Planning matters

I recently attended a Thames River Crossing event, hosted by The Thames Estuary Partnership, Transport for London (TfL) and National Maritime.  They were showcasing 13 proposed river crossings, including bridges, tunnels and ferries to support growth in London. The presentations from TfL, Farrells and the Port of London Authority (PLA) were broad ranging and featured questions including -

“Where are the opportunities?”

“What does this mean for shipping?”

“Do we need to rethink the way the river serves London?”

These are all crucial topics for consideration particularly to ensure sustained economic growth and enable continued housing development in London.

All the speakers established that new river crossings are required to support the current population growth in London.  However, what stood out to me was that whilst TfL is considering the imminent ‘need’, has published a “River Crossings Plan” and undertaken long-term work with many stakeholders and expert groups,  there was no consensus on the locations or form of said proposed crossings.

It is increasingly recognised that meeting infrastructure needs is vital to delivering housing, particularly as London’s population is due to increase to circa 11 million people by 2050. The Barking Riverside planning permission for 10,800 homes is a prime example of how  proposed river crossings can release otherwise unviable brownfield land in Greater London for housing  - the housing figure for this development is partially based on the London OvergroundeExtension to Thamesmead. Without significant transport improvements, the original masterplan permission in 2007 imposed planning conditions on the site to limit development to only 1,500 units.

Existing observed trips in London are higher than forecast in the latest Mayor’s Infrastructure Plan and transport capacity is becoming an increasing concern.  As a starting point, there are a number of initiatives to increase capacityand shift transport mode within existing TfL assets, such as the new superhighway on Vauxhall Bridge.

TfL’s Plan “Connecting the Capital” identifies thirteen new locations for river crossings, some of which are in place, while others are long term visions. These crossings fall into four categories, pedestrian/cycleways, passenger ferry opportunities, public transport crossings and highways all in the form of bridges, tunnels or boats:

1. Jubilee Line (public transport)
2. Crossrail 2 (public transport)
3. Nine Elms to Pimlico (footway/cycleway)
4. Garden Bridge (footway/cycleway)
5. Rotherhithe to Canary Wharf (footway/cycleway/passenger ferry)
6. North Greenwich to Isle of Dogs (passenger ferry)
7. Silvertown Tunnel (highway)
8. Charlton (passenger ferry)
9. Crossrail (Public transport)
10. Gallions Reach (highway)
11. Barking Riverside to Thamesmead (public transport)
12. Belvedere (highway)
13. Lower Thames Crossing (highway) although this is outside of the Greater London area)

However, Farrells architects presented a different view on the location of river crossings.  Their suggested routes were smaller scale, ‘low-level’ bridges, much closer together, with at least five crossings connecting the Isle of Dogs (see below image). They predominantly focused on the growth of communities around low level, more affordable bridges similar to Newcastle’s Millennium Bridge. Farrells’ proposals focused on releasing housing potential and the benefits that better connections bring to local communities (indirectly improving London’s economy). Conversely, TfL concentrated on easing existing capacity and improving the economy, which would indirectly unlock land for future development.

The challenges of shipping were brought into the mix by the final speaker from thePLA. The PLA has no in-principle dispute with river crossings, having supported the Cable Car, the Millennium Bridge and others. In the context of trade and navigation, the Gross Value Added by the port - particularly in East London - is a huge benefit to the local economy supporting approximately 44,000 jobs.  As such, allowing access to large vessels along the river as a public right of way is of the utmost importance for the PLA.

It was clear that there is an interesting conundrum – balancing north/ south accessibility and connectivity, with maintaining theeast/ west route along the river.  It must also be considered that, if a bridge is required to be ‘raised’ too often for shipping to pass, then it is not creating a north-south connection as required by the general population.  Unfortunately, the tide has no respect for rush hour and ships are bound by tidal movements. I’m confident that accessibility in all four compass directions is not an insurmountable problem but it was brushed over somewhat by speakers.  Further concerns were voiced from the floor in relation to ‘too many proposals for highways’ when the national planning policy and government agenda clearly promote sustainability and use of public transport - another issue that was not discussed in depth.

