HSA Conference – York

School of the Built Environment

Localised planning, sub-regional housing markets and affordability outcomes:

modelling a new regime

Prof Glen Bramley(Heriot-Watt University, Edinburgh, UK

Contact: [email protected]; +44 (0)131 451 4605)

19 April 2012

HSA Conference – York


Overview of Paper

• Major regime change in 2010 to ‘localised’ planning for new housing

• (Previous planning system, policy 2004-09 and post-2010)• National Planning Policy Framework• Unpacking NIMBYism - public attitudes to local housing

development• Predicting local opinion and planning stances• Initial responses by local authorities• Forecasting market and social impacts – sub-regional model• Conclusions


Previous System

• Comprehensive LU planning system (widely supported)• Plans (LDFs) vs development consents (discretionary)• Neglect of supply in policy till 2004 (Barker)• Regional spatial strategies & numerical targets, • Requirement to consider effects on affordability• New Quango NHPAU • More investment in social housing and infrastructure• But system still failed to deliver much increase in output

‘At the centre of these recommendations is the principal objective that planning should take more account of, and use market information….Central to achieving change is the recommendation to allocate more land for development…..A stronger role for regional planning bodies is recommended, ….charged with setting out advice on market affordability targets, housing numbers, strategic growth areas, and co-ordinating links between the key players’ (Barker, 2004, p.6).


Housebuilding Output

0

50000

100000

150000

200000

250000

300000

350000

400000

1946

1950

1954

1958

1962

1966

1970

1974

1978

1982

1986

1990

1994

1998

2002

2006

Private Enterprise Registered Social Landlords

Local Authorities All Dwellings


Regional Affordability Trends

FTB Mortgage-Cost-to-Income Ratios by Region & Country 1994-2010

0

5

10

15

20

25

30

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Year

Per

cen

t o

f H

hd

In

com

e

United Kingdom

North East

North West

Yorkshire & Humb

East Midlands

West Midlands

East

London

South East

South West

Wales

Scotland

Northern Ireland

Source: Pawson & Wilcox, UK Housing Review 2011/12, Table 2.3.2.Based on averages of FTB prices and all household incomes of working households


Localist Planning Reform

• Critique of previous system as ‘broken’, ‘bureaucratic’ (and unpopular)

• Scrap regional planning bodies and regional strategies • Scrap top-down numerical housing targets (& NHPAU)• Remove some planning guidance (re density, ‘garden

grabbing’)• Local authorities to take decisions (except where devolved to

local communities)• Incentives – extra grant related to number of new homes

(NHB)• Broad continuance of planning gain agreements but

formalised ‘Community Infrastructure Levy’• Presumption in favour of sustainable development


National Planning Policy Framework

• Draft published 2011 heralded radical simplification, streamlining, promotion of economic growth & development (via ‘presumption’)

• This caused great furore• Final version published March 2012, notwithstanding rhetoric,

rows back quite a bit from that• Defines ‘sustainable development’ – balance of economic, social,

environmental• Still gives primacy to Development Plan (LDF) – but must be up to

date (1 year to update post-2004 plans!)- may draw on regional policies and evidence ‘where appropriate’

• Green Belt protection unchanged; encourage brownfield; • Meet full need+demand evidenced for HMA (via SHMA)• 5/10 year land supply, deliverable, with 5/20% buffer, implem

strat.• Plan for mix of size/type/tenure, incl afford hsg• Encourage larger urban extensions & new settlements


Sustainable Development?


Primacy of the Plan


So what does ‘presumption’ mean?


Unpacking NIMBYism – public attitudes

• Past evidence/literature suggests NIMBYism quite prevalent in England

• 2005 survey suggests strong resistance to additional housing within existing urban neighbourhoods (‘CityForm’)

• Impacts on traffic, pollution, parking were strongest -ve factors

• 2010 BSAS suggests majority opposition, esp among - those with a strong view - middle classes - owner occupiers - Tory/LibDem/Green - South - suburbs


Attitudes by Tenure & Overall

Table 4: Support for or Opposition to More Homes being Built in Local Area by Tenure, UK 2010

All Own Social Rent

Support strongly 4.9 2.7 13.3 Support 24.8 21.5 34.4 Neither supp/opp 22.5 22.8 17.7 Oppose 30.3 32.9 22.2 Oppose strongly 15.1 18.0 10.3 It depends 2.0 1.9 1.1 Don't know 0.4 0.1 1.9 Total 100.0 100.0 100.0 Base 3297 Net Support -15.7 -26.8 15.2

Source: British Social Attitudes Survey 2010: see Bramley ‘The Housing Challenge’ in Curtice et al (forthcoming)


Attitude by Type of Area

Table 5: Support for or Opposition to More Homes being Built in Local Area by Urban-Rural Type and Broad Region

