Philip Barnes – Blog


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NIMBYISM – A RIGHT AND LEFT COALITION?

Sometimes it takes an overseas perspective to make you realise something fairly obvious. And so it was for me when reading the Planetizen interview with Ben Ross about how the Maryland Purple Line mass transit project had tackled the issue of Nimbyism when developing the http://www.planetizen.com/node/69135.

As well as the usual important stuff about feedback,transparency and mobilising supporters Ross brought home to me that the reason Nimbys are so powerful is that, unlike nearly any other political cause, Nimbyism is a coalition of both the political right and the political left.

It’s the same in the UK when trying to address the housing crisis. When it comes to delivering the homes we need, most people recognise that (for good or ill) this is dependent on private sector housebuilders. This requires the release of large numbers of brownfield and greenfield sites.

That requirement for greenfield site releases to be built by private housebuilders creates problems for both the left and the right. And because it so much easier to oppose something than to create something the inevitable result has been a huge undersupply of housing.

For the right the problem is obvious. Population growth and housing aspiration is focused most heavily in the South East where tory constituencies dominate and there is little brownfield land outside London. Greenfield housing is unpopular and MPs and local councillors queue up to denounce the evils of concreting over the countryside. As they articulate the need to halt the rapacious developers, little mention is made of a housing crisis described by Nick Boles as immoral.

For the left the problem often seems to be profit. From what I hear in cross-sector “round table discussions”, I sometimes get the sense that some on the left regret the fact that volume housebuilders need to play a key role in addressing the housing crisis. It sometimes feels as though the message is that if housebuilders must be allowed to build, then they should be rigidly controlled and restricted to brownfield urban sites!

The tone is often the same. An evidenced case relating to the quite obvious capacity (as a nation) to release small amounts of land to house the nation is met with hyperbole about urban sprawl and housebuilders wanting to tear up the planning system. Quickly followed by descriptions of fabulous urban regeneration schemes across the UK and Europe. Without any realisation that we housebuilders equally regard them as fabulous (indeed delivered many of them) but are simply pointing out that regeneration is only one of the levers we need to pull in order to address the housing crisis. Others are required.

More plans, more control, more research, more organisations, more regulation, more studies, more planning often seems to be the safe approach without any hard evidence that more state-side control actually leads to more delivery.

With the left and right up against us – no wonder we housebuilders have under delivered!! But, instead of moaning – what can be done about it?

Firstly I need to immediately exempt Ministers and Shadow Ministers from the broad generalisations above. From what I see and hear Nick Boles, Emma Reynolds and Kris Hopkin understand the issues clearly and work tirelessly working out solutions to try and deliver more homes. Despite the obvious political difficulties.

Secondly we housebuilders, at times, need to focus more clearly on solutions and ideas rather than just describing the dysfunctional outputs arising from a fairly dysfunctional system.

Nobody in housebuilding is arguing for a liberalised Spanish/Irish – planning system or an unregulated land market. But perhaps we need to work ever harder on identifying what we do stand for. Would Martin Luther King really have had as much impact if he titled his 1963 speech as, “I Have a Nightmare?”

Thirdly we all need to remember the importance of robust hard evidence. At present in the housing debate there is too much articulation, and insufficient demonstration, of the points being made. Whether you agree or disagree with the content the recent Shleter/KPMG report – it’s a robust evidenced contribution and a good first salvo in the run up to May 2015.

THOUGHTS ON THE SHELTER / KPMG “HOMES WE NEED” REPORT

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It’s now 11 months to the election. Thankfully, housing will finally dominate an election campaign for all 3 parties. All no doubt promising more building but without saying exactly where.

Over the next few months all those with a vested interest in seeing more (or less) new homes will be publicising their suggestions for what should go in the respective manifestos. The first salvo came from Shelter/KPMG publishing “Building the Homes We Need” recently. Although the first, I strongly suspect that not much else will be better researched in the months ahead. This is an important well-presented piece of work demanding considered responses from across the housing sector.

Whilst I certainly do not speak for Barratt as a whole I am happy to provide some personal observations.

