Supplementary Memorandum by the West Midlands
Regional Assembly (WMRA) Secretariat (AH 55(b))
APPENDIX 2
RESPONSE OF THE WEST MIDLANDS REGIONAL ASSEMBLY
TO ODPM CONSULTATION: PLANNING FOR HOUSING PROVISION
1. SUMMARY
1.1 The West Midlands Regional Assembly's
(WMRA) response to the ODPM consultation paper "Planning
for Housing Provision" is set out below. The accompanying
letter also summarises the WMRA response and is endorsed by the
Chairs and Vice Chairs of the Regional Planning Partnership and
Regional Assembly.
1.2 The Summary Box below spells out the
principle points of concern which the West Midlands Regional Assembly
wish to bring to the attention of ODPM and sets out the main steps
ODPM are earnestly asked to take in response to this consultation.
Sections 3 and 4 following, develops these and other points in
more detail:
| 1. These proposals seem to have been devised to address South East of England growth pressures but are to be applied out of context in the rest of the UK, including the West Midlands. We too in the West Midlands are concerned about high price/high demand pressures and the Region now has a confirmed RSS with a set of policies to address this within long run sustainability principles. The oversimplified market led approach to addressing high demand could be very damaging to the West Midland's regional economy and implementation of its Regional Spatial Strategy.
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| 2. The proposals could reverse our recently approved Regional Spatial Strategy (RSS). The West Midlands RSS is seeking to halt the decentralisation of households from the Major Urban Areas. The proposed approach by ODPM is market led with the potential for increased development on greenfield sites in areas of high demand. The West Midlands RSS may be ambitious but is realistic and there is now good evidence of the Strategy beginning to work. Housing Land supply is being increased in the Major Urban Areas and private developers have shown increased interest in working within the Metropolitan areas.
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| 3. The Regional Planning Body must retain discretion in determining regionally significant planning issues and in interpreting national policy to regional circumstances. WMRA does not want a solely administrative relationship with the proposed National Advice Unit. There must not be a "one size" fits all approach to regional and sub-regional housing supply and policy.
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| 4. WMRA supports local planning authorities working together, if based on sound empirical analysis of the housing market areas and if this is with LHAs in their work on sub-regional/joint housing market/needs assessments and strategies as ODPM have encouraged elsewhere. Whilst joint DPDs are welcome it should be acknowledged that this will be challenging for authorities and it would be helpful to consider whether any inducements could be offered to them.
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| 5. WMRA welcomes the proposed approach to HMAs, which are a key feature of the new Regional Housing Strategy 2005, but concerns were felt about whether the proposed changes are sufficiently flexible to deal with the HMAs in our Region which are varying mixtures of "low demand" or "growth" rather than being all one or all the other.
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2. DETAILED WMRA RESPONSE
2.1 The opportunity to comment on these far reaching
proposals is appreciated though the length of time given for the
response is strongly felt to be too short, and inhibits the process
of genuine consultation. The ODPM document gives a set of principles
and proposals which pave the way for fundamental change to the
approach to determining housing land release through the planning
system. This is noted with grave concern as to the anticipated
consequences for the West Midlands Region and the Regional Spatial
Strategy and Regional Housing Strategy.
2.2 Rarely is it appropriate to refer to a document as
historic, or of major significance, in the development of policy.
However the gravity and scale of potential change this consultation
paper introduces warrants understanding it in these terms. It
changes, in a fundamental way, the basis upon which planning decisions
on residential land release will be made.
2.3 Until now the planning system has guided market forces
by balancing a range of factors in a political decision making
context. Under these proposals the level of market prices, and
their rate of change, will determine housing land release. Sustainability
and environmental considerations are intended still to play a
part but the detail is missing. The inference is that these will
be applied to guide development to the "least worst"
spatial options. It seems unlikely the new approach will allow
the RPB or LPAs to altogether reject the "demand led"
land release on sustainability grounds should they be minded to
consider this appropriate. Further clarity on this is required
from ODPM before the Regional Planning Body could respond fully
and finally on this proposal.