Perhaps more radical thinking is required, such as that suggested by one audience member – a ‘Thames Barrage’ - producing a large freshwater lake. Although this may be easier for river transport and north-south connectivity, the Environment Agency may have some concerns!  Perhaps we should learn from best practice, in cities such as Rotterdam. So many options to consider….there is no doubt that this issue will move higher and to the forefront of the Government’s London transport agenda in coming months and years.

Only 48 hours after recently submitting a planning application for the change of use of a commercial unit in Wales, we were advised that it was not valid despite us meeting all statutory requirements. After much to-ing and fro-ing, the application was registered by the local planning authority (LPA) as it was, indeed, valid. It gets worse. Before it was validated, we were also told by the LPA that the application had been reviewed by the highway authority and that it would have to be refused. And to cap it all, we were told that the application was likely to give rise to public objections and therefore we should revise the proposal. All this before the statutory consultation process had even begun, and before due process had been followed. The highway authority never did raise any objections to the proposed development. Whilst non-validation is not a regular occurrence, neither is it rare. Even more recently, a London borough planning officer point blank refused to accept an amendment to a similar application and forced us to withdraw rather than seeking to address the issues raised during the consultation. The reason? The ‘pile of applications waiting on his desk’.

Our experience of LPAs is usually far more positive but in a few cases, some have chosen to take a systems approach to handling planning applications in a bid to be more efficient. One would not complain about efficiency, usually. However, there appeared to be little flexibility in the approach that the LPAs had taken and, in the case of the first example, it did not make for a constructive start to the 8-week determination period ahead of us. It would seem that performance indicators associated with target determination periods are at least in part behind these experiences.

At times, I’m sure that LPAs feel that they are stuck between a rock and a hard place. Agents often need an application determined positively as quickly as possible. There are occasions, on the other hand, when we want to spend time fully exploring competing issues resulting in the determination process taking longer than the targets allow. Ideally, there will have been some pre-application consultation between the Council and the applicant (or their agent) before the submission is made but for many reasons this is not always possible. We welcome any authority that works positively with us and the applicant to get the best development within the constraints of the project. The difficulties arise when LPAs are pushed into a corner to ensure that they are meeting performance targets. These create barriers that force an applicant into either withdrawing and resubmitting, or taking a refusal and appealing that decision in cases where having a little more discussion would avoid additional time and expense for all parties.

In Wales, we are in the middle of a Positive Planning revolution, okay perhaps not a revolution, but a change agenda. The Welsh Government is making legislative, policy and culture changes. I’m not aware of anyone who objects to the overall intention of these changes (although some of the details might have been better drafted to greater effect). But, meeting performance indicators that are set in legislation raises concerns for me, and many applicants.



‘Planning Performance Framework Indicators and Targets’ grade authorities across a range of categories into three performance bands: ‘Good’, ‘Fair’ or ‘Improve’. ‘Efficiency’ is one of the sets of indicators. Is there a risk that the barriers we have recently experienced could worsen? This would indeed seem a possibility. Annual reports are to be prepared by LPAs and are reviewed by the Welsh Government. The first reviews are due to be published this spring. The final criteria for designating an authority as poorly performing are to be consulted on later this summer. It is likely that it will be against these indicators that LPAs will be measured for persistent under-performance. When commenced, provisions in the Planning (Wales) Act 2015 will allow applicants to bypass persistently failing planning authorities and to submit applications direct to the Welsh Ministers.

If this is the stick that could see recent negative experiences increase, we have to find opportunities to work through this challenge. There are two obvious approaches that we can adopt. While attracting a sum of £190 (for major applications), amendments to planning applications give LPAs an additional 4 weeks on top of its target timescale. This could be used to encourage LPAs to work with applicants to address issues of concern instead of refusing an application simply to avoid a big black mark in its performance. Four weeks is not altogether welcomed by many clients but it will inevitably be more time and cost effective than seeking to resubmit or appealing a refusal.

There may also be the option to deal with unresolved details by condition in some circumstances. This in itself can give rise to its own problems, particularly where they go undetermined and a developer needs to start on site. However, an additional condition would generally be more productive than a refusal where the development would be unacceptable without the additional detail.

All in all, performance indicators can be helpful but it is not yet clear the extent to which LPAs will be able and willing change their existing cultures, such as in the example above, and will continue to be driven entirely by the target determination timescales. These in the not so distant future will decide whether or not the LPA will be classed as poorly performing or not. And well, that’s another blog altogether.

