Strategic Housing Provision Through Local Planning

Dealing with housing through your
Local Plan
John Baker
October 2013
To provide for the needs of the community
To direct development to the right places –
and away from the wrong places
To achieve development of the right quality
To join up the activities of different parties to
achieve common objectives
To attract investment through the confidence
that comes of having a strategy in place
Why have a plan?
but putting a plan in place means
dealing properly with housing
provision
- which means taking a lead and
acting strategically
housing provision – not the only strategic
issue, but the big one!
 
If the plan led system doesn’t deliver, the presumption will!
Making provision for housing is a
fundamental part of setting a coherent
strategy in a good and sound Local Plan
Setting the level of provision:
is the responsibility of the local planning
authority
requires evidence
Providing housing
a plan wont be found sound by an
Inspector unless it complies with the
National Planning Policy Framework
and Inspectors are  now applying the
requirements of the Framework
 
Para 7 - meet needs of present and future
Para 14 - positively seek opportunities to
meet development needs, sufficient flexibility
Para 47 - significantly boost supply, meet full
objectively assessed needs, deliver viable
sites
Para 159 - Use a SHMA, meet the need and
demand, identify scale and mix
Para 167 - ‘Assessments should be
proportionate’
 
The NPPF
 
requirement is not the same as housing supply (Rother, East
Hampshire, Ryedale, BANES, Dacorum)
should not include policy judgements (Suffolk Coastal)
should use national projections as the starting point
(Rushcliffe, Ryedale, Dacorum)
should consider the whole of the housing market area
(Rushcliffe, East Hampshire, Coventry, Hart , Waverley,
BANES)
should use a transparent methodology and consider all
relevant forecasts (Hull, BANES, North Somerset Judgement)
absence of provision for an adequate future supply of
housing (N W Leicestershire)
 
Inspectors views
Hart Core Strategy – Inspectors letter 26 July 2013
Non compliance with duty to cooperate
Significant failures with respect to soundness and
requirement to identify objectively assessed need
Waverley Core Strategy – Inspectors Preliminary
Conclusions 13 June 2013
‘Requires a more considered assessment of housing need
within the context of the housing market area’
Expect the Council to take a positive approach
Review of policy constraints and designations
Inspectors views continued…
“In order for the Core Strategy to be found sound it must
at least set out a policy framework which allows for an
adequate supply of housing land over the plan period as
a whole and a five year supply of deliverable sites to be
identified”
Wigan Core Strategy – Inspectors letter 14 March 2013
Inspectors views continued…
 
NPPF Para 49 – policies are not up to date if there is an
identified need and no deliverable 5 year supply.
Numerous appeals tested, upheld by Secretary of State
which overrule employment protection, settlement
boundary, landscape, green space and wedge policies and
others. Costs being awarded.
- Tarporley Cheshire (APP/P1133/A/12/2188938),
- Shutterton Combe in Teignbridge Borough Council (APP/P1133/A/12/2188938)
- Basingstoke and Deane (APP/H1705/A/12/2188125 ) and Cherwell
(APP/C3105/A/12/2189191)
- Ingleby Barwick, Stockton on Tees Borough Council (/APP/H0738/A/13/219538)
- Guisborough, Redcar & Cleveland Borough Council (APP/V0728/A/13/2190009)
Appeal decisions
Be based on fact and unbiased evidence
To be done at relevant functional area
Assists with defining housing market area and identifying sources
Must start from ONS / CLG housing projections
Must not make local adjustments about migration unless they have the
agreement of other LPAs within their housing market area
Only test realistic scenarios – not consider purely hypothetical future scenarios
Supply constraints must not contaminate the assessment of housing need
An allowance should be made to reflect past under delivery
Increased emphasis given to market signals, land values, prices, affordability
Encourages standard methodology to aid transparency
Comprehensive assessment only required every 5 years, but regular local
monitoring!
Considerable detail on how to calculate affordable housing element
National Planning Practice Guidance
assessing the housing requirement
understanding supply and deliverability
deciding on the level of provision to make
in the local plan
unmet requirements and neighbouring
authorities
Looking at
The requirement must be objectively assessed
the provision made through the plan can be
different from the objectively assessed
requirement
any difference has to be very well justified
what to do with the unmet element?
Requirement and provision
What is your housing market area?
NPPG: The relevant functional area
- market based, migration flows and contextual
How does your authority area relate to the
housing market area (HMA)?
What relationship do you already have with
neighbouring authorities across the HMA?
What information is available for that area?
The Housing Market Area
For a housing market area
provide evidence of the level, type, size and
tenure of housing
undertake further detailed analysis as required
such as detailed affordable housing needs
assessment, analysis of affordability and
consideration of sectors of population such as
older people
The SHMA
involve others by taking a corporate approach
working across the Council, with key partners,
stakeholders and registered providers
Information on homelessness, those in
temporary accommodation, overcrowded and
concealed households and on waiting list in
bands A-D
Will provide a basis for
informing strategies across the Council
continuous monitoring
The SHMA continued…
Through a comprehensive understanding of what
is required to address demographic change and
the implications of achievable economic potential
in the area to understanding how your population
will change over time.
Establishing an objectively
assessed requirement
 
