Philip Barnes – Blog


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Scotland versus England

Three days north of the border confirmed the longstanding perception that, on some issues, Scottish planning policy is perhaps ahead of England.

Albeit one issue, where our Scottish Divisions undoubtedly share our English pain, is the extra delays and costs incurred through liaison with the water industry. Indeed maybe more so, given that allocated sites in Scotland can routinely face huge delays and demands to fund capacity studies which, frankly, ought to have already been completed long ago to inform the development plan allocation.

As a planner the removal of strategic development plans in Scotland brings mixed feelings. Taking away the delays and complexity caused by an extra tier of plan-making obviously sounds attractive. But the reality is that strategic planning is simply better at making the necessarily difficult strategic decisions on the level and location of growth (and no growth).

With strategic planning long gone in England we are actually seeing local plans only providing for 88% of national housing need. The Duty to Cooperate down south has hardly been a huge success in accelerating housing delivery and, as a planner, I do question whether removing strategic planning delivers better planning no and growth. Albeit that strategic planning at the national (rather than regional) level may be more feasible in Scotland?

Also mixed feelings towards the huge recent increases in Scottish planning fees. Obviously such increases are accepted if they deliver a better and faster service in delivering growth. But again, evidence of this correlation can be hard to find when looking at England.

The introduction of the new Local Place Plans has strong political backing and appears to have many similarities with English Neighbourhood Plans. As always, the attraction for housebuilders is the opportunity to work with local communities to find out where housing growth is needed and how perceived impacts can be mitigated. English experience points to the necessity of the higher order plan being crystal clear on the level and location of housing need. Local Place Plans will fail in their purpose if they are simply used by anti-development groups as a means to prevent new homes in a locality.

There’s no doubt its exciting times to be a planner and/or a housebuilder in Scotland especially with this week’s publication of the new Scottish Planning Bill. That said, I can’t help thinking that an equivalent to the English NPPF is needed, making it clear that the presumption in favour of sustainable development kicks in if there is insufficient land supply and no up-to-date local plan. My reading of some recent Scottish appeal decisions only reinforces this view. Albeit perhaps this could be sour grapes from being on the wrong end of several Scottish decisions recently!!

Yet a few weeks ago, we won an appeal decision for new homes in Green Belt because the (entirely sensible IMHO) Green Belt policy allowed the development to come forward given the severe local shortage of housing AND the fact that the new homes would have no adverse impact on coalescence, openness and landscape quality.

PS Final point, on a completely different subject, is to mention the greatest living Scotsman, albeit I am biased as a Newcastle Falcons season ticket holder. Namely Doddie Weir who is currently doing unbelievably great work supporting MND via his Doddie’5 Trust. (@DW5Trust). Please join me in donating at https://t.co/QuQMfz2Rql


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Budget 2017. Well just the land value capture bit actually

So the Chancellor resisted the pressure to introduce land value value taxation. (LVT) and instead chose to review CIL. This despite the avalanche of recent documents and research urging him to introduce LVT

Whilst some of the LVT contributions have been a little shallow for such a complex area, the Civitas report a couple of weeks ago thankfully delivered some great research and analysis on LVT and shone much light on the issue.

However, Civitas underplayed the role of the local plan process (see later) and therefore the LVT recommendations would be difficult to implement within the confines of the UK planning system. But overall the quality of the research the lifted the spirits.

Its a very complex area but for those who choose NOT to get into the detail it seems a no-brainer. Especially if you have never bought land, never built homes, never applied for planning permission, never prepared a local plan, and never sat in Government taking difficult decisions which actually affect real people.

The potential advantages are seductive. The state can tax tax anyone who owns land. It can buy land at agricultural prices, secure planning permission for housing, and then sell it back to housebuilders at higher prices. Thus creating a huge financial warchest to be spent on infrastructure and affordable housing.

So what’s not to like?

Unfortunately, for those who will actually be directly affected we have no choice to get into the weeds of this new tax. And that’s where the questions start.

Resources

A true and comprehensive LVT will require an accurate value of every plot of land in the UK, with the valuation splitting out the value of the land as opposed to the buildings on the land. The valuation will also need to differentiate between the existing use value and any other other potential use value.

Only then can the state accurately tax both the existing value and the hope value which, under current rules, needs to be factored into the valuation. In other words an assessment of planning and market prospects of the full range of uses the land can, and cannot, be put to. For every field, garden, factory, car park, office building etc etc.

