Cross party consensus on tackling London’s housing crisis

Congratulations to Quatro for putting on an excellent debate on ‘Tackling London’s Housing Crisis’ (12th November), and to some really insightful contributions from Cllr Ravi Govindia (Leader of Wandsworth Council), Sir Steve Bullock (Mayor of Lewisham) and Cllr Stephen Knight (GLA and Richmond Council).

Apart from giving credence to the old adage ‘never mix liberal democrats with property developers and alcohol’ (best not ask), the evening provided cross-party clarity on the need for action in the Capital.  All speakers acknowledged that difficult decisions need to be taken, and perhaps surprisingly, all recognised that if we are to return to anything like pre-World War II delivery rates, the Green Belt cannot be viewed as sacrosanct. Cllr Govindia staunchly defended the right for foreign investment in London property – and foreign residential ownership, whereas Sir Steve Bullock was anxious to move the focus away from home ownership to renting, particularly PRS. Cllr Knight felt that the priority was on addressing London’s acute need for affordable housing. 

So where does the debate take us? I would suggest it takes developers into town halls. Difficult decisions do need to be taken, and whilst the London Plan (and borough local plans/LDF’s need to be respected and considered, the opportunity exists for developers with landholdings – and ambition – to move the agenda on – and in the short term.  The GLA has an important role in providing leadership, guidance and pragmatism; what price protecting a worn-out shed site when we need to build 50,000 homes a year? (not my figures – I was saying 35,000 last week, but those of the assembled politicians).

Those with the vision are likely to reap their own rewards…

Trying to save the Golden Goose …

I spoke yesterday evening at the Martin Arnold LLP conference: ‘Community Infrastructure Levy – Or How to Kill the Golden Goose!’

Image

Perhaps inevitably, the first question was ‘what is the Golden Goose?’

Well as I went on to explain, to my mind, the bird that must keep on laying is the British property industry underpinning the economic recovery, and key among that is building homes in London and the South East – because that’s where most of the quality jobs are.

So why does CIL pose a risk? Well, the problem with CIL is that it’s an arbitrary tool that prioritises infrastructure payments above all else. So as a minimum, affordable housing suffers, and in many instances, development as a whole is put at risk.

There are ways to mitigate it, and a positive that has emerged from CIL (and the wider recognition of the fact that viability as an argument is now here to stay in planning), is that developers are entitled to make a profit – at least 20%.

But developers will be the ones that will carry the blame for private homes being expensive (CIL is nothing more than a land tax that goes straight to the bottom line), and there being no affordable accommodation within a scheme.

The demise of the Golden Goose may have been exaggerated by the title of the conference, but I don’t like the look of it’s flying feathers…

 

Villagers in Freak Concrete Flood Incident…

More concrete Vicar?

I see that the Sunday Times has taken another emotive pop at developers (“Builders use loophole to flood villages with concrete”, ST 3/11/13). They are always excellent headings, but not necessarily accurate (in all senses).

http://www.thesundaytimes.co.uk/sto/news/uk_news/Environment/article1335472.ece

Apparently, ‘villages in beauty spots are under attack from property speculators’.  I was envisaging a Jam and Jerusalem meets Rourkes Drift occurrence, with a baying mob of rabid developers flying over hedgerows and kissing gates armed with spears and bows and arrows.  The local vicar barricading the entrance to the church, whilst the PTA of the local primary school catapult Rocky Road and scones at the passing infidels.  It would make a great eight-part daytime drama.  Alan Rickman as Thorgan Smeltz (property baron).  Joanna Lumley as Petuna Golightly (renowned local watercolour artist).

In reality, a few people are upset that developers have had the temerity to put their heads up above the parapet and have promoted residential schemes where local authorities have not got round to adopting an up to date development plan.  It’s hardly incendiary, and certainly not deserving of accusations of flooding of, if not quite biblical, but man-made proportions.

So why haven’t these councils adopted a development plan? No doubt pressure on resources, the impact of changes to the planning system and speed of hand have played a part.  It may also be that officers and councillors know that if they lead on a plan, they will have to acknowledge the need for housing in the very areas that developers are considering.  Who wants that kind of flack?