The past allows us to understand the present
How did our previous policies shape the
population?
Is this what we wanted and needed?
What would happen if past trends continue ?
Projections - are based on the information from
the previous five years.
 
 
Demographic issues
 
Does the projected population profile fit your
vision and aspirations?
For example - want economic growth but
insufficient working age population
How can past trends be changed-
what policy mechanisms are there to do this?
what would the mix of housing be?
Demographic issues continued …
people arriving from elsewhere in the UK
(internal) and abroad and people leaving to go
to other parts of the UK and abroad
(international)
sensitive and volatile
can be varied to test different assumptions
not influenced by policy choices - no prospect of
zero migration so this would be a wholly
inappropriate scenario
Migration
a key assumption
is perhaps not falling as fast as previously
predicted, but this may be self fulfilling
because of the restricted access to suitable
housing
is very sensitive to small changes
Average household size
 
Integration between assessment of and strategies for
housing and employment (as required by NPPF).
But not all demand for homes is created from new jobs -
considerable demand coming from existing population.
key issue in the North Somerset high court challenge
Jobs based calculation are useful to:
cross check and corroborate demographic information
ensure housing doesn’t constrain growth
influence distribution of jobs and homes
Jobs and Homes
Understanding the implications of sectorally based
achievable economic potential in terms of future job
levels:
testing up to date employment projections
using economic activity rates to convert job growth into
the level of population needed to provide the
employees required to fill the jobs
translating the total population into households
according to predicted household size
An employment led approach
Relationship between authority areas and
settlements and implications of current
commuting levels
Travel to work data - 2011 census release due late
2013 and comparison with 2001 data
What level of self containment do your
settlement have?
Is it possible to reduce out commuting?
Taking account of commuting
approach to seeing the requirement now established
by combining demographic and economic scenarios
 
 
if economic led requirement greater, take this
if lower, use demographic led requirement
 
Understand the potential supply of housing
 
SHLAA is a separate assessment of suitable sites
sets out what is available, suitable, deliverable
Used for five year land supply
Must be critically assessed to determine
realistic potential
Relationship with supply issues
 
Allowance can be made for windfall if the windfall rate
is based on past data
is cleaned of any sources appearing elsewhere in the supply
contains no double counting of sites with permission in the first
few years
 
Common mistakes:
assuming development rates ie per site / sales outlet per
annum that are higher than development industry agree
not factoring in long enough lead in times between sites getting
permission and delivering houses
SHLAA
The SHLAA is an objective assessment of housing that can come
forward, with an estimate of when
 
Understand market signals
Understanding completions, as far back as possible by
year to assess long term averages - indication of what
was possibly under previous policies and in different
/better market conditions
Use Developer workshops to explore viability issues:
understand market areas
land and house prices
likely build rates
market for different types of houses
Market capacity and deliverability
 
Review of:
Landscape designations
Employment land
Settlement boundaries
Green belt - Hunston judgement
 
Using Sustainability Appraisal as a key tool to
understand the implications of various options
Reviewing designations and policies
 
Can the requirement be met?
Should the level of provision be different ?
inability to deliver what is required
inability to fund infrastructure needed to make the
place work
Factor in policy issues: economic growth,
reduction in commuting, high affordable need,
green belt, environmental capacity
Any difference must be FULLY JUSTIFIED
Translating the requirement and
supply into a provision target
 
Effectively a distribution issue
To adjacent authorities within the HMA, but what if they:
cannot meet their own need
are equally constrained
Duty to co-operate
is a legal test and soundness test
ensures working together at the functional area to deliver
effective spatial plans
Examples -
http://www.pas.gov.uk/pas/core/page.do?pageId=2133734
 
Where does the unmet
requirement go?
 
