I-SPHERE submits evidence to House of Lords on National Policy for the Built Environment

Professor Glen Bramley
Professor Glen Bramley

This blog reproduces evidence submitted to the House of Lords Select Committee on National Policy for the Built Environment by I-SPHERE Professors Glen Bramley, Neil Dunse and Chris Leishman. 

This evidence addresses a number of Questions posed in the Call for Written Evidence (Questions 1, 3., 4., 5., 6, and 7), primarily around the theme of planning for new housing. The evidence is based on an accumulation of research evidence gained through a number of research projects supported by the Engineering and Physical Sciences Research Council (EPSRC, specifically the ‘CityForm’ and ‘SNACC’ consortium projects), the Joseph Rowntree Foundation, and the former National Housing and Planning Advice Unit, among others.

Q.1 Are decisions that shape England’s built environment taken at the right administrative level?

While it is right that local authorities play a key role in local planning, that role should be performed in a context which ensures that the essential interests of the nation and of wider neighbouring localities and regions are reflected. The present English planning system fails this latter requirement, because it has abolished the former regional planning machinery and left these interests only haphazardly catered for through the arrangements for National Infrastructure, the ad hoc/responsive interventions of planning inspectors, and ill-defined, untested and still-localised ‘duty to cooperate’.

Evidence from our and other research on the operation of housing markets, demographic processes of migration and household formation shows clearly that there are strong connections between local areas, particularly at sub-regional scale (within so-called ‘housing market areas’ or ‘travel to work areas’), and indeed significant connections between what are treated administratively as separate regions (notably London and the rest of southern England)[1]. In other words, under-provision of housing in some areas will impact adversely on other areas, in terms of migration flows, house prices, rents, affordability problems and unmet housing needs. These effects will also have an impact on the performance of the economy, as for example key workers find it difficult to obtain suitable housing, particularly housing to buy.

Specific evidence can be cited to show that, given patterns of public attitudes towards new housing, a predictable outcome of the move to ‘Localism’ in determining Local Plans was a reduction of planned levels of new housing in the areas of higher need and demand (South East of England, and wider South), with some (ineffective) increase in lower demand areas (remote and northern areas)[2]. Actual changes in local plans following this policy change conformed to this prediction. Furthermore, evidence from modelling the housing market at sub-regional level shows that, in general, the benefits of increasing supply in terms of improved affordability are enhanced if surrounding areas increase supply as well. In the particular, and important, case of London, the surrounding ‘Home Counties’ area can make a potentially larger contribution to alleviating the pressure in London than can London itself, particularly if one takes a realistic view about acceptable densities and quality of life[3].

Q.3 Does the NPPF provide sufficient policy guidance?

The biggest weakness of NPPF is the lack of a spatial perspective (see below). On housing requirements, the Practice Guidance looks sound on paper but is unambitious and in practice unreliable and capable of being manipulated to justify inadequate plans. There is undue reliance on household projections, which are increasingly unstable, unreliable and lacking in credibility[4], and no attempt at forward forecasting of market outcomes – in contrast for example with the Chancellor’s ‘Fiscal Framework’ which is built around forecasts. Current practice examples highlight the resulting problems, including quite inappropriate judgements about the scale of housing supply adjustment which should be made in response to adverse ‘market signals’[5].

Q.4 Is national planning policy in England lacking a spatial perspective? What would be the effects of introducing a spatial element to national policy?

The short answer to the first question is clearly ‘yes’. The effects of introducing a spatial element must be to some extent speculative, and will depend on the form and process adopted, although one can gain some clues from existing practice in Scotland.

The central dilemma of regional/spatial planning is to balance the perceived imperatives of economic growth and international competitiveness with the desire to spread prosperity, reduce inequalities in economic outcomes, stabilise declining areas and foster a spirit of inclusion for the remoter places. We would speculate that an explicit spatial strategy would recognise that the ‘super-region’ comprising London plus the ‘Greater South East’ is vital to the overall economic performance of GB plc, and would support facilitating the growth of employment and housing in key city-regions within that overall frame, including appropriate new settlement/garden city/urban extension elements. For these areas, more housing is a key element.  Beyond that, there would be a desire to promote similar growth points in the more peripheral and northern regions; for these areas, infrastructure, land reclamation and regeneration might be higher priorities. Infrastructure priorities would be (hopefully) shaped through this spatial strategy process.