Such an undertaking is clearly impossible and impractical in austerity Britain.

LVT Lite

But what about the plethora of ‘LVT lite’ options? In the interests of brevity this blog will focus on just one of those. Namely the idea that the state can CPO housing land at agricultural value.

Again, as we enter the weeds a few issues emerge:

1. Where would the Human Rights Act (HRA) fit in? It could be relatively easy to repeal 1961 Land Compensation Act, but I suspect the HRA could be a tougher nut to crack given recent assurances on EU legislation. I base that on expert witness experience in a number of CPO inquiries.

2. Where would the local plan process fit in? At Local Plan Public Examinations there are always many more landowners promoting their land for housing than the allocations available. The winner is the site which is the most appropriate, in planning terms. It is a hugely competitive process and the state is the ‘referee’. So what would happen if the state is also a player on the pitch? Would we then need new North Korean style planning rules to guarantee the ‘right’ outcome in planning terms, irrespective of true planning merits?

3. Where would landowners fit in? And what about the need to get new homes built quickly? My day job tells me that landowners prefer high land prices to low ones so they would obviously refuse to sell their land at prices they were not happy with. Thus necessitating a long, complex and hostile CPO process. Other landowners would obviously step up and offer their land to the local plan process. Are we then asking the state, as ‘enabler’, to tell the state as ‘planning authority’, that it must resist the other suitable, deliverable site, in planning terms, because the state wants to buy another plot more cheaply? Hmmmm. Next stop the sale of planning consents???

4. What does history tell us? Firstly that securing land value capture via taxation will be hugely complex, controversial and difficult to implement. No wonder the Daily Mail have already coined it the Garden Tax. The Poll Tax is instructive on the ease of introducing new taxes into modern Britain.

And secondly the concept appears to have more logic in an environment where cities are expanding fast and the state feels frustrated with certain landowners withholding land to support that process. However since 1947 the role of the state has completely reversed with the key task being to stop/restrain city growth via Green Belts, in opposition to the huge numbers of willing landowners and developers. Therefore LVT perhaps appears to have less logic. Particularly in relation to acquiring development land on the edge of cities.

4. Who even is the state in its enabler role? Presumably Homes England, plus Council-owned development companies, plus 100s of new development corporations? But what would happen if the local Council is anti-growth? As some are? And would the state have the capacity to become the dominant land-trader, to the exclusion of private sector participants, across 300-plus local authorities

Sum-Up

In simple terms we now have a buggers-muddle of development rights being nationalised in 1947 but land value still being mostly privatised.

So my vote on doing land value capture better goes to the the 2015/16 CIL Expert Panel Group report. Namely:

– a simple tariff to cover wider infrastructure contributions; and

– negotiated contributions on site specific measures, via S106.

If the right local plan policies are in place early, covering infrastructure and affordable housing, builders will negotiate a land deal which which reflects these obligations. If not……..

It seems that the Chancellor broadly agrees and we look forward to contributing positively to the CIL Review signposted in the Budget last week.

Two final points.

Firstly people create the demand for infrastructure not new homes. Population growth is going to happen anyhow, with or without the new homes. No parent ever told their child that they were created because somebody firstly built a house. No new immigrant ever came to the UK because the OAN and local plan was proposing broadly the right amount of new homes in their target location. New Homes deliver new infrastructure rather than increasing the stress on the existing.

Secondly, in my experience the state is often not good at bringing forward land quickly.

Let’s wish the new Homes England organisation all the best.


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Conference season reflections

The annual tour of the party conference housing fringe events is over for another year.

Annual leave meant only the Conservatives this year. The mood was downbeat, as expected. Housing seemed to have a higher priority than ever before, with a common view that unless the Tories can achieve success in addressing the housing crisis they are unlikely to win the 2022 election.

The higher priority for housing invited more (often less informed) views into the discussion. And it appeared very few people could actually define what would success look like, in 2022? Everyone agreed about the need to build more homes and capture more younger voters, BUT would it be via?
a. Home ownership levels continuing to fall? or,
b. Home ownership stabilising at the current c60%? or,
c. Home ownership starting to start rising again?

No fringe panellist or expert appeared willing or able to give an answer to the above. The announcement on Help to Buy was obviously a major piece of good news for further driving up private sector supply and there were also positive announcements on Council housing. But it seemed difficult to see where the priority lies aside from the obvious desire to build more homes of whatever tenure, social rented, private rented or owner occupation.

