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27/03/2018

Let’s all bash the developers – oh, wait…

Words:
Hammer

The government has been shifting the blame for slow build-out of planning permissions from planners to developers. It's a relief for hard-pressed planners, but it's still not really addressing the issue, argues Simon Wicks

The draft revised NPPF was accompanied by escalation in anti-developer rhetoric from Theresa May and Sajid Javid. It makes a refreshing change for a premier and housing secretary to declare open season on developers rather than planners. But it doesn’t really take us closer to solving the housing crisis.

Yes, we know some developers some of the time do some land banking. They may well have, as May called it, a “perverse incentive” to do so. If the commercially rational choice is to sit on land for which you’ve overpaid in land and housing markets made dysfunctional by poor policymaking, then that’s what a business will do.

If you can then guarantee a 20 per cent profit, even where that means sacrificing a public good (affordable housing), then that’s also what many firms will do. No amount of shaking a big stick stamped CPO is going to change this.

“There are planners who are behind the curve. But neither they nor developers can be held wholly responsible" 

By the same token, of course, we know there are planners who are behind the curve. But neither they nor developers can be held wholly responsible for the cultural and structural flaws in the land and housing markets that lead to slow build-out rates on consented schemes. It’s kinda complicated.

But politicians can fix it. It will require a nuanced appreciation of what happens on the ground and, it seems, there is someone in the governing party who is displaying this – Sir Oliver Letwin MP, charged with investigating the gap between permissions and build-out rates.

His interim letter to the chancellor and housing secretary was published in the same week as the draft NPPF. It discusses skills, resources, the negotiation of conditions and – most tellingly – absorption rates. Here’s the rub. If houses on a large site sell slowly, there’s little incentive to build them at speed. But if the houses are all built by the same builder to the same designs in the same type and tenure using the same materials, where’s the thrill for the buyer?

Letwin hints at a solution in a mix of builders, styles and types on site creating competition and interest. He vows to visit Germany and the Netherlands to see what public mechanisms they use to achieve this.

Planners have been saying all this (and I haven’t even touched on land price) for years. There’s irony in former planner-bashers moving towards a similar position. Yet more in a free-marketeer talking about state intervention. But my favourite piece of cognitive dissonance here is that Letwin’s report is due in summer, and it’s likely to have ramifications for policy. The NPPF – the policy document – is also to be published in the summer. Who else thinks there’s a problem with the timing?

Simon Wicks is deputy editor of The Planner

Photo | iStock

 

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