Response to the Government’s consultation on proposed changes to the current planning system from Andrew George – Chief Executive of Cornwall Community Land Trust
Response to the Government’s consultation on proposed changes to the current planning system from Andrew George – Chief Executive of Cornwall Community Land Trust
Dear Madam/Sir,
Response to the Government’s consultation on proposed changes to the current planning system
Cornwall Community Land Trust (CLT) is one of the most successful CLTs in the UK, having delivered a wide variety of community-led housing projects – 26 so far – and more homes – over 250 – across Cornwall and the Isles of Scilly since it was founded in 2007. It is a registered provider (RP), and investment partner, has helped establish 12 local CLTs and worked in partnership with 5 other RPs and is a Community Benefit Society regulated by the FCA.
Cornwall CLT has particularly specialised in delivering discounted market sale (resale price covenant) homes on over half of its developments and has handled many resales which confirm the success of the product and that its integrity in delivering in perpetuity community benefit is sustained through a robust application of the legal constraints which underpin the system. As a product it is similar in principle but different in practice to the Government’s proposed ‘First Homes’ policy. Although we broadly support the principle we are unpersuaded that ‘First Homes’ will deliver any benefits and would create significant difficulties in a place like Cornwall as the basis for the setting of discounts appears less appropriate and reliable and hence more difficult to deliver effective and lasting community benefit, in particular for those local families and individuals whose needs are not and cannot be met by the market.
Cornwall CLT strongly endorses the submission to this consultation from the National CLT Network (NCLTN) attached. We will not repeat the points made but will refer to them in the response below. We make a number of additional points based on our detailed experience of frontline work in the affordable housing sector and of our use of primary development planning tools like rural exceptions policies.
We also strongly endorse the point made by the NCLTN re. the importance of the continuation of the Community Housing Fund (CHF). An effective planning policy provides a helpful framework for the delivery of affordable homes but the CHF provides the essential fuel to ensure delivery.
The Government’s proposed approach to assessing local housing need
Q1: Do you agree that planning practice guidance should be amended to specify that the appropriate baseline for the standard method is whichever is the higher of the level of 0.5% of housing stock in each local authority area OR the latest household projections averaged over a 10-year period?
No. The assumptions behind this and previous Government methodologies are fundamentally flawed. It’s understandable why national strategies might be drawn into this flawed conclusion when it is overly fixated on numbers (300k p.a.) rather than effect (meeting unmet housing need). In these circumstances Governments have assumed that it’s the State’s duty to divvy out the national target figure and to in turn impose this amongst resistant local authorities and even more resistant local communities. This approach has proven to be counterproductive in places like Cornwall, in spite of it being one of the fastest growing territories and least nimyish communities in the country.
Q2: In the stock element of the baseline, do you agree that 0.5% of existing stock for the standard method is appropriate? If not, please explain why
No. The Government’s approach takes an unhelpfully two-dimensional assumption regarding the operation of the relationship between the development system and the local market. Cornwall is a classic example of the failure of the Government’s approach. Cornwall is one of the fastest growing places in the UK. After the periods of the fastest growth since growth-led planning was adopted in Cornwall in the early 1960s the housing problems of local families are more often than not greater (ie worse) rather than better resolved. Although it seems counter-intuitive local housing need is better met in a planning environment in which developer expectations and hope values on land are effectively contained by a strong planning system and lower housing projections. Coupled with powerful enabling policies and other planning tools like the rural exceptions policy the climate for meeting local housing need is strongly enhanced when the projected figure is in fact constrained.
Q5: Do you agree that affordability is given an appropriate weighting within the standard method? If not, please explain why.
Regrettably this is a largely forlorn exercise. The proposed changes to the planning system strengthens the ability of uncooperative developers who more-often-than-not seek to reduce their duty to deliver genuinely and in perpetuity affordable homes on their development sites and can do so both before and after securing planning permission. The proposals include for example the lifting of the small sites threshold, below which the developer does not need to contribute towards affordable housing. Quite apart from taking policy in the wrong direction it turns the application of affordability weighting into a process of pointlessly constructing fantasies.
Delivering First Homes
Q8: The Government is proposing policy compliant planning applications will deliver a minimum of 25% of onsite affordable housing as First Homes, and a minimum of 25% of offsite contributions towards First Homes where appropriate. Which do you think is the
most appropriate option for the remaining 75% of affordable housing secured through developer contributions?
i) Prioritising the replacement of affordable home ownership tenures, and delivering rental tenures in the ratio set out in the local plan policy.
ii) Negotiation between a local authority and developer.
iii) Other (please specify)
We endorse the NCLTN response.
Option ii) – The tenure mix of the remaining 75% should be negotiated between a local authority and developer.
In addition we are unconvinced that the effectiveness of the S 106 system and the proper legal constraints it provides will be adequately replaced and replicated in the Government’s proposals.