This need to build more homes of all tenures was shared by everyone and both Sajid Javid and Alok Sharma both spoke strongly and well on the importance of more supply.

Many seemed vexed by the tension between wanting to support home ownership but recognising that in some Tory heartland areas rented housing is sometimes the only viable option for low and middle income younger households who don’t benefit from financial assistance. It seemed clear that helping the huge amount of people who face difficulties in securing access to a good stable home appeared more important than protecting house prices.

Many spoke about the geography of the problem. Several asserted that the social problems caused by high housing prices are limited to London and parts of the South East and that in most other areas the market is functioning reasonably well.

The Help to Buy (HTB) announcement showed that the commitment to building more homes for sale remains. In relation to H2B there seemed little consensus in the fringe events. Some were opposed due to the perceived inflationary effects. Others were supportive, citing the 130,000 FTBs who have been helped so far and the 135,000 more households who will benefit in the future. In perhaps the biggest housing fringe at the conference, David Thomas spoke strongly on the value and importance of Help to Buy if recent private sector volume increases are to continue

It was perhaps surprising that nobody mentioned the independent evaluation of Help to Buy for the Government, which showed that HTB has driven 43% increase in additional housing supply that would not have happened otherwise. Similarly nobody considered what the housing supply (and price) levels would be now if HTB had never been introduced. Some felt that more HTB was akin to putting petrol onto a demand fire, whilst others felt that taking it away would be be like pouring water on a supply fire which has seen output rise to 200,000 per annum.

Green Belt was never far from the surface and the perception was that most were willing to see proportionate releases from Green Belt, especially if linked to Green Belt extensions. Alok Sharma, several times, helpfully reiterated that the Green Belt can be reviewed in exceptional circumstances. Tim Montgomery described Green Belt as, “the most pernicious form of regulation in UK history, four times worse than anything from Brussels”

Skills and capacity was also a focus and another interesting tension emerged. Namely the need to attract young bricklayers, carpenters, roofers, etc into the industry now, but, at the same time, promoting the modern methods of construction which could potentially see lower demand for such skills in the future. The sector obviously needs to manage the messaging strategy here. It is going to need bricklayers and carpenters for a very long time yet and messages that such skills are short-term and dying would be misleading and unhelpful.

So there was more interest on the importance of building more housing than hitherto. But the gap between party conference rhetoric and local decisions remains. During the conference itself:
– we heard that a major City Council have decided to delay the publication of their Site Allocations Plan in order to review their proposed Green Belt figures in light of the new, reduced, OAN figures from DCLG.
– Barratt passed the one year mark on a planning application for housing on an allocated site which also delivers a much needed brand new rugby club


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Winning people over

In the last 50 years arguing in the case favour of new homes has felt like warfare. And asymetric warfare at that.

Firstly we know our politicians consistently argue passionately for more homes in Parliament and at party conferences. But locally, MPs, Mayors, and Councillors routinely run for election on a ticket of stopping housing development. The most recent edition of Northumberland News proclaims successes in stopping housing development and removing cycle lanes.

And secondly local and national media traditionally find it easy to find column inches and airtime for the press releases produced by local housing objectors. But its much harder to find the local people who will speak up in favour of new housing in order to present a balanced story. No wonder much needed new homes, in line with local and national policy, are often presented as local people being the victims of a harmful pollution imposed from above.

Classic ‘good’ vs evil’ territory.

But things are changing and the reason is social media.

Nobody in the pub had heard of Priced Out three years ago. Now some people have. Priced Out consistently present strong and persuasive messages on the importance of more housing and any journalist worth their salt can easily find them to balance up an anti-housing story.

Yimby groups are popping up across the UK. Usually where they are most needed. London Yimby, Oxford Yimby, Cambridge Yimby, even Yorkshire YIMBY are on Twitter and Facebook.

Pubgoers still don’t know about the Yimby groups yet. But they will do in two/three years time. These grass roots groups are local and do fantastic work in promoting the harms of housing undersupply, the benefits of new affordable housing, and countering objections.

Social media is their weapon of choice because its popular with the demographic hardest hit by the housing crisis. And importantly, they often provide an easy-to-find voice for mainstream media looking for a counterweight to the anti-development voices.

