Housing need, economic growth & the evidence base for local strategies

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Prof. Glen Bramley of Heriot-Watt University presents to SWO Housing, Planning and the Economy event on Tuesday 26 February 2013. Held at UWE, Bristol.

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PowerPoint Presentation:

Planning for New Housing: housing need, economic growth and the evidence base for local strategies Prof Glen Bramley (Heriot-Watt University, Edinburgh, UK Contact: g.bramley@hw.ac.uk ; +44 (0)131 451 4605) South West Observatory Conference UWE, Bristol, 26 February 2013 SWO Conference – Bristol

Overview of Presentation:

Overview of Presentation Change in planning regime – ‘Localism’ & NPPF The problem – local sentiment & new housing Existing stances & likely changes What should a ‘sound’ core strategy look like? How to assess: models, forecasts, sensitivities Local cases: Gloucestershire & WoE Suggestions for policy

Previous System:

Previous System Comprehensive LU planning system (widely supported) Plans (LDFs) vs development consents (discretionary) Neglect of supply in policy till 2004 (Barker) Regional spatial strategies & numerical targets, Requirement to consider effects on affordability New Quango NHPAU More investment in social housing and infrastructure But system still failed to deliver much increase in output, before being overtaken by GFC & recession

Localist Planning Reform:

Localist Planning Reform Critique of previous system as ‘broken’, ‘bureaucratic’ (and unpopular) Scrap regional planning bodies and regional strategies Scrap top-down numerical housing targets (& NHPAU) Remove some planning guidance (re density, ‘garden grabbing’) Local authorities to take decisions (except where devolved to local communities) Incentives – extra grant related to number of new homes (NHB) Broad continuance of planning gain agreements but formalised in ‘Community Infrastructure Levy’ Presumption in favour of sustainable development Retain SHMAs & SHLAAs

The Problem – public attitudes:

The Problem – public attitudes Past evidence/literature suggests NIMBYism quite prevalent in England 2005 survey suggests strong resistance to additional housing within existing urban neighbourhoods (‘CityForm’) Impacts on traffic, pollution, parking were strongest -ve factors 2010 BSAS suggests majority opposition, esp among - those with a strong view - middle classes - owner occupiers - Tory/LibDem/Green - South - suburbs

Attitudes by Tenure & Overall:

Attitudes by Tenure & Overall Park et al (eds) (2011) British Social Attitudes: the 26 th Report. London: National Institute for Social Research Chapter by Glen Bramley on ‘Housing Attitudes and Changing Policies’

What would persuade them?:

What would persuade them? Side benefits of new housing, particularly - employment opportunities - greenspace, parks - improved transport links - schools, leisure, shops, medical etc. Financial incentives to residents not rated per se Smaller starter homes, affordable homes to buy & rent

Summing up Predicted Patterns:

Summing up Predicted Patterns Using moderate assumptions about conditional support and delivery of some side-benefits (levels 2 & 3*)…. ..more support in NE, Y&H, E Mids; still net oppos in other regions, esp SE and East …more support in central cities, and in ‘most rural’, and depressed areas; still more opposition in suburbs (esp London) & prosperous areas * Levels: 1. unconditional support 2. support if open space & leisure improved; 3. support if wider range of improvements incl educn, healthcare, transport 4. as 3. but include switching from opposition to support Comment: level 2 probably most realistic, given public spending and development viability constraints.

PowerPoint Presentation:

Planning Stance c.2007

Predicting Change in Stance:

Predicting Change in Stance Combined predicted conditional support for development with existing planning stance index at LA level, to generate 4-way discrete typology A lot of LAs (60%) predicted not to change 95 predicted to shift down their supply, 44 to shift up (slightly more optimistic 87:53) Shifting up more common in north and midlands Shifting down predominant in London, south (and YH); in south outside London, 62 downshifts vs 3 upshifts (!) Minority of upshifters are City Centres and deeper rural – some of these have other constraints e.g. National Parks Downshifters include many areas formerly known as significant growth locations Recent survey by Tetlow King shows picture consistent with these predictions, altho bigger reduction in SW and some in midlands