Let’s start with the stuff I really like.

Firstly it’s clearly underpinned by a huge amount of research and consultation. This allied to its crisp narrative and super use of informative charts and graphics means it commands respect.

Secondly the recognition of the need to get land to these housebuilder more quickly and cheaply is apposite. The report notes that the residual land value model all housebuilders use helps drive high land prices and encourages speculators to enter to the land market occupying a (high value) space between the landowner and the housebuilder. Housebuilders are competitive and land is the raw material we fight hard for. Therefore when a landowner is focussed only on achieving the highest land value (not irrational) then infrastructure and social spend can suffer as housebuilders do what they can to give the landowner what he/she wants – the highest possible price – in order to secure control of the site.

Conversely there are many examples where Barratt have worked with enlightened landowners primarily driven by the need to create quality and legacy. Again not irrational. This allows us to focus more easily on the qualitative elements. For example at Derwenthorpe at York (Joseph Rowntree Foundation) and Cane Hill in Surrey (Homes and Communities Agency) the product has been truly outstanding.

However the report skilfully and honestly articulates that these examples are perhaps the product of enlightened landowners and housebuilders rather than a “natural” output from the current system.

Thirdly the focus on more custom build, more self-build and more small builder activity is welcomed. Lending difficulties, the recession and our unduly complex planning system has driven many small builders out of business. At Barratt we support the “Help to Build” proposals in the report and would like to see more small builders back. Why?

  • They don’t compete with us
  • They train people for our industry
  • They often pioneer new housing in areas which haven’t  had any in recent years. When local communities see that new housing brings in nice new families (rather than a calamitous fall in local house prices) it can “pave the way” for us

Fourthly it goes without saying; the proposals for New Homes Zones are supported albeit more detail, in particular in relation to the role of the landowner may be useful. Similarly recognition of the need to make some Garden Cities actually happen and to release land from Green Belt is all good and sensible stuff. As is the suggestion that LEPs (in the absence of anything else) get involved in driving “larger than local” strategies to meet housing need in functional economic areas.

Fifthly measures to fund early infrastructure provision and create less market volatility cannot be argued against. Similarly funding proposals to switch funding from benefits to bricks, to create a Housing Investment Bank and relax regulations in order to encourage more local authority and institutional investment in housing.

And finally I completely agree with the following narrative on page 10:

“City and town leaders have few incentives or tools to build consensus and infrastructure provision remains largely independent from housing. This means that support for new housebuilding can easily wilt in the face of local opposition”

Strategic planning provided local politicians with a “scapegoat” or “fig leaf” in relation to really big, difficult and unpopular strategic housing decisions. At present it is arguably unfair to ask local councillors to take such decisions- let’s remember that the average size of a local authority ward is 5,500 people.

So where was I crinkling my nose as I was reading? It was in relation to the argument that there should be no wholesale reform of the planning system. This would seem impossible if some of the key recommendations of the report were introduced, namely new Home Zones, a new strategic planning layer, Green Belt swaps, Garden Cities and cross boundary needs assessments.

Overall though, hat-tip to the authors for bringing a lot of issues together and making an effective cri de coeur in relation to increased supply.

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LONDON’S GETTING BETTER AND BETTER….. THE ONLY LOSERS ARE LONDONERS

One of the “perks” of this job is that I get to sit in on lots of discussions about the causes, symptoms and solutions for the UK’s housing crisis.

Two things always tend to strike me. First how many people claim to have discovered the single “silver bullet” which, when addressed, will solve the crisis. And second how London centric the discussions often
are.

In respect of the former the reality is that there are huge number of causes and possible solutions. Every lever needs to be pulled right now rather than just one or two which suit the politics of the proponent.

In respect of the latter the London focus is entirely understandable. The participants usually live in London or the South East and are often personally affected by the incredible dynamics of the London market.

Rather than one simple cause of the London overheating it seems, at this particular moment, that there are a range of positive forces making London more and more attractive as a City. This is generating housing demand from numerous sources relentlessly pushing the market upward. What are these forces and would it be sensible to try and hold them back?