This is the carrot and stick of Localism.  If local communities are not engaged, and compelled to see the value of leading on their own growth strategies, developers will fill the void.  You can hardly blame developers for that; they are in business, and it’s not as if we don’t need the blessed houses.  But local communities lose out, and so do developers, as there is less control for the former, and adversarial applications are always more expensive; there is no certainty that utility companies in particular will acknowledge their responsibility to accommodate growth (which comes with a development plan), and planning appeals cost a lot of money.

I’m looking forward to next week’s follow-up article: “Developers Steal Cornwall”.

Green Belt – Friend or Foe?

The age old debate rages on – why should the Green Belt make room for future development when government policies have historically been put in place to protect it?

image

The answer? This depends on which one of these statements you agree with:

1.       There is no housing crisis.

2.       There is a housing crisis.

The Government has previously stated that while the Green Belt is an important protection against urban sprawl, councils can review local designations to promote growth. Councils are actively encouraged to use the flexibility set out in the NPPF to tailor the extent of Green Belt land in their local authority area to reflect local circumstances with regards to housing need. However, there are concerns amongst the Conservative grassroots that the Government are losing voters who believe that the protection of the Green Belt is being completely ignored, and that the Government is pressurising local authorities to increase housing targets when in their opinion, there is no housing shortage or insufficient land supply.

The facts cannot be ignored.

First time buyers are increasingly struggling to get on the housing ladder; the average age of first time buyers is now 40 across many parts of the Country. Many have to rely on subsidies from parents, which essentially means that only a small proportion can really afford to buy a home without help. Many more homes (and affordable homes) are needed.

There is an increasing population. This is partly down to immigration, yes, but also down to the fact that the population is ageing. Importantly, people are choosing to stay in cities with families further increasing the urban population. Do you remember the Specials single – Ghost Town? They wouldn’t write that song today.

The problem of housing need is also compounded by the fact that people are living their lives differently. Older people are staying in the family home long after the children have left. Many more people live alone these days and Englishmen and women tend to demand a castle (that is, a spacious house rather than a one bed flat), and I don’t especially criticise them for that. I wouldn’t want someone telling me to move.  Whatever the reason for the increase in the demand, housing need must be quantified to ensure housing growth is realistic.

There is also simply not enough Brownfield land available. Brownfield sites which are vacant or available in places where housing demand is high are in very short supply. People forget that Brownfield sites do not just magically become available when they are needed.

The recent recession has led to many sites receiving planning permission but not having the funds to be implemented. Those who criticise so called ‘Land Banking’ should be reminded that developers are businesses. Simple as. If they are not going to be able to make a profit when they sell the houses then there is no economic sense in building them. In any case, the recent economic recovery is witnessing these sites increasingly come forward.

In London especially, these facts are heightened. Despite this increased growth, why is London the only major world city that is not expanding in land area? And at what point does the absence of an availability of family housing reduce the attractiveness of a global city?

London and the other major urban areas of England should not be left behind because housing provision is hindered by a reluctance to face facts and review the Green Belt.

These issues are explored further in an excellent article in the Guardian entitled ‘Build on the green belt to solve London’s housing crisis’ by Colin Wiles: http://gu.com/p/3jzgz

The myth of “concreting over the countryside”

The Campaign to Protect Rural England (CPRE) has good intentions – there is no doubt about that – but often they directly contradict themselves. While the CPRE often calls for affordable housing in rural areas, it has this week objected to new Government proposals that would make it easier to convert farm buildings into housing.

Image

All this used to be fields… ( Some rights reserved by ☺ Lee J Haywood)

A spokesman says the plans “will mean housing popping up in unsuitable locations in the remote countryside. And it’s not just the housing but the garages, sheds, lighting and fences that will come with them that will destroy the character of rural areas.” It appears wrong-headed to oppose the use of existing (and I am sure often derelict) barns, workshops and other outbuildings for housing, while asking for rural affordable housing to be delivered…where? On Greenfield sites? There are few Brownfield sites in rural areas that can be used for housing. Surely converting dilapidated farm buildings into new homes would only enhance the character of rural areas?