City, town Suburbs

Village, country

North, Mids

South, O Lond

Inner London

Support strongly 8.0 3.8 3.1 4.3 4.0 11.6 Support 28.5 24.7 23.5 24.6 22.1 36.4 Neither supp/opp 23.6 19.8 20.6 24.9 20.2 19.1 Oppose 25.2 34.5 26.2 31.3 31.4 22.5 Oppose strongly 12.1 15.8 20.9 11.9 20.0 8.7 It depends 1.9 1.3 5.5 2.2 2.1 1.7 Don't know 0.8 0.1 0.1 0.9 0.1 0.0 Total 100.0 100.0 100.0 100.0 100.0 100.0

-0.8 -21.7 -20.6 -14.3 -25.3 16.8 Source: British Social Attitudes Survey 2010: see Bramley ‘The Housing Challenge’ in Curtice et al (forthcoming)


What would persuade them?

• Side benefits of new housing, particularly- employment opportunities- greenspace, parks- improved transport links- schools, leisure, shops, medical etc.

• Financial incentives to residents not rated per se• Smaller starter homes, affordable homes to buy & rent

Table 7: Type and Tenure of New Housing Needed Locally

No New Homes Needed 20 Flats/maisonettes 14 1-2 bedroom houses 35 5+ bedroom houses 3 Homes to Buy 27 Private Rent 8 LA or HA 39


Predictive Model for Support/Opposition

• Developed predictive model for support or opposition, simple or conditional on various side-benefits

• Step 1 – logistic regression model within BSAS micro data with attached area attributes

• Socio-demographic factors – age (-) children (+) renter (+) flat (+) soc class III (-) low income (+)

• Political affiliation – Lab (+) Lib Dem (+?) BNP-UKIP (-) Green (-)• Area factors - bit city (+) village (-) low density (?+) South &

Outer London (-) area satisfaction (+) deprivation (+) existing supply level (+) open/green land (+) Green Belt (-)

• Step 2 – predictive functions on equivalent aggregate data at LA level

• Predict majorities for development under various conditionality assumptions (e.g. provision of greenspace & leisure; provision of wider package of service & transport benefits) + switching possibility


Table 5: Predicted Support, Opposition and Majorities for Development Under Different Conditional Assumptions by Region and Type of Locality

Area Type Pro-devel

Pro-devel Pro-devel

Pro-devel

Support 1 Oppose 1

Majority 1 Major 2 Major 3 Major 4

G O Region

NORTH 0.311 0.386 -0.075 0.030 0.045 0.350

YORKS & HUMB 0.283 0.407 -0.124 0.002 0.003 0.345 NORTH WEST 0.278 0.421 -0.144 -0.026 -0.021 0.320 EAST MIDLANDS 0.311 0.368 -0.056 0.053 0.070 0.365 WEST MIDLANDS 0.276 0.416 -0.141 -0.027 -0.021 0.310

SOUTH WEST 0.287 0.459 -0.172 -0.080 -0.054 0.292 EAST 0.267 0.491 -0.224 -0.131 -0.111 0.239 SOUTH EAST 0.257 0.501 -0.244 -0.151 -0.132 0.235

LONDON 0.285 0.472 -0.188 -0.085 -0.072 0.316 Total 0.280 0.445 -0.165 -0.060 -0.046 0.301


Urban-Rural

Urban 0.274 0.454 -0.179 -0.064 -0.057 0.311 Some Rural 0.273 0.455 -0.183 -0.081 -0.067 0.278

Quite Rural 0.305 0.409 -0.104 -0.021 0.008 0.303 Most Rural 0.350 0.330 0.020 0.095 0.131 0.380

LA Supergroup Cities and Services 0.285 0.401 -0.117 0.021 0.022 0.381

Coastal and Country 0.304 0.420 -0.116 -0.035 -0.005 0.294 London Centre 0.357 0.338 0.019 0.136 0.145 0.487

London Cosmop 0.318 0.491 -0.173 -0.089 -0.061 0.342 London Suburbs 0.241 0.556 -0.315 -0.222 -0.207 0.204

Mining and Manufact 0.285 0.426 -0.141 -0.034 -0.024 0.302 Prospering UK 0.266 0.472 -0.206 -0.113 -0.095 0.250

Total 0.280 0.445 -0.165 -0.060 -0.046 0.301


Summing up Predicted Patterns

• Using moderate assumptions about conditional support and delivery of some side-benefits (levels 2 & 3*)….

• ..more support in NE, Y&H, E Mids; still net oppos in other regions, esp SE and East

• …more support in central cities, and in ‘most rural’, and depressed areas; still more opposition in suburbs (esp London) & prosperous areas

* Levels: 1. unconditional support 2. support if open space & leisure improved; 3. support if wider range of improvements incl educn, healthcare, transport

4. as 3. but include switching from opposition to supportComment: level 2 probably most realistic, given public spending and development

viability constraints.


