Re-thinking housing targets

The passage of the Levelling Up and Regeneration Bill through Parliament has not been without controversy – no more so than in early December when it was announced that housing targets are to be scrapped. Simon Atha, Associate Director in Boyer’s Midlands office describes how this is likely to impact future housing provision.

Related topics:  Property
Simon Atha | Boyer
8th December 2022
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It came as no surprise to the development industry when Michael Gove let it be known that he is giving in to Conservative backbench pressure and amending the Levelling Up and Regeneration Bill to make clear that housing targets are to become 'advisory'.

The change to the draft legislation will mean that local planning authorities (LPAs) will be allowed to build fewer homes than the nationally-generated figures predict are necessary, provided they can show that meeting the target would significantly change the character of an area. Since any new development inevitably changes the character of the area in which it is situated, this substantial amendment to the draft legislation looks set to reduce new housebuilding growth up and down the country.

A ‘rebasing’ of housing targets had been on the cards for several weeks: the term was first used in a comment by Secretary of State Michael Gove which went on to describe a need to allocate housing in ‘a fair way that takes account of changes in population’.

In a PMQs that followed, Rishi Sunak elaborated further, stating that the Government is ‘committed to making homeownership a reality for a new generation, and we must build homes in the right places, where people want to live and work…but I want those decisions to be taken locally, with greater say for local communities rather than distant bureaucrats.’

So the seemingly intractable problem of determining ‘fair’ targets will be passed to LPAs, further politicising the decisions taken, while inevitably reducing the number of homes built and exacerbating affordability issues throughout the country.

Not just content with removing nationally set housing targets, Bob Seely MP and Theresa Villiers MP, the leading rebels behind the backbench rebellion have claimed that; ‘For the first time, Government will consult on allowing councils to refuse applications from developers who do not build and ministers will explore the introduction of a character test in planning. This is an important first step to drive 'spivs' from the housing market.’

This ‘character’ test is another example of out-of-touch NIMBY politicians seeking to block legitimate housebuilders from delivering much-needed new homes. Introducing ‘character’ as a test for granting planning permission opens the door to treating anti-housebuilding prejudices and biases as 'legitimate’ planning considerations.

Sadly, extravagant political statements have shocked the system without providing a solution - from Boris Johnson stating that his party would not support greenfield development to Liz Truss referring to housing targets as ‘Stalinist’ - combined with broader issues in need of a political solution, such as nutrient neutrality, has had a stalling effect on local plans. And we are still awaiting the revised NPPF, promised for July, with its suite of development policies to streamline strategic planning.

The current – soon to be former - process to housing targets combines nationally set targets with allocations made through local plans. The setting of targets based on household growth and affordability statistics is generally reliable but lacks sensitivity to local areas which may welcome or oppose growth for a range of complex reasons linked to transport infrastructure, immigration or growth of employment areas.

Consequently, the allocation of centrally determined targets through the local plan process is notoriously difficult and plays into the hands of local NIMBYs determined to restrict new housebuilding.

The Regional Spatial Strategies (RSSs) put in place by the last Labour Government have been mooted as a solution. Certainly, there were benefits to regional planning such as taking the local level politics out of plan-making and providing a wider range of strategic thinking to the issues of housing numbers and infrastructure. But regional housing targets were also criticised for lacking local understanding.

In my view, an alternative is a national spatial plan to allocate housing, which takes into account strategic infrastructure, broad growth centres and population movement.

A national plan would avoid the siloed thinking that has dominated so-called strategic planning for decades. For example, in the East Midlands, we see limited collaboration between LPAs (something likely to be reduced further if the Levelling Up and Regeneration Bill succeeds in removing the Duty to Cooperate and nationally set housing targets are removed). Before that, the RSS for the East Midlands ticked the ‘regional collaboration’ box and was effective at regional level, but didn’t cover wider cross-regional strategic issues.

A national spatial plan would deliver a whole-country approach, meeting the need to ‘level up’ by allocating potential growth areas and, importantly, allocating the means for transport infrastructure to support increased housing delivery. It would formalise policies which currently exist as guidance through the NPPF (such as good design and environmental responsibility) – delivering on Michael Gove’s condition that, ‘a fair way of allocating housing…means that homes need to be more beautiful [and] that the environment is protected.’ It would also provide the opportunity to review the Green Belt boundaries on a national level, away from the interference of local politics.

Local plans should not be streamlined further, because their evidence base is instrumental in allocating homes effectively in the most sustainable locations. Furthermore, design codes should become integrated into local plans, as is the intention of the Levelling Up and Regeneration Bill, but with consistency.

In my mind the Government’s latest approach to housing targets will only exacerbate the housing crisis and add to issues of affordability, locking out a generation of people from being able to buy their first home. An alternative put forward by the Truss administration was to incentivise communities to accept more housing.

But development shouldn’t be seen as a wrong to be righted through compensation. Already Section 106 obligations, CIL and affordable housing contributions exist to offset the impact of new development and provide infrastructure associated with it. Expanding the scope of this to ‘incentivise’ communities may pose risks in respect of transparency and impartial decision-making by local planning authorities and would potentially impact viability.

The creation of a national spatial plan would be a positive, pro-development approach to solving the housing crisis. It would deliver growth and infrastructure, building on the NPPF’s principle of ‘presumption in favour of sustainable development’. It is also an opportunity to provide much-needed infrastructure at a national level without the interference of local politics.

Despite the predicted adjustment in house prices in 2023, the housing market remains one of the greatest catalysts to economic development and, as the Levelling Up Bill states, combined with an appropriate investment in employment and transport infrastructure, can kick-start growth in the parts of the country that need it most. A national spatial plan would speed up delivery and therefore the benefits of levelling up. The approach would allow for broad zones for development in the context of national and regional transport proposals and enterprise zones (freeports, investment zone or their next iteration), along with Green Belt and other environmental considerations.

To reiterate my earlier point, the uncertainty that has dominated and impeded the planning system throughout this Government must come to an end. Unfortunately, it is now clear that by giving in to the rebels on housing targets the Government has shown it is not committed to delivering economic growth or tackling the housing crisis through ‘levelling up’.

The Government’s target of building 300,000 new homes a year appears to have been effectively abandoned due to pressure from NIMBYs and with an eye on local elections in 2023 and the next general election in either 2024 or 2025. Whilst this may appease a small vocal minority, the Government’s approach is unhelpful to those in the housebuilding industry and most importantly those many people in desperate need of quality and affordable housing.

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