London Plan EiP: A change is gonna come

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Draft London Plan EiP: A change is gonna come

Draft London Plan EiP: A change is gonna come

Giorgio Wetzl 04 Apr 2019

Lichfields is currently monitoring the draft London Plan Examination in Public (EiP), which is scheduled to last until May 2019, and will report on relevant updates as part of a blog series. The seventh blog of the series focuses on some key further suggested changes proposed by the Mayor.

After months of hectic hearing sessions, lengthy written statements, endless words, minor suggested changes, followed by further suggested changes, we are now officially in the break-month of the London Plan Examination in Public (EiP), which will duly resume at the end of April.

In this context, you might well be forgiven for having lost the plot over where we are at with the draft London Plan, and the latest GLA position on some of the more contentious proposed policies. Whilst, we are still far from knowing any official recommendation from the Planning Inspectors (with the Inspectors’ report currently expected sometime in Summer 2019), the break creates an opportunity to look back at some of the changes the GLA has officially endorsed via published further suggested changes.

Below, I have listed six key policy changes (plus a little bonus) which are likely to significantly affect the development sector in London, if endorsed and confirmed by the Inspectors. All the references below to draft London Plan policies/paragraphs are taken from the latest version of the whole Plan (published August 2018, available here).

1. Housing targets and monitoring: a steep stepped approach?

One of the main concerns for London Boroughs has surely been the high annualised housing targets (set out in table 4.1 in the draft Plan) and their immediate application from April 2019. The GLA seems to have accepted that it is unrealistic (and procedurally questionable, given that the Plan is not yet adopted) for London Boroughs to step-up their housing delivery at the levels the GLA envisages from year one.

Accordingly, it proposes to allow Boroughs to increase their housing targets gradually, allowing them ‘to set out a realistic, and where appropriate, stepped housing delivery target over a ten-year period’ (Paragraph 4.1.3[1]). This might provide a short-term solution to address under-delivery in the first years, but the cynics among us might say that it will simply allow Boroughs to kick the can down the road.

Interestingly, the proposed change also touches on another very contentious point, this being the interplay between proposed housing targets, the Government’s standard method for assessing housing need, and the Housing Delivery Test. Boroughs wishing to opt for a stepped housing delivery target are to clearly articulate ‘how these homes will be delivered and any actions the boroughs will take in the event of under-delivery’; the draft Plan now notes that a ‘clear articulation […] would also fulfil the requirement of a ‘Housing Delivery Test action plan’’.

Notwithstanding the questions raised by London Boroughs on the potential impacts of this ad-hoc regime (with the new London Plan based on the 2012 NPPF, while Local Plans will be based on the 2019 NPPF), MHCLG concerns about London’s deviation from the standard method for assessing local housing need, and the draft Plan’s reference to the Housing Delivery Test, the Mayor seems firm in his view that housing delivery in London should be assessed against his targets, rather than the standard method-derived housing requirements.

This makes for a policy area of the draft London Plan worth following, particularly to understand what the Inspectors will recommend in light of these differing views between the Government and the GLA, as well as for the potential practical implications it may carry. 

2. Small sites: yet, not too small to contribute

Another contentious policy, due to the draft Plan’s over-reliance on its potential achievements and the modelling assumptions behind it, is Policy H2 ‘Small sites and small housing developments’.

Further suggested changes proposed to this policy provide clarifications that any affordable housing requirement that Boroughs wish to apply to small housing developments of nine units or less should only be ‘a tariff approach rather than seeking on-site contributions’ (Policy H2 H[2]). Additional changes to supporting text further stress that ‘affordable housing requirements from development of nine or fewer units should be asked for as a cash in lieu contribution’.
Moreover, the presumption in favour of small housing developments[3] would also apply to change of use of non-residential buildings to residential use, which has now been deleted from the list of small housing developments exempted from the presumption; this was added to the list via August 2018 minor suggested changes (Policy H2 F, and related supporting text at paragraph 4.2.3A [4]).
The deletion of the above and other exemptions to the presumption in favour of small housing developments (including the exemption for designated Green Belt and MOL sites) suggests that the original assumptions behind small sites-related housing delivery might have been too optimistic.