With newspaper headlines on the plight of ‘generation rent’, the proliferation of TV adverts for landlord’s insurance and debate on the ‘housing crisis’, most will be aware that private renting is on the increase. Since 1991 the proportion of households privately renting has been steadily increasing and approximately 20% of English households now live in the private rental sector (PRS), up from 9% in 1991. Despite significant and growing demand for housing in the PRS, most properties are still owned by part-time landlords and the sector is overwhelmingly made up of second-hand stock, with few new homes designed specifically for PRS tenants. This is in contrast to many European countries and the USA, where a significant number of homes are built specifically for the needs of private renters, often at scale and in the single ownership of an institutional investor - much like many prime commercial properties in the UK.

This is now beginning to change. In October 2015, British Property Federation (BPF) research found that over 21,000 dwellings (including 14,276 in London) specifically designed for private renters and aimed at the institutional investment market (or ‘build to rent’) had planning permission in the UK. By the February 2016 update of these figures planning permissions for build to rent had surged to over 30,000 dwellings, a 47% increase in just five months. Since the New Year, investment in the sector has continued apace with the likes of L&G and U + I announcing significant new investment and RBS allocating £1bn to fund ‘build to rent’ development.

While permissions for ‘build to rent’ dwellings are small in comparison to ‘for sale’ housing, in the prevailing brownfield-first policy context they are important. Despite increasing housing starts in 2015, new housing supply is still lagging significantly behind housing need. With no immediate prospect of substantial Green Belt review, both Sadiq Khan and Zac Goldsmith as London mayoral candidates have recently affirmed their commitment to this political sacred cow, development on brownfield sites will need to intensify.

‘Build to rent’ is well suited to this challenge. There is minimal overlap between would-be buyers and tenants and so such developments can be delivered alongside traditional ‘for sale’ housing without directly competing with it. The BPF research has also suggested that delivery rates for ‘build to rent’ could significantly exceed those of ‘for sale’ developments. Furthermore, the timescales for returns on PRS investments are much longer term than ‘for sale’ housing and this means investors retain a strong, long term interest in the local area. Such schemes therefore potentially can be a significant bonus and boost to regeneration and estate renewal projects, increasing the speed of delivery and ensuring that a powerful advocate for an area’s regeneration remains in place after homes are developed and the initial media attention ebbs away.

Considering the above, it is no surprise that ‘build to rent’ has attracted political interest. Since Sir Adrian Montague’s Review of the barriers to institutional investment in private rented homes (2012), ‘build to rent’ has garnered increasing political support, including reference in the Mayor of London’s Housing Covenant (2013) and the establishment of the Government’s build to rent fund. This has also begun to translate into planning policy; the 2015 Further Alterations to the London Plan set out the requirement for Local Development Frameworks to provide “positive and practical support to sustain the contribution of the Private Rented Sector in addressing housing needs and increasing housing delivery”. The Mayor’s Housing SPG, published 15 March 2016, fleshes out what this support entails under the heading ‘Build to Rent’:

1. Housing Mix: policies requiring larger units as part of the housing mix “could be applied flexibly to ‘built to rent’ schemes” in central or highly accessible locations (para. 3.3.11);
2. Viability: the SPG notes that in some cases due to “distinct economics of the sector”, ‘build to rent’ will not be able to support the same level of affordable housing as ‘for sale’ development. The SPG advises that provided a scheme is secured for private rent for a fixed period through a covenant (in the s.106 or other legal agreement) reduced affordable housing provision, where justified with a viability assessment, would be acceptable provided that a ‘clawback’ mechanism was in place to secure additional contributions if any dwellings were sold outside of the long term PRS market. It notes the ‘clawback’ period should be a minimum of 15 years (paras. 3.3.6 to 3.3.8);
3. Affordable Housing: intermediate rent, which qualifies for mandatory CIL relief, can be delivered in place of traditional affordable housing (para. 3.3.10). This is beneficial to ‘build to rent’ developers as it allows the retention of single ownership and management.

