Proposed Student and Young Professionals … Student and Young Professionals Accommodation,...
Transcript of Proposed Student and Young Professionals … Student and Young Professionals Accommodation,...
Proposed Student and Young
Professionals Accommodation,
Bonner’s Field, Sunderland
Capacity Assessment Butlers Walsall Ltd December 2016
23160/HE/AFa
Nathaniel Lichfield & Partners nlpplanning.com
This document is formatted for double sided printing. © Nathaniel Lichfield & Partners Ltd 2016. Trading as Nathaniel Lichfield & Partners. All Rights Reserved. Registered Office: 14 Regent's Wharf All Saints Street London N1 9RL All plans within this document produced by NLP are based upon Ordnance Survey mapping with the permission of Her Majesty’s Stationery Office. © Crown Copyright reserved. Licence number AL50684A
Proposed Student and Young Professionals Accommodation: Capacity Assessment
12635697v2
Contents
1.0 Introduction 1
Proposed Development .................................................................................... 1
Area of Impact.................................................................................................. 1
Study Framework ............................................................................................. 2
Structure of the Report ..................................................................................... 3
2.0 Policy Context 4
National Policy Context .................................................................................... 4
Sub-Regional Policy Context ............................................................................ 5
Local Policy Context ........................................................................................ 6
Summary ......................................................................................................... 8
3.0 Baseline Context 9
Student Population ........................................................................................... 9
Housing requirements ...................................................................................... 9
Current supply................................................................................................ 10
Potential supply .............................................................................................. 11
Summary ....................................................................................................... 13
4.0 Capacity Assessment 14
Establishing Capacity ..................................................................................... 14
Demonstrating need ....................................................................................... 14
Summary ....................................................................................................... 19
5.0 Economic Impact 21
Construction Impacts ..................................................................................... 21
Operational Impacts ....................................................................................... 22
Expenditure Impacts ...................................................................................... 24
LPA Fiscal Impacts ........................................................................................ 25
Summary ....................................................................................................... 26
6.0 Conclusions 27
Proposed Student and Young Professionals Accommodation: Capacity Assessment
12635697v2 P1
1.0 Introduction
1.1 This report has been prepared by Nathaniel Lichfield & Partners (NLP) on
behalf of Butlers Walsall Limited. It sets out the capacity for, and impact of, the
proposed development of new, high quality mixed-use student accommodation
on previously developed land at 1-5 Bonner’s Field, Sunderland, as requested
by Sunderland City Council (‘the Council’) as part of the pre-application
meeting.
Proposed Development
1.2 The quantum of development being examined via this assessment comprises
of 403 purpose-designed bedspaces1 for both undergraduates and young
professionals, together with a 156m2 (GEA) A1/A3 retail unit.
1.3 The description of development proposal is as follows:
“Demolition of existing workshops and erection of 363 unit mixed use
residential block for students and young professionals (Use Class C3) with
integral car parking, ancillary amenities and commercial unit (Use Class
A1/A3), along with external landscaping and access works.”
1.4 The site is located immediately west of Sunderland College and Sunderland
University’s Riverside Campus sites. It is included within the Middle Super
Output Area (MSOA) ‘Sunderland 006’ within the St. Peter’s Ward in
Sunderland and is currently vacant.
Area of Impact
1.5 As the proposed development is predominantly targeted at Higher Education
students, the most appropriate area to be considered as part of the capacity
and needs assessment is the Sunderland local authority area.
1.6 However, it is also recognised that the economic impacts generated during
construction and operational phases of the development are likely to be
observed across a wider labour catchment area – i.e. the area from which the
proposed construction/operational development would draw the majority of its
workforce.
1.7 For the purposes of this assessment, the wider labour catchment area has
been defined as the two local authority areas of Sunderland and South Shields.
This has been defined having regard to 2011 Census data relating to
commuting patterns. This shows that the majority (81%) of workers in the
Middle Super Output Area (MSOA) within which the application site is located
live within these local authority areas and the majority of residents (79%) of this
MSOA also work within the same two local authority areas.
1 Including 314 no. studios, 40 no. 2 bed flats and 9 no. 1 bed flats.
Proposed Student and Young Professionals Accommodation: Capacity Assessment
P2 12635697v2
Study Framework
1.8 This report draws upon the BeDSPACE methodology developed by NLP,
which provides an analytical framework for assessing the capacity for and
economic benefits of, new student accommodation developments. This
framework, as it relates to the analysis for the proposed developments at 1-5
Bonner’s Field, is set out in Figure 1.1 below.
Figure 1.1 NLP BeDSPACE Analytical Framework
Source: NLP
1.9 The analysis focuses first on the capacity and need for additional student
accommodation, before considering the wider role that student accommodation
can play in supporting economic growth.
Proposed Student and Young Professionals Accommodation: Capacity Assessment
12635697v2 P3
1.10 Our approach is consistent with the requirements set out in Para 16.5 of the
Council’s Draft Core Strategy, which states that proposals should clearly
demonstrate the likely demand for additional accommodation with regard being
given to:
“Existing and projected numbers for students in further/higher education in
the city, taking into account any expansion plans of the University of
Sunderland;
The proportion of these students that is likely to require accommodation in
the city;
The existing number and location of student housing units;
The number and location of additional student housing units that have
extant planning permission;
Any potential impact on the local housing market if the number of students
living in accommodation not specifically designed for students decreases;
and
The adaptability of the proposed development for uses other than student
housing if the anticipated demand does not manifest.”
Structure of the Report
1.11 The report is structured as follows:
Section 2 provides an overview of the baseline policy context concerning
student accommodation at the national, sub-regional and local level;
Section 3 considers recent trends in relation to the local student
population trends and outlines the student accommodation profile of the
main impact area (Sunderland local authority area). The wider economic
context for the labour catchment area (Sunderland and South Tyneside) in
which the application site is located is also considered;
Section 4 examines the current capacity and need for additional student
accommodation within Sunderland;
Section 5 sets out the potential economic impacts that could be generated
during the construction of the development and after its completion; and
Section 6 presents the overall conclusions.
Proposed Student and Young Professionals Accommodation: Capacity Assessment
P4 12635697v2
2.0 Policy Context
2.1 The following paragraphs provide a summary of key planning and economic
strategy documents of relevance to the development proposals. This includes
a review of the national, sub-regional and local policy context relating to higher
education, housing and student accommodation.
