Friday, 26 September 2014

On the Greater Manchester Spatial Framework

The first impression of confirmation that the ten AGMA authorities are to develop the nascent spatial framework (GMSF) for identifying future housing and land requirements into a statutory joint Development Plan Document (DPD) was a positive one. The replacement of regional planning by the current Government with a wishy-washy 'duty-to-co-operate' was to the detriment of strategic plan-making, and Greater Manchester, functioning as it does as a single spatial entity, will manifestly benefit from more coordinated planning.

On reflection though, one starts to wonder about the ability of the ten LPAs to get local plans in place whilst the GMSF process is ongoing. Although the consultation document states that "no weight should be attached to the intention to produce the GMSF or the initial evidence that is the subject of this consultation", it is also stated that "the objectively assessed needs or requirements for individual districts will be a key output of future stages of work on the GMSF".

The stated timetable envisages that a GMSF will be adopted in 2018, but we should add a couple of years to that just in case. Even if individual LPAs start work on the amendments to Green Belt boundaries and the identification of specific sites before the adoption of the GMSF, it is hard to imagine that allocations will be confirmed much before 2022. That is eight years away. What are the ten LPAs to do in the meantime? What is the development industry to do in the meantime? What is the city's growing population to do in the meantime?

The Oldham (November, 2011), Trafford (January, 2012) and Stockport (March 2011) Core Strategies were adopted before the NPPF (March 2012) and Manchester's (July, 2012) came soon afterwards. It is now accepted (confirmed in the Broom Hill, Sevenoaks appeal from October 2013) that the NPPF's requirement for LPAs to meet the full, objectively assessed needs attracts more weight than housing requirements included in development plans adopted in accordance with the previous advice in PPS3 (which required the provision of a sufficient quantity of housing taking into account need and demand). 

What progress now in Rochdale, Bury and Salford? Since the suspension of the Rochdale EiP the Council had been producing an up-to-date SHMA, but this was delayed so that the latest population projections published by ONS could be taken account of within the study. The Inspector examining the Bury Core Strategy wrote to the Council in July 2014 following its suspension and said that:

The Council has also referred to the potential need for an early review of the plan (possibly in connection with housing) in the light of the emerging Greater Manchester Strategic Framework (GMSF). Clearly it would be inappropriate to delay the adoption of a plan indefinitely but given the potential significance of the GMSF to Bury, I can see sense, in the current situation, of awaiting its outcome before producing a plan - as I understand from the hearings neighbouring Salford intends to do.

Why would these LPAs carry on with identifying their own objectively assessed housing need so as to progress with a local plan when the GMSF process is ongoing?

In summary, the principle of greater-than-local planning is a sound one, and in Greater Manchester particularly it chimes with the 'Devo-Manc' agenda, but will a statutory joint DPD mean that the objectively assessed housing requirement of 10,706 net additional dwellings per annum is met sooner rather than later? Would progress not be swifter by identifying objectively assessed needs for individual districts through the local plan process now? Who knows, but it is going to be interesting finding out...

Thursday, 25 September 2014

On the real land banking problem

"Are 'speculative developers' the new bankers?" I asked in this previous piece. Well there is mounting evidence that they might be because, fresh from an assault on wealth and 'irresponsible' business at the Labour party conference Ed Miliband used a party political broadcast to attack "the power of the big developers" on the basis that "they’re sitting on hundreds of thousands of places for homes with planning permission and not building because they’re waiting for it to accumulate in value."
The HBF, amongst others, (here) have highlighted the three independent studies in the last decade that have all concluded that house builders do not land bank. Why would they?
  • If land has been purchased with a planning permission in place then the housebuilder will want to start selling homes as soon as possible; 
  • If planning permission is granted on land promoted by a housebuilder under option from a landowner then that typically triggers a requirement to purchase the land. Having purchased the land (and funded the cost of promotion) the housebuilder will want to start selling homes as soon as possible; or
  • If planning permission is granted on land promoted by a promoter under a kind of 'planning promotion agreement' with a landowner then that typically triggers a requirement to sell the land. Having purchased it, for the same reasons as above, the housebuilder will want to start selling homes as soon as possible.
The greater issue, to my mind, is the amount of land that is actually available to build houses on. To get anywhere near building the amount of homes that the country needs the planning system needs to deliver more land, which, as this NLP Planning report highlights it simply is not doing. This is most telling:
"Of the 126 Local Plans (outside London) that have been submitted since the NPPF a third are currently ‘in the system’ having been submitted and either awaiting or undergoing examination. A third of those 43 Plans that have been submitted and are either awaiting or undergoing examination require further evidence of objectively assessed housing need. The need for further evidence, and subsequent modifications, has drawn out the examination process for 17 (40%) of the ongoing plans for over a year."
If, therefore, there is a land banking problem in this country it is not 'big developers sitting on hundreds of thousands of places for homes', but a planning system sitting on sites with draft allocations waiting to be adopted.

(Updated 7 April 2015)

Wednesday, 3 September 2014

Permission to build: how to establish the principle of development once

Steve Morgan, Chairman of Redrow, spoke to BBC Radio 4's Today programme yesterday (from 1h19m here) about the company's record results. When asked why the company was not building more homes Mr Morgan (who has not been shy about sharing his views on the planning system in the past...) highlighted the 'challenge' of getting from an outline permission to an implementable permission.

This reminded me of the current 'technical consultation on planning', which includes the introduction of "deemed discharge" for planning conditions where an LPA has not made a decision within a reasonable time period.