Changes in social media now mean that even housebuilders can use social media positively. We can broaden our messaging to include local people who are more likely to support our proposals rather than just those who happen to live right next to the site. We can elicit views from recent customers who have recently experienced the positive life-change of moving into their new home.

And we can more easily notify potential customers who we know are looking for a new modern home and may be willing to support our scheme. Whilst social media is still a risky game, long gone are the days when housebuilders considered it as something to be avoided at all costs.

One thing is for sure. Unless communities and politicians feel that that there is a local democratic case in favour of new homes we will struggle. We need to step up.

Mark my words – Yimby will be widely understand in the pubs of the UK soon.


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ITS THE ECONOMIC POLICY STUPID

Last week I spoke at the New Politics of Housing event organised by Policy Exchange.

The introduction confirmed that the housing crisis is the most important social justice issue facing the UK and the speakers came with different ideas for solutions.

Terrie Alafat (CEO at the Chartered Institute of Housing) and John Godfrey (Former Head of Policy at Number 10), argued for more investment in social housing with Terrie also focussing on the need to focus on, and quantify, the social value of social housing.

I focused on the importance on addressing the rapid decline in home ownership, pointing out that France now has higher home ownership than the UK. France has grown home ownership from 60% to 64% over recent years whilst the UK has presided over a fall from 71% to 63%. I deployed the quote from Nick Boles that, “no aspiration is more deeply embedded in the British psyche than the desire to own ones own home” and noted that French housing supply is now c350,000 per year.

Fraser Nelson’s speech was particularly interesting in arguing that Quantative Easing has been a key cause of high housing price rises in London. Indeed Fraser argued that outside London there was no housing affordability crisis due to the affordability created by low interest rates and lower house prices.

The QE arguments were persuasive, and John Godfrey agreed. Put simply, UK Government has now spent over $600bn buying gilts and bonds with the aim of encouraging spending in the economy. It did.

The ‘extra money’ and spending naturally pushed up gilt prices and drove more investment away from gilts into other parts of the economy. As intended. With interest rates so low the property market was obviously a natural home for such extra money. Especially as the extra liquidity encouraged more lenders to re-enter the housing and property market.

We at Barratt know, as well as anyone, that mortgage availability is thankfully good at present.

We all know that QE started in 2009, stopped in 2012, and was resurrected in 2016. Experts appear less sure of the extent to which it has boosted property as an asset class and if/when the effects on the London housing market will unwind.


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HOUSING CRISIS – WATER PALAVA?

A lot of organisations get blamed for the housing crisis. Inter alia, housebuilders, planners, housing associations, landowners, land promoters, politicians etc. One group tends to emerge unscathed but, sometimes causes huge frustrations to housebuilders and local councils wanting to deliver new homes. Namely the privatised water companies.

But having said that I must immediately narrow the scope down to just 3 or 4 businesses who, in my opinion, can frustrate housing delivery and damage the reputation of the whole water industry sector.

As we all know water companies have a legal obligation, under the Water Act, to provide water and sewerage to the the population in their areas. Not just the current population but also the new residents as projected by ONS. The privatisation deal in 1989 was predicated on this civic responsibility being transferred, alongside the ability to make profits and pay shareholder dividends.

Adhering to this responsibility sometimes requires investment in system upgrades, especially in areas of lower capacity and higher population growth. Again the requirement to fund this ongoing investment was part of the privatisation deal. At privatisation all debts were written off and Government provided the sector with a £1.5bn dowry.

Unfortunately housebuilders often face difficulties in that water companies assert that there is no local capacity for extra homes and then request funding to prepare a ‘Network Analysis’  to identify whether a system upgrade is required. Housebuilders feel that the Water Company should be funding this having already made projections of local population growth and having already fed into the local plan process. It is not unusual to be faced with a bill to fund a Network Analysis at the pre-application stage with limited ability to go forward until it has been completed.

Even worse the Network Analysis sometimes then shows a need for sewage treatment work upgrades which the water company claim must be funded prior to the development being occupied. It is not unusual to be hit by Grampian Conditions preventing development or S106 requests (on top of CIL) for c£10k/dwelling in order to contribute to system upgrades.

All very frustrating if there is actually no commercial ability to provide the required payments due to other S106, CIL or affordable housing requirements. The poor LA then cannot bring forward an allocated site because of late demands from a private water company, which has previously been consulted on the feasibility of the local plan. Thus opening up the possibility of speculative off-plan smaller proposals which may fly under the water company radar nd hence secure consent.

