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Negotiating a course through the planning system is tough at the best of times, and government efforts to improve the planning system over the past near-decade have had mixed results. Last December alongside chancellor Gordon Brown’s last pre-Budget statement, the government, and adviser Kate Barker, produced another substantial batch of paperwork for the housebuilding industry to mull over. There was the long-awaited update of the key guidance document for housebuilding, the revised PPS3, the Code for Sustainable Homes and an accompanying draft supplement to PPS1 covering climate change; all of which promise to have a massive impact on what and where housebuilders develop.
At the same time the government published a consultation document on the planning gain supplement, the deeply unpopular tax proposal to fund infrastructure from the uplift on land value generated by development. And holding out the ultimate promise of a better, more effective planning system for all was Kate Barker’s review of land use planning.
With so many documents to be digested in so little time – consultation on the planning gain supplement closes on 28 February – Regenerate has done its best to distill them all down to the essentials, and asked the industry’s reaction.
Planning Policy Statement 3
PPS3 officially comes into force in April, but schemes must effectively be designed to comply with it now.
What it demands
On mix:
- Local Development Documents must set out: percentages of market and affordable housing; percentages of household types (families, couples, singles) requiring market housing; size and type of affordable housing
- There is a new emphasis on family housing, and children’s needs must be taken into account
- Set targets for social-rented and intermediate affordable housing (low-cost market housing is not defined as affordable unless it has lasting discount)
- State when affordable housing is needed. Minimum site size threshold remains 15 units, but local authorities can go lower
- Set out the approach on developer contributions. The PPS continues to prioritise on-site provision of affordable housing
- 30 dwellings per hectare remains a minimum, but local authorities may set their own densities
- PPG3’s demand for 1.5 car parking spaces per home is ditched. Again local authorities may set policy
- Identify a continuous five-year supply of deliverable sites
- Identify a supply of developable sites for 6-10 years ahead, and preferably15 years ahead
- Not include windfall sites for the first 10 years’ supply
- Definition of quality is extended to cover environmental factors
“The onus is on developers to demonstrate what the housing market is and the onus is on local authorities to say it is incorrect.”
Bill Brisbane, managing partner, Roger Tym and Partners
“Ignoring windfalls could make life difficult for many urban local authorities.”
Andy Arrick, partner, Roger Tym and Partners
“Giving local authorities the powers to choose how many cars they plan for could be awkward for housebuilders. A housebuilder could have a range of housetypes that works perfectly well in, say, Braintree where the local authority is E E happy with on-plot parking, but not in Chelmsford where they adopt a different approach.”
David Birkbeck, chief executive, Design for Homes
“The government is recognising the relevance of the first Barker report and the dearth of housing, particularly social housing. Our research into the Waverley area [in Surrey, where the developer owns a major site] shows affordable housing need running at 600 units a year. Waverley is providing 240 units of all tenures.”
Jim McAllister, chief executive, developer, the Rutland Group
“Government has acted. PPS3 is a strong policy, and the ball is now in the court of local councils. It is the system of local government that has been at fault, not the supply of land or the desire of builders to build.”
Paul Harvey, senior account manager, Green Issues, and former council leader
“The guidance contained in PPS3 will only work if every local planning authority is adequately resourced to allow it to assimilate the guidelines into policy. It is important too that landowners and developers are involved in the process of identifying developable land from the outset; 10-15 years is a long time to wait to convince a council of the merits of developing a piece of land”
Craig Wallace, solicitor, Campbell Hooper Solicitors
What to watch out for
- A swing back in favour of family housing
- More housebuilders using on-street parking to deal with differing on-plot allowances
- Developers need to do their homework before submitting applications on windfall sites
Planning gain supplement
The government has published its consultation document on the planning gain supplement with the intention of bringing the PGS into force in 2009.
What it demands
On how it is calculated:
- developers pay a “tax” on receipt of planning permission, based on the uplift in value when a site wins planning permission. The uplift is made up of the planning value minus the current use value (value prior to receipt of planning permission). PGS liability is obtained by multiplying the resulting figure by the PGS rate
- The planning value includes S106 obligations, which would be scaled back to cover affordable housing only
- PGS would apply to residential and non-residential land
- If a site is contaminated and has a negative value, then the current use value (CUV) would be registered as zero
- Where a large site is developed in phases, under outline permission followed by a series of reserved matters, a series of valuations would be made for each planning approval.
- 70% goes back into the development’s local area; 30% goes to central government for redistribution to areas in need
“Current use value ignores the problems of assembling sites and assumes land can be acquired at arm’s length open market value.”
Bill Brisbane, managing partner, Roger Tym & Partners
“It poses cashflow problems for developers in demanding payment at or near the start of development. Also, for a complicated mixed-use scheme, what is a full planning permission?”
