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Time to re-purpose first generation student accommodation?
Student accommodation has become an important part of the country’s property sector, with a boom in delivery in recent years. In 2018/19, the proportion of bed spaces provided by the commercial sector has reached half of total stock, up from 39 per cent in 2012/13[1]. In 2018/19[2] over 2.35m people attended university in the UK, including nearly half a million international students and over 1.25m UK students living away from home during term time. Whilst the long-term impacts of COVID-19 on the student accommodation market are as yet unknown, more recently, the immediate implications have resulted in soaring vacancy rates and a potential drop-off in student intake for the new academic year, including from overseas students. This was cited in a letter from the British Property Federation to the Government on 8 April 2020[3] which stated: “In light of universities closing and students being unable to work, many accommodation providers are in a difficult position but are choosing to waive rents for the remainder of tenancies, at substantial financial cost. There is also considerable uncertainty as to how the crisis will affect the number of students attending UK universities in September. As a result of the global recession, uncertainty around term dates and application procedures, and the possibility of continued travel disruption there could be markedly fewer students arriving for the new term, from both the UK and particularly abroad.” Whilst there are differing views on if and when university towns and cities may reach saturation point in relation to student accommodation, and the long term implications of COVID-19, what is clear is that there is a continuing shift in terms of what students expect from their accommodation. It is well cited that the days of students living in dingy accommodation with small, sometimes shared rooms and facilities are gone. There is also a lot of discussion about whether purpose-built student accommodation (PBSA) will free up family homes if students are choosing PBSA over existing Houses in Multiple Occupation (HMOs)[4]. However, there is less discussion on how the demands of students continues to shape the PBSA market and what that means for the first generation PBSA; and it is this point that is explored within this blog. Between 2016/17 and 2018/19 across the UK there has been a 4% growth in student numbers living in PBSA, with the PBSA sector having a 22% share of the UK student accommodation market in 2018/19[5]. Newer PBSA stock is often located centrally within a town or city, often close to university campuses. The National Student Accommodation Survey 2019 found students live on average 20 minutes from their university[6]. This represents a clear benefit for students, compared to accommodation located on the periphery, in terms of convenience for both academic and social activity. This is often due to affordable values and availability of sites as developers tested the immature market. Indeed, planning policies such as Newcastle City Council’s Core Strategy and Urban Core Plan Policy CS11 supports this trend, setting out that: “Promoting lifetime neighbourhoods with a good range and choice of accommodation, services and facilities to meet varied and changing needs, will be achieved by…Focusing the provision of purpose built student accommodation within the Urban Core.” (Emphasis added). This means that any new PBSA schemes will be better located compared to those that have been built outside of the defined Urban Core. Newcastle Council’s ‘Maintaining Sustainable Communities SPD’ (2017) sets out a number of planning benefits of focussing the growth of PBSA in the Urban Core including: making the Universities more attractive to prospective students by offering a range of high quality, affordable accommodation in accessible locations; providing increased vitality to the city centre through the increase in student residents with the associated benefits arising from increased footfall and spending in shops and local services; reducing demand for existing HMOs in Article 4 areas and thereby encouraging their return to family dwellings; securing development on often vacant or under-utilised sites and bringing previous vacant upper floors of historic premises back into use; delivering a series of often striking architectural buildings that enliven the centre of the city; generates little day to day vehicular traffic, except at the beginning and end of term; limited amenity impacts on existing residential areas; the Council receives New Homes Bonus payments and planning obligation contributions provided by the PBSH sector…to be used on infrastructure projects related to the developments... (Para 3.18) The SPD further recognises that markets fluctuate and seeks to safeguard the Urban Core with Policy SC2 requiring that the design of PBSA schemes must ensure that it can be adaptable to alternative future uses. Newer PBSA typically boasts facilities such as 5G, en-suites, double beds and well-designed communal areas. As this becomes the norm in response to competition in the market, it means that significant changes are needed to bring older accommodation up to the standards expected by students today. Even if existing older stock is brought up to similar