Since privatisation housebuilders have given these private companies £2.6bn in infrastructure charges. How it is used is not audited and we housebuilders sometimes wonder what has actually happened to the money!

As an old time planner I would much welcome a return to a plan, predict and provide approach to water infrastructure provision rather the what feels, in places, more like a risk management approach to major housing schemes as and when they arise.

Final point is to repeat that most Water Companies are positive and great to deal with. But as in all sectors the actions of a few can sully the whole sector. Same with housebuilding I guess…..


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FIVE RAINY DAYS IN AUCKLAND

So what did a five wet winter days in Auckland say to a UK planner/housebuilder about planning and urban design? In particular the similarities and contrasts with the UK? I was asked by the UK branch of the New Zealand Planning Institute to provide some thoughts so here goes.

The first thing that hits you is the dominance of Auckland’s maritime setting. You are never far from a view of the harbour and and its influence on the character, economy and history of the city. The urban pattern is essentially a grid with Quay Street running parallel with the shoreline and a series of streets running southwards up the hill towards the lovely Albert Park and the University areas.

The second impression, linked to the above, is the fantastic and ongoing regeneration of the obsolete older docks at the western end of the harbour. The scale, grain and quality of new architecture, including the Maritime Museum, is good and even in winter the area throbs with people from morning to late evening. Albeit many of these were Lions fans there for the rugby. I can imagine it is even better on a summer weekend.

Hopes should be high for the the next 20 years as the regeneration moves further west into the ‘Wynyard Quarter’, a huge area of redundant tank farms. The development has been held up due to legal disputes relating to decontamination responsibilities but the masterplan aims to deliver a new park which will deliver a major new landscape and recreational resource for the city. Already some of the anchor buildings such as new ASB Waterfront Theatre are in place.

The third key impression is the Sky Tower, Auckland’s tallest and most striking landmark. Whilst design is subjective I thought it looked fantastic, providing a great example of how a modern building can become a true icon for a city. It is clearly well loved and used by locals and tourists for, inter alia, dining, bungee jumping and skywalking. A true emblem for Auckland.

Perhaps less impressive is the modern architecture along Quay Street and fronting the harbourside. Often boxy and ‘anywhere’ in style, and often with poor detailing. A world class setting and, in my opinion, a bit of a lost opportunity. Especially given the quality of the old Ferry Building on the opposite side of the street.

Similarly, some other modern buildings in the City Centre lacked quality, texture and detail and, perhaps unfairly, I saw little evidence of proactive conservation and heritage-led regeneration schemes.

Moving out into the suburbs I found the Edwardian and inter-war suburbs charming. Generally a mix of lovely older colonial style bungalows and two-storey houses. Virtually all detached and sitting on smallish plots to a grid street pattern. Older properties interspersed with newer modern homes, again of strong design and reflecting the suburban character. Each suburb seemed to be supported a local centre with a range of local and independent traders.

Maybe I was just in the ‘posher’ suburbs but the maintenance of both the public and private realm was of incessant high quality. Two elements stood out. Firstly the good quality enclosures defining the gardens; usually mature hedges, waist high walls or attractive low fences. And secondly the variation in design and materials. There is obviously a far greater emphasis on self-build and smaller builders, although again stressing I only visited 2 or 3 different suburbs.

Moving further out, the more modern suburbs appeared lower density but retaining the grid based street patterns, decent enclosures, low rise and variety in the street scene.

The buildings and urban grain felt different to the UK. However Auckland actually still felt fairly familiar to a Brit. Why? Mainly due to how familiar the landscape felt – presumably as a result of a similarish climate? Plus the street names of course! There are some superb parks and open spaces which all felt fairly familiar in design and texture to those in UK towns and cities. Albeit with a few more exotic species.

Final point is that the character of a city is as much about the people as the buildings and spaces. In this regard Auckland excels. Indeed I would challenge anyone to find a city with friendlier locals or higher quality levels of hospitality. It is culturally diverse and the atmosphere is of a city which (a) really celebrates and promotes its Maori heritage and culture whilst also (b), doesn’t seem to have a huge chip about its colonial background. All in all a city which just felt diverse and confident. We will be back…….

Comments welcome – worth stressing again that the experience was very limited and perhaps more focused on the evening economy than urban design.