COMMUNITY BENEFITS GUIDANCE NOTE
Introduction
The principle of ‘planning gain’ is a firmly established concept within most progressive planning systems. The basic ethos of planning gain is that there should be a balanced approach toward the benefits accrued as a result of development activity. For example, developers can realize substantial profits from development projects that impact the public domain and infrastructure. Under the principles of planning gain, a proportion of those profits should be redistributed within the local community to improve social, economic, or environmental conditions. At its core, planning aims to act in the public interest, and planning gain can greatly assist in achieving this by enabling a more balanced approach to the benefits of development activity.
The Department has previously negotiated community benefits on a small number of occasions; however, this was done in the absence of an established policy framework, which reduced the Department’s negotiating leverage. The Department has therefore implemented policies in both the North East Hamilton Local Plan 2022 and the City of Hamilton Plan 2025 to support requirements for planning gain (or ‘community benefits’) in association with development activity.
This document outlines a draft format for a guidance note on this topic, which will supplement the relevant policies of the associated land use plans. The Department has sought to ensure that all relevant factors have been identified to ensure that the policy framework for this initiative is both meaningful (in terms of practical outcomes) and workable for all stakeholders. An assessment of planning applications within the city over the last 10 years was also conducted to determine options for the application of thresholds.
The consultation period on this draft guidance note will run from X to X, and all comments can be submitted to X.
Purpose of the Consultation Exercise
The concept of community benefits was presented and vigorously tested through public consultation exercises associated with the drafting of both the North East Hamilton Local Plan 2022 and the City of Hamilton Plan 2025, both of which received positive public feedback. As such, this consultation exercise is not seeking feedback on the principle of introducing community benefits policies, but rather on how the Department proposes to administer and manage this initiative through the planning and building application processes.
Policy Context
Both the North East Hamilton Local Plan 2022 and the City of Hamilton Plan 2025 include Community Benefit policies (see Table 1). It should be noted that development proposals on their own do not constitute a “community benefit.” The objective of these policies is to ensure that development activity within the city contributes positively to the local community by providing financial and/or non-financial support for enhancements to the public realm.
Both the North East Hamilton Local Plan 2022 and the City of Hamilton Plan 2025 must be applied as a whole. Therefore, there may be occasions where, in applying the plan in its entirety, the nature and extent of the benefits arising from a community benefit contribution could outweigh other considerations set out within the relevant plan. In such cases, the type and extent of contributions may form part of the negotiations between applicants and the Department of Planning.
What Types of Development are Expected to Contribute?
As stated, the Department researched historical planning application data within the city to determine appropriate thresholds for when a community benefit contribution would be mandatorily required. In identifying appropriate thresholds, the Department recognizes the complex nature of development activity and has ensured that a range of factors have been considered, such as:
- This is a new concept for Bermuda, and therefore the Department wants to ensure that it is sensitively integrated into the development process. It is necessary to outline a commitment to regularly review the implementation of this concept to ensure that it remains balanced and workable.
- Setting the thresholds too low may discourage some small to medium-scale developments, adversely impacting the vision and objectives of the associated plans.
- Setting the thresholds too high would compromise the ability of the initiative to make a meaningful contribution to the city.
- The cost of construction has risen sharply in recent years, and overly onerous contribution requirements could render some projects unviable.
Taking all this information into account, the Department has determined that the following thresholds would offer a reasonable and balanced approach to the circumstances under which a community benefit contribution would be required:
- Development proposals for new buildings with 20,000 square feet or more of gross floor area (GFA),
- Development proposals for renovations and/or alterations, and/or additions to an existing building with 20,000 square feet or more of GFA, and
- Developments proposing 10 or more residential units.
Are There any Exceptions?
- Listed buildings; and
- Derelict buildings currently classified as unusable or uninhabitable by the Department of Land Valuation.
How Will the Value of the Requisite Contribution be Calculated?