This new guidance is broadly helpful, however, it primarily captures what has already been going on, and while formally setting this out in planning policy is no doubt useful, some obstacles remain. Minimum space standards, contained in the London Plan (and other development plans) are not always particularly  suited to ‘build to rent’ development which is primarily aimed at young professionals, who move more often, and have usually accumulated less ‘stuff’. The Housing SPG does, tantalisingly, advise that Boroughs are “encouraged to work proactively” with ‘build to rent’ developers “recognising its distinct economics and, where appropriate, design requirements” (para. 7.6.7), but minimum space standards are not explicitly addressed.

‘Build to rent’ developments are well-tailored to the needs of occupiers and often include additional communal facilities such as meeting rooms, dining rooms, ‘spare’ bedrooms for guests, hire shops, gym and leisure facilities. If reduced floorspace can be justified, having regard to the overall design of the development and the intended end users, a flexible interpretation of space standards makes sense. It would after all be somewhat perverse if the rigid enforcement of high minimum space standards for the relatively few people who live in new homes stymied the creation of the new supply which may ultimately help to address the chronic overcrowding of many existing (much less well-maintained or spacious) rental properties.

‘Build to rent’ is of course no cure-all, there is only so much available brownfield land and while the end product will not be in competition with ‘for sale’ housing, competition for land will remain. It also does nothing to address the supposed generational inequity in the overall housing market, with the involvement of big institutional funds the tenant is still more or less paying someone else’s pension.

These caveats aside, the rising role of ‘build to rent’ is significant, turning hitherto latent demand for high quality, purpose built accommodation into new supply which can be delivered alongside, and not in competition with, ‘for sale’ housing.  The majority of permissions (and vast majority of completions) have been in London, and with cupboards in Clapham (allegedly) commanding the same rent as three bedroom houses in Cumbernauld this is perhaps no great surprise. However, build to rent developments are also being planned in Bristol, Manchester, Leeds and Liverpool - clearly suggesting that building to rent is not simply a symptom of the chronic undersupply and high rents which characterise the London market. Such schemes can be delivered rapidly with investors retaining a long term interest in the building and surrounding area. With new housing development being directed towards brownfield sites and housing estates, these attributes mean ‘build to rent’ is likely to play an important role in the delivery of much needed new homes over the coming years, particularly if the remaining obstacles can be ironed out.

NLP is currently assisting a number of clients in delivering new homes for rent and looks forward to working on more projects in this expanding sector over the coming years. If you have any questions, please contact us.

 

Yesterday, a Court of Appeal Judgement was handed down in the case of Richborough Estates Partnerships LLP v Cheshire East Borough Council and Secretary of State for Communities and Local Government.

The Judgement provides clarity on the phrase “relevant policies for the supply of housing” (‘the phrase’) found at paragraph 49 of the  National Planning Policy Framework (NPPF). There have been inconsistent conclusions from six other High Court cases that have considered the issue.

This Judgement is important to the development industry because paragraph 49 of the NPPF sets out that where a Local Planning Authority (‘LPA’) does not have a five year supply of deliverable housing land (‘5YHLS’) relevant policies for the supply of housing should not be considered up-to-date. NPPF paragraph 14 explains that where the development plan, or relevant policies are out-of-date, planning permission should be granted unless any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the NPPF as a whole.

In short, where a LPA cannot demonstrate a 5YHLS permission for new housing should be granted unless there are significant and demonstrable adverse impacts.

The Judgement is clear that the interpretation of ‘the phrase’ is not confined to policies in the development plan that seek to plan positively for the delivery of new housing in terms of numbers and distribution or the allocation of sites. Importantly, the Judgement held that the phrase extends to plan policies whose effect is to influence the supply of housing land by restricting the locations where new housing may be developed and goes further to acknowledge that such policies could include policies for:

• the Green Belt;
• the general protection of the countryside;
• conserving the landscape of Areas of Outstanding Natural beauty and National Parks;
• wildlife;
• cultural heritage; or
• other policies whose purpose it is to protect the local environment by limiting development.

This Judgement is important to clarify to developers and decision makers how this policy is to be applied in planning decisions. However, it must be noted that that the Judgement does not make such policies as those listed above irrelevant if they are deemed to be out-of-date; it remains a matter for the decision maker as to what weight is attributed and whether any adverse impacts significantly and demonstrably outweigh the benefits of the proposal being considered.

Click here for a copy of the Judgement.

Should you have any further queries, please don’t hesitate to get in touch.