Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Memoranda

Memorandum by The Regeneration Practice (HOU 14)

Whether the funds in the Comprehensive Spending Review will achieve the Government's target of a decent home for everyone by 2010;

  Government aims to produce a decent home for all will be backed by all, but care needs to be exercised to avoid the mistakes of the past house building programmes:

    —  post-war slum clearance programmes shared a similar ambition to create hygienic housing in the sky but failed because social and economic problems were seen in simplistic spatial terms alone;

    —  revenue funding of social housing by the State through Housing Benefit erodes a sense of self reliance, individual responsibility for management and pride of place;

    —  capital funding through Approved Development Programme (ADP) grant from the Housing Corporation on a lowest unit price basis combining with too little emphasis upon the design quality by planning authorities, have tended to reduce the design quality of affordable housing (with one of two notable exceptions);

    —  the construction of social housing without consideration for a more sustainable approach to its location or design has reinforced the ghettoism of many inner urban areas; and

    —  reliance on private developers to meet our affordable housing needs through negotiated Planning Agreements under Circular 6/98 has slowed up the housing supply side, directly increasing housing costs, and leading to mistrust between the public and private sectors.

How spending of the new resources should be balanced between social housing and options for owner occupation for those who cannot afford to buy (including shared ownership) and the mechanisms to be used for their distribution;

  It is essential to avoid 100 per cent rented stock. All residents of social housing must have a stake, however small, of ownership in order for them to take pride in the management and enjoyment of place. Shared ownership with the ability to increase individual stake holding to suit individual circumstances offers an excellent and proven model. Housing co-operatives offers another.

  Government could and should introduce fiscal measures to stimulate shared ownership finance schemes by the financial sector.

How the quality of new affordable housing can be ensured and the poor design of previous house building programmes avoided;

  It is essential to avoid a simplistic spatial masterplan-led approach which could simply displace underlying social and economic ills from one built environment to another. Spatial solutions must be addressed hand in hand with capital and revenue structures designed to promote a sense of ownership of place, high quality management, improved education, skills and job opportunities.

  ADP grant criteria should incorporate greater emphasis upon value for money taking account of design quality, rather than simple lowest unit price assessments. This will combine with the increased investment in design skills within local planning offices, to improve the design quality of affordable housing.

The effectiveness of the Housing Market Renewal Fund in tackling housing needs in areas with low demand, and in areas of economic success;

  Government has an opportunity to invest in more sustainable patterns of growth using the Housing Market Renewal Fund. However, where low housing demand exists, fiscal measures are required to skew employment to these areas, otherwise, any major investment will simply represent a blank public cheque as the process of abandonment is likely to continue to outstrip any public investment made.

  Government could and should introduce fiscal measures to skew growth into areas of the UK with low demand in order to attack the problem of abandonment at source, rather than treating the symptoms of economic failure.

  In areas of economic success where housing costs are freezing out key workers, affordable housing investment represents a golden opportunity to create exemplars for sustainable development. For example, rather than new towns constructed remote from infrastructure and public transport nodes in the Thames Gateway, design competitions could be held for tall buildings to be constructed on public transport nodes in the London suburbs. If combined with Enterprise Zone Status, these could provide focal points for new mixed use centres of development, easing the burden on transport into the city core and offering opportunities for a more balanced mixed use city to evolve in the longer term.

  Government could and should introduce Enterprise Zone Status around designated suburban public transport nodes to stimulate more sustainable patterns of urban growth. These could have prestigious affordable housing developments, excellent access to public transport and new civic spaces as their centre-piece, perhaps utilising air space development rights as the private market has successfully done at Broadgate in London.

The role of planning obligations in providing affordable housing;

  Private Developers can provide an efficient and cost effective delivery vehicle for affordable homes. But misplaced public trust that this can be any form of partnership should be replaced with a more business like approach. Were developers to meet 100 per cent of public expectations in this role, they would need to place profit second to the public goal of housing those on low income. In a competitive marketplace, a developer with this approach would be quickly bankrupt.

  The development market needs financial certainty. Equally, the key to sustaining affordable housing procured through commercial development is management. This can only be supplied by organisations who place this public goal before profit. Taking these factors together suggests that procurement from the private development market through the planning system is viable and potentially advantageous in terms of value for money, but only with certain provisos:

    (a)  Clear nationally accepted formulae need to be set to determine the quantum of any contribution by on site construction, or in kind which do not involve any local planning negotiation with developers. Arguments by developers that some land has higher development costs thereby warranting local negotiation are entirely spurious because the operation of the land market is such that land values automatically factor-in any abnormal development costs. The value of land set by the market is the residual value, after all development costs and the developers return.

    (b)  Based upon these nationally accepted formulae, a fixed payment must become automatically due relating to development of any land use, which can be discounted at predetermined rates for any on-site affordable housing provision. (See TRP written evidence into the Select Committee Inquiry into the Planning Green Paper).

    (c)  It must be a pre-condition that developers enter a Public Service Agreement with a Registered Social Landlord to manage any on-site affordable housing in order to secure a genuine and sustainable public benefit.

  With these conditions met, (and a reformed planning system) the benefits of private procurement of some affordable housing stock can be obtained, namely, truly mixed communities, private housing design indistinguishable from public stock avoiding ghettoism, and the cost efficiences of market-led house building.

Paul Latham Dip (Arch) RIBA, Director

The Regeneration Practice

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Prepared 22 October 2002