RIGHT HOUSES IN THE RIGHT PLACES -
CONSULTATION ON CALCULATING HOUSING NEED
Planning for the right homes in the right places, the eagerly anticipated consultation on the Government’s proposed approach to improving housing delivery, was launched on 14 September for 8 weeks until 9 November 2017.
The consultation covers several key areas, such as neighbourhood planning, viability and planning fees, however, of greatest interest and certainly longest content, is the new approach to calculating housing need.
Calculating Local Housing Need
The lack of a standardised and simple approach has been perceived by many as the cause of significant confusion and delays in the adoption of local plans. In the February 2017 Housing White Paper, the Government signalled its intent to adopt a standardised methodology aiming to overcome the complexity and variation across existing methods.
The proposed approach comprises the following three steps:-
- Setting the Baseline
Using the annual average household growth over a ten year period as the demographic baseline. These household projections should be regarded as a minimum local housing need figure.
- Market Adjustment
To increase the number of homes in less affordable areas, where average house prices are more than four times' average earnings, using the workplace based median house price to median earnings ratio. Then applying a sliding scale formula to the increase to ensure that delivery is higher in areas with significant affordability issues.
- Capping the Level of Increase
Applying a cap upon any level of increase dependent upon the status of the Local Plan as follows:-
- For LPAs with a local plan adopted within the last five years, the new housing figure should be capped at 40% above the annual requirement currently set in the local plan.
- For those LPAs which do not have an up-to-date local plan the new housing level should be capped at 40% of whichever is higher; the projected household growth for the area using ONS household projections, or the annual housing figure as currently set out in their local plan.
This three-step methodology will provide the objectively assessed need for local housing as a starting point for local plan preparation.
Accompanying the consultation is data publishing the housing need for each local planning authority using the proposed formula.
The figures across Greater Manchester are of interest, particularly in view of the forthcoming revisions to the Greater Manchester Spatial Framework (GMSF).
The graph below shows that the application of the methodology results in a five percent decrease in the housing need across Greater Manchester as a whole, with significant variations seen across authorities. Manchester experiences the largest decrease of 15%, whilst Rochdale has the largest increase of 12%.
Source: https://www.gov.uk/government/consultations/planning-for-the-right-homes-in-the-right-places-consultation-proposals
Further analysis is required but the overall reduction is likely to be attributable to the new method not making a specific adjustment to take account of anticipated employment growth which is an important driver for Greater Manchester.
However, the consultation states that local planning authorities can plan for a higher number than set out by the proposed method. For example, where there is a policy in place to substantially increase economic growth, local planning authorities (LPAs) may wish to plan for a higher level of growth than the new formula proposes.
The consultation sets out that in areas where LPAs are working together such as Greater Manchester, the housing need of the combined area should be the sum of the local housing need for the constituent LPAs. Importantly, it would then be down to the elected Mayor to distribute the total housing need across the spatial area.
Neighbourhood Planning
Proposals introduce a formula-based approach which would apportion the overall housing need figure to a neighbourhood planning area. The proposed formula would take the overall population of the neighbourhood planning area and calculate its percentage against the LPA population. This would provide a starting point and neighbourhood groups would be able to determine if there are any constraints which would prevent them meeting this need.
This approach could lead to contention between housebuilders, locals and LPAs. For example, in a higher value area where a LPAs strategy has been to restrict growth of less sustainable settlements, such settlements could receive a higher share of housing need based solely upon population size under the new method.
Statements of Common Ground
The consultation contains Government proposals to strengthen the current ‘Duty to Co-operate’ between authorities. LPAs will be required to produce Statements of Common Ground to increase transparency, encourage joint working and co-operation on strategic cross boundary issues, including housing need for the area.
The Government proposes that LPAs should use agreed housing market areas as the geographical area over which to develop Statements of Common Ground, although there may be exceptions where different areas can be justified.
Outline Statements of Common Ground should be in place within six months of a revised NPPF, and be fully in place within 12 months following the publication of the revised NPPF. The Statements should be reviewed and updated where necessary at key milestones (Ref 18, 19, 22 and 26) in the development of the local plan process.
Viability Assessments
The consultation also includes proposals to update planning guidance to improve the use of section 106 Agreements by making use of viability assessments simpler, quicker and more transparent. The Government is only seeking views at this stage rather than specifying how this might operate. The examples given are that guidance could range from setting out clearly defined terms to be used, a preferred approach to calculating costs and values (including land values), the format and accessibility of viability assessment reports, through to detailed process and methodology.
Planning Fees
In addition, the Government is seeking views on how an increase of a further 20% on the current fee level could be applied to those authorities which are delivering the homes their communities need and what criteria should be applied. It also asks the question whether there are more appropriate circumstances where an authority should be able to charge a 20% increase in planning fees.
Commentary
The focus and indeed proposed detail within the consultation paper is mainly upon calculating the Objectively Assessed Need (OAN) for local housing. This additional clarity to calculating OAN will be welcomed by many, albeit it is open to consultation and could be subject to future changes. Locally, we will be watching with interest in 2018 what the implications will be for the housing requirements in the forthcoming draft version of the Greater Manchester Spatial Framework.
Finally, those authorities and applicants hoping for more certainty around both the transparency of viability assessments and the application of increased planning fees will be disappointed that the detail has not yet been proposed.
We will continue to monitor and report on the outcome of the consultation and resulting changes to planning policy. In the meantime, if you have any queries, require further information or would like HOW to make a representation on your behalf to DCLG, please get in touch.
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