Select Committee on Environmental Audit Written Evidence


Memorandum from the National Housing Federation


  The National Housing Federation represents 1,400 not for profit independent social housing providers in England. The Federation's members include housing associations, co-operatives, trusts and stock transfer organisations who manage more than 1.8 million homes provided for rent, supported housing and low cost home ownership, and an increasingly diverse range of community and regeneration services.

  The Federation has led the housing association sector to a new vision in Business for neighbourhoods, predicated on commitments to neighbourhoods, customers and excellence. We see this as a progressive change programme to deliver more effective services and support for sustainable communities. It is grounded in a vision of mixed neighbourhoods in terms of housing type and tenure where associations contribute to meeting a range of needs across age, ethnicity, economic status, household size, faith, special needs etc.


The case for balanced housing markets

  It is widely accepted that balanced housing markets are essential for the economic and social success of communities, regions and the UK as a whole. Achieving this balance requires the government to respond to the problems both of housing shortage and of over-supply. We would like to see the ODPM establish a national delivery unit to respond to the "balanced housing markets" PSA target.

Case for more affordable housing

  We welcomed the spotlight that the Barker report placed on the need to boost housing supply and in particular affordable housing. Affordable housing has always had a key role to play in sustainable development. Good quality, affordable housing is central to any society's aim of improving quality of life; having a direct impact on employment, social exclusion, education, health, family life and social relations. Decent homes at a price people can afford are central to the achievement of social progress and the maintenance of high and stable levels of economic growth and employment. The Sustainable Communities Plan also recognised the wider importance of the quality of the built environment and the liveability agenda.

  The Barker report looks at housing supply from a macro economic perspective of stabilising house price inflation. As a result it recommends an increase of 17,000-23,000 affordable homes each year above current provision, and a doubling of provision from the private sector to 125,000 to 140,000 homes per year. We look at supply side issues from the perspective of what is needed to deliver the long-term objective of sustainable communities and balanced housing markets in different localities. In our joint Spending Review 2004 submission with the Local Government Association and Chartered Institute of Housing we argued for a mixed housing association programme, towards meeting future housing needs and the backlog of unmet need, to deliver 60,000 affordable rented, low cost home ownership and intermediate rented homes a year by 2007-08 building up from a programme of 35,000 homes in 2005-06.

  Our analysis is grounded in a belief that a failure to meet the needs of medium and low income households, who are priced out of private sector options, will threaten the achievement of sustainability objectives. More than 10,000 households are currently living in bed and breakfast accommodation, a further 83,630 are in forms of temporary accommodation, and 1,260,000 are on housing waiting lists. Behind these figures are the immense costs to individuals and society of people inadequately housed, or placed in temporary accommodation, in some cases far from friends and family unable to put down roots.

Rural housing issues

  Whilst the shortage of affordable homes in urban areas is well documented the needs of rural communities also require supply side solutions. The Countryside Agency estimates that an additional 10,000 affordable rural homes per year are required to meet existing rural community needs, while the Rural Housing Trust estimate there is a need for six to eight subsidised houses in each of the 8,000 small villages in England—a total of 50,000 homes. Once local people are priced out of the market it becomes harder to revitalise market towns, villages and the rural economy. House prices are often driven upwards not by local incomes but by pensions, savings and the sale of houses in other areas. It can be impossible for low to moderate-income households to compete in this environment.

Housing market renewal

  It is important to note that the other side of balancing housing markets is the need to invest in failing and weak markets. In such areas, housing market dysfunction threatens sustainability objectives. The blight of empty homes and degraded environments are significant features in some areas of the north and midlands. In our Spending Review submission we recommend that the total level of expenditure for the existing Housing Market Renewal Pathfinders should be £290 million per annum for the Spending Review 04 period to enable these issues to be adequately addressed.

  Building on the Pathfinders we need a comprehensive strategy for tackling low demand problems across the country. This recognises that the Pathfinders cover only half the areas experiencing abandonment and dereliction. We recommend that the government should address low demand problems and dysfunctional housing markets in all parts of the country by adopting a new National Strategy for Housing Market Restructuring. To fund the strategy we argue in our joint Spending Review 2004 submission for an allocation of additional £350 million over the spending review 04 period.