Can only be identified once the provision in the plan is
set.  It is the provision (10,000) divided by the years
covered by the plan (20) and multiplied by five, ie 10,000
/ 20 X 5 = 2500
To this is added :
Flexibility allowance of between 5 - 20%
Level above 5% depends on whether there has been a
record of persistent under delivery (measured by
analysis of completions against previous requirement)
Data from last 10 years and evidenced from AMR
Five year supply
 
“underprovision that has accrued against previous development
plan target”
Two schools of thought: ‘projections take account of all need
and any shortfall is reflected’ v  ‘trends reflects low
household formation rate and pent up demand should be
added’
Practice Guidance now concludes that household projections
do not reflect unmet need, and so evidence of whether
household formation rates have been constrained by supply
should be considered.
How it is addressed in the plan: preferably front loaded using
Sedgefield approach v Liverpool (residual) approach
 
Backlog
Providing the right amount and type of housing as part of a good
and sound plan by using:
Up to date information across the Housing Market Area
Approach must be clear - do not use a ‘closed box’ method to
hide assumptions
Realistic assumptions - not based on very low migration, over
optimistic economic activity rates or rely on large change in
out-commuting
Appropriate scenarios and options
Ensuring the deliverable supply meets the objective
requirement
Evidence for and justification of provision figure
Conclusions
Consideration of the supply side as a separate exercise
Robust SHLAA and assessment of deliverability, viability, market
capacity and involvement of developers in the process
Housing policies are consistent with economy policies  ie the
objective to achieve jobs is supported by the delivery of a
suitable number of homes
Consistency with the logic set out in the SHMA in terms of
affordable housing need
Regular monitoring of information to review assumptions and
assess achievement against key objectives
Conclusions
Dealing with housing through your
Local Plan
John Baker
October 2013
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Effective local planning is crucial for addressing housing needs and guiding development in the right direction. Having a sound local plan not only ensures quality development but also attracts investment. Housing provision is a significant strategic issue, with the responsibility falling on local planning authorities to set adequate levels based on evidence. Inspectors enforce compliance with the National Planning Policy Framework to ensure plans meet present and future needs. Various areas must be considered, such as flexibility, boosting supply, and using proportionate assessments.


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  1. Dealing with housing through your Local Plan John Baker October 2013

  2. Why have a plan? To provide for the needs of the community To direct development to the right places and away from the wrong places To achieve development of the right quality To join up the activities of different parties to achieve common objectives To attract investment through the confidence that comes of having a strategy in place

  3. but putting a plan in place means dealing properly with housing provision - which means taking a lead and acting strategically

  4. housing provision not the only strategic issue, but the big one! 250,000 homes needed each year 125,000 homes being provided If the plan led system doesn t deliver, the presumption will!

  5. Providing housing Making provision for housing is a fundamental part of setting a coherent strategy in a good and sound Local Plan Setting the level of provision: is the responsibility of the local planning authority requires evidence

  6. a plan wont be found sound by an Inspector unless it complies with the National Planning Policy Framework and Inspectors are now applying the requirements of the Framework

  7. The NPPF Para 7 - meet needs of present and future Para 14 - positively seek opportunities to meet development needs, sufficient flexibility Para 47 - significantly boost supply, meet full objectively assessed needs, deliver viable sites Para 159 - Use a SHMA, meet the need and demand, identify scale and mix Para 167 - Assessments should be proportionate

  8. Inspectors views requirement is not the same as housing supply (Rother, East Hampshire, Ryedale, BANES, Dacorum) should not include policy judgements (Suffolk Coastal) should use national projections as the starting point (Rushcliffe, Ryedale, Dacorum) should consider the whole of the housing market area (Rushcliffe, East Hampshire, Coventry, Hart , Waverley, BANES) should use a transparent methodology and consider all relevant forecasts (Hull, BANES, North Somerset Judgement) absence of provision for an adequate future supply of housing (N W Leicestershire)

