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RTPI: OAN methodology does not consider future growth aspirations

Words: Laura Edgar
Statistics / iStock-520660497

The government’s proposals for a new method to calculate local housing need would ‘entrench’ existing housebuilding patterns and does not consider employment projections or growth aspirations, the RTPI has said, to the agreement of several organisations.

Responding to the consultation launched in September by communities secretary Sajid Javid, the institute also noted that these plans also fail to address the need for a mix of housing tenures and types.

The government's proposals comprise a three-stage approach to calculating the level of housing required by each local authority area.

The response notes that the methodology would result in higher housing targets in the south of England and lower targets in the North. Although “useful” as a starting point, the ONS figures used in the methodology are too “short termed and narrow”.

It “does nothing to address the tendency to base housing growth on past trends, rather than on a more forward-looking strategy which takes into consideration future growth aspirations or employment projections”.

Instead, the RTPI suggests the methodology should require local authorities to be more holistic by taking into account plans and strategies already implemented, such as a council’s own economic growth strategy, a local enterprise partnership investment strategy and wider government plans, including the Oxford-Cambridge corridor and the Northern Powerhouse.

“There is not one housing crisis but many, each with different variants. There must therefore be a multifaceted approach to dealing with it” – Harry Burchill

According to the response, which has been informed by RTPI members, the Scottish Housing Need and Demand Assessment tool, while not perfect, has been cited as an example on which such a model could be based.

Local authorities need more guidance for determining not just a baseline figure of homes, but also a breakdown of the right mix of homes at an early stage.  

The RTPI has expressed concerned regarding the proposal to stop using Housing Market Areas (HMA) as geographical units for housing assessment, even though the proposals suggest using HMA geographies for “a statement of common ground”.

Analysing need based on local administrative districts could entrench existing house creation patterns rather than meeting market needs on the ground that do not follow council boundaries. It erodes the incentive for strategic planning and cooperation across boundaries.

Although the government’s plans to increase planning fee levels for those authorities delivering homes, the institute does think they should be increased across the board, arguing that low-performing authorities would continue to be stuck in a vicious cycle.

Harry Burchill, policy officer at the RTPI, said: “The RTPI sees the benefit of a better way to identify local housing need using a clear and justified method, but the current proposals need work. There is not one housing crisis but many, each with different variants. There must therefore be a multifaceted approach to dealing with it, as we have set out in our #16ways campaign.

“The unintended consequences of pursuing planning reform based solely on increasing housing numbers is very concerning to the RTPI, and as the voice of planning professionals, we will continue to influence the debate in order to achieve high standards of place-making.”

The RTPI’s full response to the consultation can be found on the institute’s website (pdf).

Economic growth cannot be overlooked

The Strategic Land Group, a land promotion company, has warned that the methodology could be set up to fail because it is misses the impact of two crucial influences on the housing market – affordable housing need and economic growth.

Paul Smith, managing director of the Strategic Land Group, said the government’s proposed methodology “attempts to provide a simple, transparent, easy-to-understand approach, but the critical question is whether it produces an accurate assessment of housing need”.

In Smith’s opinion, it doesn’t seem to. It fails to take into account affordable housing need and economic growth aspirations.

“Affordability might be central to the standard method, but that is different to the need for affordable housing meaning homes for those who cannot access market housing.

“In some areas, delivering the maximum viable amount of affordable housing from market housing schemes leaves a shortfall against the need for affordable homes. In those circumstances, current planning guidance suggests increasing the housing target to enable the need for affordable housing to be met.

“As it stands, though, the standard method does not take into account the need for affordable homes at all. It therefore risks failing to meet affordable housing need.”

On economic growth aspirations, Smith said apart from a “little lip service”, they aren’t taken into account”.

[The standardised methodology] “does not take into account the need for affordable homes at all” – Paul Smith

“Simplifying the way housing need is calculated will be of huge benefit. Far too much time and effort is currently wasted arguing over the minutiae of housing need models. Yet simple should not be at the expense of missing crucial influences on the housing market.”

Likewise, planning consultancy Johnson Mowat, working on behalf of the Leeds City Region Consortium, said there needs to a more positive focus on linking the proposed methodology to employment growth and plans for economic growth.

Under the draft methodology put forward by the DCLG, the Leeds City Region would see a total net reduction in the annual delivery of new homes of around 3,500 dwellings, according to the consortium’s submission. The planning consultancy says this would result in a loss of 6,500 direct construction jobs and 4,500 indirect construction jobs.  

“We consider it paramount that the proposed methodology does not stifle economic growth across the Leeds City Region, and ensures that future planned housing growth matches the region’s economic aspirations.”

“Housing delivery is intrinsically linked to economic growth,” the consultation submission notes. “The new approach therefore would constrain economic growth ambitions across the Leeds City Region and potentially reverse the economic gains of the post-recession years if local authorities in this region fail to think beyond the methodology alone.”

Read more:

Javid announced methodology to assess local housing need

RTPI response to the standardised methodology consultation (pdf)

Johnson Mowat’s response to the standardised methodology consultation

Strategic Land Group blog on the standardised methodology consultation

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