Developer's wish not to build them on brownfield site being considered
Government says it needs to assess the possible future demand for affordable apartments in Port Erin before deciding whether a developer can avoid building new ones.
Ocean Castle Limited – which is part of The Tevir Group – has submitted a planning application to transform the former Ocean Castle Hotel site on the promenade.
It wants to build 38 apartments on the brownfield plot with financial backing from the Island Infrastructure Scheme.
The development is required to contain 9.5 ‘affordable housing units’ however, in its planning application, the group claims it would be ‘challenging’ to ‘viably accommodate’ these.
The Tevir Group has blamed increasing building costs which, it says, have resulted in the viability of the scheme being ‘threatened’.
Instead the group says it would rather reach an agreement with government by offering a ‘commuted sum’.
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In response the Department of Infrastructure has told Manx Radio it does accept commuted sums from developers in lieu of affordable housing.
This, it says, is where there is a ‘lack of demand for a particular area or a certain property type’.
The DoI adds this could also apply when additional costs could fall on apartment purchasers such as annual service charges or ground rents.
These, the department says, might place ‘too great a financial burden’ on first time buyers at a time when ‘they can least afford it’.
Preliminary discussions have taken place with the applicant and officers are in the process of assessing the possible future demand before a final decision is made.
Commuted sums are calculated as the likely difference in the selling price per square metre of an affordable dwelling (currently £2,831 psm) compared to an open market equivalent (less adjustment to reflect differing specifications).
The amount of commuted sum for the Ocean Castle application has not yet been assessed.
Money received from developers in this way is paid into a DoI Housing Reserve Fund which is used exclusively to support the development or refurbishment of affordable housing.
Manx Radio has contacted The Tevir Group for comment.