  9. Inspectors views continued Hart Core Strategy Inspectors letter 26 July 2013 Non compliance with duty to cooperate Significant failures with respect to soundness and requirement to identify objectively assessed need Waverley Core Strategy Inspectors Preliminary Conclusions 13 June 2013 Requires a more considered assessment of housing need within the context of the housing market area Expect the Council to take a positive approach Review of policy constraints and designations

  10. Inspectors views continued In order for the Core Strategy to be found sound it must at least set out a policy framework which allows for an adequate supply of housing land over the plan period as a whole and a five year supply of deliverable sites to be identified Wigan Core Strategy Inspectors letter 14 March 2013

  11. Appeal decisions NPPF Para 49 policies are not up to date if there is an identified need and no deliverable 5 year supply. Numerous appeals tested, upheld by Secretary of State which overrule employment protection, settlement boundary, landscape, green space and wedge policies and others. Costs being awarded. - Tarporley Cheshire (APP/P1133/A/12/2188938), - Shutterton Combe in Teignbridge Borough Council (APP/P1133/A/12/2188938) - Basingstoke and Deane (APP/H1705/A/12/2188125 ) and Cherwell (APP/C3105/A/12/2189191) - Ingleby Barwick, Stockton on Tees Borough Council (/APP/H0738/A/13/219538) - Guisborough, Redcar & Cleveland Borough Council (APP/V0728/A/13/2190009)

  12. National Planning Practice Guidance Be based on fact and unbiased evidence To be done at relevant functional area Assists with defining housing market area and identifying sources Must start from ONS / CLG housing projections Must not make local adjustments about migration unless they have the agreement of other LPAs within their housing market area Only test realistic scenarios not consider purely hypothetical future scenarios Supply constraints must not contaminate the assessment of housing need An allowance should be made to reflect past under delivery Increased emphasis given to market signals, land values, prices, affordability Encourages standard methodology to aid transparency Comprehensive assessment only required every 5 years, but regular local monitoring! Considerable detail on how to calculate affordable housing element

  13. Looking at assessing the housing requirement understanding supply and deliverability deciding on the level of provision to make in the local plan unmet requirements and neighbouring authorities

  14. Requirement and provision The requirement must be objectively assessed the provision made through the plan can be different from the objectively assessed requirement any difference has to be very well justified what to do with the unmet element?

  15. The Housing Market Area What is your housing market area? NPPG: The relevant functional area - market based, migration flows and contextual How does your authority area relate to the housing market area (HMA)? What relationship do you already have with neighbouring authorities across the HMA? What information is available for that area?

  16. The SHMA For a housing market area provide evidence of the level, type, size and tenure of housing undertake further detailed analysis as required such as detailed affordable housing needs assessment, analysis of affordability and consideration of sectors of population such as older people

  17. The SHMA continued involve others by taking a corporate approach working across the Council, with key partners, stakeholders and registered providers Information on homelessness, those in temporary accommodation, overcrowded and concealed households and on waiting list in bands A-D Will provide a basis for informing strategies across the Council continuous monitoring

  18. Establishing an objectively assessed requirement Through a comprehensive understanding of what is required to address demographic change and the implications of achievable economic potential in the area to understanding how your population will change over time.

  19. Demographic issues The past allows us to understand the present How did our previous policies shape the population? Is this what we wanted and needed? What would happen if past trends continue ? Projections - are based on the information from the previous five years.

  20. Demographic issues continued Does the projected population profile fit your vision and aspirations? For example - want economic growth but insufficient working age population How can past trends be changed- what policy mechanisms are there to do this? what would the mix of housing be?