The first is undoubtedly the dramatic rise in the quality of London’s schools. 20 years ago they were a basket case – now thanks to a range of investment programs (The London Challenge, Pupil Premium, higher teacher salaries, Study Plus) they are perhaps the best in the Country. No longer do young families flee London in order to give their kids a chance in life. This means even less homes on the market available for others.

Secondly overseas investors want to invest here. The political stability since The Glorious Revolution in 1688 is in stark contrast to, inter alia, Ukraine, Thailand, Greece or even France. This confidence and investment in our country is helping to get new homes built. Any idea that investment which gets homes built, is somehow unwelcome, seems folly to me. Once built they are occupied by Londoners and absorb market pressure.

Walking round London is simply different to walking round other UK cities. You can feel the economic confidence – on the street, in meetings and during economic discussions. The policy challenge is how best to harness a speeding recovery.

In the North East the challenge remains to stimulate one. Without available jobs in the regions the traditional flight of 28-35 year old teachers, planners, engineers, nurses, lawyers, etc from London simply isn’t happening anymore. Their houses aren’t becoming available.

Throughout the 90′s and 00′s London haemorrhaged these families to the Midlands and North. They helped take up the huge amount of public (and private) sector jobs in the regions being created by a Government spending boom. Those opportunities don’t exist any more as the economy and public sector employment has reduced. Meanwhile there is evidence that public spending and employment in London has actually increased – perhaps understandable as managing growth takes more resource than stagnation or decline.

London’s ever improving cultural attractions, facilities and public transport is also, itself, driving housing market pressure. As arts, transport and sports budgets get slashed in places like Newcastle those relying on such opportunities seek them elsewhere. I know of two, wealthy baby boomer couples who have downsized to two smaller properties – one in the North East and one in London. Why? – firstly to be closer to nest-flown children but also because they want to see good shows, visit great exhibitions and eat at busy restaurants. In areas that are vibrant any night of the week. Plus the capital growth of the last 2 years in London (compared to the North East) means the investment has made obvious financial sense.

SO – in London we have better schools, a successful growing economy, more public sector jobs, ever improving cultural attractions and more investment confidence. Clearly all great news?

EXCEPT that all of this upward housing market pressure means it is becoming virtually impossible for Londoners to gain access to decent housing without baby boomer backing. The average London house price is nearly 10 times annual salary and rents are rising 8 times faster than earnings. Last year the national average salary went up by £261 whilst the average house price went up £16,000.

At the risk of walking well trodden ground the answer must be a dramatic increase in housebuilding including a truly radical appraisal of the role and function of Green Belt in many of the outer London Boroughs. Public and private sectors working together – sharing risk by taking advantage of (hopefully) a relaxation of the local authority lending cap. It means finding underused rail stations and building attractive garden villages and cities there. After the endless rhetoric is it now time for action?

Plus a more positive policy focus on rebalancing the economy of the country. Shifting national public functions and jobs away from the areas of housing shortage and towards areas in need of jobs and investment is a welcome start and would not harm London. This shift could help kick start, an ultimately necessary, private sector resurgence in the North.

Clearly its much more complex than this but, as a dyed in the wool northerner, this seems more sensible than pursuing measures to inhibit the global economic success and attraction of our capital city.


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TIME TO REFLECT ON THE PAST, PRESENT AND FUTURE OF THE PLANNING SYSTEM

The TCPA Annual Conference at The Liberal Club came as blessed relief recently. A time to reflect on the past, present and future of the planning system. An enjoyable and valuable time out from the cycle of meetings, presentations, train journeys and hotel check ins. I still can’t quite believe it’s only been 4 months since I was lucky enough to take on this national role.

The conference also allowed me to reflect on all the various land, housing and planning presentations I have seen since joining Barratt. I came to the conclusion that one of my favourites was by Andrew Carter at a fringe event at the Labour Party conference. Why? Well firstly because he reflected many of my own views (obviously essential) but he also provided interesting new evidence on the subject. In particular Andrew made the point that whilst in his view the land, housing and planning systems are dysfunctional – everyone behaves rationally. No sector or grouping can be described as irrational given what is front of them.

