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


Memorandum by The Chartered Institute of Housing (SHC 21)

INTRODUCTION

  The Chartered Institute of Housing (CIH) welcomes the Select Committee Inquiry into Planning for Sustainable Housing and Communities. Our members are involved in a range of activities that contribute to the development and management of sustainable environments. As well as our interest in planning, CIH has contributed to the policy debates on social exclusion, community cohesion, choice based lettings, neighbourhood management and other issues related to promoting sustainable communities.

  CIH has submitted evidence to the Committee's Inquiry into Affordable Housing which we believe is also relevant to the issues being considered here. CIH made a joint submission to the Affordable Housing Inquiry together with the Local Government Association, National Housing Federation, Royal Town Planning Institute and Shelter that focused specifically on the role of planning obligations in providing affordable housing. We believe that our suggestions set out in both these submissions, would assist local authorities in their attempts to deliver more sustainable housing and communities.

OVERALL SCALE OF HOUSE BUILDING REQUIRED

  A number of organisations have made projections for new housing based on successive Government population and household projections for England and there is now a good deal of consensus on the numbers of homes required. Figures produced for the Joseph Rowntree Foundation, which were updated from 1998-based household projections to take on board the year 2000 population projections, suggest that the newly arising need for dwellings will be about 210,000 per year. This does not include the backlog of unmet housing need that includes, for example, people living in bed and breakfast accommodation, families and households that are forced to share and hostel residents, etc. In 1996, this backlog was estimated to be around 650,000 households. Eliminating this backlog over a 20 year period would add an additional 32,000 dwelling per year to the total number required. These figures are very similar to those derived on behalf of the House Builders' Federation.

  While projections need to be continually updated in the light of new data, it can be safely assumed that well in excess of 200,000 new dwellings are needed in England each year for the next 20 years or so. With the level of completions of new dwellings (plus conversions) running at an average of only 154,000 per annum over the last five years it can be seen that there is a significant shortfall in provision.

ARE THE PROPOSALS LIKELY TO SIGNIFICANTLY REDUCE HOUSE PRICES?

  The higher level of funding for affordable housing announced in the Spending Review is not likely to increase the level of house building by enough to reduce house prices significantly. This is partly because the number of additional affordable homes that can be provided from the increased funding is relatively small in relation to the total amount of housing that will be built. In addition, these homes will be provided for people who cannot otherwise buy, so while it will help to meet the housing needs of households that require homes at less than market prices, it is not likely to affect the market significantly.

  Measures to support key workers have until recently been aimed at subsidising buyers to purchase existing properties, rather than increasing the overall supply of homes. If anything, this has the effect of increasing, rather than decreasing, house prices. The announcement in the Spending Review of moves to build new housing for key workers is therefore welcome and CIH suggests that any future funding for this group should also focus on boosting supply.

THE GEOGRAPHICAL DISTRIBUTION OF NEW HOUSING, INCLUDING PLANS TO CONCENTRATE DEVELOPMENT IN THE SOUTH EAST IN FOUR GROWTH AREAS, MILTON KEYNES, THE CAMBRIDGE/STANSTED CORRIDOR, ASHFORD AND THE THAMES GATEWAY

  We agree with the Government's plans to designate these areas for growth. However, in order to be sustainable, this must not result purely in concentrated developments of housing, but must include facilities to support thriving communities. Services such as transport, shops, doctor's surgeries, leisure centres, etc will also be needed and these must be co-ordinated with the housing development.

  Whilst it makes sense to have some concentration of new house building, these areas cannot provide for all London's housing needs. These plans must not exclude growth in other high demand areas of London and the South. For example, there is high demand in West London, and this would not be met by building in East London, which would encourage, rather than ease long-distance commuting. These plans are not likely to significantly reduce the demands placed on other London boroughs in terms of their responsibilities to meet housing need and tackle homelessness.

WHETHER THE PROPOSALS WILL PROMOTE HIGH QUALITY SUSTAINABLE COMMUNITIES WHILST AVOIDING POORLY DESIGNED URBAN SPRAWL

  CIH considers that a new approach to planning and the way that public agencies seek to influence the housing market are needed in order to promote sustainable communities and prevent sprawl.

  The neutrality of the planning system, and the way that planning has become focussed on arbitrating on disputes over land use, has inadvertently contributed to the increasing divisions in society and the prevalence of unsustainable communities. Left to the market, housing of different types and sizes will inevitably separate into different locations so that better and worse off households become physically separated, worsening problems of social exclusion in poorer neighbourhoods.

  The Government has pledged to introduce a statutory purpose for planning, when an opportunity to legislate presents itself. Depending on the purpose that is chosen, how it is framed and whether subsequent planning guidance is reformed in line with this, this will have an important bearing on the delivery of high quality sustainable communities in the future.