Conclusions on housing markets

  The provision of housing in different localities needs to be based on whole market assessments so that in different localities an appropriate mix of housing between affordable rented, low cost home ownership and intermediate rented housing is provided.


  Sustainability will be best met by delivering inclusive and mixed neighbourhoods (in terms of housing type and tenure to meet a range of needs across age, ethnicity, economic status, household size, faith, special needs etc) where people want to live. Research published by the Federation in September 2003 Regional Futures: Neighbourhood Realities indicates that there is a general consensus that mixed neighbourhoods are the places where people have the best chance of thriving.

  Promoting mixed communities means action to increase the mix on existing mono-tenure areas, such as peripheral council estates, as well as action to ensure that new developments cater for a mix from the outset. It is also about ensuring that in areas, such as rural communities, that the needs of people on low to moderate incomes are not squeezed out by rising land and property values.

  In the growth areas, political concern is tending to focus on the large-scale physical infrastructure and flood protection needed to make the developments sustainable. Whilst these issues are important, we will not build sustainable communities if we forget about social infrastructure and social mix. Also of importance is attracting employment to these areas. The housing market renewal programme also offers the opportunity to not only restructure the built environment but also to let for mixed and sustainable communities.


Investment needs

  A significant increase in the supply of affordable housing can be achieved through the expansion of the housing association development programme and through initiatives to bring empty homes back in use. In our joint Spending Review 2004 submission we propose a mixed housing association development programme costing £8.4 billion to deliver 60,000 affordable rented, low cost ownership and intermediate rented homes a year by 2007-08. This is based on the planning system complimenting public expenditure to secure the supply of affordable housing set out.

Reform of planning policy

  Indeed planning policy should be seen alongside housing investment as central to ensuring that the nation's housing needs are met and that individuals and communities enjoy quality housing and neighbourhood environments. In areas of high land values and limited supply the provision of new affordable homes is heavily dependent upon land use and planning policies.

  Prior to Barker, the planning system was already undergoing major change. We welcomed the encouragement given to mixed tenure in new developments in the recent consultation on PPG3 and PPS1. However, we believe the statement in the draft PPS1 that a "suitable mix of housing including adequate levels of affordable housing" will be difficult to achieve unless firmer commitments are made in PPG3. Therefore we have suggested that "planning policy should include a presumption that all housing developments should respond adequately to the full range of needs—including the provision of a genuine mix of market and affordable homes".

  In our recent response to PPS1 we also endorsed the statement that "sustainable development is the core principle underpinning planning". But we stressed the need for a framework to enable planners to achieve this. We suggested the model developed within the Egan Review on "Skills for Sustainable Communities" could provide a tool for planners to test the components of sustainability.

  We would urge the government, in responding to the Barker report's call to re-visit PPG3 and liberalise planning, not to lose sight of the importance of affordable housing within mixed developments and the achievement of wider sustainability objectives.

  With the passing of the Planning and Compulsory Purchase Act, we are keen to keen to explore ways in which "on site" in kind affordable housing through s106 schemes could be maintained and promoted by planners to encourage mixed and sustainable communities. We are concerned that the alternative optional planning charge will, particularly in areas of high land values, force local planning authorities to allow affordable housing in areas of cheaper land where social housing is already predominant. If the planning gain supplement, proposed by Barker, is to be introduced, the details of how it operates would also needed to be tested against mixed community and wider sustainability outcomes.

  We are concerned that the Barker report's presumption that land should be used for the most commercially viable purpose could squeeze sustainability considerations. Also, "best consideration" should only be one of a number of criteria that public bodies have to consider in relation to land disposal. The policy framework should be changed to also require them to ask "how can this site be optimised for public benefit". In this way sustainability objectives could be placed at the heart of public land disposals.

  Barker was right to draw attention to some of the problems with the current planning processes. However, any proposal to liberalise land-use planning and fast track approval should ensure that quality and sustainability are not sacrificed to speed. We welcomed the recently announced piloting of design codes by English Partnerships in conjunction with CABE. Design codes do have the potential to improve both the speed and quality of development delivery. However there is a risk that by focusing primarily, if not solely, on aesthetic considerations, design codes will fail to secure wider sustainable outcomes.

  On the specific point of unmet rural housing needs, the rural exceptions policy (Planning Policy Statement 7) should be maintained alongside the new rural allocation policy to enable sites solely for affordable housing to come forward.