National Policy Context
National Planning Policy Framework (2012)
2.2 In March 2012, the Government published the National Planning Policy
Framework (NPPF). This document replaced all previous Planning Policy
Statements and Guidance notes. At the core of the NPPF is the principle of
sustainable development which is defined as having three roles; economic,
environmental and social. New development proposals should actively comply
with each of these priorities.
2.3 The document establishes a presumption in favour of sustainable
development. For decision-taking, the NPPF states that this means:
Approving development proposals that accord with the development plan
without delay; and
Where the development plan is absent, silent or relevant policies are out-
of-date, granting permission unless … any adverse impacts of doing so
would significantly and demonstrably outweigh the benefits.
2.4 The NPPF is resolutely pro-growth, recommending that the planning system
should seek to support economic growth rather than constrain it:
“The Government is committed to ensuring that the planning system does
everything it can to support sustainable economic growth. Planning should
operate to encourage and not act as an impediment to sustainable
growth. Therefore, significant weight should be placed on the need to
support economic growth through the planning system.” (NLP emphasis)
[Planning should] “proactively drive and support sustainable economic
development to deliver the homes, business and industrial units,
infrastructure and thriving local places that the country needs. Every effort
should be made objectively to identify and then meet the housing,
business and other development needs of an area, and respond positively
to wider opportunities for growth.” (NLP emphasis)
2.5 With specific regard to residential development, the NPPF comments that local
planning authorities should:
“Plan for a mix of housing based on current and future demographic
trends, market trends and the needs of different groups in the
community.” (NLP emphasis)
Proposed Student and Young Professionals Accommodation: Capacity Assessment
12635697v2 P5
“Recognise that residential development can play an important role
in ensuring the vitality of centres and set out policies to encourage
residential development on appropriate sites.” (NLP emphasis)
Planning Practice Guidance (2014)
2.6 CLG (Communities and Local Government) has produced on-line Planning
Practice Guidance which includes guidance on the assessment of housing and
economic development.
2.7 The Practice Guidance provides a methodology for assessing housing and
economic development needs. It highlights that all needs across all types of
housing should be considered as part of the plan making process, including the
private rental sector and student housing.2
2.8 For student housing specifically, the Guidance states that:
“Local planning authorities should plan for sufficient student
accommodation whether it consists of communal halls of residence or self-
contained dwellings, and whether or not it is on campus. Student housing
provided by private landlords is often a lower-cost form of housing.
Encouraging more dedicated student accommodation may provide low
cost housing that takes pressure off the private rented sector and
increases the overall housing stock.” (NLP emphasis)
“Plan makers are encouraged to consider options which would support
both the needs of the student population as well as local residents before
imposing caps or restrictions on students living outside of university-
provided accommodation.” (NLP emphasis)
2.9 The Guidance also states that all student accommodation can contribute
towards the local housing requirement, based on the amount of
accommodation it releases in the housing market.3
Sub-Regional Policy Context
North East Local Enterprise Partnership, North East Strategic Economic Plan (2014)
2.10 The NELEP’s Strategic Economic Plan (SEP) entitled: More and Better Jobs
sets out a clear vision that by 2024, the North East LEP economy will provide
over one million jobs; representing an increase of 100,000 new jobs.
2.11 By driving jobs growth, the plan aims to fully close the gap on employment
rates between the North East and the national average (excluding London),
and to halve the gap on three quantifiable measures, including:
“Gross value added (GVA), with wages and profits rewarding workers
and investors and sustaining high levels of employment;
2 Paragraph Reference ID: 2a-021-20160401
3 Paragraph Reference ID: 3-038-20140306
Proposed Student and Young Professionals Accommodation: Capacity Assessment
P6 12635697v2
Private sector employment density, with more companies and jobs
driving a high growth economy; and
Activity rate, with no one left behind, and those distant from or
disadvantaged in the labour market helped to take advantage of the
opportunities created by a successful growing economy.”
2.12 In order to achieve this scale of change and to maximise the North East LEP
economy’s opportunities effectively, the plan seeks to capitalise on the region’s
strengths, including:
“The cities, NewcastleGateshead, Sunderland and Durham, are powerful
locations, combining higher education, cultural and tourism assets, retail
and evening economy, with financial, professional and business services
employment. The large and international graduate and post graduate
populations in the main cities add to the evening and weekend
economies, and more leisure visitors are taking city breaks in the North East.”
(NLP emphasis)
2.13 Building upon these strengths, the SEP identifies opportunities to capitalise
upon the contribution which Universities make to the economy of the North
East and the importance of continuing to promote the area as a destination for
international students.
Local Policy Context
Sunderland Economic Masterplan (2012)
2.14 The Sunderland Economic Masterplan seeks to set the direction for the city’s
economy over the next 15 years to ensure Sunderland has a prosperous and
sustainable future.
2.15 A central element of this Masterplan is to support the development of
Sunderland’s city centre to attract investment and young people. This includes
the need to develop a university city to generate increased spending and
activity within the city centre.
2.16 The Masterplan states that: “the notion of a university city includes a physical
sense of attractiveness, vibrancy and cultural appeal - not only to students, but
also visitors and investors.” As a result, the plan seeks to encourage the
retention of students within the city centre to bring about these characteristics
and qualities and to generate more activity, both day and night.
Sunderland Core Strategy and Development Management Policies Draft Revised Preferred Options (2013)
2.17 In order to support the ambitions of the Economic Masterplan and in alignment
with the NPPF, the Draft Core Strategy seeks to ensure that new housing
development meets the future needs for all residents, including students. To
achieve this, the Strategy states that the City Council will: “support the
Proposed Student and Young Professionals Accommodation: Capacity Assessment
12635697v2 P7
development of student accommodation in appropriate and accessible
locations where there is an identified need.”
2.18 The strategy recognises that the University is of key strategic importance for
the Sunderland and highlights the need for student accommodation in
appropriate locations. The Strategy seeks to direct student accommodation to
the campuses and the Central Area (in which the application site is located) to
minimise car use and provide good access to the educational establishments
and local facilities.