Planners tend to behave rationally in my experience. The problem is that planning departments are massively understaffed and they sometimes get asked by local politicians to take decisions which feel to them (and us) as irrational.

Local politicians behave rationally in a localism world. Their job is to get elected. New housing is unpopular so they are often opposed to it. They get elected by a small community. They reflect what that community wants rather than what is required by the duty to cooperate or some “larger than local” planning issue. They sometimes berate developers, again perfectly rational because many communities don’t want development.

Housebuilders also behave rationally. We have to build houses (clue in title) and we have to do it profitably. No job for me if we don’t. We face an under resourced planning system and a shortage of adopted plans. We also have perhaps too little risk appetite. Why? Because many of us nearly went bust 5 years ago. Again perfectly rational when you consider planning consent costs are roughly £2m per 1000 houses – from pre app to construction. Therefore we are now compete trying to outbid each other to buy land from either the public sector or the land promoters who have taken the risk to secure planning permission. We then try to build and sell in a way which ensures we make a profit – for the reason given above. Again all rational.

Local communities tend to behave rationally. It is a peculiarly British trait that when it comes to retirement planning we often place some reliance on the value of our prime asset – the home. As such when the housebuilder comes along to build houses at the end of the street we think it might adversely affect the value of our home. Especially if we are not too far off retirement age. The thinking is that if planning permission is NOT granted then I can afford gold standard retirement provision. If permission IS granted it might be silver or bronze. Of course the reality is that new homes tend to lift local house prices but the fear and subsequent action cannot be described as irrational without compelling evidence to the contrary.

So what can be done? I don’t think that an overhaul of national planning policy is the answer. Looking back to days of PPG3 and PPS3 you would have to be a monumentally churlish developer to say Nick Boles hasn’t done a great job in delivering NPPF and NPPG in the face of huge opposition. Much of it from his own party! Sure there remain difficult issues at the local and “larger than local” level but in this modern multimedia world I suspect even the most hard-nosed planner and housebuilder accepts that a policy of forcing millions of homes on an unwilling Middle England would be difficult. Between 1947 and 1950 alone the state rocked up at 11 separate communities and told them all they were the now the fortunate recipients of a massive New Town. Personally I can’t see that being replicated going forward without major political difficulties if not civil unrest. Yes we need a more strategic approach but waving a New Town wand will be hard.

In the meantime NPPF tells us that if a Council doesn’t have a plan or a 5 year land supply it may be more difficult to defend a refusal of permission. In my view this way better than what we had 5-10 years ago.

For me the answer is that there is not one single answer. There are many levers to increase housebuilding and they all need to be pulled right now. Thinking about the most important themes at I am again drawn to the one of the key questions in Andrew Carter’s presentation. Namely how do we get more land into the hands of housebuilders earlier and at a price which make it easier for us to build beautiful developments with abundant social, physical and environmental infrastructure? Remember we actually want to do that because it means our homes sell more quickly and nobody should under-estimate the importance of early return on equity in delivering a profitable development. Debt is expensive.

The other theme for me is collaboration. Especially as there are no way we housebuilders can deliver what is needed on our own. I am doing more work in Scotland and they do seem to have cracked this consensus nut better than down here. Perhaps some lessons to learn. Also I am struck by the cross-sector cross party support for the brilliant “Yes to Homes” campaign. Anyone fancy launching a “Yes to Planning” campaign which focuses on how, when planning is done well, it delivers growth and beautiful places.


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HOW DO WE DELIVER MORE SPACIOUS NEW HOUSING

The issue of ‘rabbit hutch’ houses has been in the news recently. Unsurprising given the Governments Housing Standards Consultation Paper which poses the question whether we should introduce either mandatory space standards or introduce a space labelling scheme to make it crystal clear to purchasers what they are purchasing in space terms.

Many of the commentators are rightly focussing on the how the size of UK housing compares with our peers across the world and how larger new homes could benefit future occupiers. In relation to the former there is no doubt that for a country with no lack of space for new housing our new properties do seem smaller than would be expected. As an example the living space in our new homes has fallen by a third since the 1920s and according to RIBA are the smallest in Western Europe.

