218.Section 78 provides that an LHA may designate an area as subject to selective licensing if:
it is, or may become, an area of low housing demand (subsection (4) lists some characteristics that can distinguish such an area), and/or
it has a significant and persistent problem with anti-social behaviour where the inaction of private landlords is a contributory factor.
219.In the case of a designation under the first condition, the LHA must believe that the designation, together with other measures, will help lead to an improvement in the social or economic conditions in the area. In the case of a designation under the second condition, the LHA must believe that the designation, together with other measures, will help lead to a reduction in or elimination of the problem of anti-social behaviour.
220.The section also allows the appropriate national authority to specify other criteria for making a selective licensing scheme to deal with other housing challenges.