standards, their peripheral location remains. Therefore, if price points do not reflect this difference in location, maintaining high levels of occupancy is likely to become challenging and there is a risk that more peripheral schemes become obsolete. However, with these challenges comes opportunity. It is well documented that we are in the midst of a housing crisis; with a national ambition to deliver 300,000 new homes each year for families, first time buyers, renters, young professionals and older people. With strong demand across such a broad demographic comes a similarly broad housing requirement; meaning there is a need to deliver a range of house types, sizes and tenures in a variety of locations. Whilst the first generation PBSA may not be as centrally located to university campuses as newer PBSA, they are generally on the periphery of towns and cities, with good public transport links, existing infrastructure and some with car parking provided. So what does increased supply and the growing demands of a mature market and planning policy context mean for the first generation accommodation? There is a clear opportunity to repurpose older PBSA stock to better balance demand and supply whilst helping to meet the housing needs of a different, non-student, sector of society. This could include apartments for older people or young professionals alike; both of who typically seek well located and connected accommodation. Indeed, re-purposing an existing PBSA block would not have to be focussed on solely the young professional or solely a retirement scheme; there is clear merit in integrating the two to help form a balanced and mixed community. Lichfields has developed the Bedspace Model and Carepacity Toolkit to assist developers, operators, universities and local planning authorities in identifying opportunities for PBSA and housing for older people across the UK; being able to find sites as well as demonstrate the need and capacity for such development within a local area. We are also able to find sites or appraise existing sites that could benefit from being re-purposed to bring them into a more viable and attractive use. If you would like further information on our planning services, please do get in touch.   [1] NUS responds to accommodation cost survey 2018[2] HESA data[3] Supporting the student accommodation sector through COVID-19[4] Planning matters, Student accommodation[5] Lichfields analysis of HESA data[6] National student survey 2019  

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Following Orders: five actions necessary for DCOs and the NSIP regime to be used for large-scale housing
Amongst the various planning reform ideas floated in recent months has been the concept of allowing use of the Development Consent Order (DCO) process to apply to large-scale residential-led development schemes. This is not new, but a recent report by the Social Market Foundation[1] (SMF) even went so far as to suggest it should be the default route for securing a consent for all schemes of over 1,000 dwellings in order to address a “convoluted, expensive and uncertain planning system”. The SMF report suggested four changes to the Planning Act 2008 were needed, the first being to remove the need for DCOs to be made in accordance with an National Policy Statement (‘NPS’) (because the projects would not be of national significance) and then three measures to shorten the timetable for the DCO process after submission. In this blog[2] we review why these four changes – whilst interesting – do not address what is needed for DCO to be an effective tool for large-scale housing schemes. We do this with reference to how the regime works in practice for other infrastructure projects and an analysis of the current planning barriers to large-scale housing delivery. We put forward some practical recommendations to ensure a residential-led DCO regime is fit for purpose.   What’s the problem for large scale housing projects? Before designing a policy solution, it is sensible to grasp the nature of the real-world problem it is designed to solve. Broadly, the time taken for large-scale housing developments to progress is because the planning system is applying four broad tests: The tests of principle 1.  That there is a need for that scale of housing development in a particular district; 2.  That the site is an appropriate location for the development, with reference to the impacts any development would have and the political choices made at a local level. The test of deliverability 3.  That the proposal is deliverable[3] in the sense of there is a “reasonable prospect these large-scale developments can come forward” in a way that is consistent with clear expectations for the quality of development and supporting a sustainable community. The test of quality 4.  