Planning Stances

• Can we actually characterize, define, and measure the planning stance of a LA?

• Not easy given discretionary UK system, ragged completion of LDFs, non-standard SHLAA & AMR documents, strangely uneven collection of stats by DCLG etc.

• Considered 11 indicators and selected 5 for composite based on power to predict flow of new permissions

• Five selected were: log outstanding permissions/100 hhld; % small sites; social completions /100 hhld; % applications granted l t ave; land available % hhld

• (Other indicators discarded were: brownfield share; % area Green Belt; recent % granted; ave decision time; 5 year land supply %).

• Existing planning stances more positive in North and East of country; more positive in central cities and most rural areas; most negative in suburban, peri urban and affluent areas


Table 7: Planni.ng Stance and Former RSS Housing Target by Region and Type of Locality

G O Region Planning Stance

RSS Target

North East 0.029 0.668 Yorks & Humber 0.156 0.987

North West 0.037 0.749 East Midlands 0.108 1.019 West Midlands -0.120 0.641 South West 0.091 1.219 East England 0.053 1.107 South East -0.052 0.911 London -0.050 1.028

England 0.019 0.936

Rural Category

Urban 0.029 0.888 Some Rural 0.003 0.985

Quite Rural 0.009 0.992

Most Rural 0.101 0.969

ONS LA Supergroup Cities and Services 0.076 0.873

Coastal and Countryside -0.011 0.955

London Centre 0.199 1.148 London Cosmopolitan 0.267 1.305 London Suburbs -0.121 0.952 Mining and Manufact 0.008 0.743

Prospering UK -0.022 0.993

Total England 0.019 0.936


Predicting Change in Stance

• Combined predicted conditional support for development with existing planning stance index at LA level, to generate 4-way discrete typology

• A lot of LAs (60%) predicted not to change• 95 predicted to shift down their supply, 44 to shift up

(slightly more optimistic 87:53)• Shifting up more common in north and midlands• Shifting down predominant in London, south (and YH); in

south outside London, 62 downshifts vs 3 upshifts (!)• Minority of upshifters are City Centres and deeper rural –

some of these have other constraints e.g. National Parks• Downshifters include many areas formerly known as

significant growth locations


Table 8: Predicted Change in Planning Stance towards New Housing by Region and Type of Locality (number of LA districts in England)

Area Category Unclass -ified

No change Low

Change to Low

Change to High

No Change High Total

NORTH 0 3 3 6 11 23 YORKS & HUMBER 3 3 6 1 8 21 NORTH WEST 0 15 10 11 7 43 EAST MIDLANDS 1 6 2 8 23 40 WEST MIDLANDS 0 15 3 10 6 34 SOUTH WEST 1 19 13 1 11 45 EAST 0 19 20 2 7 48 SOUTH EAST 1 36 29 0 1 67 LONDON 1 14 9 5 4 33 Total 7 130 95 44 78 354


Reviewing Soundness of Targets

• Revised NPPF makes judgement of soundness of evidence base on housing need & demand key to what will happen

• These judgements will be made by planning inspectors• They are likely to look at household projections, but what

else?(affordability levels or changes? Environmental & infrastructure capacity?)

• How will prolonged recession in construction impact?(in short run, a lot of unimplemented permissions/allocations)

• System is supposed to be based on localism but a lot of intervention from PINS could generate a lot of friction


Smarter Incentives

• Not discussing financial incentives ‘New Homes Bonus’ in detail in this paper, but would suggest….

• Larger marginal incentive targetted at smaller number of authorities

• Above threshold level of output• Only for areas with significant shortfall• Only where clear sub-regional collaboration• Extra bonus where job growth above threshold


Initial Responses of Local Authorities

• Some local authorities were back-pedalling on RSS targets in anticipation of election, including legal challenges

• Some local authorities reacted very quickly following Election• Others biding their time, uncertain of legal position and how

other aspects of system would change (e.g. LDF core strategy, attitude of PI’s, PFSD)

• Two unofficial surveys in Sept 2010 & May 2011 provide a consistent picture

• About half of LAs sticking to current numbers, most of rest reducing to some extent (ave about 20% reduction for these)


Table 8: Early Indications of Reductions in Planned Housing Numbers in Southern Regions

Region Official Unofficial Total RSS targ % of % of pa 20 yr 1 yr 20 yr South West 52,910 10,400 63,310 29623 213.7% 10.7% East of England 20,490 10,700 31,190 25400 122.8% 6.1% South East 15,588 13,671 29,259 32008 91.4% 4.6% Yorks & Humber 10200 10,200 20871 48.9% 2.4% Delays/refusals of PPs 5630 Total 99,188 34,771 139,589 107,902 129.4% 6.5% Total South 88,988 34,771 129,389 87,031 148.7% 7.4% With expected futher Reductions 238,193 87,031 273.7% 13.7%

Source: Tetlow-King Consultancy study for National Housing Federation, updated September 2010.


