Memorandum from The Royal Town Planning Institute (RTPI) (CRED 16) Introduction 1. The Royal Town Planning Institute (RTPI) is a professional body, learned society and charity that exists to further art and science of spatial planning. It has in excess of 21,000 members, who provide planning advice and services to central and local government, the voluntary sector, communities and developers including for profit housebuilders and housing associations. 2. The CLG Committee is considering the likely effectiveness of the measures which the Department for Communities and Local Government is taking to deal with the credit crunch, with particular reference to: § achievement of the Government's housebuilding targets, both for market and for social housing; § the financial viability and ongoing business of housing associations; and § measures to help existing and prospective homeowners affected by the credit crunch. 3. The RTPI's interest is in the use of planning policy and decision making to support achievement of the Government's housebuilding targets, both for market and for social housing, and in the potential for planning to provide short term economic stimulus and to set the foundations for medium to long term economic recovery. Issues 4. In 2007 before the credit crunch, the Housing Green Paper led to the adoption of significantly raised housing targets, to ensure a better match between underlying housing need and the delivery of housing. The National Housing and Planning Advisory Unit was set up to provide supporting analysis. 5. The short term demand for market housing has since reduced, consequent on a decline in the availability and terms of mortgage borrowing. However, demand for social and mixed tenure (affordable) housing is rising. Retention of core housing design and construction sector skills and production is and should remain an important objective within government's response to the credit crunch and the emerging recession. By doing so, the government should aim to stimulate the economy through design, construction and materials related employment, to ensure that short term demand for affordable housing can be met and to provide a better launch pad for a return to housing growth in the medium term. 6. The planning system has a key short term role to play in delivering affordable housing, as much affordable housing is levered out through contributions from private market housing development, using agreements under section 106 of the Town and Country Planning Act 1990 (as amended). As private developers face falling underlying land values, their capacity to contribute affordable housing will decline. The planning system offers the prospect of becoming a place in which brokerage between public fund contributions to support affordable housing delivery and ongoing private construction takes place to a greater extent than is presently the case. Achieving this benefit would involve aligning government housing market support policy measures with planning practice around the negotiation and variation of section 106 agreements at the local level. 7. It is also critically important to recognise that the underlying basis for medium and long term housing forecasts and hence the role of the planning system in housing delivery over these timescales has not been radically changed by the credit crunch. A fall in short term housing demand does not justify a consequent reduction in the forward land supply available for housing - delivered through regional and local plan-making. The provision of land supply to meet underlying need suggests the maintenance of pre-crunch medium to long term targets, prospectively supported by a medium term rise in housing affordability consequent on a return to lending confidence allied with a market adjustment in house prices. 8. The planning system is needed to provide medium term support for housing and broader economic recovery in the following ways: § Regional and sub-regional plan making must continue to provide the framework within which the strategic location and broad scale of future housing development are set out. § Local (local development framework) plan making must continue to deliver the land necessary to support housing delivery in the medium to long term. § To the extent that falling application fees in the short term and apparent declines in housing demand eventuate, local planning authorities should be encouraged not to see these as offering short term opportunities to down-scale plan making capacity around housing. To be fleet of foot and poised to grow out of the recession, the UK and England within it must have the medium to long term plans in place to deliver land and new housing, where it is needed. To enable this to occur, local planning authorities must retain skilled plan-making labour forces and plan-making capacity in the short term. October 2008
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