Dumballs Road - The Embankment

Can someone more familiar with the planning process explain what ratification by the cabinet of the council means and entails? Given that planning permission was granted, I'm a bit confused. Is it because the council are footing some of the bill?

this is my take on it although my knowledge is quite limited. I thought applications could be delegated to planning officers however when there is a significant development such as this then the council has to approve the application rather than the planning department.

The Cabinet are not involved in the planning permission procedure. The scheme has planning permission.

The Cabinet are involved in discussions about the Council being involved in delivering the affordable housing and also land assembly.

Can someone more familiar with the planning process explain what ratification by the cabinet of the council means and entails? Given that planning permission was granted, I'm a bit confused. Is it because the council are footing some of the bill?

this is my take on it although my knowledge is quite limited. I thought applications could be delegated to planning officers however when there is a significant development such as this then the council has to approve the application rather than the planning department.

The Cabinet are not involved in the planning permission procedure. The scheme has planning permission.

The Cabinet are involved in discussions about the Council being involved in delivering the affordable housing and also land assembly.

Thanks. Is this why the council are meeting this week then, to discuss the social housing aspect of the development? what sort of things do they discuss? I'd have thought if the scheme has planning and 250+ social houses are planned, then that doesn't leave much else to talk about.

The Council has to decide whether it will agree to the terms Belepheron are saying are needed to ensure development - which I believe is a 40 year commitment to increase rents in line with RPI from a starting point of 80% of LHA allowances (the max amount tenants can claim in housing benefit).

Now this is actually a fairly big risk for the LA. RPI inflation is a flawed measure - it systematically over-estimates inflation because of a problem with a formula. It is also generally about 1% or so higher than CPI inflation (which does not have this flaw). So over time, the rents will increase from 80% of LHA allowances, to perhaps 120% or more over the 40 year period. That means housing benefit won't cover rent - so either people will have to pay more themselves, or the council will have to make up the difference.

If I were the council, I would demand a change in the uprating rule. Start at 90 or 95% of LHA but then uprate in line with CPI inflation. That means the developers get more money up front and the council faces less financial risk in the future (because rents won't go above the maximum allowable for housing benefit).

So thats why theres a lot else to talk about.

It might not be possible to make that change in uprating rule. The investors might be using the RPI-uprating as a hedge against RPI inflation risk (many other contracts are still linked to RPI despite it being bunk). They might not value a CPI-link as much and that could undermine the financing of the deal.

So thats why theres a lot else to talk about.

It might not be possible to make that change in uprating rule. The investors might be using the RPI-uprating as a hedge against RPI inflation risk (many other contracts are still linked to RPI despite it being bunk). They might not value a CPI-link as much and that could undermine the financing of the deal.

my basic understanding of RPI is that it includes mortgages whereas CPI doesn't. so why is RPI being considered when mortgages aren't included in the cost of living in the property? Doesn't seem sensible.

NB thanks for the explanation.

Thats one difference between RPI and CPI. But CPI does include rents and in the long term you'd think mortgage interest costs and rent costs should move in the same direction and broadly the same rate (otherwise there is a big incentive to switch from owning to renting or vice versa) - of course in the short term they can diverge a lot.

The more important difference between RPI and CPI in this context is the formula used to calculate the change in prices. RPI's formula is simpler but wrong. It has the nasty feature that if prices of goods all rise by the same amount, and then all fall back to the original level - the overall RPI level at the end is higher than where it started. Its because of problems with expenditure weights. Means RPI overstates inflation. CPI doesn't suffer this problem so is lower (and more accurate).

Uprating benefit rates with a lower measure and rents with a higher measure is a recipe for a financial disaster for the council though - many tenants wouldn't be able to make up the difference.

Confirmation that the Council have decided the scheme is unaffordable -

http://www.walesonline.co.uk/news/wales ... ff-7796198

Alternatives are being looked at so not all is lost.

On a general note I was surprised that the renders have been received so negatively on here. These have been available for over a year now and I think that when they first come into the public domain the opinion was generally favourable. I don't know what has changed in the interim. The quality of the materials and the public realm and the provision of well thought out green spaces will determine how successful this development will be, but just simply looking at the designs I like what is being proposed. Effectively this is a new suburb being created, see Thornhill, Pontprennau and St Mellons for the last stab at creating new suburbs. See Lloyd George Avenue for the last attempt by the volume house builders to create an inner city thoroughfare. At least this looks like its going in the right direction (always assuming that given the news above it ever gets off the ground.....)

Interesting to learn that it they believe it represents generally good value for money - but the amount of borrowing means it is unaffordable at the moment. Generally low interest rates mean now is actually a fairly good time to borrow to pay for investments.

Like I said I had much greater worries about the rent guarantees being requested.

Do any of you think the whole scheme will be parked for now or is the developer likely to begin with the private homes in the meantime ?

The reason i didnt liek the renders because there was too much in the way of variation in design between low rise and high rise elements, the taller buildings were hulking and not elegant and there were random and faddy coloured boxes around cheap render. Ultimately this scheme is falling down because of the economics of the developer.