This article was first published in Royal Town Planning Institute South West newsletter.
Much has already been written about the Department for Communities and Local Government’s Housing White Paper (HWP) ‘Fixing our broken housing market’, and rightly so. The delays in issuing the Paper has heightened anticipation for what might be included, as did rumours of disagreement within Government about how drastic some of the measures should be (seemingly surrounding the green belt in particular).
As most summaries have since identified, many of the proposed measures or initiatives are not ‘fresh out box’ new, but are ideas or policies that have been pursued before in one form or another. Take a bow promoting development on brownfield land, or encouragement for local authorities to use compulsory purchase powers to get stalled sites going. Nevertheless, despite references from the opposition in the House of Commons to the HWP being slim, it sets out a large number of proposals, and kick-starts further consultation on some of those measures.
The first challenge is simply staying on top of all the announcements, policy amendments, consultations and new regulations. But it doesn’t end there, new regulations come with commencement dates (when they come into force in law) and transitional provisions (which determine how the new procedures tie in with, and replace, the old).
These can be bespoke in each case, and quite intricate - as shown by the commencement orders bringing into force the compulsory purchase related provisions of the Housing and Planning Act 2016. This complexity may be with us for some time, continuing in the first instance with the Neighbourhood Planning Act 2017, which itself already amends the Housing and Planning Act 2016. There are any number of ‘new’ measures in the HWP that, if pursued, will come with challenges and we have commented on but some of the key ones below.
Community Infrastructure Levy (CIL)
In November 2015 DCLG tasked a CIL Review Group with assessing the effectiveness of CIL. Whilst its findings were reported alongside the publication of the HWP, DCLG’s response is not due until the Autumn Budget. That delay, bearing in mind the Group reported to DCLG some months before the HWP was released, may be due to the far reaching changes put forward - namely replacing CIL as we have it now with:
- A local infrastructure tariff (‘LIT’) set at a low level but applying to most developments without exceptions or reliefs.
- Section 106 agreements (in addition) for larger developments.
- For Combined Authorities, a strategic infrastructure tariff (‘SIT’) much like that run by the London Mayor for Crossrail.
The above would be accompanied by the removal of the problematic pooling restriction and ‘Regulation 123’ list in the current system. One suspects neither will be missed!
This is a relatively radical shift, not least given the commitment from all sides to date to get to grips with the CIL system as it is now. The challenges may be significant - understanding the level the LIT should be set at, ensuring a strict approach as reliefs an exemptions are to be cut back and simplified, upskilling on section 106 drafting and negotiation, adhering to transitional arrangements, the minefield of amendments to permissions, tying the LIT, SIT and section 106 obligations closely to the Local Plan process, to name a few. That is not to say that the status quo is to be preferred, and few appear to have spoken in favour of it.
The Housing Delivery Test
The HWP explains that the Government will introduce a housing delivery test to hold authorities accountable for their role in new home delivery. The intention is that this will highlight any shortfall against target, ‘provide a mechanism for establishing the reasons why’, and then trigger certain actions by way of response. As the years pass, the ramifications of not meeting the required percentage of the target become more severe, and so it goes without saying that is important that the baseline is correct.
From November 2017 if delivery is below 95% of its annual target, an authority must publish an action plan. If from November 2017 delivery is below 85%, then the authority must allow for a 20% buffer on their five year supply. From November 2018 onwards, the presumption in favour of sustainable development will automatically apply if certain delivery targets are not met, topping out at 65% of target for 2020 onwards.
There have been a number of articles assessing quite how many authorities this might catch, with some stating that as many as two thirds of authorities will be affected in some way. The consequences of this will be felt in appeals, and an increase in applications for housing in locations that authorities may consider sub optimal. However, for those authorities that perform poorly due to matters such as green belt restrictions, it seems clearer now that such protections will not be trumped by the presumption.
The housing delivery test may ultimately be a case of the bark being worse than the bite - underperforming authorities may already be subject to a 20% buffer. However, if it changes behaviours without the need for the bite, presumably so much the better from Government’s point of view.
The HWP confirmed that the Government will not introduce a statutory requirement for starter homes now, due to concerns raised that this would not respond to local needs. Instead, it is looking for authorities to deliver starter homes as part of a mixed package of affordable housing of all tenures.
It will take time for authorities and their local plans to adjust to the new definition of Affordable Housing (to be incorporated into the glossary of the NPPF), which will now include starter homes, discounted market sales housing and affordable private rented housing. In the meantime, they will need to grapple with how to address this during the transitional period in section 106 agreements, and consider how flexible to be in terms of the tenures that these agreements allow. Developers are likely to want to include the wider definition and all the tenures falling within that, firstly so that a greater number of products can be brought forward, and secondly to take more control over their developments. Small to medium developers in particuar have expressed a desire to provide affordable homes themselves (including managing rental properties).
DCLG is also currently considering altering national planning policy to expect authorities to seek a minimum of 10% of all homes on individual sites for affordable home ownership (as opposed to rental) products from developments of over 10 units or 0.5ha. Will this now mean that affordable home ownership products will take priority over affordable rental products where a site cannot cross-subsidise a large proportion of affordable dwellings?
The HWP restated the Government’s intent that authorities should amend green belt boundaries only when they can demonstrate that they have examined fully all other reasonable options (brownfield, underused and surplus public sector, and density). Also, where land is removed from the Green Belt, local policies should require the impact to be offset by compensatory improvements to the environmental quality or accessibility of remaining Green Belt land. Crucially, the Government will explore whether higher contributions can be collected from development as a consequence of land being released from the Green Belt. This gives rise to two questions: what might authorities lawfully demand from developers, and how might those demands fit within the current restrictions in the CIL Regulations. In the current climate of shifting sands, neither is particularly easy to answer.
There are plenty of other headline grabbers - permission and in principle and brownfield registers, changes to completion notices, and a developer’s record of delivery being taken into account in determinations. The resourcing of planning departments however seems to be overlooked when it is surely one of the most significant challenges. The planned increases in planning fees may help, but with an avalanche of new measures to grapple with the resolution of that particular issue seems no closer.