Sub-Regional Economic Model

• Model developed from NHPAU feasibility study for group of LAs

• Econometric functions linked in spreadsheet simulation for different policy or economic/demographic scenarios

• Shows impact of varying planned numbers through supply, household numbers, prices and affordability

• Consistent with earlier models• Impacts moderate and take time• Spatial interactions important – for example, London

affordability affected a lot by provision in surrounding South East regions


HOUSING SUPPLY

HOUSING MARKET

DEMOG- GRAPHY

LABOUR MARKET

Job Struct & Growth

Employment, Unemploy- ment

Earnings, Income

Market Potential

Migration In+ /Out- x Age

Population Growth x Age

Household Formation x type

Household Numbers/ Growth

House Price

Household - Stock Balance

Vacancies, Sharing/ Concealed

Afford- ability

New Build

Amenities Climate Greenspace

Topography Urban/ Rural

Land Release; Planning Regulation

Dwelling Stock

H E Students

Skills

GDP

Credit Int Rates

Population Structure x Age


Key Component Models

• Housing supply (private completions)• Migration (gross, x age group)• House prices• Household formation (micro based)• 1st 3 estimated on short panels 10 years x 102 HMA areas• Some spatial interaction terms• Some cross-sectional variables of interest • IV treatment of supply & prices


HMA Areas Showing Price Growth


Predicting Impacts of Localist Shifts

• Combine predicted shifts in planning stance based on BSAS analysis and existing stance analysis with subregional market model

• Basically vary flow of permissions for up/downshifters by +/-50% & trace impacts

• Overall average impact for England quite small• Regional impacts larger but in opposite directions

- more new housing in N (but not Y&H), Mids- less new housing in S, esp SE (and YH)

• Affordability impacts match this, at smaller scale - overall deterioration of c.1% - but 8% worse in SE, 5% in London, 3-4% in EE

• Exact magnitude subject to several uncertainties - but logic and direction of effects very compelling given the evidence


Predicted Impacts of Localist Planning on Housing Supply and Affordability by Region in 2026

-17.0% -12.0% -7.0% -2.0% 3.0% 8.0%

NE

YH

NW

EM

WM

SW

EE

SE

GL

ENG

Reg

ion

% diff from baseline

Affordy

Compltns


Housing and the Economy

• Concerned that likely pattern of shifts in planning stance under localism will be broadly perverse from point of view of existing affordability and housing need problems

• Further concern that this could well be perverse from economic growth point of view, given that south of England has strongest recent growth record and growth potential (e.g. from innovative firms, private sector)

• Quite strong negative correlation between affordability and GVA growth, already (r=-0.56)

• Predicted changes are predominantly downwards in the higher growth areas and vice versa (r=-0.38 at district level)

• Systematic downshift in the key growth regions (SE, EE)• More positive shifts/stances in deeper rural areas could be

unhelpful or lead to excessive sprawl and high commuting costs, emissions etc.


Affordability and Predicted Plan Shifts by GVA Growth

Affordability in 2007 by Real GVA Growth 1997-2007

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

0.00% 1.00% 2.00% 3.00% 4.00% 5.00%

Real GVA Growth % pa

% a

ble

to

bu

y

affordy

Predicted Change in Planning for New Housing by Real GVA Growth

1997-2007

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

0.00% 1.00% 2.00% 3.00% 4.00% 5.00%

Real GVA Growth % pa

Ch

ang

e P

lan

chgplg


HMA Areas showing GVA Growth


Conclusions

• The 2010 regime change in England is pretty radical for UK;hence impacts very uncertain; although revised NPPF more ‘reassuring’

• Public attitudes generally negative, especially in key southern suburban & small town areas- but may be susceptible to shifting with good packages of infrastructure and appropriate housing

• Incentives unlikely to be enough (altho CIL may help)

• Actual decisions so far show cuts in plan numbers esp in south• Index of planning stance and predicted changes in stance generally

negative in pressured south• Modelled impacts show affordability benefits take time and spill

across boundaries – creating ‘planners dilemma’

• Subregional collaboration desirable but wobbly• Much depends on how PI’s interpret ‘soundness’ of local plans in

light of ‘evidence’ in SHMAs & SHLAAs• Overall balance of evidence suggests significant danger that new

regime will lead to less housebuilding and worse affordability• ..and it is likely to further limit national economic growth

Documents

HSA Conference – York