Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence


Memorandum by Torbay Council (AH 70)

  Torbay Council welcomes the House of Commons Select Committee investigation into the affordability and supply of housing.

  The matter is of great concern to Torbay, as it faces an exceptionally high level of housing need. The 2003 Housing Needs Survey (Fordham's Research) identified a need for 1,816 affordable homes per year; whilst house prices are over 11 times average earnings. The 2004 Joseph Rowntree Research (Wilcox 2004) found that Torbay is the 13th least affordable local authority in the country for first time buyers who are under 40 years old. I attach brief further evidence of the extent of housing need.

  Torbay affordable housing problems are particularly pressing because both of its main industries—seaside resort tourism and fishing, are in long-term decline. In 2001 it lost 5,000 jobs when its largest single (non-tourism) employer, Northern Telecom, relocated to China. The affordability problems in the South East are well known. However the problems faced by the South West Region have received less attention. Resorts such as Torbay have to present an affluent image and emphasise their high environmental quality in order to attract tourists. This undoubtedly militates against the true extent of their social problems being recognised.

  The Government is conscientiously trying to address the shortage of affordable housing, and for this it should be congratulated. In the context of this, I would be grateful if the following points could be considered.

OVER-RELIANCE ON MARKET INDICATORS

  The Council would prefer that the need for additional housing was promoted through a plan led system, and is concerned that market indicators should not be over-relied on. Markets are unlikely to provide adequate affordable housing, which by definition, is for people who cannot afford to enter the housing market in the first place.

  It should also be noted that the Government is distorting the housing market by well-intentioned programmes that fuel demand for housing. In particular we are referring to allowing self-invested personal pension (SIPs) investment in property, which fuels the demand for second homes and investment properties, at the expense of first-time buyers. Some HomeBuy products have a similar effect, although admittedly these will help people onto the housing ladder.

LINKING HOUSING TO THE ECONOMY

  Torbay's need for affordable housing is exacerbated by very low average wages (under 70% of the National average and on a level with Cornwall). Moreover, delivering an increase in housing supply will not be sustainable if employment prospects are not improved.

  There is concern that the amendment to PPG3 (Paragraph 42a "Supporting the Delivery of New Housing" January 2005) will exacerbate the loss of employment land to residential use. Similarly in Torbay there is a significant loss of holiday accommodation to residential use, which could, if not carefully regulated, undermine the area's long-term viability as a resort.

  The problem is that high residential land values result in pressure for residential use of employment (or tourism) land. Not because such uses are inherently unviable, but rather because residential land values are higher. It is a case of the external social benefits of having a broad-based economy not being directly represented in land values.

NEED TO IMPROVE MECHANISMS FOR THE DELIVERY OF AFFORDABLE HOUSING

  The Government's consultation paper, "Planning for Mixed Communities" is an excellent document and addresses many of the inadequacies of circular 6/98. The sooner the provisions are put in place, the better. It would be preferable if it were enacted by Ministerial Statement, rather than wait for the final version of PPS3.

  In particular "Planning for Mixed Communities" provides good guidance on:

    —  Clear and workable definitions of affordable housing, and removing the vague and misleading term, "low cost market housing".

    —  Lower site size thresholds. Thresholds in Circular 6/98 (25 dwellings/1 ha) are too high. A new "normal" threshold of 15 dwellings / 0.5 ha is still likely to be rather high and creates an incentive to develop sites for 14 dwellings.

    Planning for mixed communities does offer the opportunity to reduce thresholds. This is absolutely critical for Torbay if affordable housing supply is to be increased. The recently completed Urban Capacity Study (Scott Wilson 2005) identifies a constrained capacity of 364 dwellings per year on previously developed land. However, only 50 of these are likely to arise from sites of 0.1 ha or larger.

NEED FOR REALISM ABOUT PLANNING OBLIGATIONS/GAIN

  Circular 5/2005, "Planning Obligations" is helpful in that it confirms that affordable housing is a legitimate planning obligation, within the tests for reasonableness etc in the circular.

  Nevertheless, Circular 5/2005 did not go as far as the aspirations of the various sustainable Communities Plan documents might suggest. One is that the Government intends to introduce a Planning Gain Supplement as recommended in the Barker Review of Housing Supply.

  This would remove the monies paid from obligations from the communities in which housing is built. It also removes any incentive from Local Planning Authorities in delivering on the Barker Review's aspirations; since the contributions arising from development will not remain in that area.

  Nor would it be good for local democracy. Local Planning Authorities will be reduced further to being supplicants of Central Government, rather than being empowered to serve their local community.

  The Council does not have an in principle objection to taxing betterment (as an Optional Planning Charge/Planning Gain Supplement would do). However, great care needs to be taken that this does not stifle development, particularly at a time of uncertainty in the housing market.

NEED FOR ADDITIONAL FUNDING

  Planning gain/obligations in themselves will not be sufficient to meet the very high need for affordable housing (particularly rented housing). An ongoing commitment to housing funding through the Housing Corporation is needed. (It is noted that such funding has increased). Public subsidy may be particularly needed on S106 sites, where the amount of developer contribution/subsidy is insufficient to allow the provision of affordable housing if there are other abnormal costs such as contamination.

NEED FOR CLEARER DELIVERY MECHANISMS: ROLE OF REGISTERED SOCIAL LANDLORDS

  The delivery of affordable housing is complex and there is a role for clearly worded best practice guidance, to advise on issues such as the calculation of subsidy, appropriate targets for affordable housing, model legal agreements, etc.

  Planning for affordable housing is much simpler where a registered social landlord is involved. Most Planning Officers are not affordable housing specialists. The involvement of an RSL allows matters such as management, rent levels, etc to be dealt with separately from the planning system. Conversely, when affordable housing is provided by a non-RSL, the planning officer (or solicitor) dealing with the case needs to ensure that many more (non-land use) matters are addressed, for example, rent levels, the type of tenancy, management regimes.

  For this reason, the emphasis on RSLs as the providers of affordable housing should only be relaxed with extreme caution. There are grave reservations about non-social registered landlords being eligible for Housing Corporation funding.

IMPORTANCE OF SOCIAL HOUSING

  The Government's policy of extending home ownership is noted, and in the policy context of providing mixed and balanced communities and homes for all, is supported. However, it is critical that social rented housing is also provided, since many people will never be able to afford a property at any price. In Torbay, the Housing Needs Survey found a need for 1,215 social rented houses per year (three quarters of the overall need of 1,816).

  Social rented housing is expensive to provide, partly because of the low return from Housing Corporation social rent levels, but also due to the prejudice against social housing. The fear of social housing (perhaps sometimes justified) can also affect land values of market housing in a development, and often gives rise to vitriolic objections which complicate the planning process.

  Clear models of integrating social housing into successful development need to be produced. Shelter (who I assume will make their own representations to the Committee) have produced work on this ("Inclusion Project", March 2005). In addition, issues such as the pepper-potting of social homes, rather than creating ghettos, and clear management regimes (via RSLs) can address these fears.



 
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