But this feeds into a much wider issue that has held back the delivery of new homes for decades. Every time a new development is proposed on a Greenfield / Green Belt site in the countryside, the cries of “greedy developers, concreting over the countryside” or causing endless “urban sprawl” quickly drown out the calls for new homes and affordable housing. While the younger generation find themselves unable to get on the housing ladder, the campaigners write their objection letters from spacious family homes with large gardens, many of which were built by “greedy developers” on Greenfield / Green Belt sites prior the boom in house prices that began in the 1990s.

The reality of course is this: the British countryside has not been concreted over, it is not being concreted over, and it will not be concreted over – even if the Government embarks on a house building program to rival the post-war effort (unlikely of course). In the UK, around 80% of us live in towns and cities. In terms of what has actually been built on, the statistics issued by the UK National Ecosystem Assessment reveal some clear facts:

  • 93% of the UK has not been built on.
  • Of the 7% which is classified as urban, over 50% is green space – parks, playing fields, allotments.
  • Almost a fifth of the 7% functions as domestic gardens.
  • Nearly 7% of the urban 7% is made up of rivers, lakes, canals and reservoirs.
  • Overall, almost 80% of urban areas are actually non-developed, whether that is preserved natural environments or man made.
  • Therefore, the proportion of the UK’s landscape that is actually “concreted over” is approximately 2.3%.

Of course, one can say lies, damned lies and statistics, but this does illuminate the misrepresentation at the heart of the campaigns against new homes that strangle the debate and have contributed to the housing crisis that we now face. This is without exploring the reality of rural Britain – that it is an industrial landscape formed by intensive farming and food production. There are few completely natural and undeveloped areas of the UK.

Those who are lucky enough to own homes in rural and suburban areas in the South East of England may complain that development is focused on their area of the country, but the simple fact is that London is the economic powerhouse of the UK and a magnet for talent, entrepreneurship and prosperity – our economy is not dispersed across different cities and regions as it is in France, Italy or Germany, and no Government can address this imbalance without upsetting the free market economy that all of the mainstream political parties are signed up to. Therefore, those who live in the South East of England benefit disproportionately from this economic success, and logically should accept a fair share of new development for homes, industry and requisite infrastructure.

Unfortunately, the debate over planning and development in the UK rarely touches on logic. The CPRE may have good intentions, but they have to accept that development on Green Belt / Greenfield was not and is not always a bad thing. The same needs and motivations that prompted development in the countryside back in 1953, 1963, 1973 and 1983 still exist in 2013 – and these are not going to go away.

Only 2.3% of the UK has been “concreted over”. A tiny increase in this could make a significant dent in our housing crisis, stimulate the economy, and create a more sensible planning framework based on need and evidence. However, local and national government is not delivering a consensual approach to accommodating development, and so for the foreseeable future, it will fall on the development industry to take the strain.

Only the development industry can solve the housing crisis

The main party conferences are over, and the latest Government reshuffle has quickly faded from the headlines.  Housing is a serious issue in need of attention but ministers do not appear to have a clear strategy for solving the problem.
 
Sadly, the situation in 2013 is like any other year. It has been about a quarter of a century since the UK was building anywhere near enough homes to meet its needs.  We are currently at around 100,000 per annum, while the estimate of need stands at 230,000 – not including the severe backlog.

This graph from the FT shows the huge decline in housebuilding since the 1950s, 60s and 70s:

http://blogs.ft.com/ftdata/2013/02/22/about-those-housebuilding-stats/housing-completions-england/
 
Mark Prisk, the outgoing housing minister, was very effective at making things happen according to many in the sector. But he’s been moved to make way for a more media savvy operator, which appears to be unnecessary disruption for a policy which is driven by No 10 and the Treasury in any case. It is the Government’s role to create the right environment for new homes to be delivered but locally and nationally, it is failing.
 
Despite the Localism agenda and more supposed freedom for local authorities, councils are unlikely to get heavily involved in housebuilding ever again due to financial and capacity issues.  Conversely, our councils in their role as local planning authorities are sometimes actively obstructing new development. This happens through short term political decisions to reject schemes in the face of local objections or by not getting their local plans in order and allocating housing land in the right places. Meanwhile, housing associations do good work, but are generally reliant on others for funding and represent a small proportion of the new homes that are built.
 
Therefore, the only people who can really solve the national housing crisis are the private sector. It is up to developers to push the case for new homes and infrastructure – corporately and locally.

We cannot wait another quarter century for local and national government to get their house in order.