Examination of Witnesses (Questions 179-199)
MR STEVE
FORREST, MR
STEVE GREGORY
AND MR
COLIN DAVIS
6 DECEMBER 2005
Q179 Chair: Good afternoon. Would you
introduce yourselves, please, one at a time, and then we will
start?
Mr Forrest: I am Steve Forrest,
Strategic Housing Advisor at the West Midlands Regional Assembly.
Mr Gregory: My name is Steve Gregory.
I am Chair of the West Midlands Regional Housing Partnership.
Mr Davis: I am Colin Davis. I
am Strategic Director of Malvern Hills District Council, which
is a rural area of west Worcestershire.
Q180 Chair: Thank you very much. Can
I start off by picking you up on the issue of housing pressure.
Other witnesses to this inquiry have stressed the fact that housing
pressure is not confined to the South East and London. In what
ways do you think that the housing growth agenda, put forward
by Kate Barker, is applicable to the South but not to the Midlands?
Mr Gregory: The picture in the
West Midlands is very complicated. We have had the advantage of
a tremendous amount of research into the housing markets of the
West Midlands and how they are operating, going back several years,
both through the Centre for Urban and Regional Studies and then
more lately through Sheffield University, so we have got quite
a good picture around the complexities of the housing market.
That research has identified four broad housing markets across
the West Midlands region, from the rural west, on the borders
with Wales, an overheating south, a cooling north and then the
central region around the Birmingham conurbation. A crude application
of the Barker principles to that complicated housing market, we
are concerned, could have an effect of unpicking our Regional
Spatial Strategy. The basis of the Regional Spatial Strategy is
to attempt to absorb demand within the West Midlands conurbation
to deal with the growth in demand in the West Midlands conurbation
and not to export that growth out into the rural areas and so
exacerbate an already difficult affordability problem. I think
we have widespread affordability, but it is a complicated picture.
Q181 Chair: Are you suggesting that there
are not additional houses needed in your region, or have you quantified
how many additional houses you need, and what sorts of targets
would you set to achieve that?
Mr Gregory: We have quantified
the number of additional houses needed and that has been examined
in public inquiry and has been built into our Regional Spatial
Strategy. The broad principles behind that strategy are for the
conurbation to absorb its household growth and for the rural areas
to absorb their own local needs, which are mainly around affordability,
rather than meeting the generalised needs of the region, in terms
of more aspirational housing.
Q182 Chair: Does that suggest you want
only new social housing in the rural areas, no new private market
housing?
Mr Davis: I think it depends on
the situation. Clearly the market towns have a very significant
role to play as a focus within the rural areas, providing services
and facilities for quite a large hinterland around. There is no
reason at all why market housing should not be focused in those
larger towns as well but what we have found is that in the rural
villages gentrification is occurring, people are coming in and
buying up the properties. If I can illustrate this with my own
district, the affordability ratio is a multiplier of over nine
for newly-forming households, nine times their income, actually
to access the bottom rung of the market housing, and over 83%
of newly-forming households in the district cannot achieve that.
That is the scale of the affordability problem, so we need to
focus on that lower rung of the market. There is already a predominance
of larger, detached dwellings throughout the rural West Midlands
and that is very clear from the research that has been established
and so it is the smaller end of the market we need to focus on
and affordability. If I could make just one point, I think a lot
of the current initiatives in policy, including those announced
yesterday, are focused at low-cost ownership. If you think of
it as a ladder, the bottom rung is actually social renting and
there are lots of mechanisms for moving out of social renting
into low-cost ownership. If you move straight to low-cost ownership
you miss that vital first step on the ladder and that is what
we are suffering from at the moment. What we are seeing is extending
waiting lists, the turnover in the social stock is falling dramatically,
because people cannot afford at the moment to make that transition
out of social renting, and that is creating real problems. It
is meaning also that, at one point, 80% of lettings were going
to the homeless, which means nobody on the waiting list is getting
a chance of general needs housing. That is the nature of the rural
problem at the moment.
