Written evidence from Professor Colin
Jones (ARSS 128)
SUMMARY
Supply of housing has not kept up with demand for
a generation.
Top-down approach to planning of housing is a longstanding
tradition.
Planning policies rather than the planning system
(including RSS) has shaped the housing market cycle this decade
by slowing supply.
Effectiveness of these planning policies is linked
to house price cycles, and in the aftermath of the credit crunch
are unlikely to promote a quick revival in housing supply.
Given the dominance of planning policies rather than
the planning system in housing supply the Regional Spatial Strategies
top tier (and the subsequent delay for the localism agenda to
get off the ground) is unlikely to have much short term influence
on housing supply.
In the longer term revisions to policies currently
in the process of development will need to be substantial to improve
the position.
INTRODUCTION
A discussion paper published by the last government
in 2007 notes that "For a generation, the supply of new homes
has not kept up with rising demand." (CLG, 2007, p5). This
statement is a useful starting point for this paper as it encapsulates
the housing problem of the UK. Added spice to this quote is that
the level of house building in 2010 in England, three years later,
is at its lowest since 1924. The paper examines the role and form
of the planning system in this outcome and considers whether this
is a structural issue for the system or the consequence of planning
policies. The latter leads into a discussion about the relationship
between planning, house building and the house price cycle. Based
on these insights it then looks forward to the role of planning
in the market downturn and beyond. In completing this task it
also reviews the influence of planning on the UK housing market
cycle and hence the economy.
Before proceeding it is useful to note that the discussion
paper argued that a new national drive to support more affordable
housing was required and set out the then government's plans to
build three million new homes by 2020. Only around a fifth of
this target was to be directly met by more social housing and
at least a further tenth was to come from other forms of "affordable
housing" for rent or sale. In other words the new house building
would primarily be in the private sector reflecting the current
tenure structure.
THE EVOLUTION
OF PLANNING
FRAMEWORK IN
UK
The planning system in the UK was established in
1947 and it has followed broadly the same principles since, exhibiting
a relatively high degree of continuity although the context in
which it operates has changed substantially. Initially the emphasis
of specific policies was aimed at solving the ills of overcrowded
cities and centred on restrain urban growth and channelling new
development into new and expanded towns. The overall system is
comprehensive and gives local authorities the responsibility for
the production of strategies for the use of land and development
control. The main attributes of the system is its flexibility
and discretionary nature in the granting of planning permission.
Nevertheless the precise role of local/urban plans has been periodically
reconfigured, partly linked to the ideological stance of the government
in power.
Until this summer a two tier planning system in cities
had broadly been in operation in different guises since the late
1960s although not universally applicable across the UK. A key
function of plans is to ensure sufficient provision of land for
new development and a critical input was the assessment of local
housing land requirements. The system generally has a "top
down" approach to this task although the mechanisms vary
in constituent parts of the country. The process has been increasingly
sophisticated but essentially involves assessing a future local
housing needs based on population forecasts that is then fed into
assessing annual housing provision housing requirements.
As the role of social housing has diminished as a
result of a combination of minimal new building over two three
decades and the sale of council houses to sitting tenants so the
planning system has become more pivotal to housing policy (Bramley,
1997). At the beginning of the noughties the frictions this created
led to reforms to replace the plan-led "predict and provide"
system with a "plan, monitor and manage" approach that
ostensibly encouraged planning to steer the market rather than
follow it (Prescott, 2000). The changes were also bound up with
a new vision for planning entitled "spatial planning",
a term adopted from continental Europe, that supposedly signalled
a move from a passive to positive approach to land use planning.
It is also a time that unresponsive housing supply
was identified as a major housing policy challenge (Bramley, 2007).
The issue partially re-emerged on the policy agenda in the context
of the Sustainable Communities Plan and then more fully in an
independent government review by Kate Barker (2003, 2004). This
review sets out a plethora of recommendations (Barker, 2004) aimed
at changing the planning system. There is a focus on the need
for greater use of market indicators as a basis of providing land
for future development. In particular she suggests that the traditional
approach of allocating land on the basis of household projections
(and related needs estimates) could be improved by setting targets
for planning that are based on affordability measurements.
In 2006 the planning system in England was reformed
to speed up the system and make it more sensitive to market pressures.
