2017 Response to Right Houses in Right Place (November)

INTRODUCTION

It is remarkable that data from the Office of National Statistics reveal, that in spite of the number of households rising from 21.2 million in 2001 to 23.7 million in 2016, the number of owner-occupied dwellings has remained stable at just under 14.8 million. The proportion of owner-occupied homes since 2001 has therefore declined from 69.5% to 62.3%. Does this mean the section of the community, that can afford to purchase their own homes, is now fixed?

The increase of 2.5 million dwellings in that time is all in dwellings for rent. Nearly all new dwellings have been for sale, but they have not appeared to swell the owner-occupied figure. This can be explained by landlords purchasing existing dwellings, that have been owner-occupied dwellings, and converting them to rent. After all developers' business plans are directed at sales and not lets, because they need the capital to stay in business.

Local Authority building of houses for rent virtually stopped in 1981, having built around 100,000 dwellings a year since 1946. That means there is a shortfall of 3 million dwellings for rent. The population increase since 1981 is about 8 million, so where do they live? We know that 3 million single adults (20 to 34 years old) now live in their parents' homes, and many young families occupy households of more than one family.

It seems clear that the broken housing market will not be fixed by persuading the young to take on sub-prime mortgages, and sooner or later, when interest rates rise, this would lead to another 2007 crisis. Government is beginning to realise that homes for rent are the need, and the only organisations that would be prepared to build sufficient houses for rent are local authorities and housing associations. Sadly the current government offer to fund the necessary deficit of rented dwellings falls far short of the need and demand. The current annual figure of 140,000 dwellings built by the private sector - only exceeded from 1958 to 1973 and in 1988 - appears to meet the current demand for owner-occupiers, but it does not and would not meet the demand or the need for rented dwellings.

Planning policies propose but do not build houses. Local authorities and housing associations could build dwellings for rent if funded, but developers will not since their interest is in dwellings for sale and they appear to be meeting the demand. More planning consents are needed for dwellings for rent and not for dwellings for sale.

RESPONSE to QUESTIONNAIRE

Question 1

a) do you agree with the proposed standard approach to assessing local housing need? If not, what alternative approach or other factors should be considered?

NO.

The ONS calculations of the predicted need for more households in each of the 355 local authorities are generally accepted, and surely they constitute a sufficient understandable method of allocating need. The total would meet the total predicted need.

Each local authority (LA) is different and to apply a universal equation as if 'one size fits all' is both unreasonable and just not feasible. Allowing each LA to justify an increase, for example on grounds of immigration, or a decrease on appropriate grounds, such as the absence of useable green space and substantial numbers of students as temporary residents, would recognise the problems faced by many LPAs. To tinker with the figures using an arbitrary formula seems unnecessary and will arouse discontent and result in delays.

The wish to increase the ONS figure where the affordability ratio is high does not make sense. The formula offered would lead to more high price development where the affordability ratio is already high, when the need is surely for affordable dwellings occupied by those, often on relatively low incomes, essential for working on the infrastructure - education, health care, policing, etc.

If the LA's average house price is high, so would the price of new dwellings be high even were there acceptable land for housing development. Areas with high affordability ratios will lack affordable dwellings not just the number of dwellings. Accordingly, it would make more sense to allocate a higher percentage to affordable dwellings in any target when awarding planning consent. The higher the affordability the higher the percentage for affordable dwellings, presumably for the LA and Housing Associations to build for rent. This should bring those seeking employment in the infrastructure closer to their place of work.

b) how can information on local housing need be made more transparent?

This simple calculation would be totally transparent.

Question 2:

do you agree with the proposal that an assessment of local housing need should be able to be relied upon for a period of two years from the date a plan is submitted?

YES.

Question 3:

do you agree that we should amend national planning policy so that a sound plan should identify local housing need using a clear and justified method?

YES. . Provided the formula is as simple as described in Q1 a

Question 4:

do you agree with our approach in circumstances when plan makers deviate from the proposed method, including the level of scrutiny we expect from Planning Inspectors?

YES.

Question 5:

a) do you agree that the Secretary of State should have discretion to defer the period for using the baseline for some local planning authorities? If so, how best could this be achieved, what minimum requirements should be in place before the Secretary of State may exercise this discretion, and for how long should such deferral be permitted?

NO.

b) do you consider that authorities that have an adopted joint local plan, or which are covered by an adopted spatial development strategy, should be able to assess their five year land supply and/or be measured for the purposes of the Housing Delivery Test, across the area as a whole?

YES.

c) do you consider that authorities that are not able to use the new method for calculating local housing need should be able to use an existing or an emerging local plan figure for housing need for the purposes of calculating five year land supply and to be measured for the purposes of the Housing Delivery Test?

YES. If the simpler calculation were adopted, then the local plan figure should suffice.

Question 6:

do you agree with the proposed transitional arrangements for introducing the standard approach for calculating local housing need?

YES. Provided the calculation in Q1a is accepted.

Question 7:

a) do you agree with the proposed administrative arrangements for preparing the statement of common ground?

YES.

b) how do you consider a statement of common ground should be implemented in areas here there is a Mayor with strategic plan-making powers?

A wider commitment is needed to encompass the independence of mayors.

c) do you consider there to be a role for directly elected Mayors without strategic plan- making powers, in the production of a statement of common ground?