3. Affordable Housing or employment land, that is the question

There is no doubt that the provision of affordable housing in London is the number one priority of the draft London Plan.
A suggested affordable housing change that is already worrying some in the Built to Rent sector relates to Boroughs being able to ‘require a proportion of affordable housing as low cost rent (social rent or London Affordable Rent) on Build to Rent schemes’. Furthermore, these potential low cost rent homes ‘must be managed by a registered provider’ (Supporting text 4.13.9A[5]). This could represent quite a conundrum for those Build to Rent developers who are not registered providers (the large majority), and could create issues around different managements within the same building.
The draft London Plan also includes affordable housing policies relating to residential development on London’s industrial land.
In order to achieve some form of planning benefit from future losses (beyond provision of new homes) and ‘given the difference in values between industrial and residential development’ the draft London Plan policy H6 proposes a threshold of 50 per cent affordable housing for development in certain industrial locations where there would be a net loss of industrial capacity. 
The supporting text of Policy H6, as amended, refers to ‘industrial floorspace capacity’ and says ‘residential development proposals that would result in a net loss of industrial floorspace capacity on Strategic Industrial Locations, Locally Significant Industrial Sites or Non-Designated Industrial Sites are expected to provide at least 50 per cent affordable housing to follow the Fast Track Route’ (Supporting text 4.6.6[6]).
However, the concept of ‘industrial floorspace capacity’ comes with some caveats, in the form of recently proposed footnote 46E. This recognises that the floorspace capacity approach also applies to ‘sites used for utilities infrastructure or land for transport functions that are no longer required’ for the purposes of Policy H6; furthermore, the footnote acknowledges that ‘some surplus utilities sites are subject to substantial decontamination, enabling and remediation costs’. In these instances, and if ‘it is robustly demonstrated that extraordinary decontamination, enabling or remediation costs must be incurred to bring a surplus utilities site forward for development, then a 35 percent affordable housing threshold could be applied, subject to detailed evidence, including viability evidence, being made available’ (Footnote 46E[7]).

The above is a sensible change given that development on industrial land often incurs in greater costs in terms of site preparation. One might assume that such decontamination costs should be accounted for in the price paid for land, but it is also true that many sites might have been bought well before the fast-track route approach to affordable housing was introduced.

4. Industrial land: exempting from the plot (ratio)

Still on industrial land policies, significant debate emerged at the related hearing session on the introduction of a minimum floorspace plot ratio of 65% (industrial floorspace/total land) as benchmark against which the principle of ‘no net loss’ of industrial floorspace capacity should be measured. In the draft London Plan industrial floorspace capacity is defined ‘as either the existing industrial and warehousing floorspace on site or the potential industrial and warehousing floorspace that could be accommodated on site at a 65 per cent plot ratio (whichever is the greater)’[8].  

However, the GLA recognises that not all industrial uses might be able to operate or being commercially viable if a strict 65% floorspace plot ratio were to apply. Accordingly, a further suggested change provides for exceptional circumstances, where ‘it should be demonstrated that it is not feasible to achieve no net loss of industrial floorspace capacity through alternative configurations, multi-storey industrial development, a wider mix of industrial uses, or other appropriate measures’ (Supporting text 6.4.5AB[9]). However, this exceptional approach will not apply to industrial developments proposed as part of SIL/LSIS consolidation processes, and for industrial/residential/non-industrial co-location schemes.

5. Green Belt and Metropolitan Open Land: national policy and no land-swap

Green Belt and Metropolitan Open Land (MOL) policies are always a contentious topic, and the draft London Plan is surely no exception.
However, and quite surprisingly, the GLA does not propose to amend Policy G2 B (i.e. Green Belt ‘de-designation will not be supported’), which many consider inconsistent with national policy. The Mayor of London written statement clarifies the reason for this, as the ‘policy wording has a different emphasis to the NPPF, with the NPPF requiring the demonstration of exceptional circumstances to justify boundary changes. The emphasis in the draft London Plan is considered justified as Green Belt release is not considered necessary, with the vast majority of London’s development needs being able to be met within London, without developing on the Green Belt’ (Paragraph 65.8[10]).
The capacity to meet the vast majority of London’s development needs within its own boundaries has been challenged by many stakeholders, particularly in light of the very high housing targets, industrial land policies, and over-reliance on small sites potential housing delivery. It will be interesting to learn the Inspectors’ view on this point.