2.4 In addition, for the West Midlands RSS, the ODPM
proposals effectively appear to reverse the housing "step
change" Regional policy recently confirmed. As such, ODPMs
proposals will most likely undo the current RSS and begs serious
questions about the Government's understanding of, or commitment
to a sustainable future for the West Midlands conurbation and
wider Region. Despite references in the paper to the ongoing importance
of sustainability assessments, these major implications lie at
the core of the concerns expressed here.
2.5 The West Midlands Regional Spatial Strategy may be
ambitious but is realistic and there is now good evidence of the
Strategy beginning to work. Housing Land supply is being increased
in the Major Urban Areas and private developers have shown increased
interest in working within the Metropolitan areas, for example,
more executive homes being built in the conurbation. However,
in consultation over both the RSS and Regional Housing Strategy
2005 private developers have made it clear that they would prefer
to see a greater release of greenfield sites outside the conurbation.
WMRA fears that the proposals within the consultation paper will
both undermine developer confidence within the Major Urban Areas,
thus undermining regeneration in these areas and lead to demands
for an ever increasing land release and further decentralisation
within the Shire Counties, as greater land release is encouraged
where prices are high. This proposed approach appears to be highly
unsustainable and wholly against the principles of the West Midlands
RSS.
2.6 The proposals are in the main, on the Government's
own statements, designed to address the growth pressures of the
South East. The application of the housing market area designations
of High growth, Managed, Low growth, and "managed reduction"
may have some resonance in the South East (low growth, or managed
reduction excepted), but this raises important considerations
as to how these designations would apply in the West Midlands.
The concept of an area of "managed decline" seems to
introduce a spatial policy concept which has no other reference
in current urban or regional policy. It is not the concept behind
Pathfinders or Areas of Low Demand / Housing Market intervention.
ODPM is asked to reconsult on these issues again when they have
explained in more detail what they could mean.
2.7 The housing trajectories attached to these designations
are to be a key feature, of the new "market price" lead
system, but it needs to be made plain by ODPM that they could
be used flexibly depending on the housing market needs and the
nature of each of the (sub-regional) Housing Market Areas. For
example, could the trajectory be treated as a floor, a floor with
a limit to over-provision, or a ceiling in accordance with current
RSS policy?
2.8 If the increase in housing supply is to be applied
simply wherever house prices are higher than a regional or national
average, thereby implying an unmet pent up demand, then the West
Midlands RSS will be severely undermined. This would not only
accelerate the out migration from the conurbation leading to social
polarisation and increased trends towards ethnic segregation;
it would undermine the Black Country vision, the Pathfinder interventions,
and Coventry's regeneration. Current efforts at housing market
renewal in the Major Urban Areas would falter. By the same token
it would increase the development of owner occupation in the Herefordshire,
Worcester, South Warwickshire arc, probably to the detriment of
the environment, and local services, accentuating traffic problems
and requiring more infrastructure expenditure. WMRA would welcome
a more balanced description of how the policy could be used.
2.9 The principle of Local Planning Authorities working
together, especially in joint DPDs, to address functional housing
market areas is welcome. However, ODPM gives no recognition in
this paper, unlike other recent consultation documents, for the
need for Planning and Housing Authorities to work closely together.
Neither does ODPMs document require LPAs to tie their understanding
of Regional and sub regional housing markets with the shared evidence
base and analysis which will now underlie the RSS and RHS. ODPM
need to rectify this and acknowledge the work achieved by Regional
Housing Boards in developing well evidenced and well aligned,
Regional Housing Strategies. The Housing Market Area approach
referred to in the ODPM document should support the delivery of
the RSS and Regional Housing Strategy. It is these Strategic documents
that should form the strategic policy context for joint or cross
authority working in both local housing strategy and Development
Plan Documents. There may need to be some sub-division of the
West Midland's RHS HMAs, (now carried forward into the West Midlands
RSS implementation by virtue of paragraph 6.25[109]
of the RSS), to allow the ODPM "trajectory management"
approach to be adopted.
2.10 In the West Midlands whereas there has been a continual
under supply of affordable housing over recent years, the supply
of new market housing has been running ahead of Regional requirements
in several places. This should simulate the anticipated conditions
in which the Barker solution expects to be applied. This raises
the question as to whether this oversupply has depressed prices
or satisfied demand. The evidence does not look supportive of
the Barker and ODPM expectations. Despite the assurances of some
housing economists promoting the Barker free market model, of
"more supply equals lower or stabilised prices", there
is real concern that the housing market does not operate in this
way. It seems not to account for housing increasingly being "a
consumable", and that places have a "brand" value
which people buy into above the brand's apparent inherent value.