That the design and form of development and associated infrastructure is acceptable – at a masterplanning and more detailed stage of design. Currently, the crucible for considering tests 1-3 is typically the statutory development plan which is scrutinised through a local plan examination. Test 4 is addressed primarily through planning applications (and sometimes through supplementary policy/framework documents) only after the local planning authority (LPA) has established the principle through an emerging or adopted allocation[4]. In our experience, the current barriers for large-scale housing schemes are where: There are delays in preparation of local plans[5] or such plans fail to grapple effectively with strategic or long-term needs. This can be down to local political factors, community opposition or problems resolving technical/transport issues[6]. In many areas – particularly in Green Belt and higher demand areas - large-scale housing schemes never get to the starting gate; Large-scale projects are allocated in emerging Local Plans but the LPAs and promoters fail to convince the examining Inspector that the schemes are a suitable or effective way of meeting housing need and/or not demonstrably deliverable. We explored examples here. The problem particularly affects the largest-scale of developments which often require costly transport and other social infrastructure (and for which funding is often not yet secured); and There can be practical problems at planning application stage, perhaps because detailed matters of implementation – for example, over infrastructure, land assembly or other factors – have not been resolved. The often lengthy time taken to get planning permission for large-scale housing schemes was explored in Start to Finish. The question for any planning reform is how to overcome these problems, whilst recognising that any large-scale scheme requires significant investment of resources in the planning and technical process, and the need is to encourage developers to invest in bringing forward sensible proposals in the right places and address the relevant considerations at the appropriate stage. How could DCOs help and what are the barriers? Since its inception, the DCO system has been a proven success for major infrastructure; with the majority determined in accordance with defined timescales and, proportionally, a high degree of success for applications that have been through the process. However, whilst the benefits are compelling, our experience also identifies clear barriers that should guard against an assumption that the current regime could be ‘simply’ extended to major housing schemes. Benefits of the DCO system 1.  Greater Control to the Developer: On the process up to the point of submission of a DCO application, major infrastructure providers have embraced the greater control afforded to them in forming a deliverable consent for their scheme. Whilst rigorous, the consultation, assessment and design development requirements defined by the 2008 Act place the developer firmly in the driving seat until much later in the process of securing consent and provides greater focus to the activity in the pre-submission stage.  A DCO application effectively seeks approval for a consent that works for the developer and, therefore, improves its deliverability 2.  Guaranteed Timescales to a Decision: Once submitted, the certainty of timescales (and their rigorous application by PINS) provides almost a guarantee on when a decision will be made. When allied with the overriding need for the development having already been established through mechanisms such as an NPS - and the significant work already undertaken by the developer before the application is made – it provides the greater certainty of success for each application that justifies the additional up-front investment involved.  3.  ‘One Stop Shop’ Consent: Finally, and importantly, the delivery of projects subject to a DCO benefit from the ‘one stop shop’ approach to consenting. The efficiency afforded by bringing together in one place, and through one examination, a consent for a development with the ability to compulsory purchase land, to stop up and create highways and a range of other powers saves time and ensures a consistent approach.  Potential barriers to using DCO for housing 1.  Lack of Flexibility: Large-scale housing schemes will build out over many years and this requires flexibility to adapt to changing circumstances. However, the nature and legal status of a DCO places an obligation on PINS to ensure that every parcel of land within a site is fully accounted for and its future function within the major infrastructure project has been clearly defined and assessed.  For many infrastructure projects fixing detail far into the future is not difficult; and for those that do require flexibility, PINS has issued guidance on the use of the ‘Rochdale Envelope’ which has allowed the grant of several DCOs over recent years. However, we foresee problems in how these principles (as currently framed) could be applied to the rapidly changing nature, and sheer complexity, of major housing projects both prior to consent and, then, as they are constructed over a number of years.  These difficulties may include delay in the pre-application period whilst developers seek to satisfy the Rochdale Envelope tests for a DCO; pressures on the case-making required to deliver a CPO; and, once consented, further delays due to a need for a potentially significant number of ongoing applications to amend a DCO as a response to changing circumstances and market demands. 2.  