The value of the contribution will be 1% of the estimated total development costs (defined below). Where the level of the proposed contribution relative to the development costs requires verification, in the opinion of the Director of Planning, the Department will consult with an appropriately qualified person. Contributions can take the form of financial and/or non-financial contributions or a mix of both.
If the total development cost changes as a result of revisions to the development proposal the community benefit contribution cost will be adjusted accordingly.
What Constitutes Total Development Costs?
Total development cost means construction costs, including finishes, site works, and re-grading associated with new developments.
Total development cost does not include:
- Costs for hazardous materials abatement,
- Land use planning consultants,
- Feasibility studies,
- Environmental review,
- Land acquisition,
- Legal fees,
- Architecture/engineering,
- Construction management,
- Geotechnical surveys,
- Historical surveys,
- Demolition,
- Ongoing maintenance of the community benefit contribution(s), and/or
- The cost of securing financing for the development.
Types of Contributions
A financial contribution is when a developer makes a monetary contribution to the Public Realm Improvement Fund, totaling 1% of the estimated total development costs. If the application is approved, a condition of approval will require the funds to be transferred to the Public Realm Improvement Fund prior to the issuance of a partial or final Certificate of Completion and Occupancy.
The Department of Planning will collaborate with the Corporation of Hamilton to determine which public realm improvement projects the funds should be directed toward. For financial contributions, the developer will not be responsible for the management and maintenance of the contribution.
A non-financial contribution is when a developer provides a non-monetary contribution that matches the value of 1% of the estimated total development costs. The type of benefit, its location (which must be within the application site), installation, and ongoing maintenance will fall under the responsibility of the developer and/or landowner. Where the level of the proposed contribution relative to the development costs requires verification in the opinion of the Director of Planning, the Department will consult with an appropriately qualified person.
The contribution must be installed by the developer in a location within the application site that enhances the public realm, to the satisfaction of the Director of Planning. If the planning application is approved, conditions of approval will require the contribution to be installed prior to the issuance of either a partial or final Certificate of Completion and Occupancy.
Developers can opt to split the 1% value of the estimated total development cost between both financial and non-financial contributions.
What if a 1% Contribution is Not Economically Viable for My Project?
If you believe that a community benefit contribution would unreasonably impact the viability of your project, the Department may request a development viability statement, providing a comprehensive outline of the project costs. The Department may have this information analyzed by an appropriately qualified person within Government. In such cases, the Department may reduce the required contribution or waive it entirely.
Project Identification
Financial contributions will be used for public realm improvement projects identified by the Corporation of Hamilton, in collaboration with the Department of Planning. Non-financial contributions will be negotiated between the applicant, the Department of Planning, and the Corporation of Hamilton through the planning application process. Details of the contribution will need to be provided with the planning application submission and may require consultation with the Bermuda Arts Council.
Management of the Public Realm Improvement Fund (Financial Contributions Only)
All financial contributions will be allocated to a dedicated Public Realm Improvement Fund, managed by the Corporation of Hamilton in collaboration with the Department of Planning. This fund will be used exclusively for public realm projects within City land that align with the strategic goals of the City of Hamilton Plan 2025 and the Strategic Plan of the Corporation of Hamilton.
Monitoring
The Department of Planning will monitor the implementation of this policy and the contributions secured. Regular updates will be published on the Department of Planning’s website to demonstrate how contributions are being managed and used for the enhancement of the public realm. The Department will specifically monitor whether the extent of community benefit contributions is routinely rendering projects unviable and will take necessary steps to ensure the initiative remains workable for all stakeholders.
Compliance
Non-compliance with the corresponding community benefits policy may result in the refusal of planning permission. Developers are strongly encouraged to engage with the Department of Planning through our free pre-consultation process as early as possible to ensure that community benefit contributions are adequately understood and addressed prior to the submission of a DAP1 application. This will enable a quicker planning application process.
Letters of objection and/or representation should be emailed to planningfrontdesk@gov.bm referencing the PLAN or SUB number in the subject line.