Q183 Anne Main: I was interested to hear
your comment, Mr Gregory, about not providing houses that are
more aspirational houses, because that is just the exact opposite
of what we were hearing before. Are you saying that you want to
limit the sort of housing that you are having built, that is the
feeling I am getting, so that you are attacking that one end of
the market, because previous witnesses have just said they want
to encourage people with skills sets and things, the aspirational
houses, and that is what they want to provide? Are you saying
you do not need that in your area, it is more renting, it is the
lower end and it is the smaller houses?
Mr Gregory: I think, as Colin
said, within the rural areas, the pathway of choice that is missing
is the first rung on the ladder, the lower value. The market has
provided executive houses, not to excess because clearly they
are occupied and they are performing a useful role, but the market
has provided four-bedroom, detached houses in Warwickshire to
the exclusion, virtually, of the lower-rung types. Within the
conurbation, without intervention and the change in our planning
processes, the market tends to provide, within the inner-city
part of the conurbation, smaller units, lower-value units, so
people who aspire to a larger house, a better quality property
in the core of the conurbation have a very limited choice. Although
the economy might be doing quite well, their skill set might be
right, they have not got an opportunity to stay there so that
puts additional pressure on the housing market outside the conurbation
and takes the general house price up, which is then competing
with what are very low wages in the rural parts of the region.
Mr Davis: I think it is fair to
say that it is a very diverse range, in terms of its housing markets
and its housing needs. There is no `one size fits all' solution
to the West Midlands, it needs a variety of tools and opportunities
to create those pathways of choice.
Q184 Martin Horwood: Some of the more
extreme micro markets, if you like, are near your regional boundaries,
which raises an interesting issue. I am not challenging the validity
of regional boundaries, because they have got to be somewhere,
at least not today anyway, but, to quote one local example, you
talk about overheating in the Vale of Evesham, presumably that
is affected by what I would perceive, coming from Gloucestershire,
as overheating in Gloucestershire as well. Are you doing any kind
of liaison with the South West Regional Assembly, for instance,
to try to influence them to follow your kind of approach, because
at the moment they seem to be taking a very different and a much
more market-led one?
Mr Forrest: We are conscious of
this connection across our boundary and again we have discussions
through our colleagues, through the English Regions Network, liaising
with each other to find out what can be done. This is at the very
early stages but we have opened that discussion.
Q185 Martin Horwood: I have never even
heard of the English Regions Network. Is this yet another tool?
Mr Forrest: Those of us who are
planning bodies meet together and those of us who are in the housing
fraternity meet together.
Mr Gregory: The research we have
done across housing markets though suggests a fairly self-contained
region, with some influences from outside the region but a region
that holds together reasonably well. Certainly, within those rural
areas, the research has shown there is a highly mobile community,
a very, very mobile community, which is not tied by employment
to where they live, so I think that gives the close boundary.
Q186 Martin Horwood: Certainly we have
people commuting from Gloucestershire into Birmingham and we have
commonality of housing between Gloucestershire and the Vale of
Evesham, so it must be affecting those boundaries?
Mr Gregory: There is some evidence
of migration from the South East and the South West to cheaper
areas in the Midlands. One area that we are particularly keen
to explore is some links with the south Midlands-Milton Keynes
growth area. If we could co-ordinate the development and the growth
within the Milton Keynes area with the aspirations of our Regional
Spatial Strategy and make the two fit together, really we could
have win-win. If we get the planning wrong and we do it at the
wrong time we could have lose-lose. You could see the unity of
greenfield sites on our boundary with Milton Keynes taking up
some employment opportunities which then draw people to that employment.
Q187 Martin Horwood: Would you welcome
a National Spatial Strategy then?
Mr Gregory: Ish; as long as it
does not become a sledge-hammer. I think the problem is actually
that the interpretation of this needs to be done at quite a localised
level and built up and then some needs and connections between
sub-regions and regions worked out. I think the danger is of opportunities
and initiatives coming down from the top that they do not always
hit the right buttons locally.
Q188 Anne Main: Can I take you back to
what you believe might unpick your Regional Strategy. Because
you do not want a national one, or `ish, do you feel then that
having the Barker view, which is a national view, is a problem
to you, that you would rather not have it? You would not have
imposed housing targets given by a Treasury vision, would you
rather have more looking at what you need locally and then deciding
what sort of housing you need to provide? Is that you are saying,
or not?