Up Front Costs: The SMF work focuses on shortening the post-submission timescales, but this misses the point that the biggest focus of the DCO process is prior to submission. We anticipate that many promoters of large-scale housing schemes would be challenged by the significant risks and costs to be incurred before a DCO application can be made; and this may, by itself, reduce the potential or desirability for developers to ‘opt-in’ to its use. The DCO pre-application process would represent a significant ‘step up’ in required activities when compared to that for a planning application and as a result we question how attractive it would appear as a proposition versus a traditional planning application, unless there was some additional advantage to pursuing the route. 3.  Establishing the Principle of Development: Upon submission of a DCO application and its consideration through the examination, our experience shows that it works efficiently due to its focus on areas of detail with the key matter of need having been already established through a NPS. With this in mind, and unless a large-scale housing scheme has already been allocated in a local plan, we cannot conclude that the current policy framework provides confidence to ensure that the examination process would not get entangled in a lengthy debate on this fundamental issue; nor that the current methods by which a DCO examination proceeds would be suited to such a debate.  Even before an application is made, the question of ‘need’ could frustrate the process and lead to challenges in ensuring that successful and meaningful pre-application engagement and assessment can be conducted.  In particular - and related to the question of localism - we suspect that more positive engagement would be likely where the principle of a project has already been established and the terms of engagement surround those matters of detail relevant in delivery of a robust consent that addresses impacts and key local issues. What is needed to make a housing DCO regime effective? So DCOs have benefits, but there is not an automatic read-across to large-scale housing such as new settlements. We have identified five actions needed if the NSIP regime is to be extended: Action 1 - Clarity on the tests of principle: need and location To ensure developer buy-in to the DCO process, and justify the significant up-front investment and work required, it will be vital to ensure that the principle of development has been established. Depending on the Government’s continued appetite for localism, there are a variety of ways in which the ‘need’ and 'location' cases could be established, for example: 1.  The site or broad location being allocated in an adopted, up to date, Local Plan or some other statutory Development Plan[7]. 2.  Where there is no up-to-date local plan for the relevant area by the Secretary of State's deadline of 2023, the Government could establish a policy framework (in either a specific NPS for large-scale housing or through the NPPF) that the principle of large-scale housing schemes in any location up to a given size (say, 5,000 dwellings or more, depending on appetite) will be supported based on a set of clear criteria such as a significant lack of supply to meet housing needs; a site’s suitability for development (in a SHLAA or through some form of pre-screening); and ability to address the quality criteria such as those in para 72 of the NPPF. 3.  For housing schemes of a larger scale (e.g. 5,000+ dwellings), the Government could establish alternative routes via an NPS for large-scale housing to establish the need for – and perhaps location – of larger-scale developments. This system could, for example, embrace existing and future Garden Communities programme projects; schemes identified in the Government’s own long term Spatial Frameworks such as that for the OxCam Arc[8]; and the ability to link use of the DCO route to the establishment of Development Corporations for large-scale housing. But those processes for selecting locations would require levels of scrutiny and rigour consistent with the weight of responsibility involved in selecting locations for large-scale growth, cognisant of the problems that arose with the Government's attempt to identify Eco Towns.   Action 2 - Clearer guidance on the ‘Rochdale envelope’ suited to a housing scheme The use of a parameters-based approach to major housing development secured through an outline planning permission is well established and familiar to developers. However, the extent of flexibility typically afforded by this approach would likely conflict with the PINS guidance[9] on the ‘Rochdale envelope’ approach for DCO schemes.  We believe that clearer, or even new, guidance specific to major housing development would be required.  There are a number of features that we consider would need to be addressed including identifying a ‘minimum level of detail’ for housing schemes to avoid the engagement process driving into spurious detail; an allowance for facilitating ‘options’ for specific land parcels; and a greater use of design codes/rules within development zones.  We also recommend that a presumption on the need for flexibility should be established via a housing NPS or similar with a series of housing specific ‘tests’ to be met within individual applications. Action 3 - Clarity over detailed approval process The DCO – once approved – is often quite rigid, whereas large-scale housing schemes often require amendments to reflect changing circumstances over the lifetime of the development. In recent years, clarity has been provided by PINs on how, and the circumstances within which, a DCO can be formally amended to bring forward development. This has been helpful but does have timescale implications which may not lend themselves easily to housing schemes where time is often of the essence.  