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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