  We suggest that a more positive role for planning focussing on "the creation of sustainable communities" should be set out in legislation. This purpose should be explained further in terms of the three elements of "the well-being of areas" set out in part 1, section 2 of the Local Government Act 2000—that is, economic, social and environmental. The effect on sustainability over a broad area should be an important consideration when strategies are being drawn up and individual judgements made over land use. This principle needs to be interpreted for the full range of planning activities. Planning guidance and the criteria for Planning Inspectorate judgements needs to be adjusted accordingly.

  The Institute of Public Policy Research (IPPR) recently undertook an Inquiry into the Future of Social Housing, publishing its report Housing United in 2000. It suggested adopting a set of policy goals for a sustainable housing market and these are set out in an appendix to this paper. CIH believes these criteria provide a good indication as to whether or not a housing market is sustainable.

THE BALANCE OF NEW DEVELOPMENT BETWEEN HOUSING FOR SALE AND SOCIAL HOUSING

  The amount, type and location of new housing, and the balance of housing for sale and affordable housing, are key factors in determining the sustainability of a community. There are currently, however, two distinct systems for determining how much housing is built which mitigates against producing sustainable outcomes. What is needed is a common basis for deriving housing needs of all types that recognises the housing market as a dynamic system.

  Total housing figures are determined in a top down manner. National household estimates are used by regional planning bodies to determine regional targets, set out in Regional Planning Guidance. Land capacity is another factor that is used in drawing up targets and national and regional politics plays its part. Once decided, these figures are cascaded to local authority areas and incorporated into local plans, although the basis for these decisions is often unclear. The actual numbers built do not usually match the target figures for a variety of reasons, and the Deputy Prime Minister has said that he intends to ensure that local authorities do build to the targets in the future. In contrast, the levels of affordable housing required are seen as a matter for local authorities to determine for their areas, although other factors are also taken into account, such as financial capacity, the planned level of land release and the mix of sites available.

  This means that the decision-making and delivery processes—one for total housing and one for affordable housing—are dislocated from each other. For different reasons, neither process may accurately reflect housing need in a particular locality or, if it does, may not result in the need being addressed.

  The process for delivering housing overall can be seen as permissive (ie depending on land owners making land available) and constrained by "planning" issues (such as policy decisions on use of Greenfield land, etc). The process for delivering affordable housing is either reactive (requiring social housing to be provided as part of market-led schemes) or proactive (providing social housing directly) and limited by financial capacity (eg, availability of Social Housing Grant).

  This separation also means that housing professionals are not involved sufficiently in determining total housing figures, while planners are not playing a full role in deciding the need for affordable housing. This results in a dislocated, rather than a coherent policy on new housing provision. It also means that interactions between the different types of market and affordable housing are poorly understood, so that "market" solutions to meeting some affordable housing requirements (eg stimulating private renting, providing starter homes) might be missed.

  The lack of reliable methodologies for determining housing provision and affordable housing targets, as well as the fact that targets are not achieved in reality, conspire to reduce the credibility of the system. Local authorities also tend to act independently from each other, as the system does not promote a collective approach to determining housing requirements.

  There is scope for improving the way figures for total housing, and for different types of affordable housing, are generated. A much better way to tackle this would be to seek the development of a common basis for deriving housing needs that would reflect the reality of the housing market as a dynamic system. Housing market areas, rather than local authority administrative areas, also need to be given more attention, since movements frequently occur across such boundaries.

  CIH is aware that some local authorities are using techniques that take on board a range of data relating to housing markets in order to determine their need for affordable housing. Also, some local authorities are already working with others at a sub-regional level to determine housing needs. The Welland Partnership in the East Midlands is an example of such a group of local authorities.

  The emergence of a significant regional agenda, and an increasing level of joint local authority working at sub-regional level offer an opportunity to develop a new approach to deriving both market and affordable housing needs at the regional and sub-regional level. We would encourage ODPM to look more seriously into developing such an approach, which we believe would enable local authorities to take a much more coherent and strategic approach to meeting housing needs and requirements.

THE EXTENT TO WHICH DECISIONS RELATING TO HOUSING, INCLUDING NUMBERS, TENURE AND DENSITY, SHOULD BE TAKEN BY CENTRAL AND LOCAL GOVERNMENT

  Our response to the question above provides part of this answer—that market dynamics at regional and sub-regional level need to play a larger role in deriving the numbers of dwellings to be built, both market and affordable. We suggest that this might extend broadly to housing tenure, although within overall targets local authorities need to be able to decide what types of housing are developed on a site by site basis to meet specific local housing needs.

  It is reasonable for government to impose targets for density of new housing developments in order to work towards its objectives for sustainability, but we believe that other measures are needed to ensure that high density dwellings are good quality. For example, they need to be sufficiently spacious and have good quality sound insulation.



 
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