Mr Gregory: We would rather build
up the needs of our region from an understanding of how housing
markets are operating.
Q189 Anne Main: Rather than being given
a target to work to?
Mr Forrest: Yes, absolutely. Your
interpretation is quite correct. That is how we see it. The problem
we see with a Barker-style solution is that if new housing is
to be put where the house prices are highest it will be in exactly
those areas where we are trying to discourage in-migration. The
problem is that there will be far more development in those rural
areas where there is pressure for occupation, whereas we would
prefer to see that accommodated within the major urban areas.
It is that out migration which has gone on historically for so
long from the conurbation into the south of the region which we
wish to see reversed. That is not to say that there is not some
scope for owner-occupation within the rural areas, which was the
point the Chair made earlier, there is some scope for owner-occupation
for local needs but not at the expense of undermining the strategy
and trying to rebuild and have an urban renaissance within the
major urban area.
Q190 Chair: Can I pick you up on two
things. One is, from your submission, there seems to be quite
considerable hostility, in principle, to most private house-building
in the region. Is that accurate, or not? The second issue is do
you think that the only way you can persuade people to build houses
and live in urban areas is by positively preventing them from
living in rural areas?
Mr Gregory: No; no, no. No, certainly
not. The private sector will be the provider of most of the new
housing. The amount of subsidy that we are going to be able to
put into the system will provide only a small proportion of the
totality of housing that is provided within the West Midlands.
What we are trying to do is create an environment within the conurbation
that would make it attractive for developers to build houses,
aspirational houses more, more executive-type houses. That is
not to the exclusion of every other property type but it is attempting
to address a balance that we have missed over a long period of
time, over a 30-year or 40-year policy period. No; certainly there
is absolutely no hostility to working with the private sector.
There is, I suppose, quite an interesting debate with the private
sector though of the sort of framework we need to provide within
the conurbation to encourage them to provide that sort of aspirational
housing. We have done some consultation across the region, in
the Regional Spatial Strategy and in developing the Regional Housing
Strategy, of what sorts of things we might need to change within
the conurbation to make it more likely it will provide that aspirational
pathway. Some of it was mentioned in the last submission. It is
around a better environment, a less-degraded environment, better
transport links, better education, crime and community safety
issues, so it is very much a holistic approach to regeneration
that is needed there. In terms of the rural areas, we would like
them to hold the tiller on providing more and more executive homes
to allow more outward migration from the conurbation, but we would
like them to concentrate on lower-value homes for meeting the
local needs that have developed.
Mr Davis: Certainly in rural areas
we need to focus on meeting local need rather than market demand,
because the nature of the houses that are already there can satisfy
that market requirement for aspirational homes.
Q191 Dr Pugh: Obviously you are trying
to do quite a difficult task, in a way, because you are trying
to create affordable housing in rural shire areas, but not everybody
in those areas has a high wage and can afford a large, four-bedroom,
executive house, also trying to make the city more attractive
so that more people migrate into the city. What is your policy?
Have you had any chance to look at the data to see whether you
are actually succeeding to any extent, or could you be doing other
things, such as forcing a person looking for an executive house
further out to a place where maybe the planning regime is more
benign and less constraining?
Mr Gregory: I think the research
that we have done has been quite helpful in that. Touching on
your first point, we now have evidence of quite an interest from
the private sector in developing what are fairly difficult sites
within the conurbation. In my own authority our housing target
for the Regional Spatial Strategy is 900 units. Last year we managed
to complete 1,200 units and there is not any sign that interest
is slowing down now. We have got some fairly significant sites
coming forward for redevelopment and, through the issuing of planning
briefs, we are managing to get a reasonable spread of houses on
those sites, which includes more aspirational housing. I think
also in Birmingham City Centre, particularly, there is a boom
in private sector development. There are the first signs that
our focus is actually beginning to get the private sector to respond
to the needs of the region as a whole rather than a narrow part
of the market.
Q192 Dr Pugh: If we take the region as
a whole, the capacity is in no way decreasing; builders begrudgingly,
as it were, are going and building in one place rather than another
because of the constraints you are applying, is it fair to say?
Mr Gregory: Yes, I suppose that
is the crude interpretation.