Brownfield and high density development

  The current emphasis of recycling urban land before greenfield sites needs to be retained. In the light of Barker's recommendations the government should look at what more can be done to bring forward brownfield developments. There is a need for effective land assembly and a further examination of the role that English Partnerships could play in recycling unused public sector brownfield sites in a way that optimises the benefit to the public, including reflecting sustainability considerations.

  Taking many large cities as examples, most available sites for development now and in the future can be considered brownfield sites. An accurate understanding of their additional site development costs is needed to enable planners to safeguard affordable housing provision on brownfield land.

  High quality high density housing also has a role to play in ensuring effective land-use. The contribution that such developments can also make to sustaining social and economic infrastructure, such as local shops and transport links should also be acknowledged from a sustainability perspective.

  A recent London Housing Federation report Capital Gains: making high density housing work found a number of factors in the success of higher density developments, these included: accessible locations with good transport links, access to employment, proximity to shops and other amenities; low occupancy levels and child density. The research also recognised the contribution of high quality designs and housing management to the success of high density housing. With this, there needs to be a recognition of the costs of such developments.


The housing association sector

  There are lessons for private sector developers in the sustainable development approach that housing associations are expected to take to new developments and the rehabilitation of their existing stock. The Housing Corporation's 2003 Sustainable Development Strategy has the objective of ensuring that all associations with more than 250 homes address sustainable development issues in their policies, strategies and action. The outcomes it wishes to see include higher environmental performance standards and lower energy and water bills for residents. These objectives are central not only to environmental considerations but also to alleviating poverty and wider social and economic objectives.

  Housing associations build homes that are of high quality that are intended to last for decades. Their investment in homes and neighbourhoods is for the long-term. They have an ongoing housing and neighbourhood management role, such that it is in their interests to build homes and external environments to high standards from the outset.

  Housing associations develop new homes to the Housing Corporation's Scheme Development Standards. These place an emphasis on design and the quality of the whole living environment. Locational considerations include convenience of local services, such as parks, public transport, schools and post offices. Aesthetically, buildings are required to be compatible with or enhance the local environment. Schemes are also required to incorporate cost effective energy efficiency measures and for new build homes this means an EcoHomes rating level of "pass" is required—"good" is recommended. Indeed the Housing Corporation's Sustainable Development Strategy sets out an aspiration that all new affordable homes programme schemes should meet the "very good standard" by 2006.

Social Housing Grant to private sector developers

  Consideration needs to be given to the potential threat to sustainability objectives of the proposal to pay social housing grant to private sector developers contained within the Housing Bill going through parliament. How will government ensure that quality is not compromised in an un-regulated private sector? Will scheme development compliance audits be equally vigorously applied? Will quality considerations take into account environmental standards both within and beyond the home? How will private sector developers be encouraged to build for mixed communities rather than segregate tenures in pursuit of maximum land values? Will the private sector be required to recycle surpluses into social purposes in support of long-term sustainability?

  If the government persists in going down this route, the private sector recipients of grant should be required to meet the same high scheme development standards (see above) if the government is serious about its own sustainability objectives. Also for the same reasons, if the private sector is to have an ongoing management role, it should be required to meet the same high standards as associations must under the Housing Corporation's Regulatory Code. Long-term value-for-money considerations need to take into account qualitative standards, including environmental considerations, as well as the initial price per unit.

  It is not clear at this stage how the Housing Corporation sees its Sustainable Development Strategy as fitting with the administration of grants to private sector developers. To what extent will sustainable development principles be an explicit grant allocation criteria? Also, as the Housing Corporation adopts new policies over time, as illustrated by recent initiatives, such as its Sustainable Development Strategy and the Decent Homes Standard, how would these be applied to an unregulated private sector if they were not a condition of the original grant condition?


  The Federation has promoted good quality designs, through for example good practice publications such as Standards and quality in development. Details of good practice in the sector are available from us or from Sustainable Homes ( they include:

    —  local sourcing of building materials;

    —  local labour schemes and a wide range of construction training placements on new build and refurbishment sites;

    —  community enterprises;

    —  waste reduction/recycling including water recycling;

    —  high density high quality housing;

    —  energy efficiency homes.

  We would be happy to provide further information on the issues raised or good practice examples.

May 2004

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