Memorandum by the Planning and Development
Association (PDA) (AH 42)
1. The Planning and Development Association
(PDA) has a membership of around 100 qualified planners either
employed directly in the housebuilding industry or working with
planning consultancies and legal practices advising housebuilders.
In some cases they also advise local authorities on plan preparation
and assist in development control. Its members therefore have
experience of all types of housebuilding throughout the UK and
of the planning policy and practice context.
INTRODUCTION
2. The Government's intention to increase
housing supply is welcome, as is its emphasis on meeting the desire
for home ownership, while also seeking to make provision for those
who will never able to afford home ownership, or for whom it would
not be an appropriate tenure.
3. Demand for housing is dependent on a
large number of financial issues—the availability of mortgage
funding, its affordability, the performance of the economy and
the growth in wages and salaries. However the supply of new houses
is dependent on all those factors, plus the planning system.
4. It is broadly true that, over the last
25 years, despite some reverses, the economic and financial climate
has been favourable to the housing market and that demand for
owner occupation has increased as a result. However, the planning
system which controls the supply of new homes has become more
difficult to administer and control, from the point of view of
the local planning authorities, and considerably more difficult
to use from the applicant's point of view, including housebuilders.
As a result, supply has not expanded to meet demand.
5. The problem is that the system is expected
and required to mediate in ever more complex issues, which themselves
require increasing attention to process, as opposed to outcome.
These include community consultation, environmental assessment
and design, as well as implementing ever-more interventionist
polices that seek to micro-manage the housing product, at the
same time as increasing its supply. As these demands increase,
the skills required to deal with eg urban design, are not available
and, despite Planning Delivery Grant, local authorities lack resources
to deal with the applications they receive.
6. It is, in practice, proving impossible
to square the circle created by the sheer weight of policy. Government
now faces a clear choice. Either it wants more houses built or
it simplifies policy to achieve that end. Alternatively, it admits
that its aim is to micro-manage the product, in order to achieve
Government's ideas of perfection (which is not necessarily the
same as the purchasers' view). However it cannot do both, because
they are mutually exclusive aims.
7. The recent upheaval in the planning system
has added to confusion and delivery. The new Planning and Compulsory
Purchase Act 2004 is based on the false premise that the problem
was the system itself. In reality the problem is the policies
that Government and local authorities prescribe and until these
are simplified and, unless and until, some effective sanctions
are imposed on local authorities who exceed policy limits or deliberately
abuse processes (eg refusal to register planning applications
or use their own dilatory plan preparation to claim applications
are "premature") there will be no increase in new housing
supply. Indeed, as practitioners on the ground, observing the
delays experienced by our clients, the lack of resources available
to local authorities and the overload of consultation of all kinds,
we believe the new system is close to collapse. These comments
apply also to PINS, which is over-burdened by local Inquiries,
in addition to its appeals work.
8. PPG 3 is an example of over-prescription.
In seeking, inter alia, to prescribe density, restrict parking
and limit the use of greenfield land, it has seriously disrupted
new housing supply in the pursuit of what are, for reasons set
out below, often mistaken objectives. This is where the choice
between more micro-management or more housing is most starkly
revealed.
9. The revisions to PPG 3, currently being
undertaken, appear to be trying to do the right things (ie increase
land supply which is a vital pre-requisite for increasing housing
supply), but it is doing that by cumbersome and self-defeating,
rather than simple and deliverable, mechanisms. Additionally,
draft proposals seek to prescribe tenure mix, house type and mix
and expect local authorities to make market judgements, for which
they are entirely unqualified. This is entirely inappropriate,
if a step change in supply is to be achieved.
10. Against this background we set out briefly
below some considerations that will affect housing output adversely
and which are part of existing or emerging policies.
MARKET AND
AFFORDABLE HOUSING
11. Many policies seek to restrict the total
supply of new housebuilding but at the same time, to increase
the supply of affordable housing. This is totally contradictory
because restrictions on supply add to pressures of shortage, increasing
the "need for affordable housing". Moreover, most affordable
housing is delivered through cross-subsidy from landowners and
developers under s106 Agreements. The larger the percentage of
affordable housing prescribed from a restricted total, the less
that will be provided, while it is less likely that private investors
will be prepared to undertake the development.
12. An example of this perversity is to
be found in the East of England Plan which prescribes that 30%
of all new houses out of a policy total of 23,900 pa (ie 7,200)
be social rented. The effect of this policy will be to reduce
the amount of private housing to be supplied to below the current
output—an outcome that bears no relationship to the requirements
of a prosperous and fast growing region, nor does it reflect the
Government's aspirations to expand home ownership.