Housing and the Economy:

Housing and the Economy Concerned that likely pattern of shifts in planning stance under localism will be broadly perverse from point of view of existing affordability and housing need problems (see correlations below) Further concern that this could well be perverse from economic growth point of view, given that south of England has strongest recent growth record and growth potential (e.g. from innovative firms, private sector) Quite strong negative correlation between affordability and GVA growth, already (r=-0.56) Predicted changes are predominantly downwards in the higher growth areas and vice versa (r=-0.38 at district level) Systematic downshift in the key growth regions (SE, EE, SW) More positive shifts/stances in deeper rural areas could be unhelpful or lead to excessive sprawl and high commuting costs, emissions etc.

HMA Areas Showing Price Growth:

HMA Areas Showing Price Growth

HMA Areas showing GVA Growth:

HMA Areas showing GVA Growth

A Sound Core Strategy?:

A Sound Core Strategy? Should have regard to household projections (although these may embody ‘suppressed’ household formation) Should consider evidence of unmet need Should consider affordability trends and relativities (including forecasts) Should consider likely job growth and compare with working age population forecasts Should consider options for major urban extensions and new settlements

How to Assess Market?:

How to Assess Market? Obviously you can monitor trends and current indicators But planning is about the future and you really need capacity to forecast how market will evolve and what outcomes will be, conditional on a range of assumptions about supply, economy, etc. Government (in England) does not provide such tools There are models capable of doing this One example is sub-regional model developed by GB for Gloucestershire (derived from research for former NHPAU) Takes account of interactions of target locality with what is happening elsewhere and nationally Can test robustness of strategy to different conditions

County Scenarios:

County Scenarios Note that these scenarios vary supply in adjacent HMAs in parallel

Comments on County Scenarios:

Comments on County Scenarios In baseline, provision exceeds household projection, and forecast household growth exceeds projection, but working age population falls despite some job growth Affordability is better than England but deteriorates significantly later; cumulative need substantially exceeds affordable supply -12,500 20yr Low supply worsens all key indicators including affordability Higher supply raises household growth and affordability significantly, and need shortfall is greatly reduced altho not eliminated Medium increase in supply across Gloucs & surroundings improves affordability more but does not quite meet need and still gap on wkg age popn (50% incr nearly matches job growth) Med increase in supply with 45% AH quota eliminates the need gap Higher econ growth increases hhd growth, worsens afford’y, increases need gap (lower growth opposite, but less impact on need) Lower int migrn would have modest fav impact on affordy & need but worsen labour supply Ending credit rationing would improve affordability and halve need gap

Bristol (WoE) Case:

Bristol (WoE) Case

Comments on WoE Case:

Comments on WoE Case This is a much more problematic case In baseline, strategy fails on all criteria of soundness (X’s) It does not help that LA’s cut provision by 35% relative to RSS when they removed urban extension proposals in 2010 Bristol is a pressured housing market with very poor affordability Bristol sub-region has enormous growth potential and job growth could well be much higher than baseline On all scenarios tested affordability remains much worse than national and deteriorates a lot over forecast period, while need backlogs increase The main opportunities to increase housing supply are in S Gloucs and N Soms, but framework for cooperation is weak

PowerPoint Presentation:

Bristol had one of the highest growth in jobs of 102 HMAs in decade to 2007. If they grew at this rate in next 20 years, that would be 145,000 extra jobs, compared with modelled growth of working age population of 20-65,000

Some Policy Suggestions:

Some Policy Suggestions Smarter incentives – bigger, more targeted, thresholded, conditional on cooperation Urban extensions most sustainable, but require redrawing of Green Belt – traditional GB not fit for purpose Maintain s.106 – we need a lot of affordable housing and this is the main way to subsidise it Getting developers to build is like pushing string – in key growth areas you need a public/private agency to bring land forward and auction it to builders on license PINS need to apply more rigorous approach to assessment of housing requirements

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