  21. Migration people arriving from elsewhere in the UK (internal) and abroad and people leaving to go to other parts of the UK and abroad (international) sensitive and volatile can be varied to test different assumptions not influenced by policy choices - no prospect of zero migration so this would be a wholly inappropriate scenario

  22. Average household size a key assumption is perhaps not falling as fast as previously predicted, but this may be self fulfilling because of the restricted access to suitable housing is very sensitive to small changes

  23. Jobs and Homes Integration between assessment of and strategies for housing and employment (as required by NPPF). But not all demand for homes is created from new jobs - considerable demand coming from existing population. key issue in the North Somerset high court challenge Jobs based calculation are useful to: cross check and corroborate demographic information ensure housing doesn t constrain growth influence distribution of jobs and homes

  24. An employment led approach Understanding the implications of sectorally based achievable economic potential in terms of future job levels: testing up to date employment projections using economic activity rates to convert job growth into the level of population needed to provide the employees required to fill the jobs translating the total population into households according to predicted household size

  25. Taking account of commuting Relationship between authority areas and settlements and implications of current commuting levels Travel to work data - 2011 census release due late 2013 and comparison with 2001 data What level of self containment do your settlement have? Is it possible to reduce out commuting?

  26. approach to seeing the requirement now established by combining demographic and economic scenarios Most credible eg reflecting long term migration trend Demographic scenarios Economic scenarios Most credible eg reflecting sectoral forecasts and committed strategy if economic led requirement greater, take this if lower, use demographic led requirement

  27. Relationship with supply issues Understand the potential supply of housing SHLAA is a separate assessment of suitable sites sets out what is available, suitable, deliverable Used for five year land supply Must be critically assessed to determine realistic potential

  28. SHLAA The SHLAA is an objective assessment of housing that can come forward, with an estimate of when Allowance can be made for windfall if the windfall rate is based on past data is cleaned of any sources appearing elsewhere in the supply contains no double counting of sites with permission in the first few years Common mistakes: assuming development rates ie per site / sales outlet per annum that are higher than development industry agree not factoring in long enough lead in times between sites getting permission and delivering houses

  29. Market capacity and deliverability Understand market signals Understanding completions, as far back as possible by year to assess long term averages - indication of what was possibly under previous policies and in different /better market conditions Use Developer workshops to explore viability issues: understand market areas land and house prices likely build rates market for different types of houses

  30. Reviewing designations and policies Review of: Landscape designations Employment land Settlement boundaries Green belt - Hunston judgement Using Sustainability Appraisal as a key tool to understand the implications of various options

  31. Translating the requirement and supply into a provision target Can the requirement be met? Should the level of provision be different ? inability to deliver what is required inability to fund infrastructure needed to make the place work Factor in policy issues: economic growth, reduction in commuting, high affordable need, green belt, environmental capacity Any difference must be FULLY JUSTIFIED

  32. Where does the unmet requirement go? Effectively a distribution issue To adjacent authorities within the HMA, but what if they: cannot meet their own need are equally constrained Duty to co-operate is a legal test and soundness test ensures working together at the functional area to deliver effective spatial plans Examples - http://www.pas.gov.uk/pas/core/page.do?pageId=2133734

  33. Five year supply Can only be identified once the provision in the plan is set. It is the provision (10,000) divided by the years covered by the plan (20) and multiplied by five, ie 10,000 / 20 X 5 = 2500 To this is added : Flexibility allowance of between 5 - 20% Level above 5% depends on whether there has been a record of persistent under delivery (measured by analysis of completions against previous requirement) Data from last 10 years and evidenced from AMR

  34. Backlog underprovision that has accrued against previous development plan target Two schools of thought: projections take account of all need and any shortfall is reflected v trends reflects low household formation rate and pent up demand should be added Practice Guidance now concludes that household projections do not reflect unmet need, and so evidence of whether household formation rates have been constrained by supply should be considered. How it is addressed in the plan: preferably front loaded using Sedgefield approach v Liverpool (residual) approach

  35. Conclusions Providing the right amount and type of housing as part of a good and sound plan by using: Up to date information across the Housing Market Area Approach must be clear - do not use a closed box method to hide assumptions Realistic assumptions - not based on very low migration, over optimistic economic activity rates or rely on large change in out-commuting Appropriate scenarios and options Ensuring the deliverable supply meets the objective requirement Evidence for and justification of provision figure

  36. Conclusions Consideration of the supply side as a separate exercise Robust SHLAA and assessment of deliverability, viability, market capacity and involvement of developers in the process Housing policies are consistent with economy policies ie the objective to achieve jobs is supported by the delivery of a suitable number of homes Consistency with the logic set out in the SHMA in terms of affordable housing need Regular monitoring of information to review assumptions and assess achievement against key objectives

  37. Dealing with housing through your Local Plan John Baker October 2013

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