2.19 This is also considered important in supporting the regeneration of the city
centre which is identified as a key priority to attract new businesses and
investment. As part of the overall vision, by 2032, the Strategy seeks to create
a revitalised city centre, forming the destination of choice for the whole city to
live, work and play in. The Strategy also seeks to regenerate key sites along
the river corridor, removing former dereliction and vastly improving the city’s
environment. The application site, which includes a wide range of resident
leisure facilities, potentially including (for example) a gym/games room/study
rooms/dance studio, as well as a new A1/A3 unit for residents and visitors
along the riverside can assist in this regard, providing a high quality new
development on a vacant riverside site.
Sunderland City Council, Interim Student Accommodation Policy (2015)
2.20 Sunderland City Council’s Interim Student Accommodation Policy aims to link
the City Council and Sunderland University’s aspirations for developing a city
centre which has the characteristics and qualities of a university city. The main
objective of the Interim Policy is to:
“Maximise the benefit of student accommodation to regenerate the city centre
and assist in creating a university city that offers an excellent student
experience.”
2.21 The Policy recognises that student experience is a key driver for where a
student chooses to study and this experience includes housing and leisure. It
also acknowledges that Sunderland does not yet possess all of the
characteristics and qualities of a university city which is bustling with students
visiting shops, cafés, bars, restaurants and leisure activities that meet their
needs. As a result, the Policy comments:
“The city centre needs to be exploited more by student life to bring about these
characteristics and qualities and to generate more activity, both day and night.
The close proximity of the two university campuses to the city centre should
also assist in driving this forward and the potential for the city centre to be a
prime location for student accommodation and for Sunderland to be recognised
as a great experience for students.”
2.22 The Policy highlights that the majority of students currently reside in private
rented accommodation, which is predominantly comprised of Houses in
Multiple Occupation (HMOs). Wards such as Barnes, Hendon, Millfield, St.
Proposed Student and Young Professionals Accommodation: Capacity Assessment
P8 12635697v2
Michael's and St. Peter's are known to accommodate high levels of HMO’s,
resulting in the decline of traditional dwelling houses and problems for
permanent residents due to a lack of property management. This has led to
the introduction of Article 4 Directions to manage the number of HMOs within
certain wards.
2.23 The Policy goes on to state that whilst students traditionally looked for halls of
residence in their first year then moved to shared housing, recent demand
suggests that more students are seeking to reside in halls/purpose designed
student accommodation (PDSA) for all of their university life. The availability of
high quality PDSA in the right locations is therefore considered increasingly
important to prospective students.
Summary
Local authorities are required to plan for a mix of housing to meet the
needs of different groups in the community, including sufficient student
accommodation whether or not it is on campus;
More dedicated student accommodation should be encouraged which
may take pressure off the private rented sector and increase the overall
housing stock and improve the vibrancy of the area through the inclusion
of a mix of uses;
Residential development can play an important role in ensuring the
vitality of centres;
The North East’s large and international graduate and post graduate
populations play an important role in supporting the evening and
weekend economies of the region’s main cities;
Developing and regenerating Sunderland city centre will play a key role
in attracting investment;
Retaining students within the city centre will support this ambition and
help to create a university city, generating increased spending and
activity, both day and night;
The delivery of high quality student accommodation within the campuses
and the Central Area (in which the application site is located) will
minimise car travel, provide good access to local facilities and create an
excellent student experience;
The current high proportion of HMOs within the student rental market in
Sunderland has resulted in the decline of traditional dwelling houses and
problems for permanent residents in certain wards; and
The delivery of additional PDSA will help to address these challenges
and to meet increasing demand for high quality accommodation.
Proposed Student and Young Professionals Accommodation: Capacity Assessment
12635697v2 P9
3.0 Baseline Context
3.1 This section of the report provides a summary of the key economic indicators
of relevance to the proposals, in order to provide an understanding of current
conditions and recent performance. The data outlines trends regarding the
local student population and local market for student housing. It also considers
the student accommodation profile within Sunderland, as well as the wider
economic context, against which local capacity and the anticipated impacts of
the proposed development can be assessed.
Student Population
3.2 Sunderland is home to the University of Sunderland, as well as a range of
Higher Education providers and colleges. As highlighted within the Council’s
Draft Core Strategy, the University of Sunderland alone attracts some 15,000
full time and part time students to its prestigious modern campus at St. Peter’s
Riverside, together with a £75million city centre campus.
3.3 Along with other cities across the UK, Sunderland has seen a rapid growth in
the number of students over the past 15 years. In the 2014/2015 academic
year, the number of full-time students attending the University of Sunderland
totalled 11,220, compared to 8,775 in 2000/01.4 This represents a growth rate
of 28%.
3.4 This rate of growth has been largely driven by an increase in international
students. In 2000/01, international students accounted for 11% of the total
student body, in comparison to 31% in 2014/15. In absolute terms, this
represents a growth of 2,855 full time and part time students from outside of
the UK.
3.5 Whilst the Interim Student Accommodation Policy suggests that the University
does not envisage any significant increases in student numbers over the next
2-3 years, an analysis of enrolment figures over the past 5 years indicates that
the University experienced a growth of 4.6% between 2009/10 and 2014/15.5
If this trend were to continue, the city could attract an estimated 520 additional
full-time students within the next 5 years.
Housing requirements
3.6 Analysis of accommodation data from the Higher Education Statistics Authority
indicates that during the 2014/15 academic year, a total of:
1,490 full-time UK students attending the University of Sunderland
originated from outside of the North East region;
4 HESA (2016), Student data 2014/15
5 NLP analysis of HESA, Students in Higher Education 2010/11 – 2014/15
Proposed Student and Young Professionals Accommodation: Capacity Assessment
P10 12635697v2
1,030 North East based students opted to live in provider maintained
accommodation (i.e. University Halls of Residence) or private rented
accommodation; and
4,200 students were international students.
3.7 Taken together, this suggests that approximately 6,720 students (or 60% of
the full time student body) required some form of accommodation outside of
their home address in the 2014/15 academic year.
3.8 The potential increase of up to 520 full time students over the next 5 years
would result in a total of 11,740 students by 2019/20. Assuming that current
trends continue and 60% of these students require accommodation, this could
result in an increased requirement for c.7,045 bedspaces.
Current supply
3.9 As outlined within the Council’s Interim Planning Guidance, there are currently
a total of 5,472 student bedspaces within Sunderland, including:
1,547 University bedspaces;
548 bedspaces within the Forge (operated on behalf of the University);
and
3,377 private rental bespaces, including HMOs.