Q193 Dr Pugh: The worst case scenario
is that builders will go somewhere else, is it not?
Mr Gregory: Yes, that is right.
Some of the sites in the middle of the conurbation are not easy;
there are site assembly issues, there are mediation issues. If
it is easier to take an option on a farm with a single landowner
and a friendly planning authority, that is a relatively easy deal
to put together. Assembling a site in multiple ownership, currently
occupied by low-grade industrial uses, which is contaminated,
is quite a different business, so really we are trying to encourage
developers to look at those.
Q194 Dr Pugh: How do you do that, constraining
them from building on the perimeter of cities, and so on? What
do you do, apart from tell them "These are the rules"?
Mr Gregory: In effect, that is
what we have done. We are slowing down the supply of land in the
greenfield areas and we are giving greater capacity in the conurbation.
Q195 Dr Pugh: If you look at the supply
of land, it is a similar supply of land, or you are getting plainly
higher density in the cities, are you not, really?
Mr Gregory: Yes. Just touching
on your `can we persuade people to move further out', I do not
think we would want to do that because we do need sustainable
communities and very long-distance commuting does fight against
that sustainability, so we would prefer to see shorter-distance
commuting, I think, so I do not think we would encourage people
to move out. The work we have done around analysing the markets
is suggesting that there is a limited influence in the west of
the region of the markets within the central core of the region,
that there is little evidence of commuting out from Birmingham
into Herefordshire and Shropshire. As I say, there is limited
evidence. The markets do seem to be reasonably discreet.
Q196 Dr Pugh: Can I put to you one point
which has just occurred to me. You are trying, presumably, to
move your executives from the perimeter of the cities or the leafy
shires, or whatever, into attractive places, by a canal in Birmingham,
or something like that, with a substantial amount of investment.
Just thinking of it from the commonsense point of view, that is
alright for young executives, but as young executives move on
and get older they tend to produce families and they want gardens,
and all that kind of thing. Is there not a tendency for you actually
to skew the market, so that somebody who does wish to have a reasonable
house and a garden, and so on, simply decides that it is not the
area for him, or her, at the end of the day?
Mr Gregory: We are sort of dipping
our toe in the water with that. The work we have done around the
Urban Living Pathfinder, the Housing Market Renewal Pathfinder,
suggests that people move actually very short distances, that
there is little movement from the core of the conurbation out,
it tends to be in shorter hops. Our task really is not to persuade
somebody to move from Stratford-upon-Avon into the core of the
conurbation. We might want to do that eventually, but all we have
to do to stop that outward migration is persuade somebody not
to move three miles that way but to move three miles that way,
so it is less of a task. Our strategy is built around initially
retaining the existing population and making sure there are adequate
aspirational housing opportunities for the existing population,
with an ambition for the executives to remain in the conurbation.
Q197 Anne Main: You talked about having
sustainable communities and having communities that people wish
to live in. Have you identified a current infrastructure deficit
and are you confident that you will have the infrastructure in
place for the houses you wish to build in the areas in which you
wish to have them?
Mr Gregory: Largely because most
of that increased supply will be in the core of the conurbation—
Q198 Anne Main: Where you want to keep
them?
Mr Gregory: Where I want to keep
them. There will need to be some additional investment into infrastructure
because we are getting the land for those new houses from existing
industrial uses. We have protected over the years a large core
of land in the middle of the conurbation for industry, which has
increasingly become low value-added employment opportunities and
is very, very low density so it uses up a huge amount of land.
There is a need to consider whether we need more extended schools,
new clinics and health facilities, as part of a new development,
and what we are trying to put into place now is an understanding
of how that development will be timetabled so we can build some
of those costs into the development process and then to the Section
106 process for something like that.
Q199 Anne Main: Is it best for you to
keep on urban regeneration brownfield sites because you already
have a large amount of the infrastructure you think you will need?
Mr Gregory: Yes.
Mr Davis: I think there are five
sub-regional areas identified in the Spatial Strategy for growth
outside of the major urban areas, secondary growth, and certainly
there will be infrastructural requirements in some of those, particularly
highway investment, which will not be able to be financed purely
from developer contribution, it will need public investment.
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