Written evidence submitted by PricedOut [FPS 129]

 

About PricedOut

PricedOut is England’s campaign for affordable house prices. We fight for the housing outcomes of everyone priced out of homeownership and everyone priced out of the area they want to live in.

We are an organisation run by volunteers, and we’ve campaigned on planning reform - alongside the rights of private renters, and the overhaul of a regressive and inefficient property tax regime - since the mid-2000s.

https://www.pricedout.org.uk/

Our response

 

  1. Is the current planning system working as it should do? What changes might need to be made? Are the Government’s proposals the right approach?

 

No. Our planning system is broken.

 

In the context of a chronic shortage of housing in the places people want to live, it defies belief that every new housing development we deliver needs to traverse a hideously complex technical and political approval process.

 

We have an enormous amount of political discretion of whether an individual development is built, leaving the system vulnerable to capture by interest groups and lobbyists, and excluding the needs of potential future residents.

 

And we are almost unique in the extent of our poor housing outcomes. Real house prices have risen by 400% since 1970, much faster than many of our European neighbours. We have an incredibly poor supply response to increased demand for housing and have failed to build enough homes to meet demand for decades. This has manifested itself in people being forced to spend enormous proportions of their income for housing that is substandard, often overcrowded, or being priced out of where they want to live entirely.

 

We need to move to a system that isn’t “discretion, with some rules,” but is instead “rules, with some discretion.” Renters pay for our failure to build enough homes.

 

  1. In seeking to build 300,000 homes a year, is the greatest obstacle the planning system or the subsequent build-out of properties with permission?

 

Both the planning system and build out rates are barriers, but the planning system is by definition the greater barrier. It vastly restricts the supply of available land and the density at which homes can be built in the most high demand areas - most notably through green belts, density limits, and through making demolition and redevelopment of existing sites challenging and slow (and in many places not possible at all). Add to this the delays caused by slow and unnecessarily complex planning processes, even where homes are permitted, and it is clear that it would be absurd to say that the planning system is not a barrier.

As research earlier this year by Centre for Cities (confusing also called Planning for the future) noted, our current system is itself a key reason that build out rates - and the much-disputed practice of landbanking - because the highly rationed supply of development permits means that developers need a tangible and sizable pipeline to protect against the risk some of their schemes (sometimes having gone through years of various stages of planning) could stall or even be rejected at the last moment.

However, that doesn’t mean that government shouldn’t do more to ensure build out rates improve further once the new regime takes effect.

As government’s Independent Review of Build Out showed, diversity of tenure on large sites is a huge vehicle for reducing the way absorption rates constrain delivery. We discuss in our response to Pillar Three how best to implement the infrastructure levy in a way to support this.

These changes also afford government an opportunity to give councils and public bodies (perhaps most notably Homes England and the Greater London Authority) powers to compulsorily purchase land. Current rules deriving from the 1961 Land Compensation Act around hope value make it too difficult and too expensive to buy land for new development projects. We need to redefine “market value” so that public bodies can buy parcels of land that private developers wouldn’t, either because of fragmented ownership or stubborn landowners intent on holding out for the housing crisis to worsen before selling. This land could then be sold at the same rates to developers like housing associations who could deliver up to 100% affordable homes on the sites, totally unconstrained by absorption rates.

Government should also consider giving councils the power to levy land taxes (or council tax) on sites where developers have had planning permission for a long time but haven’t delivered. But this must be implemented carefully so as to not deter development at all.

Alternatively, councils could be given the power to levy additional land taxes in growth zones in some instances. If an area is zoned for growth but a landowner doesn’t want to sell, taxing them for their continued standing in the way of building the homes we need would incentivise them to sell, and developers (private and social) could buy the land cheaply, as the tax would be priced in. If they bought knowing the land is subjected to a tax, and the development is still viable on that basis, they would have a clear incentive to build out quickly.

  1. How can the planning system ensure that buildings are beautiful and fit for purpose?

 

We caution against the conflation of planning and building regulations. Whether buildings are “fit for purpose”, by which we take to mean safe and meeting adequate standards, should not be a matter for the planning system, which is uncertain and requires local planning authorities to negotiate. It should be a matter for building regulations, which are fixed, clear, and non-negotiable. Matters relating to safety are too important to be left to negotiations. We do not leave the safety and quality of any other products to a planning system, we ensure that the regulations affecting the manufacture of those products are sound and then have a system to penalise those who do not meet those regulations. It is perhaps no surprise that we have far greater problems with building quality than we do with any other type of product.

 

Regarding beauty, we support government’s proposals in the planning white paper to improve the production and use of design codes. Design codes are a key part of ensuring democracy is improved, giving local people a genuine say over styles of development that are built near them.

 

But bringing in highly prescriptive design codes would be a barrier to innovation, and would prevent architects and developers from meeting complex local demands. Particularly in urban areas that are (or should be) growing quickly, the need for developing at high density can necessitate a dynamic approach to place-making. Design codes could also be used as a way to make development insurmountably more difficult, which should not be permitted.

 

The national design code, if there is to be a national design code, should focus on quality and sustainability, not beauty. Beauty is subjective and no national code should prescribe it. A national design code may be useful as a default design code in cases where there isn’t a local one, but we see no reason why every planning authority shouldn’t have a design code (or codes) as part of its Local Plan or Neighbourhood Plans.

 

  1. What approach should be used to determine the housing need and requirement of a local authority?

We strongly support proposals which would increase housing requirements across the country. Building more homes will improve affordability for renters and first time buyers, create economic growth and jobs, and help more households escape from overcrowding and sharing.

We do recognise that there are weaknesses with the standard method, both revised and current form. A key problem is that it results in significant underestimates of housing need because it uses household formations as a basis, when household formations are themselves constrained by insufficient housing supply. This circularity “bakes in” undersupply.

However, given that our planning system effectively breaks the link between demand and supply, by limiting what developers can provide even in response to massive price signals, we do agree that some sort of target is required to ensure that development happens on the requisite scale.

Thus while this is not a perfect approach, we do think these are broadly reasonable baselines from which to work, and it is appropriate to choose a “higher of” approach, given the serious affordability pressures that have been created by insufficient housing supply.

In our response to government’s consultation on short term changes to the planning system, we have broadly supported government’s new proposed method.

 

  1. What is the best approach to ensure public engagement in the planning system? What role should modern technology and data play in this?

 

The planning system currently fails egregiously to properly consult and consider the interests of young people. It is often captured politically by local campaign groups, who are overwhelmingly older and who generally already own their homes.

 

We welcome proposals to “upstream” public engagement and democratic input into the planning system: locals should be able to influence things like design codes, but there should not be political battles over each individual development. It is also essential that in the process of developing plans, consultation and engagement should be representative of the local communities; or at the very least contributions should be appropriately weighted to ensure that renters and younger peoples’ interests are not excluded from the process.

 

  1. How can the planning system ensure adequate and reasonable protection for areas and buildings of environmental, historical, and architectural importance?

 

No comment.

 

  1. What changes, if any, are needed to the green belt?

The green belt should be completely abolished. Contrary to popular belief, the green belt is not necessarily green, accessible, or aesthetically pleasing. Areas that do meet these criteria should be protected (and there are a wealth of other planning designations to do so), but the enormous amount of land within the green belt that does not meet this definition should be released and used for desperately needed housing.

  1. What progress has been made since the Committee’s 2018 report on capturing land value and how might the proposals improve outcomes? What further steps might also be needed?

 

No comment.

 

 

October 2020