Examination of Witnesses (Questions 80-99)
PROFESSOR ALAN
MURIE, MR
PETER LEE
AND DR
ED FERRARI
28 NOVEMBER 2005
Q80 Chair: Can I try and pick you up
. . .
Mr Lee: I am just trying to address
the question of where the problem is, which seems to be suggesting
that there is not a problem.
Q81 Chair: I do not think Alison was
suggesting there was no problem.
Mr Lee: No, it was a rhetorical
question.
Q82 Chair: I am having real difficulty
in trying to work out whether what we are having is an interesting
academic discussion . . .
Mr Lee: No, no. I think it is
more than that.
Q83 Chair: Hang on! Or whether we are
actually getting somewhere that can inform policy. I want to actually
quote the last sentence of your written evidence, which is "A
national spatial strategy seems a starting point for addressing
regional disparities. This would require strong leadership to
a framework for economic and housing investment that may seem
too interventionist for some." Do you mean people should
be told where they are going to be able to live and work?
Mr Lee: No, I do not think it
is suggesting that at all. I think maybe we are looking at this
too internally about housing delivering all the kind of solutions,
that we build more housing and that will solve the problem. We
build it where people want to live and that will solve the problem.
It is a bit like roads: if we build the roads, obviously we will
just increase the demand. If we build the housing in the South
East, obviously there will be strong investment in that housing,
but is it necessarily the right way to go in terms of the use
of national resources? We have to tie up the housing to regeneration
and economic development, which seems to suggest much more of
a kind of spatial plan to those kinds of policy troubles.
Q84 Mr Olner: I want to touch on affordability/demand.
There was a time in the sixties when they tried to say to Coventry,
"You cannot have any more industry there; you have too much
so we will send it up to Scotland." Sadly, it all failed.
That has been tried in the past. How do we address this problem
about the regional demand, because affordability comes on the
back of demand. If the demand is all down there in the south-east,
how do we try to level out the demand side of the equation?
Professor Murie: That is about
a wider policy than the housing policy. It is about policies that
affect the pattern of economic development across the board. I
do not think people would suggest you go back to those kinds of
measures.
Q85 Mr Olner: Industrial building certificates?
Professor Murie: Industrial development
certificates. That is right. I do not think anyone would suggest
you go back to those. Unless there is some concerted attempt to
think through properly how investment in infrastructure and different
activities may contribute to the generation of economic activity,
you could end up with a situation in which public investment adds
to the pressurised nature of the economy in the south and south-east
of England. I do not think there is an easy answer. It is about
the wider economic development and regeneration policy, not just
the housing policy. We think there is a route through regional
housing strategies and things like housing market renewal that
could be one dimension within a strategy to try and rebalance
markets, but it certainly could not do it on its own and it is
not easy to achieve. I suppose there is a feeling that there is
insufficient attention being given to trying to balance that development.
Q86 Anne Main: You said there were places
being constructed in Manchester and lying empty. People were not
wanting to live in them. Perhaps you could give some of the reasons
why. If you are thinking in terms of being slightly interventionist,
are we saying that, to have some sort of regional affordability,
we are looking at putting some sort of limits on who can buy?
I would like to tease out exactly what you are referring to. Are
you saying it is for local people only? What sort of things are
you suggesting? Otherwise, the investment is just going to flood
into those places?
Mr Lee: I would hope that we are
having more than an academic debate here that will just go away.
We are trying to apply our research findings to some of the policy
implications here. I am not painting a picture of rows and rows
of empty apartment blocks in Birmingham but where we have a vacancy
rate in the city of 4% and a vacancy rate in some city centre
areas of 13 and 15%, that seems to be out of kilter. What is being
delivered is not necessarily what is needed. It is not about saying
to people that they cannot invest in housing. It is saying at
some point the government has to join up policy and say, "We
talk about sustainable communities and urban renaissance."
Whose community and whose renaissance?
Q87 Anne Main: What is being delivered?
Is it the size of unit, where it is located, accessibility of
transport?
Mr Lee: Probably we are in danger
of developing too many monolithic one and two bedroom apartments.
On the assumption that households will be smaller, households
will still have friends and, where they have been divorced and
have families, they will want their kids to stay over, so there
is an assumption that smaller households have to be put in small
one, two bed or studio flats.
Q88 Chairman: Is it the private sector
that we are talking about?
Mr Lee: Yes.
Q89 Chairman: The properties you are
talking about with this high vacancy rate in city centres are
private sector?
Mr Lee: Yes, but it is not about
necessarily saying that people cannot invest; it is about saying,
"What is the climate that we are creating here?"