Andy Arrick, partner, Roger Tym & Partners
“The fact that it is recommended that affordable housing remain a negotiated procedure detracts from the proposal’s main aim to reduce negotiation costs and reduce time. It is affordable housing that takes the most time in negotiating Section 106 agreements.”
Craig Wallace, solicitor, Campbell Hooper Solicitors
“The question of how local authorities balance liability for PGS between landowners and developers over a series of years remains unanswered.”
Peter Stockdale, regeneration partner, Campbell Hooper Solicitors
What to watch out for
- If PGS comes into effect, landowners could sit on land
- Regeneration players could look to markets outside of the UK, where there are fewer obstacles to operations
Code for Sustainable Homes/Zero carbon homes
The code is voluntary initially, but replaces EcoHomes in April. It becomes mandatory in 2008. The government has said it wants all housing output to be “zero carbon” by 2016 (see article page 49). Zero carbon homes will be exempt from Stamp Duty. The Code was issued alongside three consultation papers: Draftsupplement to PPS1: Planning and climate change; Building a greener future: Towards zero carbon development; and Water efficiency in new buildings. All have a deadline for responses of 8 March.
Draft supplement to PPS1 demands local authorities produce spatial strategies that:
- help deliver the government’s climate change programme
- deliver patterns of urban growth that help secure fullest possible use of sustainable transport
- sustain biodiversity
On scoring:
- Homes can achieve a rating of from one to six stars, one star being in excess of Building Regulations requirements and six being an exemplar development. The star rating is based on a points score, which is similar to EcoHomes on which the code is based. But unlike EcoHomes: certification is carried out on completion of construction, not at design stage; housebuilders cannot win points for building close to public transport; and points can be gained for Lifetime Homes, security and zero carbon technologies
- The improvement over the target emission rate in the 2006 Building Regulations ranges from 10% (one star) to zero carbon (six stars)
- Homes receiving at least 10% or 15% of total energy demand from local renewable or low-carbon energy sources will receive 1.2 points or 2.4 points respectively
- Water consumption per person per day should range from 120 litres (one star) to 80 litres (six stars)
- Peak run-off rates and annual volumes of run-off should be no greater than they were before development
- A site waste management plan must be in place
- Household waste storage must be provided, either externally or by allowing 0.8m3 of space in the home.
- Homes can gain points for composting facilities
“You’ve got to be careful that the premium it puts on new homes doesn’t become too much. If you are buying a £300,000 home and environmental standards make it a £360,000 home, then that will exacerbate house price inflation.”
Jon Ladd, chief executive, BURA
“To go zero carbon in the construction of a house and be at the forefront of sustainable communities delivery will cost in the region of £12,000 to £20,000 a unit. I don’t think it is fair to expect the developer to absorb that.”
Jim McAllister, chief executive, developer, the Rutland Group
“It is important to bear in mind that despite the admirable objectives of the draft PPS, applictions incorporating reforms will still need to go through the planning committee process. Buy-in to the benefits of sustainable development is essential from councillors and the general public – in order to avoid a NIMBY effect.”
Craig Wallace, solicitor, Campbell Hooper Solicitors
“The challenge for government will be helping the housebuilding industry turn its policies into reality countrywide. Can the current planning system cope with such an ambitious drive?”
Paul Harvey, senior account manager, Green Issues, and former council leader
What to watch out for
- Housebuilders should be redesigning their homes to adapt to advanced standards early – or they could be redesigning for the next decade.
The Barker review of land use planning
Kate Barker’s report was published alongside the pre-Budget report last December.
What it recommends
On the economy:
- Planning should be made more responsive to economic factors
- The needs test should be abolished
- The green belt should be reviewed
- An independent expert commission should consider applications for big infrastructure projects
- The number of call-ins of planning applications should be halved
- Applications and plans should be processed faster
- Minor applications, such as loft conversions, should be taken out of the system
- Policy paperwork should be cut by 75%
- Developers should be able to make goodwill payments to compensate residents adversely affected by schemes
- Developers should be able to pay extra for premium service from the planning system
“There is mention of goodwill voluntary payments - on the face of it, this smacks of buying permissions.”
Andy Arrick, partner, Roger Tym and Partners
“We need reform of the Land Compensation Act – in France landowners allegedly receive up to 20% over open market value so there is less objection to development involving compulsory purchase.”
Bill Brisbane, managing partner, Roger Tym and Partners
“The independent planning commission has pluses in speeding up the process, but how does that square with what the government is saying about localism?”
Jon Ladd, chief executive, BURA
“Recommendations to relax development restrictions on the green belt will be welcomed with open arms by developers and landowners alike, but will be likely to result in objection/challenge and appeal from the public.”
Craig Wallace, solicitor, Campbell Hooper Solicitors
What to watch out for
- How much of Barker’s report feeds into policy, starting with the government white paper on planning, due in the spring.
Source
RegenerateLive
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