With regards to current exemptions from delivery of affordable home ownership products:
Q9: Should the existing exemptions from the requirement for affordable home ownership products (e.g. for build to rent) also apply to apply to this First Homes requirement?
Exemptions are part of the problem and become Trojan horses available to be misused by developers who can cynically sidestep society’s expectations. So exemptions should be closed off, not extended.
Q13: Do you agree with the proposed approach to different levels of discount?
We endorse the NCLT response.
In reality CCLT has, with extensive experience, discovered that it is very unwise to commence a project in which a landowner/developer/agent has an expectation of an unrealistic return presented as norm. On some projects the required discount on our discounted sale homes has been as much as 70% (at the 2 phases of homes at St Minver in north Cornwall for example). It would be far better if the policy were presented in a manner which lowered rather than raised expectations and then based discount levels on a rigorous assessment of the local circumstances including local incomes and affordability.
Q14: Do you agree with the approach of allowing a small proportion of market housing on First Homes exception sites, in order to ensure site viability?
Permission to allow a limited amount of open market housing on rural exception sites has had a detrimental impact on the delivery of affordable housing projects. It has increased land value expectations, which has in turn stalled potential projects and significantly lowered the proportion of affordable homes delivered on sites which have managed to secure permission. These problems will be replicated on FH exception sites.
We refer to your para. 66 which contends that rural exceptions policy is “underused” as a “delivery mechanism. If this is the case it is because of the twin impacts of very high house building projections which drive hope values on many otherwise suitable sites adjoining villages and because the expectation of achieving ever higher levels of open market homes on these sites drives landowner expectations of unfeasible returns.
Q15: Do you agree with the removal of the site size threshold set out in the National Planning Policy Framework?
Strongly oppose for all the reasons set out in response to other questions – 17, 18 etc.
Q16: Do you agree that the First Homes exception sites policy should not apply in designated rural areas?
Yes. We strongly support and endorse the response of NCLTN. We would also add that from our experience the prospect of FHs on exception sites at 70% of market value would drive expectations that such sites would secure an even greater premium and thus undermine the ability of affordable housing providers to deliver projects.
Q17: Do you agree with the proposed approach to raise the small sites threshold for a time-limited period?
There are two main points to make here. First, in Cornwall most housing sites that deliver affordable housing are under 50 houses. We do not have the same mass housing delivery as other part of the UK. This threshold of 40 or 50 will create a deficit in the delivery of affordable housing over that 18 month period and therefore would not create a balance between the delivery of affordable housing vs economic support for the SME .
Secondly we would also question how the local authority would view a deed of modification submission on existing affordable housing schemes in order to reflect this policy and remove affordable housing during this 18 month period. This may also affect approvals which have not yet been implemented but still extant. How could the LPA resist such an application? This would further erode the affordable housing provision already approved and in the pipeline for Cornwall. This has a knock on effect on predictions and allocations of housing and is catastrophic for any local authority.
We also strongly endorse the response from NCLTN.
Q18: What is the appropriate level of small sites threshold? i) Up to 40 homes ii) Up to 50 homes iii) Other (please specify)
Iii) Other. Ie none. The threshold should be reduced not lifted. Otherwise the Government’s proposals would be totally counterproductive, if delivery of genuinely affordable housing is the objective. We agree with NCLTN.
Q19: Do you agree with the proposed approach to the site size threshold?
No.
Q20: Do you agree with linking the time-limited period to economic recovery and raising the threshold for an initial period of 18 months?
Refer you to our response to Q17 above.
Q21: Do you agree with the proposed approach to minimising threshold effects?
We are unconvinced that the Government could construct an effective policy to combat the kind of cynical behaviour the paper describes. Indeed that the Government recognises the need to combat such behaviour presents still further evidence why it is a very bad idea!
Q22: Do you agree with the Government’s proposed approach to setting thresholds in rural areas?
Like much else in the paper it’s not well fleshed-out. It would be better to tighten policy across the board rather than just permitting a lower threshold exception in very limited areas.
Q23: Are there any other ways in which the Government can support SME builders to deliver new homes during the economic recovery period?
Yes. Drop all of these proposals. Too much capital and resource is being siphoned into lottery-win inflated land values and thus lost from builders, especially SME builders.
Increase the strength of planning controls so that it helps to constrain land value expectations, especially of rural exception sites. Cornwall CLT is a good customer of local SMEs but could do much more and develop many more affordable homes by working in partnership with SME builders if the Government reversed its misguided impression that these proposals will assist the sector. Regrettably they will do the opposite.
If the Government really wants to support SME builders it should take policy in the opposite direction to that proposed here.
Thank you for affording us the opportunity to respond to the consultation. We hope these comments – coming as they do from an experienced and successful practitioner – will assist the government in finding an effective policy to support the sector.
Yours sincerely,
ANDREW GEORGE
Chief Executive/Lewydh Office.
01872 243554
Email. andrew@cornwallclt.org
Address. 2 Princes Street, Truro, Cornwall, TR1 2ES
www.cornwallclt.org