3.10 An analysis of the private rental stock suggests that of the 3,377 private rental
bedspaces outlined above, approximately 788, or 23% are operating as PDSA
halls of residence, as outlined in Table 3.1 below (assuming 100% of the
available bedspaces have remained in the student housing market).
Table 3.1 PDSA housing stock, Sunderland
PDSA Halls of Residence Number of beds
Park Lane House Stockton Road 114
Dunn House,North Bridge Street 110
Cassaton House, Fawcett Street 105
All Saints House, Portobello Lane 90
City View @ Phoenix House, Union Street 88
Swan Street Centre, Swan Street 68
Ella Lea Court, Lower Dundas Street 55
Sun Central, Norfolk Street 44
City View @ Thornhill, Thornhill Crescent 40
Rectory Lodge, Tunstall Road 26
Harrison House, Fawcett Street 25
West Lodge, Tunstall Road 23
Total 788
Source: NLP analysis of student housing planning permissions
3.11 This would suggest that there is a current supply of 2,883 purpose designed
bedspaces, including University accommodation and the Forge, with the
remainder of the private rental stock comprising of private rental
houses/flats/HMOs.
Proposed Student and Young Professionals Accommodation: Capacity Assessment
12635697v2 P11
Potential supply
3.12 In terms of future supply, the Interim Student Accommodation Policy indicates
that there were a further 3286 student bedspaces with extant planning
permission in 2015.
3.13 Since this date, a review of the Council’s Planning Portal indicates that a
further:
72 beds have been approved; and
151 beds are under consideration.
3.14 Taken together – and assuming all bedspaces with extant/current planning
permission and those under consideration come forward – this would generate
a potential supply of c.3,435 PDSA bedspaces. However, it is recognised
within the Interim Student Accommodation Policy that a number of the 328
extant planning permissions are longstanding and may not come forward and
the 151 beds under consideration are not guaranteed. Therefore, if none of
the 328 extant and 151 proposed bedspaces are developed this could
potentially reduce the supply to c.2,955 bedspaces.
3.15 This would suggest an overall maximum undersupply based on current
demand of between 3,285-3,765 student bedspaces. Based on the
estimated student increase, this could potentially rise to c.3,610-4,090
bedspaces – although it is recognised that a proportion of this will continue to
be provided by the private rental sector.
3.16 The full extent of this undersupply is currently accommodated within
HMOs/other private rental provision within Sunderland. However, as outlined
in Section 2.0, this has led to a reduction in traditional dwelling houses.
Indeed, an analysis of Council Taxbase data for 2016 indicates there are 1,350
dwellings exempt from Council Tax predominantly for the accommodation of
students within the Sunderland local authority area.
Wider Economic Context
3.17 The principal economic conditions and trends in the main area of impact
(Sunderland) and the labour catchment area (Sunderland and South Tyneside)
in comparison to the regional and national average are summarised in Table
3.2.
6 Excluding Phoenix House has now come forward comprising of 88 beds.
Proposed Student and Young Professionals Accommodation: Capacity Assessment
P12 12635697v2
Table 3.2 Headline Economic Trends
Factor
Main impact area:
Sunderland
Labour catchment
area (combined)
Region: North East GB average
Total population (2015) 277,200 425,900 2,624,600 63,258,400
Total population growth (2005-2015)
-0.7% -0.7% 3.0% 7.8%
Working age population growth (2005-2015)
-2.4% -1.8% 1.0% 5.4%
Proportion of residents aged 16-64 (2015)
64.0% 63.7% 63.3% 63.3%
Economic activity rate (Jul 2015-Jun 2016)
72.5% 73.7% 75.3% 77.9%
Proportion of working age residents claiming JSA (Oct 2016)
2.1% 2.5% 2.1% 1.2%
Working age residents claiming JSA for 12 months + (Oct 2016)
0.8% 0.9% 0.7% 0.4%
Jobs density (no. of jobs per working age resident) (2014)
0.71 0.65 0.70 0.82
Employment growth (2010-2015) 7.1% 6.4% 6.8% 5.2%
Working age residents with NVQ level 4+ (2015)
25.3% 16.8% 30.7% 37.1%
Working age residents with no qualifications (2015)
10.2% 6.2% 10.4% 8.6%
Key: Better performance than the main impact area
Worse performance than the main impact area
Source: ONS / NLP analysis
3.18 As demonstrated above, in comparison to the labour catchment area, regional
and national average, the main impact area has:
Experienced lower total and working age population growth over the
period 2005-2015;
A higher proportion of residents aged 16-64 and higher levels of
employment growth over the period 2010-2015; and
Lower economic activity rates, suggesting that there is capacity within the
labour market to increase employment levels.
3.19 In comparison to the regional and national average, both the main impact area
and the labour catchment area also have:
A lower proportion of residents with NVQ level 4+ qualifications; and
A higher proportion of working age residents claiming JSA for 12 months
or more.
3.20 This suggests that there is a need to support additional employment
opportunities within the local area and to retain skilled residents within the local
authority.
Proposed Student and Young Professionals Accommodation: Capacity Assessment
12635697v2 P13
Summary
Sunderland University has a total full-time HE student population of
11,220. Over the past 15 years, this has grown by 28%;
This rate of growth has been largely driven by an increase in international
students, accounting for 31% of the total student body in 2014/15;
If the growth of full-time HE students over the past 5 years were to
continue, the city could attract an additional 520 students within the next 5
years;
Based on the proportion of North East students living in student/private
rented accommodation and the number of students from outside of the
region, approximately 6,720 students would require housing in the
2014/15 year;
If these trends were to continue, the potential increase of 520 full time
students over the next 5 years, could result in an increased requirement
for c.7,045 bedspaces;
The current supply of University/PDSA bedspaces totals c.2,883, with a
maximum potential supply of up to 550 more, assuming all of those with
extant/recent/pending planning permission are completed;
This would suggest a current undersupply of between 3,285-3,765
bedspaces assuming all students requiring accommodation would seek
PDSA provision. Over the next 5 years, this could rise to c. 3,610-4,090
bedspaces;
Currently, a high proportion of this demand is accommodated within
HMOs/other private rental provision, with 1,350 dwellings exempt from
Council Tax predominantly for the accommodation of students; and
The main impact area has experienced lower population growth,
economic activity rates and a higher proportion of working age residents
claiming JSA for 12 months+, suggesting that there is capacity within the
labour market to increase employment levels.