There has been less focus on (a) the causes of the problem, (b) whether those causes are still in play and (c) what we can do to remove those causes.

The root causes are PPG3, housing undersupply and landowners. At the risk of “he would say that wouldn’t he” housebuilders are not usually the prime cause.

PPG3 brought in zealous brownfield high density approach to housing. The famous phrase “maximise the efficient use of land” unsurprisingly became translated into the planning system as requiring housebuilders to “cram as many on as possible” in order to make land more efficient at producing new homes. Buy to let tower blocks and estates of tiny terraced house delivered the PPG3 policy and the housebuilders and developers responded. As the the housing crisis worsened due to new housing supply massively undershooting population growth the pressure for ever more units and density (in order to avoid the need to build on green fields) grew and grew. The result was ever smaller homes to address the gordian knot of a policy requiring more and more housing from less and less green fields.

And where does the landowner fit in? Often the value of land is dictated by the amount of saleable floorspace that can be accommodated in a site. In the old days it was the planners job to restrain density in the face of landowner pressure for more floorspace. The famous Parker Morris standards were a planning response to avoid unduly high densities. For many landowners PPG3 arrived like manna from heaven – even the planning system now wanted super high density. When selling a site the landowner could always pick the housebuilder with highest density scheme as this would usually generate the highest value AND good planning prospects. 

The result was inevitable – lots and lots of small units.

And the solution? NPPF is a good start. The policy obsession with density is giving way to an emphasis on quality and character. Local planning policies need to give clearer guidance at an early stage. In London high density will remain an objective given the population pressures but clearer policy guidance will nevertheless help landowners and housebuilders understand what type and size of housing is appropriate on a site cognisant of important amenity issues.

Elsewhere, in particular for the new generation of garden suburbs local planning policies and guidance will hopefully give landowners clearer guidance that when selling the site the aim must not be to maximise density to maximise “efficiency” (and site value) but instead focus on good quality spacious family housing on decent plots and set within attractive new landscapes.

For us housebuilders that is what we want to build and sell because that is usually what people want to buy.


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THE FIVE PURPOSES OF GREEN BELT

 Previous posts have set down my views on the need for pragmatism when considering the economic, social or environmental value of some of our provincial green belts. A clear distinction has always been drawn with the London Green Belt – partly reflecting my limited detailed knowledge of it.
A key issue has been whether a “no development” stranglehold around cities like Newcastle/Gateshead best meets economic and social objectives. For example the OECD (presumably unaware of Green Belt policy) concluded in 2010 that “space to grow” is one of Newcastle’s key economic advantages over other competitor cities. To the west it’s about 70 miles to Carlisle and to the north it’s 150 miles to Edinburgh. Little did OECD know that a Green Belt boundary hard up to urban edge currently prevents new development to address population growth and economic ambition.
It will take 1,750 years to concrete the Newcastle segment of the Green Belt at current rates of development. If this segment were a tennis court then the controversial Core Strategy draft proposals for a much needed 6000 new units in the Green Belt extension would measure some 80cms x 80cms if they were all in one place – which they are not. The 2014 Public Examination will determine whether 6000 is anywhere near enough.
Turning to the London Green Belt a few weeks ago I completed the London Revolution cycle ride which circumnavigated London – generally all within the Green Belt. It provided a superb two day snapshot of the Green Belt starting in Docklands then from the Lea Valley across the North Downs then southwards via the Chilterns towards Windsor. The second day involved cycling along the South Downs and then northwards via Box Hill and Crystal Palace back to Peruvian Wharf
The overriding perspective was of the incredible value of the Green Belt. Often it felt like cycling through deep countryside despite being only 10 or so miles from the centre of one of the world’s greatest cities. An amazing contrast to more sprawling cities such as Los Angeles, Tokyo or Cairo.
 A second impression was the quality and attractiveness of the settlements and the landscape. You were never pedalling long before passing through a quintessential English village or beautiful rolling pastures. A real sense of a valued and cared for landscape. That said the M25 and the arterial motorways never seemed to be too far away!
Whilst a two day cycling ride is no substitute for a proper spatial analysis it did seem that many, if not most, of the many settlements we passed through did have the capability of accommodating at least fifty or a hundred or more dwellings without undue conflict with the 5 famous purposes of including land within a Green Belt. Particularly given the topography and landscape enclosure of much of the route. It also seemed that many of the settlements had enjoyed reasonably regular periods of growth until the 1960s or 70s but that more recent development, on the urban edge, was much rarer. Some felt, frankly, as though they had been preserved in aspic and were lacking vibrancy.
I was left with a sense that many settlements do have easy potential to take some limited growth to meet local housing needs but that Green Belt policy appears to have unnecessarily and inflexibly drawn up the drawbridge. I was also left with a sense, in some places, that most people around the place appeared to be over 50 or 60. Perhaps the beneficiaries of earlier episodes of development.
Going back to the 5 purposes of including land within Green Belt my cycle-by site visit left the impression that the London Green Belt has undoubtedly been incredibly valuable in preventing urban sprawl, promoting urban regeneration, protecting the setting of historic towns and safeguarding the countryside from encroachment. It has also clearly been successful in preventing the coalescence of settlements. Indeed in many places some limited further development would appear to neither cause coalescence nor prejudice any of the other 4 Green Belt purposes.
That said I would repeat again that my initial view based on a cycle ride needs to be seen for what it is – a snapshot opinion without detailed research. An opinion based on a pretty comprehensive on the ground look however.