Q90 Anne Main: Is it to do with land
densities, people having to have 30 to 50-plus per hectare?
Mr Lee: That might be part of
the problem but in planning terms the government has core output
indicators in terms of measuring urban renaissance. One of its
core output indicators is density of dwellings, so you have over
30, 40 or 50 dwellings per hectare, but if we factored in residency
rates and said, "What is our utilisation of land here?"
we might be delivering low density over here but people are occupying
them. We are delivering high density here but we have quite a
high vacancy rate, so it works out that our utilisation of the
land is probably less over her either because investors are not
prepared to lower their prices to let, say, graduates come into
the market. You want to be selling to graduates at £80,000
or £90,000. If you are on an income of £20,000, and
you have £13,000 or £15,000 of debt—in London,
if you are talking about £80,000 or £90,000, you would
probably think: I will buy one of those tomorrow.
Q91 Chairman: Is there the same vacancy
rate in private properties in the middle of London as there is
in the middle of Birmingham?
Mr Lee: I guess not. Does that
not emphasise the point about economic development?
Q92 Mr Olner: There are not many luxury
apartments vacant in Birmingham in the centre.
Mr Lee: I do not know where the
evidence for that is.
Q93 Martin Horwood: One of the areas
in which you seem to most diametrically contradict the ODPM is
around the issue of sustainability. They would say that the increase
of supply is essential to deliver sustainable communities and
particularly they would support, for instance, urban extensions
to their identified, principal urban areas. You seem to suggest
that is just going to generate unsustainable urban sprawl. Would
you like to defend your position on this?
Dr Ferrari: There are plenty of
examples, particularly in the north and the Midlands, where even
if brown field targets are being met in terms of the use of previously
developed land there is a lot of capacity around without having
to start thinking about urban extensions.
Q94 Martin Horwood: Is that not in a
different part of the country? I come from one of the areas where
the urban extensions are planned. It is nowhere near those places.
It is in the south-west in my case.
Dr Ferrari: I assume you are referring
to the growth areas in the sustainable communities?
Q95 Martin Horwood: Not in my case but
it applies to the growth areas like Milton Keynes as well. In
my case it is a PUA in the south west.
Dr Ferrari: One of the interesting
things is that two or three years ago we talked about low changing
demand and there were nine housing market renewal pathfinders
set up to address very real and complex difficulties. Then things
like the Northern Way come along which is essentially an economic
development package which includes things like transport infrastructure
and a whole host of measures aimed at closing a productivity gap
between the north and the south in the UK. Suddenly the pressure
is on and I think there is a real risk for areas that we were
talking about just two years ago as low demand to see themselves
as growth areas and therefore the incumbent pressure is on the
planning system to build on green field sites and undertake urban
extensions of the sort you are referring to, even in the north
and those parts of the Midlands where affordability pressures
are perhaps not as acute as in the south.
Q96 Mr Betts: What is the evidence that
the concept of the Northern Way has led to increased pressure
to build on green field sites?
Dr Ferrari: I do not have any
prima facie evidence other than being involved with a number
of the pathfinders as they are trying to deal with real planning
applications being made by developers on the sites.
Q97 Chairman: Have they been approved?
Dr Ferrari: Some have and some
are being called in by the Department.
Chairman: It shows the system works.
Q98 Anne Main: Is that because it is
easier for a developer to go onto a fresh field site than it is
to regenerate a brown field site?
Dr Ferrari: We are not just talking
about green field sites here. We are talking about sites that
would be classified under the performance targets as brown field.
It is just that they have not been previously classified as housing
sites in the planning framework. For example, the old unitary
development plans which have now been replaced by local development
frameworks may classify large ex-industrial sites as brown field
but not as housing land, as employment land instead. Developers
would prefer to develop those sites as housing or perhaps mixed
use site with a complement of leisure, employment and housing
uses. It is not necessarily green field but they are nevertheless
on the edge of existing major urban areas where capacity exists
within those urban areas.
Q99 Mr Betts: That is not my experience
in Sheffield where you are looking at the reclassification of
industrial land next to housing market renewal areas. They plan
the two together. People are very cognisant of the inter-reaction
between them.
Dr Ferrari: Funnily enough, some
of my experience is not in Sheffield. I know Sheffield has some
very particular characteristics such as bordering a national park,
which means it has planning constraints probably far in excess
of other areas. The neighbouring local authority of Rotherham
has a particular problem of the sort I referred to. Newcastle
upon Tyne has recently granted a large urban extension to the
north at the same time as having a market renewal area in the
south and the west of that particular district.
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