3.21 Taking into account the above, the proposals therefore present a key
opportunity to accommodate the potential increase in student numbers, reduce
the numbers of students residing in the private rental market and support
additional employment opportunities in the local area through the construction
and operational phases of development.
Proposed Student and Young Professionals Accommodation: Capacity Assessment
P14 12635697v2
4.0 Capacity Assessment
4.1 This section provides a summary of the capacity for further student
accommodation within the local authority area of Sunderland, drawing upon the
findings of Sections 2.0 and 3.0, as well as an analysis of local and comparator
area accommodation trends.
Establishing Capacity
4.2 As demonstrated below, the local authority area of Sunderland has potential
capacity to accommodate a maximum of 3,610-4,090 additional bedspaces
within the next 5 years, assuming all students who require accommodation
wish to reside in PDSA. However, it is recognised that, in practice, a
proportion of this demand will continue to be supplied by the private rental
sector.
Figure 4.1 Capacity for additional PDSA in Sunderland Local Authority Area
Source: NLP analysis
4.3 In determining the full extent to which this maximum level of PDSA capacity is
required, it is also important to understand the local context in which the
development is proposed, including current accommodation trends,
comparator area trends, housing delivery and policy drivers. These factors are
considered in the following paragraphs.
Demonstrating need
Current accommodation trends
4.4 Current accommodation patterns demonstrate that clusters of students residing
in PDSA/private rented accommodation are focussed around the city centre,
highlighting the preference for student accommodation sites to be within close
proximity to the University campus and local services. In particular, the wards
Proposed Student and Young Professionals Accommodation: Capacity Assessment
12635697v2 P15
of Barnes, Hendon, Millfield, St. Michael's and St. Peter's contain a high
proportion of students in University/PDSA halls/private rental housing.
Figure 4.2 Location of students in University/PDSA halls/private rented accommodation 2014/15
Source: HESA (2016) / NLP analysis
4.5 At the city centre level, there is a clear focus of provision around the city centre
and University’s main campus areas, as defined within the Council’s Interim
Student Accommodation Policy. However, as demonstrated within Figure 4.4,
there are also a number of extant and pending permissions as well as 2
University Halls of Residence located outside of this central area.
4.6 The Interim Student Accommodation Policy states that:
“To assist in the regeneration of the city centre and in creating a ‘University
City’, the City Council will consider favourably proposals for purpose-built
student accommodation or the conversion of existing buildings for student
accommodation within the city centre and on existing university campuses.”
4.7 The application site itself is located within the St Peter’s campus area,
reflecting its strong links to the University campus, located just 350m east of
the site. The site is also highly accessible to public transport links, with St.
Peter’s Metro Station located just 150m west of the site.
Proposed Student and Young Professionals Accommodation: Capacity Assessment
P16 12635697v2
Figure 4.3 Location of existing/proposed student housing
Source: NLP analysis of Sunderland City Council Planning Portal Applications for Student Housing
Comparator areas
4.8 As outlined within Section 3.0, Sunderland has a current supply of 2,883
University/PDSA bedspaces, providing accommodation for 26% of the full time
student population (totalling 11,220). However, if student numbers continue to
rise at current rates, the full-time student body could total 11,740 within the
next 5 years, reducing this figure to 25%.
4.9 The potential maximum future supply of up to 550 additional bedspaces would
increase this figure to 29% based on future student growth, however it is
recognised that this includes 328 bedspaces with extant permission and 151
bedspaces pending consideration. Assuming none of these bedspaces come
forward, the supply would reduce to 2,955 bedspaces, providing
accommodation for just 25% of students.
4.10 In comparison to other university cities across the UK, this represents a
significant shortfall in the provision of PDSA relative to student numbers. As
demonstrated in Figure 4.1, university cities across the UK, on average, offer
Proposed Student and Young Professionals Accommodation: Capacity Assessment
12635697v2 P17
PDSA bedspaces for 38% of the total full-time student body. Regional
competitors such as Newcastle and Durham have a level of provision which
aligns with, or exceeds this average figure, generating a strong
accommodation offer for current and potential students.
Table 4.1 Percentage of full-time students able to access PDSA (September 2016)
City
Percentage of full-time students able to access PDSA (Sept 2016)
Coventry 53%
Liverpool 51%
Leicester 47%
Durham 42%
Nottingham 41%
Edinburgh 41%
Sheffield 40%
Leeds 40%
Exeter 40%
Newcastle 38%
Aberdeen 38%
Cardiff 37%
Southampton 36%
Manchester 36%
Birmingham 35%
Bristol 34%
London 30%
Sunderland 26%
Glasgow 22%
Source: Source: Knight Frank, (2016), Student Market Review
4.11 For Sunderland to offer a comparable level of provision (i.e. 38%), a total of
4,265 bedspaces would be required based on current student numbers, or
4,460 based on potential future student numbers.
4.12 In order to bridge this gap, the potential minimum requirement for new PDSA
could be in the region of 1,380 bedspaces based on current student numbers
and PDSA supply recognising that a proportion of the students requiring
accommodation would wish to remain within the private rental sector.
However, if student numbers continue to rise, this could increase to between
1,025-2,2407 bedspaces based on the potential future supply. This assumes
all existing accommodation remains operational and fit-for-purpose.
4.13 The proposed development of an additional 403 bedspaces for students and
young professionals therefore offers an opportunity to help address this short-
term need, providing high quality accommodation in close proximity to the Sir
Tom Cowie campus.
7 Assuming that either all 550 bedspaces are developed, or just the 72 with recent planning
permission.
Proposed Student and Young Professionals Accommodation: Capacity Assessment
P18 12635697v2
Housing delivery
4.14 As highlighted in the Council’s Interim Student Accommodation Policy,
accommodation is a key driver in influencing where a student chooses to
study. The supply of modern, fit-for-purpose and high quality accommodation
choices will therefore be central in supporting Sunderland’s aspiration of
becoming a university city with a vibrant city centre.
4.15 However, as outlined below, Sunderland has delivered a significantly lower
number of new PDSA beds in 2016 than the majority of the UK’s university
cities, with the exception of Bristol and Manchester. This suggests that the
quality of student accommodation offer of other cities across the UK will be
improving at a significantly faster rate than in Sunderland.