More supply may just mean more demand unleashed and no guarantee
that if lower house prices were achieved it would result to bring
a greater proportion of housing within the reach of low income
families. This perspective leads to concerns of a potential future
scenario of an unyielding National Advice Unit requiring the RPB
and LPAs to release more housing into such areas until the reasons
for their attractiveness have been lost. ODPM's assurances are
sought to that this is not the way the new system will operate.
3. FURTHER DETAILED
RESPONSES
3.1 There are several other areas of concern which the
WMRA wish to bring to the ODPM's attention:
3.2 Notwithstanding the forgoing comments, there remain
some areas of real disquiet about the Government's rationale used
to justify these radical proposals. Such a radical change from
the more balanced approach which characterises the current planning
system might be justified if there was clear evidence to lay the
blame for housing shortages at the door of the planning system.
However, despite the voluminous analysis by Kate Barker and her
Treasury team, Government has never satisfactorily addressed the
twin facts (acknowledged in the Report) that:
— the fall in total housing supply over the past
50 years can be wholly accounted for by the fall in construction
of publicly subsidised housing, and that the private market house-building
rate has remained at a fairly constant level over the same period.
— In this context, the new approach advocated in
"Planning for Housing Provision" assumes that the release
of land for housing will result in an increase in house building
rates to meet demand, ignoring the industry's other interests
in controlling the rate of flow of completions of new houses to
(at the very least) maintain price levels and match its productive
capacity.
3.3 Much of the ODPM's criticisms of planning and its
shortcomings, such as the comment that "many" local
authorities do not actively manage their housing supply to ensure
sufficiency is not supported in the West Midlands. [110]The
evidence here is to the contrary.
3.4 The noticeable and serious shortfall in social housing
construction as Governments have sought to reduce expenditure,
has unsurprisingly led to shortfalls of affordable housing supply
in many places, but that, and affordability issues cannot be laid
at the door of the planning system.
3.5 In addition, it is felt these proposals will result
in:
— An adverse shift in the balance of power against
communities in favour of housebuilders. For example, efforts in
the West Midlands to reduce and eventually eliminate net out-migration
from the metropolitan area to the rest of the Region would almost
certainly suffer as house building increased in the areas of high
demand in the Shire Counties. It would become increasingly difficult
to interest housebuilders in redeveloping and refurbishing housing
in the Major Urban Areas, this would be detrimental to Urban Renaissance
in the Region and would unravel successes already achieved by
the RSS in bringing executive homes to the conurbation.
— The inevitable unsustainability of this approach
requiring its eventual reversal, but at what cost to urban renaissance
and ruined environment.
— Pressures to develop easier greenfield sites rather
than more complex brownfield sites where time and remediation
are needed.
— Rolling provision discouraging brownfield investment
and encouraging greenfield development.
— adverse adjacency effects that need to be capable
of being managed and not over ridden by a Government requirement
to deliver specific numbers of new properties to meet affordability
ratio targets.
— The type and mix of housing to be consistent with
the recently identified RHS requirements and deliver the range
of housing choices needed in each distinct sub regional HMA, or
more local community, not to add more of what the market has already
provided where this is not the priority, and
— An expectation that the private sector will perceive
the newly proposed regime as a practical switch of policy emphasis,
despite protestations to the contrary, so that current profitability
of brownfield land remediation in the conurbation will be undermined.
3.6 The WMRA requests that the ODPM give,
— A more balanced description of how the new policy
could be used, expanding on how to ensure that areas where demand
is weak or declining do not suffer from over-supply.
— Further guidance on how affordable housing could
be delivered in sufficient amounts through the new policy would
also be helpful. It is noted that whilst affordable housing features
in the approach it does not appear to be the main driver and there
is little evidence that the measures proposed will make much positive
impact on the affordability problem.
— Full assurances that the prospect of building
houses for which there is no demographic demand, only an economic
one, will be accepted as grounds for not continuing to drive up
housing numbers.