The answer is simply to ensure to include the mayor in the consultation process.

Question 8:

do you agree that the proposed content and timescales for publication of the statement of common ground are appropriate and will support more effective co-operation on strategic cross-boundary planning matters?

YES.

Question 9:

a) do you agree with the proposal to amend the tests of soundness to include that: i) plans should be prepared based on a strategy informed by agreements over the wider area; and

YES. It all depends on ensuring that the several parties are obliged to participate and sufficient staffing and funding is provided to facilitate the process. Without that obligation and support, no progress on coming to a common ground agreement is likely.

ii) plans should be based on effective joint working on cross-boundary strategic priorities, which are evidenced in the statement of common ground ?

YES.

b) do you agree to the proposed transitional arrangements for amending the tests of soundness to ensure effective co-operation?

YES.

Question 10:

a) do you have suggestions on how to streamline the process for identifying the housing need for individual groups and what evidence could be used to help plan to meet the needs of particular groups?

This question assumes that planning can determine how developers will implement any consents. The only developer who might be supportive would be the LA providing rented accommodation. The LA would know the need and the demand and should be able to act accordingly.

b) do you agree that the current definition of older people within the National Planning Policy Framework is still fit-for-purpose?

No comment.

Question 11:

a) should a local plan set out the housing need for designated neighbourhood planning areas and parished areas within the area?

NO. If localism is to have any meaning, surely the relevant neighbourhood plans will produce the required policy. If they fail to meet the required policy they would not pass all the tests.

b) do you agree with the proposal for a formula-based approach to apportion housing need to neighbourhood plan bodies in circumstances where the local plan cannot be relied on as a basis for calculating housing need?

NO. Unless it entails the formula proposed in this document.

Question 12:

do you agree that local plans should identify the infrastructure and affordable housing needed, how these will be funded and the contributions developers will be expected to make?

YES. Local planners are the only people who can identify both infrastructure and affordable housing needs. Who else is qualified to do so? If they don't suggest how these should be funded, who else can, certainly not the developers? LPAs must negotiate, if not stipulate, developer contributions through S106 and CIL. Developers may not like it but at the moment they seem to wag the dog.

Question 13:

in reviewing guidance on testing plans and policies for viability, what amendments could be made to improve current practice?

The viability issue is currently destructive of far too many planning proposals for adequate affordable dwellings. Provided LPAs have a declared policy on the fair distribution of affordable dwellings in proposals from private developers, developers should organise their funding and plans to meet the policy before submitting applications for planning consent.

Question 14:

do you agree that where policy requirements have been tested for their viability, the issue should not usually need to be tested again at the planning application stage?

YES.

Question 15:

how can Government ensure that infrastructure providers, including housing associations, are engaged throughout the process, including in circumstances where a viability assessment may be required?

This happens already. Statutory undertakers, that do not work together, produce an unsatisfactory development. Viability should not enter the equation at all.

Question 16:

what factors should we take into account in updating guidance to encourage viability assessments to be simpler, quicker and more transparent, for example through a standardised report or summary format?

Provided LPAs have appropriate policies on affordable housing in their areas, developers should be prepared to include the viability issue in their planning applications.

Question 17:

a) do you agree that local planning authorities should set out in plans how they will monitor and report on planning agreements to help ensure that communities can easily understand what infrastructure and affordable housing has been secured and delivered through developer contributions?

Monitoring should be mandatory, but without adequate staff in the Building Regulations Departments and Enforcement Departments, adequate monitoring is impossible.

b) what factors should we take into account in preparing guidance on a standard approach to monitoring and reporting planning obligations?

Staffing, staffing and staffing.

c) how can local planning authorities and applicants work together to better publicise infrastructure and affordable housing secured through new development once development has commenced, or at other stages of the process?

This can only be achieved by employing more competent staff.

Question 18:

a) do you agree that a further 20 per cent fee increase should be applied to those local planning authorities who are delivering the homes their communities need? What should be the criteria to measure this?

Fees should be directly related to the cost of the work being done. Standard fees unrelated to the work will always lead to criticism when fees are not in proportion to the effort.

b) do you think there are more appropriate circumstances when a local planning authority should be able to charge the further 20 per cent? If so, do you have views on how these circumstances could work in practice?

Fees should be locally based so that they fund the planning department and associated services such monitoring and enforcement.

c) should any additional fee increase be applied nationally once all local planning authorities meet the required criteria, or only to individual authorities who meet them?

Fees should be decided locally.

d) are there any other issues we should consider in developing a framework for this additional fee increase?

No comment.

Question 19:

having regard to the measures we have already identified in the housing White Paper, are there any other actions that could increase build out rates?

Developers know the rate at which their houses will sell and will see no point in producing houses at a faster rate. There are developers that slow the rate in order to maintain the price to ensure a 20% profit. One option to deter such developers would be for LPAs to refuse further planning applications in their area until an acceptable percentage of their current developments is completed. On the other hand substantial financial penalties might influence such rates, but if they are punitive the developers will just stop building and go elsewhere.

Adequate funding of local authorities and housing associations to allow them to build dwellings for social rent would obviously increase build out rates and is the policy most likely to meet the demand and need for that large section of the community currently suffering from their inability to afford either to buy or even to rent their homes.

November 2017                                                Alan B Shrank - NORA chairman