Planning for growth

Planning policy was a particular focus for the Chancellor’s ‘Budget for Growth', with a series of announcements designed to address long-standing complaints about the cost of applying for planning permission, and the time take to process applications. 

However, two planning announcements in particular seem to raise as many questions as they answer.

The Budget statement abolished the national target for 60 percent development on brownfield sites, a sensible move on what has always been a blunt policy instrument.  In theory, building on previously-developed land is a thrifty use of a limited resource; in practice, it pushed up land prices by restricting supply. 

However, by simply abolishing the national target the Chancellor has taken only half a step towards solving the problem.  The Growth Review announced that choice about development on brownfield will be ‘localised’, while greenbelt restrictions will be maintained.  This neither addresses the effect on prices, nor takes the plunge and looks again at the status of the greenbelt, some of which is definitely more brown than green. As we proposed last year in our Arrested Development report, the Government needs to bite the bullet and review its position on greenbelt, to avoid restricting development unnecessarily.

The Chancellor also announced he would introduce a presumption that planning applications will be approved, unless they compromise ‘the key sustainable development principles’ in national planning policy.  In the absence of the anticipated National Planning Policy Framework it is hard to judge the real meaning of this.  However, it is clear that the sustainable development principles will have to be very carefully drafted in order to be effective, as they will be the only means of controlling what is built.  It’s a big jump from national sustainable development principles to their successful implementation at local level.

These principles will also be the only way to ensure development is of sufficient quality. Increasing quantity is not enough on its own; quality has to be part of the success equation.  Development must be fit for purpose to avoid short changing business: it needs to be connected into existing transport networks; to provide businesses with the facilities they need while being flexible enough to allow for future expansion.  New housing should provide the type of accommodation the local market needs, and should promote quality of place in order to attract a workforce. 

Put simply, development that doesn’t improve the place where it is built represents a poor investment and a missed opportunity.  Effective sustainable development principles should therefore take quality into account, and the government needs to make sure this happens rather than sparking a ‘dash for trash’.

Comments

[Alan Wenban-Smith]

I can see that appealing to the ideological preferences of the new government might seem a smart idea in these hard times, but this is pretty depressing stuff to be coming from a Centre that is (nominally) FOR Cities. It is perhaps worth remembering that the National Housing & Planning Advice Unit (quoted in your brief) was New Labour's big idea, and its insistence on ever higher housing land provision was the main impetus behing the Coaltion’s abolition of RSSs. NHPAU’s prescription was based on the presumption that higher new build was needed to cause housing prices to fall.

Since then we have seen new build plummet but prices fall (directly contrary to the NHPAU model). It is now clear that the rise in house prices was a demand bubble, driven by hot money, rather than a supply side issue. (In any case, as 90% of the housing market is second-hand, prices are extremely insensitive to new build). Surely the credibility of NHPAU is shot – if not, what would it take?

The present position that Labour’s massive boost to the housing land pipeline is working its way through the system (give or take a court case or two). At a time when effective demand is at an historic low, suggesting that we add more does not look very clever: all it means is that such new housing as is built will be on the easiest sites (ie ex-urban greenfield). This will have the effect of dragging in investment in infrastructure and services – public and private – further denuding the cities where most people will continue to live, polarising society, diluting and spreading labour markets, increasing car- (and fossil fuel) dependency and undermining economic agglomeration. So is it really such a good idea to make greenfield land freely available and abandon the notion that cities should renew themselves within (broadly) their own footprint?

Should not the Centre for Cities be addressing these kinds of issue, instead of supporting the kinds of Toy Town economics that got us into this mess?

[Tom Bolton]

Alan, thank you for your strongly argued response. We differ on your central argument: that rising house prices are not caused by a restricted supply of housing. There was of course a house price bubble, but this is surely only part of the story. Between 1995 and 2011 average house prices rose by 160%, according to the Land Registry, part of a much long-term upward trend which has seen house prices far outstrip inflation.

As our 2010 Grand Designs? report showed, mean house prices are significantly higher in the cities that have grown the most over the last 35 years, than in those which have experienced declining populations. However, the Centre for Cities has not suggested that either greenfield or greenbelt land should be made ‘freely available’, nor does it support car dependent development. Instead, we argue that to prevent houses from becoming even less affordable in growing cities, policies need to allow development where demand is actually located. For these cities it seems unlikely that they will be able to expand within their existing footprint.

However, responding to the pressures on land in these cities would not necessarily require the entire greenbelt to be opened up. Equally, greening over land in areas where demand for industrial space or housing has decreased is a solution that should be taken more seriously. Either way, local councils should be free to decide on the course of action that’s best for their area, but are currently prevented from doing so.