Table 4.2 Delivery of new PDSA beds (September 2016)
City Delivery of new PDSA beds (Sept 2016)
London 5,082
Edinburgh 1,888
Newcastle 1,453
Southampton 1,382
Leeds 1,332
Cardiff 1,311
Liverpool 1241
Sheffield 1,178
Birmingham 1,128
Leicester 939
Glasgow 858
Aberdeen 718
Coventry 376
Exeter 362
Nottingham 311
Durham 307
Sunderland 211*
Bristol 71
Manchester 0
Source: Knight Frank, (2016), Student Market Review
*Based on the number of bedspaces under construction in the Interim Student Accommodation Policy and the completion of Phoenix House.
4.16 As demonstrated above, only Bristol and Manchester have delivered a lower
number of bedspaces in the past year, however, these cities already include a
higher proportion of bedspaces (34% and 36% respectively). Only Glasgow
currently has a lower proportion of PDSA, however, development rates were
three times higher over the past year.
4.17 The development of new, high quality and modern bedspaces will be central in
enabling Sunderland to compete with other university cities. However, the
majority of Sunderland’s current stock of PDSA was developed within the
Proposed Student and Young Professionals Accommodation: Capacity Assessment
12635697v2 P19
1980’s and 1990’s, including the University’s accommodation and the Forge,
which account for over 70% of the current PDSA stock.
4.18 The overall requirement for between 1,025-2,240 bedspaces is therefore likely
to be significantly higher in Sunderland in order to support the continued
development of modern, high quality accommodation.
Policy drivers
4.19 Analysis of local policy (as outlined in Section 2.0), highlights that:
Student experience is a key driver for where a student chooses to study
and this experience includes housing and leisure;
More students are seeking to reside in halls/purpose designed student
accommodation (PDSA) for all of their university life;
Wards such as Barnes, Hendon, Millfield, St. Michael's and St. Peter's
are known to accommodate high levels of HMO’s, resulting in the
decline of traditional dwelling houses and problems for permanent
residents due to a lack of property management;
Student accommodation will play a key role in regenerating the city
centre and assist in creating a university city that offers an excellent
student experience; and
Focussing development within the city centre and campus areas (in
which the application site is located) will minimise car travel, provide
good access to local facilities and the University.
4.20 This indicates that there is a clear policy focus on supporting student housing
within the city centre and campus areas, in order to support the development of
a university city, protect family housing and prevent an over-concentration of
students within the private rented sector.
Summary
If all students requiring accommodation wished to reside in PDSA, the
potential maximum capacity for new student accommodation over the
next 5 years would total 3,610-4,090 bedspaces;
Current accommodation patterns demonstrate that clusters of students
residing in PDSA/private rented accommodation are focussed around
the city centre, highlighting the preference to be within close proximity to
the University campus and local services;
There are currently a number of extant and pending permissions as well
as 2 University Halls of Residence located outside of the city
centre/campus areas;
The application site itself is located within the St Peter’s campus area,
reflecting its strong links to the University campus, located just 350m
east of the site;
Proposed Student and Young Professionals Accommodation: Capacity Assessment
P20 12635697v2
Based on an analysis of comparator university cities across the UK,
Sunderland would require a minimum of between and 1,025-2,240
bedspaces over the next 5 years to provide a comparable level of PDSA
provision relative to the total full-time student population;
However, it is also recognised that over 70% of Sunderland’s current
PDSA accommodation stock was developed in the 1980’s/1990’s,
increasing the requirement for modern bedspaces;
Low levels of recent development in comparison to other university cities
also suggest that the quality of student accommodation offer of other
cities across the UK will be improving at a significantly faster rate than in
Sunderland, widening the gap in accommodation offer; and
There is a clear policy focus on supporting the future growth of student
housing within the city centre and campus areas, in order to support the
development of a university city, protect family housing and prevent an
over-concentration of students within the private rented sector.
4.21 The proposed development therefore presents a key opportunity to contribute
towards these objectives and to accommodate the growing numbers of
students requiring accommodation in Sunderland.
Proposed Student and Young Professionals Accommodation: Capacity Assessment
12635697v2 P21
5.0 Economic Impact
5.1 In respect of the need to build a strong, competitive economy, the NPPF states
that:
“The Government is committed to ensuring that the planning system does
everything it can to support sustainable economic growth. Planning should
operate to encourage and not act as an impediment to sustainable
growth. Therefore, significant weight should be placed on the need to
support economic growth through the planning system.” (NLP emphasis)
5.2 The Localism Act also confirms that local finance considerations are now a
material consideration.
5.3 This Section therefore identifies the economic benefits which will arise from the
proposed development under the following headings:
Construction Impacts: quantifies the economic benefits to be delivered
during the construction of the proposed development – including an
analysis of construction jobs and investment;
Operational Impacts: considers the employment impacts to be generated
once the development is completed and operational;
Expenditure Impacts: considers the uplift in local expenditure to be
generated by new student residents at the completed development; and
LPA Fiscal Impacts: assesses the increased revenue streams for
Sunderland City Council that could be generated by the proposals
through New Homes Bonus payments.
Construction Impacts
5.4 The key economic benefits to be delivered during the construction phase
comprise of: an injection of significant private sector capital into the local
economy; employment opportunities supported in the construction industry and
related sectors; and the uplift in economic output generated by the investment.
Each of these benefits is considered in the paragraphs below.
Investment
5.5 The proposed development of approximately 403 student and young
professional bedspaces is anticipated to result in a total capital investment of
c.£15 million, representing a large injection of private sector funding into the
local economy.8
Employment
5.6 Based upon an estimated total construction cost of £15 million, it is anticipated
that the proposals could be expected to generate almost 150 person years of
8 Based upon estimated build costs provided by the client
Proposed Student and Young Professionals Accommodation: Capacity Assessment
P22 12635697v2
construction employment, equivalent to supporting just under 75 temporary
construction jobs per year of construction throughout the 2 year build period.
5.7 In addition, a number of indirect jobs would be supported in suppliers of
construction materials and equipment, as well as associated professional
services. Businesses would also be expected to benefit to some extent from
temporary increases in expenditure linked to the direct and indirect
employment effects of the construction phase. This is likely to be driven by
workers spending their wages in local shops, bars, restaurants and other
facilities, which in turn, helps to support the creation of induced jobs.
