School of the Built Environment

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 ConferenceUWE, Bristol, 26 February 2013

SWO Conference – Bristol

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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

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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

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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

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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

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Attitudes by Tenure & Overall

Table 4: Support for or Opposition to More Homes being Built in Local Area by Tenure, UK 2010

All Own Social Rent

Support strongly 4.9 2.7 13.3 Support 24.8 21.5 34.4 Neither supp/opp 22.5 22.8 17.7 Oppose 30.3 32.9 22.2 Oppose strongly 15.1 18.0 10.3 It depends 2.0 1.9 1.1 Don't know 0.4 0.1 1.9 Total 100.0 100.0 100.0 Base 3297 Net Support -15.7 -26.8 15.2

Source: British Social Attitudes Survey 2010: see Bramley ‘The Housing Challenge’ in Curtice et al (forthcoming) Park et al (eds) (2011) British Social Attitudes: the 26th Report. London: National Institute for Social Research

Chapter by Glen Bramley on ‘Housing Attitudes and Changing Policies’

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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

Table 7: Type and Tenure of New Housing Needed Locally

No New Homes Needed 20 Flats/maisonettes 14 1-2 bedroom houses 35 5+ bedroom houses 3 Homes to Buy 27 Private Rent 8 LA or HA 39

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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 supportComment: level 2 probably most realistic, given public spending and development

viability constraints.

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Planning Stance c.2007

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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

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Predicted Impacts of Localist Planning on Housing Supply and Affordability by Region in 2026

-17.0% -12.0% -7.0% -2.0% 3.0% 8.0%

NE

YH

NW

EM

WM

SW

EE

SE

GL

ENG

Reg

ion

% diff from baseline

Affordy

Compltns

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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.

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HMA Areas Showing Price Growth

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HMA Areas showing GVA Growth

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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

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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

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County Scenarios

Note that these scenarios vary supply in adjacent HMAs in parallel

Model V.10 Gloucs Cnty Case Gloucestershire Current Baseline A C Mod D Fairly E Mod Hi F Mod Hi H Hi Econ J Lo Int K End Numbers over 20 years Low (0.6) High (1.35) High (1.5) Var quota 45%quota Growth 2.6 Migrn Credit Rat'Provision' 58,490 58,490 √ 35,094 78,962 87,735 78,962 78,962 58,490 58,490 58,490Completions 49,175 49,175 32,867 62,696 68,374 55,922 74,134 51,448 48,374 61,240Household Growth 55,478 55,478 √ 34,066 73,607 80,829 62,879 81,806 61,223 54,765 65,602DCLG Household Projection 56,800 56,800 56,800 56,800 56,800 56,800 56,800 56,800 56,800 56,800Net Migration inc international 12,702 12,702 -35,199 53,280 69,313 29,096 70,703 6,944 6,188 30,307

Total Population growth 48,551 48,551 2,165 87,345 102,653 64,378 103,968 46,699 39,984 64,860Working Age Population -15,228 -15,228 X -37,487 3,624 11,745 -8,486 12,769 450 -22,323 -4,869Job Growth* 15,666 15,666 15,666 15,666 15,666 15,666 15,666 33,526 15,666 15,666

Affordability ave level % buy 37.3 37.3 33.8 40.5 42.0 38.7 43.2 34.8 37.9 48.2 difference from England 3.1 3.1 √ -0.2 6.1 7.6 4.4 8.7 0.6 3.1 3.3Affordability change % pt 07-31 -13.5 -13.5 X -18.2 -9.6 -8.1 -12.0 -5.8 -17.6 -12.6 -0.4Backlog need change 2011-31 3,049 3,049 X 3,500 2,704 2,588 3,240 1,479 3,478 2,118 495Cumul Need-Aff Supply 12357 12357 X 20357 5982 4204 9294 -1361 15597 11787 6575

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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

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Bristol (WoE) Case

Approx 30/70 Model V.10 WoE Case RSS 2008 nat/local Greater Bristol (WoE) Current Baseline A C Mod D Fairly F Mod Hi G Hi Econ I Lo Int J End V high Numbers over 20 years Low (0.6) High (1.35) High (1.53) Hi quota Growth Migrn Credit Rat supp+AH'Provision' (check) 62,900 62,900 X 37,740 84,915 96,237 84,915 62,900 62,900 62,900 125,800Completions 63,794 63,794 53,359 72,869 77,564 79,049 73,056 61,745 90,437 105,435Household Growth 83,283 83,283 X 72,109 93,024 97,886 97,747 98,428 79,239 106,576 122,137DCLG Household Projection 136,800 136,800 136,800 136,800 136,800 136,800 136,800 136,800 136,800 136,800Net Migration inc international 47,055 47,055 20,872 69,737 81,079 77,060 55,547 21,777 87,539 122,334

Total Population growth 134,521 134,521 109,402 156,222 167,057 163,434 146,549 104,990 171,459 206,487Working Age Population 42,830 42,830 X 28,447 55,294 61,515 60,066 66,199 20,467 65,407 86,690Job Growth* 58,595 58,595 58,595 58,595 58,595 58,595 107,355 58,595 58,595 58,595

Affordability ave level % buy 25.8 25.8 24.5 26.9 27.5 27.8 22.9 26.4 36.5 31.8 difference from England -8.4 -8.4 X -9.6 -7.3 -6.8 -7.3 -11.0 -8.4 -8.5 -5.9Affordability change % pt 07-31 -19.9 -19.9 X -21.6 -18.2 -17.3 -17.1 -23.7 -19.2 -6.4 -11.4Backlog need change 2011-31 9,792 9,792 X 10,274 9,432 9,266 8,446 10,598 7,734 3,778 5,838Cumul Need-Aff Supply 58248 58248 X 56387 59788 60546 54384 64592 58865 50753 43190

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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

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Job JobGrowth Growth1997-2007 1997-2007

hmaname abs pa % paLondon 39053 0.72%Gtr Manchester 10838 1.19%Tyneside 8082 1.56%Brighton-Sussex-Coast 7522 1.33%Greater Bristol 7228 1.63%Leeds 6965 1.67%Liverpool-W Lancs 6326 1.47%Greater Sheffield 6125 1.54%Greater Exeter 5858 2.91%Greater Birmingham 5814 0.74%

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

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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