Q.5 Optimal Timescale for Planning?

In the 1990s and early 2000s you could certainly say that planning timescales had got too short in the UK. Typical structure and local plans had a 15 year time horizon, but by the time they were approved they had ten or less years to run. Within such a time horizon, it is difficult to bring large scale new sites forward and get housing completed and sold and new communities established. This was convenient for local politicians, who thereby avoided having to make potentially controversial decisions which would upset comfortable local voters. ‘Planning’ became opportunistic, grabbing ‘windfall’ sites resulting from factory closures and the like, rather than thinking about the best shape for future city regions[6]. This approach was reinforced by the excessive emphasis in planning policy guidance (recently reinforced) on ‘brownfield’ redevelopment.

In other countries, where city and regional authorities and state governments take planning for growth more seriously, ‘urban growth boundaries’ are often set with a longer time horizon of 20-25 years or more.

The current conventional time horizon for Local Plans is 20 years. This is the minimum for that purpose. For regional and national spatial planning, where the role is strongly connected to infrastructure requirements, a longer timescale is needed (of the order of 40 years). This is similarly the case in relation to aspects of environmental sustainability, including both mitigation and adaptation to climate change. The function of planning to such time horizons is not to prescribe an infallible blueprint or trajectory – it is rather to test the resilience of urban settlements, economies and infrastructure to a range of conditions which may prevail. For example, the SNACC project we participated in highlighted the significant risks of overheating arising within typical suburban housing areas in southern England within that timescale[7].

Q.6 What role should Government play in addressing issues of housing supply?

The current system in England is confused and contradictory. The ‘Localism’ emphasis post-2011 directly contradicts the emphasis in NPPF, reiterated in Fixing the Foundations [8], on meeting housing need and demand in full. The negative effects of the former on planned housing supply in high growth potential regions was predictable, predicted and realised[9]. We have already argued for a robust government-led approach on spatial planning (Q.3-Q.4 above). However, policy commitments made in 2015, particularly the emphasis on maintaining (rather than reviewing and redrawing) Green Belts, confound the problems.

While clearly housing supply has suffered disproportionately in the financial crisis and recession of 2008-12, our research supports the view that four issues hold back housing supply in the longer term: (1) not enough land allocated through planning in high demand south of England; (2) lack of funding and assured provision of necessary infrastructure to support new/expanded communities; (3) the conventional speculative housebuilding model is not responsive enough (the ‘pushing string’ problem)[10]; (4) quite a lot of the housing required should be ‘affordable’ (including social renting), but the funding and mechanisms to deliver this are inadequate.

To address issue (1), government should formalize the sub-regional collaboration of local authorities on a housing market area/TTWA basis[11], including imposing arrangements where local agreement is lacking. Key elements of planning strategy including housing numbers and locations for major growth should be determined at this level, with statutory backing. There is a case for absorbing Local Enterprise Partnerships within these structures. Where there are significant housing numbers and market issues which spill over even these sub-regional areas, notably as between London and the Greater South East, the Government should reach a view, in consultation with the GLA/Mayor, about the balance of housing numbers to be allocated as between the GLA area and the GSE, and between the sub-regional planning areas within the GSE.

To address issues (2) and (3), local authorities or LA-led land development agencies in growth areas should have powers to acquire development land (with reserve CPO power) at existing use value plus a fixed premium, with the possibility of sharing ‘equity’ in the ultimate development profit, after meeting all infrastructural and planning obligation costs, with the original landowner. They should use such powers and land to auction sites under licence to wider range of potential housebuilders with conditions on mix, price range, and delivery dates, with freeholds conveyed to the final purchasers[12].

To address issue (4), local authorities should have their powers to apply s.106 planning agreements for affordable housing re-emphasized, and not watered down or sidestepped as in some recent government initiatives. Relevant to both issues (2) and (4), ‘viability assessments’ relating to planning obligations should be undertaken according to a standard format with routine market information inputs updated, with a maximum profit margin (e.g. 15%), and these should be published.

Q.7 How do we develop built environments which are sustainable and resilient?

Our research has a bearing on two particular aspects of this question, each of which is quite important.