Clarity is required on how consent for design details should be secured and, second, to confirm alternative means to vary a DCO – this may relate to whether or a not a change is considered material or otherwise[10].  We recommend that lessons are learnt from those schemes already with the benefit of a DCO. This would seem to lend itself to enshrining within the wording of a DCO greater involvement of the relevant planning authority for dealing with detailed submissions and, potentially, some forms of amendment.  This system should seek to include clarity on the scope of submissions to be made and timescales for review and determination by the relevant planning authority. Action 4 - Resourcing at PINs and LPAs Whatever system is put in place, it is essential that PINs are provided within sufficient and available resource to process and examine an increased number of applications; whilst also ensuring that there is no lessening of the service to traditional NSIPs. Allied to this, greater investment in training and knowledge for relevant planning authorities to ensure that they can engage with the DCO process in a timely manner.  This could, for example, require the identification of a DCO ‘champion’ in local authorities affected or the dedicated assistance of a Homes England DCO team.   Finally, more guidance on performance agreements in respect of DCOs to cover both the pre-application period and also post grant of a DCO (particularly where authorities maintain responsibility for approving elements of detail) would be welcomed. It would be of benefit to prepare a standard schedule of fees for engaging with the DCO process to avoid disparity in approach between authorities and to allow developers to have greater certainty on likely costs, whilst helping LPAs resource themselves appropriately. Action 5 - Meaningful consultation PINs has issued very helpful guidance to applicants and others engaging with the DCO process to explain the benefits and parameters of the pre-application consultation process. We would endorse the preparation of guidance for residential developers to provide more contextual information and to enhance the likelihood of take-up in the DCO process, and ensure there is positive engagement by utilities and other key stakeholders.  In addition, it will be necessary to further highlight the benefits of the pre-application consultation process to other third parties (such as local residents) such that there is a clear understanding of the need for meaningful consultation rather than representations being made in a deliberate means to frustrate the process and challenge the principle. Summary DCOs have long been cited as a potential mechanism for improving the consenting route for delivery of large-scale housing. Whilst there is undoubtedly scope for this, we would not go so far as the recent SMF paper in suggesting it be the default route, as it carries with it requirements that may not be appropriate in all cases; the traditional route (planning applications), development corporations or Local Development Orders will be other possibilities that may work better. Further, in order for it to be of practical benefit as a route, it requires changes to establish a clear policy basis for such schemes, a fit-for-purpose approach to the establishment of parameters and addressing matters of detail, catering for the flexibility on schemes that will build out over decades, proper resourcing and ensuring meaningful consultation.   [1] The SMF report is available here.[2] Which is an abridged version of a longer discussion paper.[3] ‘Deliverable’ in the sense of NPPF definition at para 35(c) of being deliverable over the plan period, as opposed to the definition used for the purposes of assessing a five-year housing land supply.[4] For smaller residential schemes of less than 1,000 units, it is not uncommon for speculative planning applications outside the development plan, which seek to address questions 1-3 in the context of there being no up-to-date local plan or an absence of five year land supply.[5] The patchy coverage of up-to-date local plans is a longstanding problem – see Lichfields research here. [6] See for example the recent problems impacting the Tandridge Local Plan, as summarised in the Inspector’s letter here.[7] In which case, it would be necessary to be confident that the barriers to having Local Plans in place and for successfully allocating large-scale scheme (overcoming the problems identified in North Essex, Uttlesford and Hart) can be overcome, for example with changes to the NPPF and guidance to ensure the right balance is struck in judging deliverability in advance of funding being secured. The DCO route could even be a factor justifying a reduced bar for testing factors such as land ownership. [8] See para 2.129 of the Budget[9] PINS Advice Note 9 'Using the Rochdale Envelope' (V3, July 2018) [10] Paragraphs 9 to 16 'Guidance on Changes to DCOs' (December 2015) defines the circumstances in which a change could be material including environmental impacts, impacts on local businesses and communities, where a need for a Habitat Regulations Assessment is required and where CPO is affected

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