Whilst described as a 'nuclear option' when first mooted back in January, this is actually quite a sensible way of reminding LPAs that the issuing of a decision notice does not constitute the end of the application process. Given though the work required between the granting of an outline consent and work starting on site, the deemed discharge of conditions, like much of the Coalition's activity, constitutes a tinkering around the edges rather than real reform.

The planning system alone cannot be responsible for the construction of the amount of new homes the country requires, but it does need to provide the wider development system with the land to do so. The NPPF (which as Mr Morgan points out was largely a consolidation and rebalancing exercise rather than fundamental reform) may have played a role in LPAs making 8% more residential decisions in the year ending March 2014 compared to the previous year (with major residential decisions up by 31%), but, as Mr Morgan points out (I can find no empirical evidence to support his assertion, but do share it) the majority of new permissions are in outline, which means that there are still several hoops for builders to jump through before a spade can be put in the ground.

So. Enough tinkering. Let's talk about real reform. The obvious solution, to me at least, is the preperation of local development orders (LDOs) as soon as preferred allocations in local plan document are identified so that they can be made as soon as practicably possible upon the document's adoption. The Government has been pushing the use of  LDOs recently (see here and here), but housing and planning minister Brandon Lewis has made clear that this was to protect the countryside from building (here). With the general election out of the way next year and with ministers perhaps more willing to acknowledge publicly that greenfield sites need to be developed, the conjoining of LDO and local plan processes for both major green and brownfield sites has the potential to expedite the planning process significantly.

If the possibility of sensible condition reform represented a 'nuclear planning option' then one can imagine the reaction of The Telegraph et al to allowing development without planning permission so let us anticipate the inevitable relaunching of the 'Hands Of Our Land' campaign...

'You're riding roughshod over the wishes of local people!' No. A LDO would be linked to the formal adoption of a strategic allocation, which would have been subject to the usual local plan process.

'We'd have no control over what development looks like!' No. A design code would be a condition of the LDO.

'Developers would be able to get away without making financial contributions!'. No Section 106 planning obligations cannot be required under a LDO, but this does not prevent section 106 agreements being offered. For example, if a condition attached to a LDO requires mitigation of an impact from development then a section 106 agreement could be used to secure this. Further, development carried out under a LDO may be liable to pay a CIL charge where one applies (and every LPA will have adopted a charging schedule next year...).

I would actually contend that a consolidated local plan and LDO process would not only expedite development, but might also result in better development. Consider two hypothetical strategic sites on the edge of a hypothetical town, both promoted through the local plan process and both ultimately adopted. Site A has been supported by a design code and masterplan framework, as well as technical material to support deliverability, which have been endorsed by an inspector at an EIP. Site B has been passively promoted by a landowner until the point preferred status was confirmed, whereupon an outline application was submitted. Site A, developed in accordance with the design code and masterplan framework, is likely to create a better development than Site B, which will be brought forward through piecemeal reserved matters submission.

The leap between the promotion of Site A, above, and a consolidated local plan and LDO process is not actually a great one. A lot of design and technical work is undertaken during the local plan process to demonstrate suitability, availability and achievability and this work, more often than not, is simply resubmitted in order to then go through the planning application process. The Telegraph would have to find a threat level above nuclear in order to cover the story, but in this context LDOs for strategic allocations are as sensible a measure as the deemed discharge of conditions.

Tuesday, 2 September 2014

Will we ever build enough new homes?

GVA’s latest Development Outlook report notes that, helped by the strengthening economy and government initiatives, there has been a surge in development activity over the last twelve months, with new private sector residential construction orders increasing by over 30%. The 138,441 starts on new homes across the UK is the highest since 2007, but remains well below the 265,000 new households that are forming each year and even further below the 300,000 required if the historic backlog is taken into account.

So why are we not a nation of house builders? What is preventing us from adequately housing ourselves?

Let’s get the big one out of the way first. We are a nation of Nimbies. The British Social Attitudes Survey suggests that opposition to new homes fell between 2010 and 2013, but there is still a discrepancy between the recognition that new homes are needed nationally and the support for new house building locally. The loudest voices at planning committees are the people who are already on the housing ladder.

Then there is the question is land. Even if land is allocated for development (and development plan coverage remains poor, often in part due to our Nimby friends), owners are not compelled to release it for development and with no compulsion to do so many can be content to retain it as an investment. This can apply as much to public sector land as to private sector, though often it can be difficult to find out who owners actually are. Unlocking land is also often a major barrier because often capital investment is required early in the development process, but capital receipt is not captured until much later.

What though to do about it? Well for a start we need the housing, development and construction sectors to be more vocal in highlighting the benefits of new homes and consequences of not providing enough. The industry needs to speak on behalf of those who do not own their own home and to try to win the support of local politicians who are often swayed by the vocal minority.

There also needs to be an acceptance that the current private sector model within the current land and planning systems will not deliver enough new homes. GVA’s ‘Development Outlook’ report, for example, notes that house builders, wary of the peaks and troughs of past economic cycles, may show restraint in the face strong house price inflation rather increase output.

The public sector, therefore, needs to take a greater role in enabling and building new homes. At central government level there is support for garden cities, but in the build up to the 2015 general election and wary of our Nimby friends, that support is for proposals that are ‘locally-led’. In the absence of any deliverable proposals to date and with the general election out of the way, perhaps the next government will be bolder and more visionary.

At local government level authorities will need to work across departmental budgets and with neighbouring authorities to pool what resources are available so that they can be invested in large scale schemes.

What is clear though is that if we keep doing what we are doing we will never build enough new homes.

This is a piece that was written for Construction News.