Firstly, there is the issue of the density and form of future housing development, which is bound up with planning and location. There is a view in some quarters that the right way forward for housing supply in England is to build mainly or exclusively on brownfield sites within the existing urban areas, and probably mainly in the form of higher density (flatted) housing rather than houses with gardens at ground level (implying medium density or less). Some equate such an urban vision with ‘sustainability’, but our research shows clearly that such a single-minded focus on urban compaction will not support sustainability in important respects, including social, environmental and economic, and will not meet the range of people’s preferences and promote maximum wellbeing and happiness. Whether measured in terms of people’s ‘willingness to pay’ preferences (as in house price models) or in terms of people’s satisfaction with different aspects of their social and community life, high density living does not score well, although it does offer acknowledged advantages in terms of accessibility to services and opportunities[13]. Even from an ecological perspective, in terms of biodiversity and wildlife, suburban environments (with their gardens and greenspaces) score better than the average agricultural land ‘protected’ in Green Belts.

Secondly, a key challenge in mitigating carbon emissions and climate change is to increase the energy efficiency of housing. Government has effectively scrapped targets for ‘zero carbon’ new build homes, creating uncertainty for the market[14]. However, the largest challenge here is with the existing housing stock. Since most of this is owned by private individuals, the keys are to raise awareness, to motivate and to facilitate individual investment in energy-saving improvements to the homes and their systems. The Government’s current headline programme, the Green Deal, has been a conspicuous flop, with funding now withdrawn, so there is clearly a need for renewed attention to this issue.

Our research within the SNACC project showed clear evidence, from statistical modelling on the best available dataset, that even in the mid-late 2000s house prices/values did reflect the energy performance characteristics of the home, allowing properly for all the other known influences. Secondly, it showed clearly that people’s actual energy consumption and bills also reflected those energy efficiency features of the home [15]. At that time we found annual savings in energy bills of £400 pa for homes with basic, commonly applied energy efficiency measures, equivalent of £8-10,000 in capital terms. We also found, consistently, that homes with those efficiency features commanded prices about £8-10,000 higher. With the subsequent rise in both energy and house prices, these figures would now be considerably higher.

Thus it should be possible to motivate home-owners to invest in at least the more cost-effective measures, on the basis that they will get a return on their investment through both lower bills and higher values. We would expect the effects on housing values to become larger and firmer over time as (a) the effects of higher energy costs work their way through and (b) awareness grows, partly through the influence of Energy Performance Certificates and their role in the house transaction process. Regulation of mortgage lending through the Financial Conduct Authority could further encourage such awareness and motivation, by reflecting expected energy costs in the ‘affordability’ criteria applied to borrowers[16]. Additional measures may be needed, however, to make such improvements happen in the private rented sector, to ensure that any financing deals promoted are value for money, and to curb the nuisance and abuse exhibited by some of the home improvement industry that has grown up around this area.

[1] Evidence on these sub-regional interactions is developed in Bramley, G. & Watkins, D. (2015) Housebuilding, demographic change and affordability as outcomes of local planning decisions: exploring interactions using a sub-regional model of housing markets in England’  Progress in Planning, 35pp, http://dx.doi.org/10.1016/j.progress.2014.10.002; a wider review of recent housing market models in planning is in Bramley, G. (2013) ‘Housing market models and planning’, Town Planning Review, 84:1, 11-34.

[2]  See in particular Matthews, P.,. Bramley, G. & Hastings, A. (2014) ‘Homo Economicus in a Big Society: Understanding middle class activism and NIMBYism towards new housing developments’, Housing Theory and Society, 19pp. http://dx.doi.org/10.1080/14036096.2014.947173 ; see also Bramley, G. & Watkins, D. (2014) ‘”Measure twice, cut once”:  – revisiting the strength and impact of local planning regulation of housing development in England’, Environment & Planning B: Planning and Design, 41:5, 863-884, http://dx.doi.org/10.1068/b39131 and Bramley & Watkins (2015) in Note 1

[3] See Bramley & Watkins (2015), Note 1.

[4] This critique of household projections is developed in conference presentations to the British Society for Population studies, particularly Bramley, G. & Watkins, D. (2014) ‘A sub-regional housing market model for England with endogenous migration and household formation: its role in assessing the adequacy of planned new housing’ BHPS Conference, Winchester, Sept 2014, Special Session on Demographic projections and Forecasts, and also in Bramley & Watkins  (2015), Note 1.