— Facilitate sensible local planning timescales
to work through the implications of the new approach and not be
forced into ill considered responses to a Government led future
timescale for implementation, and
— Clear indications and guidance on how ODPM intends
to meet affordable and social housing needs as reliance on the
planning gain negotiations is limited.
— Acknowledge the over reliance on planning gain
to deliver affordable housing and social housing is another concern
as planning gain will not deliver enough affordable housing, nor
will it all be in the right place.
3.7 There is very little reference in the consultation
document to the relationship between planning and the work of
RHBs and Regional Housing Partnerships, thus for example, Regional
Housing Strategies are not referred to. This lack of joined up
thinking seriously undermines the extensive work and relationship
building which has taken place in the West Midlands between planning
and housing and of the shared evidence base work which supports
both the Regional Housing Strategy and Regional Spatial Strategy
Partial Review.
4. CONCLUSIONS
4.1 The new approach to planning for housing provision
advocated in the consultation runs counter to the Strategy so
recently approved by Government in the RSS for the West Midlands
and reinforced in the Regional Housing Strategy 2005. Therefore,
whilst this approach may be applicable to other parts of the country,
it should not be applied to the West Midlands Region. Alternatively,
if Government persist with a "one size fits all" approach
then it will trigger an immediate need for wholesale replacement
of the RSS, overriding all other review work currently in preparation.
4.2 A national spatial perspective is urgently required
which provides a clear understanding of different circumstances
and levels of housing requirement in different parts of the country.
A standard set of national planning guidance is not appropriate
in this case and there needs to be advice for the different regions
of the country, depending on their local circumstances, with flexibility
given to Regional Assemblies, as RPBs, to respond in sustainable
ways to the different circumstances within their own areas. This
advice has to include a consideration of the interrelationships
between housing markets in adjacent regions.
4.3 Demographic projections should remain an important
consideration in determining the level of housing proposals for
a region or sub region. These should take into account the implications
of an ageing population, the growth in one person households and
the effects of large volumes of international migration.
4.4 In order to minimise damage to the Regional Spatial
Strategy ODPM is asked to give policy guidance to allow the West
Midlands RPB to,
— Classify Major Urban Areas for Growth, and foci
for managed growth and maintain ceilings elsewhere.
— Control the definition of housing market areas.
— Treat housing market area boundaries as permeable
and take account of proximity.
— Respond to demand in adjacent housing markets.
— Secure the role of the RHB working with the RPB
to ensure the translation of market signals into the housing mix,
tenure and types that are directed at sustainable, socially balanced
communities.
— Deal with the interrelationships between low demand
and high demand areas.
— Rigorously monitor house prices in the Region,
particularly the affordability of houses for those in the lower
quartile, as this is where the impact is greatest and where the
need for affordable housing is greatest.
4.5 WMRA also urges ODPM:
a. To publish its consultants final research documents
behind the proposals for the affordability econometric model and
the sustainability modelling.
b. To explain how these are to be worked together at the
Regional and sub regional level, and
c. To resource RPBs to undertake sensitivity testing on
the proposed approach prior to the adoption of ODPMs proposals,
especially in areas of high priced housing, (eg the South and
West Housing Market Areas of the West Midlands Region using the
intended model to understand the implications for the market,
infrastructure and the environment that would result from increasing
the supply of homes in Stratford, for example; to establish how
many homes would need to be built in order to reduce housing prices,
or the rate of price rises, over what period and spatial area).
4.6 The WMRA requests that ODPM respond to these matters
raised in this response and accompanying letter. The WMRA / RPB
secretariat would welcome an opportunity to explain these concerns
further in relation to the West Midlands if ODPM officials felt
this would be a useful means of forging mutually acceptable proposals.
9 September 2005
109
RSS para 6.25 written in anticipation of the defining of the HMAs,
applies these to RSS policy CF5 "Delivering Affordable Housing
and Mixed Communities". Back
110
Eg see WM RSS Annual Monitoring Report 2004 (WMRA2005), and Supplementary
Report "Plan, Monitor, Manage" provision of Housing
in the West Midlands: 2004 (WMRA2005). Back
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