The new approach was firmly in the top down tradition. Two main
levels of plan were introduced: Regional Spatial Strategies (RSS)
and Local Development Frameworks (LDF). Regional Planning Bodies
took responsibility for preparing, monitoring and implementing
the RSS which involved the identification of both a rolling five
year supply of developable land and up to a further fifteen years
of potential housing land. It was thought this system should provide
market and state actors with greater certainty.
This complex system of allocating land for new housing
involved numerous stages and inputs. At a general level, assessments
were made of housing need, and future requirements for new housing
were set out. This technocratic exercise outlined in Figure 1
was based on a range of background data including projections
of future numbers of households and assessments of the capacity
of regions and sub-regions to provide for this additional requirement.
In practice these technical processes were subject to serious
criticisms as they are data driven and have a debatable theoretical
basis (Jones and Watkins, 2009). The problems started with the
essential building block, the definition of local housing market
areas. These functional areas were often simply taken to be convenient
local authority boundaries and lack credibility (Jones et al,
2010). They are also embedded within the administrative regions
even though housing market areas, for example Manchester, straddle
such boundaries. The result is apparent sophisticated forecasts
but scratch the veneer and their reliability is questionable.
Perhaps the process was more important than the results
as it promoted engagement of a wide range of actors, including
housebuilders, social landlords, property agents as well as community
and regeneration agencies. And while it was a flawed pseudo-scientific
exercise it offered a vehicle for justifying increased house building
and a mechanism for the identification of land supply. Notwithstanding
these criticisms these new processes took time to set up and implement
and this may have contributed to a slowing of new house supply.
But the answer may also lie in specific planning policies which
are now considered.
Figure 1
Source: Ferrari (2008 p8)
RECENT PLANNING
POLICIES
Spatial planning set itself extravagant goals or
claims about what it can achieve. Planning Policy Statement 1
issued in 2006 for England stated that planning aims to ensure
the right development, in the right place at the right time
(CLG, 2006) and the planning system was also now charged with
the delivery of affordable homes, establishing sustainable communities
and securing local economic development. It is useful to briefly
review these policies and their impact.
PROVISION OF
AFFORDABLE HOUSING
The previous government strongly encouraged the use
of "planning agreements" by local authorities that oblige
private housing developers to make social contributions (a negotiable
development gains tax) in return for planning permission to build
(CLG, 2006b). In the noughties the government chose to expand
the supply of affordable housing by using this mechanism. The
use of planning agreements to provide affordable housing placed
it as central core of national housing strategy.
However, there have been three problems with this
policy. The most fundamental was that it failed to address the
conundrum of using the planning system to generate affordable
housing while the affordability problem is partly created by the
constraints of the planning system. Setting aside this conflict
it follows that this policy of planning agreements was only likely
to be applicable where there are severe planning/urban growth
constraints and not a universal panacea across the country. Second,
the assessment of a developer's contribution is a complex task
and planning officers do not have either these skills or sufficient
negotiating skills. Partly because of this problem the processing
of these agreements and hence the developments themselves became
very slow and cumbersome. There are also considerable doubts about
the efficacy of the system in generating funds, albeit in kind.
Third, it was decided that to promote social mix the affordable
housing had to be normally provided on the same site as the private
housing.
This last ingredient added to the complexities. A
major area of friction was the persistent differences between
developers and planners about the type and location of affordable
housing to be built (Rowlands et al, 2006). The success of the
policy is also very dependent on the buoyancy of the private housing
market and new house building rates, and in the first half of
the noughties the numbers of affordable housing provided in this
way did increase (Crook et al, 2006). However, the success of
these agreements was heavily concentrated in areas of high housing
demand/value, principally London and the South East of England
with very few affordable housing units provided in northern regions.
Overall though the use of planning agreements dampened the upswing
in house building expected with the rise in house prices and therefore
contributed to exaggerating the house price cycle.
SUSTAINABLE DEVELOPMENT
Sustainable development is an overarching goal of
planning yet the term is subject to interpretation. The planning
profession has emphasised environmental and ecological concerns
and both the government and the planning profession have placed
a strong emphasis on urban design as part of sustainable development
within a compact city form. This has been translated into a policy
that encouraged high residential densities by following a stringent
defence of the green belts surrounding the cities, a minimum recommended
development density of 30 dwellings per hectare in England (since
2006, although recommendations were higher between 2000 and 2006)
and the reuse of "brownfield" land. There was a target
in England for building 60% of new homes on re-used urban land.