[5] Inadequate response to market signals, as well as questionable household projections, feature in the case of Bristol-West of England, discussed in Bramley (2015), Note 10.

[6] This critique of planning, which focuses primarily on Scotland, was developed in School of Planning and Housing (2000) The role of the planning system in the provision of housing, Social Research Report, Scottish Government,  and Bramley, G. & Kirk, K. (2005) ‘Does planning make a difference to urban form? Recent evidence from Central Scotland’, Environment & Planning A, 37:2, 355-378.

[7] See main report on SNACC project, Williams, K., Gupta, R., Smith, I., Joynt, J., Hopkins, D., Bramley, G., Payne, C., Gregg, M., Hambleton, R., Bates-Brkljac, N., Dunse, N. & Musslewhite , C. (2012), Suburban Neighbourhood Adaptation for a Changing Climate (SNACC): final report University of the West of England.

[8] H M Treasury (2015) Fixing the Foundations: creating a more prosperous nation. Cm 9098. Alias the ‘Productivity Plan’. See esp. Ch.9, Ch.15

[9] See Matthews et al (2014) (Note 2) for evidence on public sentiment and Bramley & Watkins 2015 (Note 1) for evidence on the impact on output and affordability.

[10] See especially Bramley, G. (2015) ‘Pushing on string: demand and supply’, Built Environment, 41:2, 144-165; and also Bramley, G. & Watkins, D. (2015), Note 1.

[11] There has been extensive research on the systematic definition of housing market areas based on a range of evidence; Jones et al (2010) carried out a review and offered sets of boundaries – see Jones, C., Coombes, M., & Wong, C. (2010) Geography of Housing Market Areas: Final Report. Research Report to DCLG. London: DCLG http://www.communities.gov.uk/publications/housing/geographyhousingmarket

[12]  A similar proposal from a highly experienced practitioner is Walker, J. (2012) Land value capture and infrastructure delivery through SLICS.Tomorrow Series Papers 13. London: Town & Country Planning Association

[13] For key findings on ‘social sustainability’ and urban form from the EPSRC ‘CityForm’ research  see Dempsey, N., Brown, C. & Bramley, G. ‘The key to sustainable urban development in UK cities? The influence of density on social sustainability’, Progress in Planning, 77:3, 89-141, http://dx.doi.org/10.1016/j.progress.2012.01.001 ; Bramley, G., Dempsey, N., Power, S., Brown, C. & Watkins, D. (2009) ‘Social sustainability and urban form: Evidence from  five British cities’, Environment & Planning A, 41:9, 2125-2142, http://dx.doi.org/10.1068/a4184  ; for key findings on density and house prices see Dunse, N., Thanos, S. & Bramley, G. (2013) ‘Planning policy, housing density and consumer preferences’, Journal of Property Research, 30:3, 221-238; http://dx.doi.org/10.1080/09599916.2013.795992

[14] While the retreat from zero carbon homes as a regulatory target is perhaps an understandable response to the recession and undersupply of housing, it contributes to uncertainty which itself may harm supply chains, as emphasized in  http://www.ukgbc.org/press-centre/press-releases/over-200-businesses-urge-chancellor-reconsider-scrapping-zero-carbon .

[15] The key outputs from this aspect of the EPSRC SNACC project are: Williams et al (2012), Note 7;  Thanos, S. & Dunse, N.  (2012) The Changing Effects on Domestic Energy Expenditure from Housing Characteristics and the Recent Rapid Energy Price Movements, RICS Report, http://www.rics.org/uk/knowledge/research/research-reports/domestic-energy-expenditure/  ; and Dunse,  N., Thanos, S., & Bramley, G. (2011) ‘Relationships between house value, energy expenditure and energy ratings’, 18th European Real Estate Society Conference, Eindhoven, June 2011.  http://discovery.ucl.ac.uk/1411174

[16] See for example Griffiths, R.,  Hamilton, I.,  & Huebner, G. (2015) The role of energy bill modelling in mortgage affordability calculations Report. RCUK Centre for Energy Epidemiology, University College London, in association with the UK Green Building Council.