Housing crisis – There is about to be a new government – it will be fine…

Listening to Radio 4, women from Bexley were talking about when they were young – they got married, lived with their parents for a year to save a deposit for a house, and then bought one. They went on to say that now there was no way their children could do that.

Who’s fault is that? One said the government had to do something  and another said that the government couldn’t do anything, and it was all because we were too soft letting too many people into the country.

The impact of the ageing population still living in their houses, some people still having babies increasing the need for supply, years of undersupply and decreasing affordability, exacerbated in some areas by the domestic draw of economic prosperity; seems to be forgotten by the ‘immigration’ viewpoint put forward particularly in the press.

There is just not enough housing nor is there enough planning for housing. And there’s increasing resistance to housing in many areas – often where the need and demand is highest. Essentially, people don’t like change; people particularly don’t like change that in any way undermines their personal life experiences.

What makes people resistant to new housing development (I have been here before https://planningadvisor.wordpress.com/2012/08/07/what-we-want-is-economic-growth-but-not-house-building/) is lack of infrastructure and lack of the provision of affordable housing for those in their community. People will resist when they find that they can’t get their child/grandchild into the local school, when it is more difficult to get a doctor’s appointment etc.

People fail to connect that their view of not wanting new development next to them, in their town, on their countryside, to why their children are still living at home at 26 – and why the generation of 20+ now don’t contemplate ‘family’ life as they are still living in their mum and dad’s back bedroom.

So surely, the government, house builders, developers, land agents and all the others involved in the industry know this…? Well, yes, but effectively tackling the infrastructure issue appears too challenging and politically the issue of more housing at a local level is toxic in many areas. So, the main political parties appear to agree that there is a housing shortage but… they will need to translate national rhetoric to local policies in action – they will have to demonstrate leadership and bottle to deliver and meet the needs of the country and its population, particularly the young. To do this they will need to take on the vocal ‘middle-aged’ middle class and the self-interested landowners, developers, housebuilders etc..

At present some government policies have made it more difficult to achieve the provision of affordable housing and housing accompanied by infrastructure.

The CIL Regs which now prohibit pooling five or more s106 obligations (as a reason for granting planning permission), with only a third of local authorities having a CIL in place, will mean that many authorities have no mechanism to collect contributions towards the necessary infrastructure that communities crave. This lack of a mechanism may make it impossible to get contributions to even basic mitigation which may result in the refusal of development including market and affordable housing development that are so desperately needed.

In addition, both CIL and now S106 net off existing vacant floorspace – further reducing the LPA’s ability to seek contributions to infrastructure and affordable housing respectively.

I have before voiced concern about the issue of viability, land value and the role of the land owner (https://planningadvisor.wordpress.com/2014/01/21/do-the-landed-aristocracy-hold-the-key/) if this is appreciated as a crisis – harming lives and the country’s prosperity – the role and expectation of the landowner needs to come under scrutiny and be addressed by government.

All that said, an obvious difficulty is that the planning system keeps changing – local planning authorities (LPAs) keep getting knocked off course with their plan making and their CIL. Every time something changes they have to review their evidence, update their evidence, spend more money, get council approval and so on… An example of this is six changes to the CIL regulations in five years and changes by examiners to the interpretation of these regulations, most notably in relation to viability and affordable housing.

Changes to s106 and CIL knock on to plan-making and plan wide viability. And, finally, the challenges of objectively assessed need and duty to cooperate (with no regional plan), which need to be balanced, should not be underestimated as obstacles to the planning and delivery of housing.

But don’t worry – there is about to be a new government – it will be fine..

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Community Infrastructure Levy hits Housebuilding – If only it were that simple!

Savills’ recent report, referred to by Planning and the FT – http://offlinehbpl.hbpl.co.uk/NewsAttachments/RLP/SpotlightCILIs_it_delivering.pdf – seem to suggest the correlation between introducing a CIL and an area not being attractive for house building is simple. I don’t think it is a clear correlation to say CIL makes the area less attractive for house building.

Firstly there are very few authorities with CIL – many of them have relatively recently adopted it – Savills’ evidence base is not huge (16 local authorities). Nearly all of those that have a CIL already had a plan in place. These may have already consented much of their growth and will have allocated sites that have been the subject of planning consents that are already being built out – in the best plan led fashion. That cannot be said for all the authorities in the country.

Also, as identified by Savills, there is a huge a spike in the numbers of planning applications being granted subject to s106 obligations at every authority pre the adoption of a CIL. Many of these schemes have been in negotiation for years and to start again with discussions in a CIL world would not be desirable –although the decision rests with the developer. It is also worth bearing in mind that a lot of applications will have been hanging around for some time pre CIL as developers want a planning ‘decision’ and by that they often mean the resolution to grant subject to a s106. They are not always in a hurry to complete the s106 as they are not intending to go straight on site and the resolution will be enough for them to work on. However an authority’s decision to adopt CIL gives a new imperative to get the s106 sorted.

To compare these limited CIL authorities with the rest of the country is very misleading- it should be noted that areas without CIL are also usually areas without a plan and probably, in a lot of cases, without a five year housing land supply. These areas are magnets for developers seeking consents on unallocated land under the NPPF- the rush has been on to get planning permission on these non-plan led sites – increasing the number of houses granted in some areas.

In terms of getting money in – that only happens in a CIL regime when the development starts and in the cases of authorities with an instalments policy later still. So it is not surprising that these 16 authorities, after only a year, have little to show so far considering: the post adoption lull of consents, then the normal lag to get development on site, the developer focus on areas which are targets for non-plan led housing, and that CIL money at most authorities will only ever be able to contribute a relatively small proportion of the overall infrastructure costs associated with the growth plan.

Savills do make a very good point that CIL does not get collected from the broad range of development originally envisaged and the amount the charging authority are able to collect has been reduced due to the neighbourhood proportion, the changes in exemptions including self-build. Most authorities with large strategic sites appear to be sticking to the use of s106 with zero or low CIL for broader strategic infrastructure – this aids the delivery of key infrastructure on these large sites. Where possible, and the CIL/s106 rules allow, CIL will be best used as match funding or part of a wider funding strategy bring in money from LEPS, City Deals, New homes bonus, business rate retention etc. for strategic or sub regional infrastructure; but all of this takes time to implement. Many charging authorities (District level) have not had the experience of pulling together funding, forward funding, and delivery of major infrastructure. This is a whole new area where they will need to develop the skills and mechanisms to deliver projects themselves or with others. Having available mechanisms for future funding infrastructure and available advice for these authorities will help the delivery of infrastructure projects in these areas.