1. Branches and regions event Housing White Paper
Do we know how many different homes we actually need to build?
Need, demand, housing targets and Objectively Assessed Need
29th March 2017
Branches and regions event Housing White Paper

2. HWP proposals: “an honest assessment of the need for new homes”
Current approach is “complex” and “lacks transparency”
Lack of standard methodology results in “lengthy debate”
“Standardised approach” would be “more transparent”, “more consistent”, “more realistic”
New approach to be published for consultation in “March”
In place by April 2018
Councils can choose to use different methodology with “reasonable justification”
More focus on meeting needs of “groups with particular needs”
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3. Our analysis
Welcome idea of standard approach – reduce delay in adopting local plans
Concerned about opportunity for argument about whether to deviate from standard methodology
Will protected countryside be a ‘reasonable justification’ to depart from the standard methodology?
But – we expect methodology to be more of the same:
Conflating need and demand
Overestimating need and demand
Not realistically deliverable
What we like:
 The principle of a standardised approach for assessing housing need, as this could reduce the scope for developers to bully local authorities at Local Plan examinations.
What we don’t like:
 It should not be left up to individual planning inspectors to make major policy decisions on whether local authorities can deviate from the national methodology. There should be clear policy exemptions to cover areas that would be (i) environmentally constrained from planning for major housing growth or (ii) able to plan for higher levels of housing growth on areas of suitable brownfield land.
What we’re unsure about:
 Will the presence of large areas of protected or otherwise valuable countryside constitute a ‘reasonable justification’ for departing from the standard methodology for calculating housing need?
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4. What you’ve said so far You broadly agree with us
Acceptability of standard method will depend on assumptions
Need more realistic understanding of household growth
Distinguish between different types of need/demand
Influence of LEP etc growth aspirations should be reduced
Local plans must not be delayed by new methodology
LPAs should be allowed to reduce OAN in response to capacity of construction industry
CPRE should devise its own methodology to promote
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5. Regional differences?
Highly likely to lead to inflated OAN in “high demand areas”
But does commitment to be “consistent with our Modern Industrial Strategy” imply opportunity to buck economic trends and realise brownfield opportunities in ‘low demand areas’?
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6. What is NO doing next?
Not just waiting for the OAN methodology consultation
Research into demographic basis for OAN (building on work done in branches & regions)
Research into difference between ‘need’ & ‘demand’ (HFP)
Will feed this discussion & other outputs from HWP consultation into that process
Come back to you again when consultation is out
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7. What might we look for in the OAN methodology?
Distinguish between need, demand and aspirational growth
Need: households, incl. concealed and projected, are adequately accommodated
Demand: aspirations for better homes for those who can afford it
Aspirational growth is not housing need – may come later
Modify projections to provide for those in genuine housing need
Eliminate any other add-ons (e.g. market signals)
Eliminate any possibility of double-counting within or between housing market or LPA areas
…and…
Distinguish between housing need, market demand and aspirational growth:
Need: all households in the area, including concealed and (policy-off) projected new households, are adequately accommodated;
Demand: aspirations for improvement in the standard or location of their accommodation among households, within or outwith, the area, who can afford to do so;
Accommodating growth aspirations is not housing need, but may be factored in to local plan housing requirements, subject to constraints and the willingness of affected neighbours.
Modify these projections with regard to local surveys of housing need, in order to plan to provide for accommodation to adequately house existing, known households that are in housing need, including in rural areas with a shortage of affordable housing to meet local needs.
Eliminate any other add-ons (e.g. market signals or other aspirations), which add to the perception that figures are arbitrary, unrealistic and artificially high.
Eliminate any possibility of double-counting in quantifying need and/or demand within the housing market area or between areas.
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8. What might we look for how OAN is applied?
OAN is one piece of evidence – never a target
OAN should stand until the local plan is next reviewed
Local plan requirements should account for size, type, tenure and geographical distribution of homes identified in OAN, availability of suitable sites
NPPF footnote 9 land should also be respected without scope for challenge
Local plan requirements should boost supply if supported by evidence of a commitment to deliver
Further add-ons should be avoided
Consideration of speculative planning applications against assessments of 5-year supply of housing land should not have regard to aspirations for growth above the rate implied by policy-off OAN
OAN should only ever be seen as one piece of evidence, not as a target against which to judge development performance.
OAN should be calculated in accordance with a single methodology, should only be tested against the correct application of that methodology and the data used to inform it, and should stand until the local plan expires or is next reviewed.
Housing requirements should be set flexibly in local plans to meet the size, type, tenure and geographical distribution of homes identified in their OAN, in the context of availability of suitable sites, the scope for urban regeneration and re-use of brownfield land.
NPPF priorities (as set out in NPPF footnote 9) for types of land where development should usually be constrained should also be respected without challenge. In these areas affordable housing for local needs should be prioritised as Government policy already allows for.
Local plan housing requirements should be expected to boost supply over past completion rates, subject to NPPF priorities for types of land where development should usually be constrained, and only if they are supported by evidence of a commitment to deliver at that rate from the combined sources of private sector housebuilders, the local authority itself, housing associations and self and custom builders.
Further add-ons to provide flexibility or address previous under-performance are unnecessary and costly to the local authority, and should be avoided unless there is strong evidence to believe that the additional land will be developed within the plan period.
Consideration of speculative planning applications against assessments of 5-year supply of housing land should not have regard to aspirations for growth above the rate implied by OAN moderated by NPPF priorities for types of land where development should usually be constrained.
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9. Over to you – workshop questions
What is the difference between “need” and “demand”? Think of the types of households that want/need/demand to be housed - where do you draw the line?
What should the baseline be for housing growth in an area?
Are we focusing on the right issues? What should we be focusing on?
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10. What would you change or clarify?
Flipchart exercise
What do you agree with?
What would you change or clarify?

11. Thank you