5.8 Applying an appropriate national multiplier9 to the 75 direct construction jobs
per annum derived above, indicates that 112 indirect and induced jobs could
be supported per year of construction (in addition to the 75 direct jobs above).
5.9 In assessing the economic impact of the development proposals, it has been
assumed by NLP that no displacement of employment would occur during
construction. This assumption has been made having regard to the 285 JSA
claimants in Sunderland and South Tyneside seeking work in the construction
industry in October 2016.10 As such, the total number of gross direct, indirect
and induced jobs (derived above) would be equal to the net additional jobs.
Economic Output
5.10 It is anticipated that the construction phase will support a temporary uplift in
Gross Value Added (GVA) – a common measure of economic output and
productivity. Indeed, the capital investment associated with the development
proposals could be expected to deliver a temporary uplift in GVA in the order of
£10.0m per annum throughout the anticipated 2 year build period. This has
been estimated having regard to the average GVA per construction worker for
the North East and taking account of the level of employment to be supported
by the scheme and appropriate GVA multiplier for the construction industry.
Operational Impacts
5.11 The proposed development of managed student accommodation and 156m2
(GEA) of A1/A3 floor space presents the opportunity to support on-site direct
and indirect/induced employment in the local area, as well as increased
economic output. These benefits are considered in the following paragraphs.
Direct employment
5.12 Based on discussions with the developer it is understood that the development
of 403 bed spaces will support the creation of 22 new FTE jobs in the ongoing
maintenance and management of the site. This is expected to include:
6 administrative staff;
9 A multiplier of 2.51 has been applied, drawing upon research undertaken by CEBR on behalf of the
National Housing Federation (2013). 10
ONS, Claimant Count, 2016
Proposed Student and Young Professionals Accommodation: Capacity Assessment
12635697v2 P23
10 cleaning staff;
4 security staff; and
2 maintenance staff.
5.13 In addition, the development of 156m2 (GEA) of A1/A3 floor space is expected
to generate between 8-13 FTE jobs, depending upon the final use of the unit,
as outlined in Table 5.1 below.
Table 5.1 Direct Employment Impacts
Proposed Use Size Employment Density FTE Jobs
Retail (A1)
156m2
(GEA)
1 FTE job per 17.5 sqm (GEA)
8-13 Foodstore (A1) 1 FTE job per 22 sqm (GEA)
Restaurant/Café (A3) 1 FTE job per 22 sqm11
(GEA)
Coffee Shop (A3) 1 FTE job per 13 sqm (GEA)
Source: HCA Employment Densities (2015) / Operator Estimates / NLP Analysis
5.14 The application site is currently vacant and, as such, no existing business
premises will be lost as a consequence of the development proposals. On this
basis, the net on-site employment change is estimated to total between 30-35
FTE jobs.
5.15 In calculating the net additional impact of this development, however, it is
important to acknowledge that some employment generated may result in
displacement from elsewhere within the AOI. Such effects can arise due to
existing businesses losing trade as a result of new development at the
application site (i.e. ‘product market displacement’), or via the relocation of
existing jobs to the site (i.e. ‘labour/factor market displacement’).
5.16 New student accommodation and ancillary A1/A3 space is expected to
generate a low level of both product and labour/factor market displacement,
taking into account:
The type and scale of development – designed to meet the needs of new
residents and to retain a higher number of students in the city centre;
The high level of existing A1/A3 provision within the local area, creating a
wide catchment area over which any product market effects would be
dispersed; and
The 4,555 JSA claimants in the AOI seeking work in sales and customer
service, administrative, security, catering and cleaning occupations,
reducing any labour/factor market effects.12
5.17 Having regard to the above, and in the absence of any site-specific impact
analysis, a 25% allowance for displacement has therefore been applied. This
11
Based upon job: floorspace ratios for restaurants provided by operators, drawing upon NLP research 12
ONS, (2016), JSA by occupation September 2016 including occupation codes: 41, 71, 72, 9223, 9224, 9233 and 9241.
Proposed Student and Young Professionals Accommodation: Capacity Assessment
P24 12635697v2
corresponds to a ‘low’ level of displacement, as defined by the English
Partnership Additionality Guide, although it is recognised that any
displacement effects observed in practice may be lower. Of the 30-35 new
FTE jobs to be created, it is therefore estimated that approximately 8-9 jobs
could be displaced, reducing the net additional on-site jobs to 23-26 FTEs.
Indirect and Induced Employment
5.18 For commercial developments, it is also necessary to consider the multiplier
effect created by businesses and organisations located at the application site
purchasing goods, supplies and services from other firms in the area of impact
and beyond. This - coupled with wage spending by employees and local firms
in the supply chain - will support the creation of indirect and induced jobs in
other local shops and services.
5.19 Based on the creation of 23-26 net additional direct jobs, it is estimated that the
proposals will result in 7-8 ‘spin-off’ FTE job in local services and other firms
across the area of impact.13 At the regional (North East) level, a total of 11-13
‘spin-off’ FTE jobs are expected to be supported (including the 7-8 to be
captured locally).
Economic Output
5.20 Additional employment created by the scheme is also likely to result in an
increase in economic output. Gross Value Added (GVA) represents the
additional value that is added through economic activity.
5.21 It is estimated that the creation of 23-26 net additional direct jobs could be
expected to generate between £535,000 - £645,000 of net additional direct
GVA per annum. This estimate has been derived having regard to:
The level and nature of direct employment to be supported by the
development; and
Average GVA per worker for those sectors that best align with the type of
jobs to be accommodated on site (e.g. retail/accommodation & food) in
the North East.14
Expenditure Impacts
5.22 The 2011/12 (latest available) Student Income and Expenditure Survey15
estimates that full-time students spend an average of £6,705 per annum on
food, entertainment, household good and personal items. Taking into account
the average annual rise in inflation (based upon data published by the Bank of
England) this equates to a 2015 spend (latest date available) of £7,142 per
annum.
