Planning, housing and markets Sarah Monk and Aoife Ni Luanaigh

Planning for housing How much housing is produced through s106? What are the main impacts of s106? Is s106 housing additional? Who pays? Is s106 housing replacing traditional new build by housing associations? Is what is promised through s106 actually delivered?

Figure 1:Trends in permissions and completions for ‘S106’

Figure 2: Trends in ‘S106 ‘ as proportion of all affordable

Main impact? Changing geography of new affordable housing More expensive because on more expensive sites / areas But meeting mixed communities agenda as most is on-site provision Most in pressured areas of South but rural affordable housing very problematic

Is it additional? Not wholly additional because more expensive sites / areas S106 contribution ‘stretches’ social housing grant – makes schemes viable Provides land in areas where housing associations can’t compete / public land supplies drying up

Who pays? In theory landowner pays But on difficult brownfield sites developer may also pay (lose profits) Easiest on high value sites Developer contribution often small proportion of total development value Market houses often modified because of s106 – easier to provide small, dense units

Is s106 replacing 100% sites? S106 is an increasing proportion of all new affordable housing Time and other resources spent on s106 rather than traditional 100% sites Appear to have lost traditional sites and cannot get them back Using public land which would have been non-s016 but now becomes mixed – good for mixed communities but using up assets

Main messages from s106 work The case for linking planning and affordable housing is relatively weak But practical reasons why it works on its own terms – local, hypothecated, housing Concerns about how far it can actually increase output and affordability But it’s the only game in town – so try to make it work better?

Main messages from s106 work Anything that replaces it must be able to do more, otherwise no point Has proved that something thought to be difficult could work – mixed communities – but at a cost? (units getting smaller, social rented being squeezed out) Value for Money message: the apparently easier options to get more (off site, commuted sum) turn out not to work better

Related research S106 policy must be supported by evidence of housing need Recent policy requires understanding whole housing market, demand and not just need New draft Guidance updated housing needs assessments to include housing markets Methods on needs assessments more prescriptive to aid consistency

Problems and difficulties Understanding housing markets often seen as looking at total stock and demographics to see if ‘in balance’ but market is buyers and sellers and the main indicator is price Sub-regional working in context of planning framework, legal implications Relationship between using local surveys and adding them up to sub-regional and regional levels – also use of secondary data

Planning for housing Recent post-Barker consultation paper proposes take up of land as trigger to inform planners about how market operating Barker highlighted land supply as constraint on house building and hence affordability But there are other constraints including infrastructure provision and relative profitability of building more housing in one location

Planning and markets The key market signals to inform planning policy must be relative prices Because planning aims to address market failures, policies should not be made on the basis of the market But it is essential that planners understand the market outcomes of their decisions even if that doesn’t change the decision

Sub-regional and regional working Regions are identifying sub-regional housing markets – not in a consistent way Also undertaking household projections (SEERA) and estimates of future need for social rented housing (SEERA, EERA, GLA) And estimates of future need for key worker and intermediate market housing

Key workers and intermediate market Intermediate housing defined as housing below market prices but above social rented – some but not full subsidy No accepted methodologies so developing a new approach For key workers and others in the ‘gap’, cannot just add up all those in the income range because they won’t want the products Nor predict from past because lack of supply

Key workers and intermediate market For South East, could use SEH to estimate totals in relevant income band Then use CORE on characteristics of households who entered shared ownership Then project forward as demographic approach But shared ownership ‘lost’ to market when move (at least in the past) So had to use gross flows in relevant income/age groups – this produced estimate of 7,000 p.a. (9% of dwellings after social housing overlap)

Market Intelligence Toolkit Market Intelligence Report for the Thames Gateway-South Essex Sub-Region Cambridge Centre for Housing and Planning Research Department of Land Economy 19 Silver Street Cambridge CB3 9EP  

Market Intelligence Developed templates for analysing local housing markets Ward, district and sub-regional levels Social, economic, demographic and stock information as well as incomes and relative prices Also looks at the affordability of different tenures and the ‘gap’ between market and social housing

Sub-regional Market Intelligence Sub-regional groupings approximate the geographical extent of the housing market Assessing housing market across the board feeds into Sustainable Communities agenda Provides a more accurate way for Local Authorities to understand the housing market in their area

Benefits of commissioning a Market Intelligence Report Improved understanding of the local housing market enables: appropriate and cost-effective allocation of resources better forecasting of housing demand and need within an area development of a suitable mix of dwelling types, adapted to local needs informational advantage when negotiating housing development with other parties.

Why is any of this important? Feeding directly into policy Improving the evidence base Clear links between mixed communities agenda and understanding housing market economics Difference between outputs and outcomes – often not intended – can be highlighted