The consequences of these policies were seen in a
transformation in the nature of housing development over the brief
period of just five years. The contribution of flats to new house
building in England rose from a fifth of the total at the beginning
of the 1990s to 46% by the end of the noughties. If social housing
completions are added the proportion of flats increased to half
in 2008-09 This move toward flats built for sale induced a major
reduction in the proportions of three and four bedroom housing
units built in favour of smaller units, especially two bedroom
properties.
The building of so many small flats, especially in
city centres, raises long term questions for the housing market
and sustainability. However, in the short term this trend was
facilitated by the emergence of "buy to let" private
landlords on a large scale who bought up many of them. At the
same time over the last decade as the house price boom increased
the unaffordability of house purchase many households have had
to delay home ownership and there was a growth of long term private
tenants.
The combination of land constraints and planning
policy had increased development densities in cities. Much of
this intensification of land utilisation incorporated redevelopment
of existing housing including their gardens. The recycling of
residential land has rose by around 50% over the latter half of
the noughties. This is emotively referred to as "garden grabbing".
This reflects both the increasing drive toward higher density
across the whole of England. Regions where there are high demand
pressures are consistently above the average. Looking at the local
authority level statistics it is clear that the statistics reflect
not just demand pressures but also the availability of gardens/residential
space to redevelop.
ABOLITION OF
REGIONAL SPATIAL
STRATEGIES
The election of the Coalition government has seen
some significant changes to the planning system notably the swift
abolition of the Regional Spatial Strategies and their replacement
with the "Localism Agenda". As part of this new approach
minimum densities for housing developments have been abolished
and gardens are to be reclassified and will no longer be treated
as brownfield land. New house building is to be promoted by property
tax incentives to the local authority.
The reforms are still a work in progress but the
top down approach to forecasting/allocating housing demand/supply
has been abolished but otherwise individual local authorities
will still need to follow the existing procedures. The essential
difference is that these forecasts/allocations will be undertaken
at the individual local authority level although they are encouraged
to work with neighbouring authorities. This will take time to
be implemented and could cause delays and uncertainty to the house
building industry. There are additional fears that public expenditure
cutbacks will limit the necessary new infrastructure required
for new housing development.
CONCLUSIONS
Planning policies rather than the planning system
(including RSS) has shaped the housing market cycle this decade
by slowing supply. The operation of these planning policies is
also dependent on a buoyant housing market but has still not delivered
sufficient housing supply in a housing boom. The effectiveness
of these planning policies is linked to house price cycles, and
in the aftermath of the credit crunch are unlikely to promote
a quick revival in housing supply. The corollary of this conclusion
and the dominance of planning policies rather than the planning
system is that removing the Regional Spatial Strategies top tier
(and the subsequent delay for the localism agenda to get off the
ground) is unlikely to have much short term influence on housing
supply. In the longer term the revisions to policies currently
in the process of development will need to be substantial to improve
the position.
REFERENCES
Barker K (2003) Review of Housing supply—Interim
report: Analysis. HMSO, London.
Barker K (2004) Review of Housing supply: Delivering
Stability—Securing Our Future Needs, final repor—
recommendations. HMSO, London.
Bramley G (1997) Housing Policy: a case of terminal
decline? Policy and Politics, 25, 387-407.
Bramley G (2007) The sudden discovery of housing
supply as a key policy challenge, Housing Studies, 221-42.
CLG (2006) Planning Policy Statement 1, CLG, London
CLG (2007) Homes for the Future, More Affordable,
More Sustainable, CLG, London.
Ferrari E (2008) Do planners need to understand housing
markets? Paper presented to ACSP/AESOP Conference, Chicago, June.
Jones C and Watkins C (2009) Housing Markets and
Planning Policy, Wiley-Blackwell, Oxford.
Jones C, Coombes M and Wang C (2010, forthcoming)
Geography of Housing Market Areas, Final Report to NHPAU.
Prescott J (2000) Statement on PPG 3 by the Deputy
Prime Minister, DETR, London.
September 2010
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