing, tax, administration and legal costs, and then set the plot sales price so that all of this is recovered. If you are careful you can still provide modestly priced plots for local people
The design comprises a simple layout with a traffic-calmed access road that will be adopted. The layout provides for a degree of separation from the nearby farm buildings as well as the expansion of an adjoining farm. This solution was negotiated with the farmer when the site was first considered.
The design constraints imposed by the B-Plan are kept to a minimum and simply cover the type of housing permissible (detached/semi-detached), the permitted building lines, coverage (35 per cent) and floor space ratios (60 per cent), building heights (wall height and pitch height 6.5m and 13m), roof slopes (0-52 degrees) and garage/parking space specification and access.
Don’t apply lots of design constraints
The German B-Plan simply sets a few basic restrictions on what can be built. If you apply lots of constraints it can put potential purchasers off
The demand for plots was high and the council received frequent enquiries. Half the plots were reserved as soon as the area was identified.
Prices and Costs
The plots have been sold at a fixed price €55 per sq m (£40). A typical 500 sq m plot costs €27,000 (£22,200). The servicing costs and local administration charges were fully recovered – these worked out at about €4,000 (£2,950) per plot.
Marketing, Sales, Ownership and Legal Issues
The same approach was used here as for the Eller IV development.
RELEASING THE RIGHT PLOTS - HART-LANGELLER
Despite the strong demand in Oberleichtersbach, some plots remain unsold in the neighbouring spa town of Bad Brückenau.
Bad Brückenau Council serviced and released the ‘Hart-Langeller’ area in 2010 to provide 70 building plots to meet demand from the local community.
The site is on the edge of the town adjoining an established residential area and benefits from open views over the Sinn valley. Plot sizes range from 500 to 1,100 sq m with prices fixed at €27 per sq m (plus servicing costs of approximately €16.54 per sq m). For a 500 sq m plot this works out at €21,770 (or about £16,000).
Although the plots are reasonably priced the additional costs associated with building on steep slope has put many people off, and two thirds of the plots remain unsold.
ENGAGING WITH DEVELOPERS TO PROVIDE PLOTS – OBRERN STRASSFELD (H4)German councils generally prefer to be involved in the development of housing and they like to take ownership of some plots so they can control the prices and manage the sale to local people. This is often achieved by land pooling through Federal Building Law or voluntary negotiation with landowners. They also engage with developers to provide plots. This engagement typically starts with pre-application discussions, followed by a council resolution to work with the developer. A contract or agreement for the developer to service the site is then signed. This will usually require plots to be brought to the market, with all the servicing costs absorbed by the developer. A council resolution will then amend the land use plan, and the developer will prepare a zoning plan with a Design Code. This will take into account the council’s requirements such as access, green space provision and design constraints. Both the land use plan and the zoning plan need to follow due process, including public consultation and final adoption by the council. The site is then serviced (roads and services adopted) and the plots are sold at market value by the developer without council involvement. As the plots are in private ownership the council cannot control who buys them and when the homes are built. However councils often make information about waiting list available to developers. Councils are also able to specify areas in their development plan where social housing or affordable plots should be provided. This type of development can also qualify for financial assistance (see below). Bad Brückenau Council, for example, often collaborates with developers to deliver plot opportunities. The council is currently in discussion with a private investor to provide 32 serviced plots on a 3.2ha site in Oberern Strassfeld. The development is favoured by the council because it will reduce public expenditure, the need to service alternative sites and to administer the sale of council-owned plots. However, there is significant public opposition to the project despite the local demand for more housing. Local concerns are that it will provide too much building land, create traffic and highway safety issues, reduce land values and lead to more undeveloped properties in local centres. The development is also currently contrary to the adopted land use plan and the developer would be required to bring forward a zoning plan (B-Plan) to provide certainty for plot purchasers. The outcome of this developer-led project remains uncertain.
PEOPLE AND FINANCE
Oberleichtersbach Council does not apply local connection criteria to the sale of its own plots.
Most of the buyers are young couples/families on moderate incomes and most commission their build from a local contractor. Many homebuilders employ offsite manufacturing systems (or ‘Fertighäuser’) to build fast, high quality, sustainable homes.
Local families who purchase a building plot in the Bad Brückenau area receive a small discount on the cost of the plot if they have children.
Public funding is available for building your own home through the Bavarian State housing program (‘Wohnungsbauprogramm’) which provides loans for building and buying single-family homes, semi-detached houses and flats.
These low interest loans (currently 0.5 percent over 15 years) are available to help younger middle and lower income families to access home ownership. Households with children also receive a one-time subsidy of €500 per child (commencing during pregnancy). Funding is available up to 30 per cent of the total cost of a first home.
This case study was compiled with reference to the following sources:
Herr Schmidt – council of Oberleichtersbach
The NaCSBA Research & Development Programme is funded by the Nationwide Foundation and aims to promote the self-build and custom build sector as an affordable route into housing for a greater number of people in the UK.
For further information, please visit:www.nacsba.org.uk or www.selfbuildportal.org.uk