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GOOD DESIGN IN NEW HOUSING – THE ROLE OF THE LANDOWNER

imageThe importance of good design in new residential development has never been so high profile. The strong message from Government is that it wants to see far more homes delivered but beyond that it also needs to see more beautiful places created. But who is actually responsible for delivering such places on the ground?

Of course everyone is familiar with the importance of the design team. The keyword here is integration. Beautiful architecture needs to be integrated with legible permeable urban design, fantastic landscape architecture and multi modal transport planning. No matter the size of the site – any of these design elements can be the weak link which causes a scheme to fall short.
What about the developer? A belief in the commercial value of design and a willingness to commit time to it is crucial. The developers fundamental job though is to deliver the scheme. This task boils down to giving the landowner the land price he requires and then achieving a sale of units which covers all costs.  Without the prospect of sales revenues exceeding costs (including land price) the development doesn’t happen.
Which brings us onto the role of the landowner. Given that costs and sales values are broadly predictable within known parameters the key area of potential financial flex on any scheme is the land value. If the sole objective of the landowner is to maximise land sale price then this clearly places more pressure on the competing bidding developers to be prudent on other costs (perhaps including design) in order to ensure that the (largely predictable) sales values clearly exceed the overall land and construction costs.
In contrast where the landowner has wider objectives (perhaps including the creation of a beautiful place) then costs which might otherwise need to go towards land price can be invested in design. If the landowner has this flexibility and makes clear the design expectations at the outset the process for creating a beautiful place is underway.  Enlightened examples of this approach include New Hall in Harlow,(William and Jon Moen) Derwenthorpe in York (Joseph Rowntree Foundation) (see photo) Bedzed in Sutton (Public Sector/Peabody) and Poundbury in Dorset (Duchy of Cornwall).
 Not all to everyone’s taste but the commitment to deliver a high quality design and a beautiful place is crystal clear. Clear design and planning guidance from the local authority can also help manage landowner value expectations and thereby assist in creating beautiful places.
So next time you think a housing estate looks “pig ugly” think beyond the architect and the housebuilder and ask what role the landowner may have have played in squeezing the pips out of the design budget. In contrast where you see beautiful places remember that the landowner will likely have been just as influential as the architect or developer.
Final plea goes to the public sector. A wave of public sector land is coming forward and surely the landowner should adopt a similar approach to the schemes described above. Simply maximising land price to achieve “best value” would be short termist and wrong headed. Public and private sector landowner commitment to (and investment in) design will pay the country dividends.
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