13
The latest English Partnerships guidance on calculating the additionality of development has been used to select a combined multiplier of 1.3 to reflect direct, indirect and induced employment effects at the local level. A multiplier of 1.5 has been assumed to reflect regional job effects. 14
Source: Experian (2016). 15
Department for Business Innovation and Skills, (2013)
Proposed Student and Young Professionals Accommodation: Capacity Assessment
12635697v2 P25
5.23 The total gross expenditure generated by the development of 403 new
bedspaces could therefore be in the region of £2.88 million. However, it is also
accepted that some of the residents within the development at 1-5 Bonner’s
Field will currently reside in accommodation in the local area and thus
contribute already to the local economy. For the purposes of this assessment,
it has been assumed that a minimum of 57% of residents will be new (based
upon the proportion of students requiring accommodation – although it is
recognised that in practice, this figure may be higher) and that 75% of the
spending will retained locally; considering the relatively low mobility of students
to travel to a wider area for shops and services.
5.24 Taking into account the above, the net additional expenditure generated by the
proposals is likely to be in the region of £1.2 million per annum; the majority of
which could reasonably be expected to be spent in Sunderland City Centre. It
is estimated that this additional resident expenditure could directly support the
creation of 18 new FTE jobs within the local area, including opportunities in
retail, leisure and other sectors. Given the planned development of a A1/A3
unit, it is possible that some of the c.18 FTE jobs may overlap with the
operational on-site jobs, although it is not possible at this stage to separate
these effects.
LPA Fiscal Impacts
5.25 The development proposals at the application site could result in increased
revenue streams to Sunderland City Council as a result of:
New Homes Bonus payments;
Release of housing back into the general market, resulting in increased
Council Tax receipts; and
Increased Business Rate receipts resulting from the A1/A3 unit.
New Homes Bonus
5.26 The New Homes Bonus matches for a six year period, the increase in Council
Tax income from new homes or homes brought back into use. Payments are
not ring-fenced and therefore local authorities are able to use Bonus payments
in the most beneficial way to support their needs.
5.27 Having regard to the above, the provision of 363 self-contained student
dwellings16 and using the CLG New Homes Bonus calculator, it is estimated
that once complete, the scheme would generate a total of over £2.1 million
New Homes Bonus payments (albeit profiled to reflect the build period for the
development).
16
Including 314 no. studios, 40 no. 2 bed flats and 9 no. 1 bed flats.
Proposed Student and Young Professionals Accommodation: Capacity Assessment
P26 12635697v2
Release of Housing
5.28 The development of 403 student bedspaces offers the potential to release
private rental housing back into the general market/prevent additional private
rental housing being taken up by students.
5.29 Based upon the definition of House in Multiple Occupation (HMO) including 3
or more people17, the proposed development could potentially release up to
134 homes back into the general market. This could also potentially increase
Council Tax revenues by almost £170,000 per annum.18
Business Rates
5.30 The provision of 156m2 of A1/A3 space at the application site could also be
expected to generate additional business rate revenue, a proportion of which
would be retained locally by Sunderland City Council. An estimate of rateable
value per m2 for the retail uses proposed at the application site was generated
from VOA data, looking at the rateable value of similar developments in the
local area. This suggests that the proposals would result in an uplift in
business rate revenue of approximately £4,900 per annum, £2,450 of which
would be retained by Sunderland City Council under the Business rates
retention scheme.
Summary
5.31 The above has demonstrated that the proposed development will deliver a
range of economic benefits, as outlined below:
17
https://www.gov.uk/private-renting/houses-in-multiple-occupation 18
Based upon average house price values for Sunderland equivalent to Council Tax Band C (ONS, 2016, House Price Statistics for Small Areas).
Proposed Student and Young Professionals Accommodation: Capacity Assessment
12635697v2 P27
6.0 Conclusions
6.1 As demonstrated within this report, the proposed development of 403 student
and young professionals bedspaces at 1-5 Bonner’s Field presents a key
opportunity to support Sunderland’s development to a university city, providing
a vibrant, high quality mixed-use residential site within the central campus
area.
6.2 The development of additional PDSA bedspaces also offers the opportunity to
regenerate a vacant riverside site and reduce the number of students residing
in the private rental sector, releasing traditional family housing back into the
general market.
6.3 The capacity assessment demonstrates that Sunderland has the capacity to
accommodate a maximum of 3,610-4,090 new student bedspaces, assuming
all students requiring accommodation wish to reside in PDSA. Recognising
that a proportion of students may wish to remain in the private rental market,
an analysis of other university cities across the UK indicates that Sunderland
would require a minimum of 1,025-2,240 bedspaces over the next 5 years to
provide a comparable proportion of PDSA.
6.4 However, taking into account the lower development rates in Sunderland and
the fact that over 70% of Sunderland’s current PDSA stock was developed
within the 1980’s and early 1990’s, the requirement for modern bedspaces is
likely to be significantly higher.
6.5 In the absence of further accommodation development, the number of students
residing within the private rental market could increase by c.310 students (60%
of the expected 520 student growth) within the next 5 years, assuming past
accommodation and growth trends continue. This would place additional
pressures on the private rental market in and around the city centre. The
development of an additional 403 bedspaces will therefore assist in meeting
this increased demand for high quality student accommodation and help to
move Sunderland closer to the average provision of PDSA relative to the
student population.
6.6 The development at 1-5 Bonner’s Field will also deliver a range of economic
benefits, including:
Providing an injection of £15m of private sector capital, which will deliver
just under £10.0m in local GVA per annum over the 2 year build period;
Supporting 75 temporary direct construction jobs per year of
construction and 112 indirect and induced ‘spin off’ jobs in the supply
chain, local shops and services;
Creating 23-26 net additional permanent FTE jobs on site, generating
between £535,000 - £645,000 additional GVA per annum;
Supporting 11-13 additional ‘spin off’ jobs in the site’s supply chain and
wider regional economy;
Proposed Student and Young Professionals Accommodation: Capacity Assessment
P28 12635697v2
Attracting and retaining new students within the city centre, delivering
just over £1.2 million additional expenditure per annum in the local
economy that could help to support in the order of 18 FTE jobs in new
and existing local businesses;
Generating just under £2.1 million in New Homes Bonus Payments and
£4,900 Business Rates payments for Sunderland City Council; and
Potentially releasing/protecting over 130 private rented homes in the
general housing market, generating up to £170,000 in additional Council
Tax revenues per annum.
6.7 These benefits should be regarded as material in determining the planning
application for development at 1-5 Bonner’s Field.
Proposed Student and Young Professionals Accommodation: Capacity Assessment
P2 12635697v2