13. The availability of more middle to upper-value
housing is essential to create movement in housing markets. It
is availability and movement that first time buyers need. "Affordable,"
defined as social rented housing, is not what people facing affordability
problems need. They are a completely different group to those
in housing need.
14. It would also be helpful to developers
who are trying to respond to the Government's £60,000 house
agenda if such units could be defined as "affordable"
for the purposes of any local plan policies.
INCREASING LAND
SUPPLY
15. The recognition in the consultation
draft, "Planning for Housing" that increased land supply
is an essential component of increasing housebuilding is both
very welcome and long overdue. The proposals that local authorities
should ensure a five-year supply is available and that they should
identify up to 15 years supply, so that it is ready to be rolled
forward if needed, is welcome. However, the mechanisms proposed
for achieving this are too cumbersome, whilst relying on the reviews
of plans, in order to release land from the 15-year review, will
be too slow. There must be a presumption in favour of development
of this land, capable of being exercised on appeal by applicants,
provided they can demonstrate an inadequate land supply.
16. In some quarters, these proposals for
a five-year supply and 15-year reserve, have been portrayed as
undermining the plan-led system. We disagree and believe that
this view stems from the failures of the plan-led system to deliver
over the years. In our view the plan-led system should be doing
exactly what is proposed, ie ensuring an orderly and predictable
supply in the long run. This is not a proposal to increase windfalls
or unpredictable development. It is a proposal to identify long-term
development; exactly what has been missing from the planning system
for 25 years.
OVER-EMPHASIS
ON URBAN
REGENERATION
17. Despite its significance, urban regeneration
cannot be pursued to the detriment of balanced housing markets
in all locations, supplying a mix of all types of housing. The
current emphasis is resulting in an over-supply of flats in urban
areas and a shortage of family housing, adding to affordability
problems in areas of highest demand.
18. It is also unavoidable that the most
economically viable way to provide subsidised affordable housing
under s106 Agreements is on greenfield sites, because the uplift
in value is far higher, as compared with urban sites with high
existing use values and competing uses. These sites do not have
the capacity to provide s106 housing and, if pressed, the owners
will sell for non-housing development, realising a higher value.
This is a dilemma not recognised in current policy.
LOCATIONS FOR
DEVELOPMENT
19. One of the Government's responses to
providing an increase in housing supply has been the designation
of Growth Areas under the Communities Plan. This is welcome, in
that it provides long term planning and investment horizons in
these areas which should help infrastructure planning and provide
certainty to the local community. However they involve long lead
times and should not be pursued to the exclusion of other sites
and locations, particularly those that can be brought into production
before the large allocations come on stream, otherwise there is
a danger of a hiatus in supply.
20. Moreover, each of these locations has
market absorption limits and significant levels of growth will
have to be accommodated in areas beyond them. The allocation of
more sites in more market locations is necessary to start and
to maintain a step change in supply, alongside the larger and
more difficult locations.
INFRASTRUCTURE FUNDING
21. Infrastructure funding can be made more
difficult if too much development is planned in limited locations.
It is essential that the ability of the private sector to generate
funding from sites and the speed at which it can be supplied informs
decisions about the location of development. There are some useful
innovations in funding being developed at present, including the
Milton Keynes tariff arrangement. Equally, SEERA has produced
a useful paper on infrastructure which, instead of exaggerating
without properly quantifying the scale of infrastructure required,
as the East of England Regional Assembly has done, has quantified
the "funding gap" and has emphasised that the problem
should not be exaggerated, nor is it insoluble. This approach
should be refined and developed.
22. Infrastructure funding must be based
on proper assessments of what is required to support a given level
of development. Developer funding should be seen as part of that
package, alongside existing education, health, local highways
and Department of Transport funding streams. Equally, the levels
and rates of development over which this cost is to be spread
is a critical factor in its deliverability.
23. Related to this is the need for co-ordinating
the approaches of Government agencies, from the Highways Authority
to Network Rail and from the Environment Agency to English Nature.
Very often these agencies appear to be pursuing totally different
agendas to that of ODPM and the Treasury, in relation to development.
The Highways Agency, for example, has been, and continues to be,
a major obstacle to development in the Growth Areas, at Milton
Keynes, Northampton, Corby/Wellingborough/Kettering in particular.
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