In terms of further suggested changes, the GLA clarifies that MOL ‘is afforded the same status and level of protection as Green Belt’ and that this should be ‘protected from inappropriate development in accordance with national planning policy tests that apply to the Green Belt’. Interestingly, the supporting text reference to the principle of land swaps being potentially applicable to MOL had been removed (Supporting text 8.3.2[11]).
6. Affordable workspace with an expiry date
Low-cost and affordable workspace policies are an interesting innovation of the draft London Plan, although initially many of the details were to be left to the Boroughs for their decision.
More details have been provided in relation to affordable workspace, where spaces are provided at below market rate due to the ‘specific social, cultural, or economic development purpose’. Affordable workspaces can be provided ‘and/or managed directly by a dedicated workspace provider, a public, private, charitable or other supporting body; through grant and management arrangements; and/or secured in perpetuity or for a period of at least 15 years by planning or other agreements’ (Supporting text 6.3.1[12]). The removal of the expectation that affordable workspace should only be secured permanently will probably be a great relief to the development sector, given the uncertainty that surrounds this new policy.
Further suggested changes proposed to remove the reference to ‘reasonable proximity’ for the re-provision of lower-cost business spaces, possibly due to the difficulties in defining what ‘reasonable proximity’ might have meant in practice.

Bonus track: live hub of planning data

Not strictly policy related, but of interest to the development sector in the Capital is the recent update on the development of a live hub of planning data by the GLA.
As explained in a useful article[13], the London Development Database will be used to ‘monitor implementation of the London Plan’. To support the monitoring phase, the GLA has published Non-Technical Planning Data Standard which sets out the key information that will be collected up-front on planning applications ‘in machine readable fields, so that planning application information can travel automatically through systems and out to the public’. As stated on the GLA website ‘[a] Technical Planning Data Standard will follow with further information on schemes, fields, and other relevant details’.
Importantly, the goal is for this automation process to be ready ‘in conjunction with publishing the new London Plan. […] Based on the outcome of the London Plan EiP, [the GLA] will amend any fields in the Data Standard that do not align with the final London Plan before the automation project goes live’.
Having robust systems in place to collect information and directly feed-back to the GLA is crucial to ensure that the practical implications of new policy approaches are closely monitored, and potential unintended consequences addressed as soon as practicable.

The draft London Plan: a marathon, not a sprint

The London Plan EiP is still moving forward, with four additional weeks of hearing sessions scheduled until the end of May, and which will cover some crucial areas such as town centres, social infrastructures and viability.
We know that the Inspectors aim to write their final report on the draft London Plan between May-July 2019, and we could reasonably expect this to be published towards the end of Summer 2019. The current target is for the final version of the new London Plan to be published early in 2020, just before the next Mayoral Election takes place (May 2020).
As the Mayor has repeatedly said over the last three years, solving the housing crisis ‘is going to be a marathon, not a sprint’, and we can surely state the same for the new London Plan publication process.
However, as someone with a far better voice than mine used to sing:
It’s been a long, a long time coming
But I know a change is gonna come, oh yes it will’

[1] Appendix 1: M19 Further Suggested Changes[2] Appendix 2: M20 Further Suggested Changes[3] ’For the purposes of part D, the presumption in favour of small housing developments means approving proposals for small housing developments which are consistent with the policies of the London Plan while recognising that local character should evolve over time to provide new homes’ (Policy H2 E, Matter 20 Further Minor Suggested Changes to Policy H2)[4] Matter 20 Further Minor Suggested Changes to Policy H2[5] Appendix 1: M29 Further Suggested Changes[6] Appendix 1: M24 Further Suggested Changes[7] Appendix 1: M24 Further Suggested Changes[8] Supporting text at paragraph 6.4.5 (The draft London Plan showing minor suggested changes, August 2018)[9] Matter 62: Land for Industry, Logistics and Services, Further Suggested Changes[10] Mayor of London Written Statement on M65 Green Belt and Metropolitan Open Land[11] Matter 65 Further suggested changes to be made to Policy G3 Metropolitan Open Land[12] Matter 60: Low Cost and Affordable Business Space Further Suggested Changes[13] A live hub of planning data for London – update (Medium)

See our other blogs in this series:

Draft London Plan EiP: A new hope for industrial land?

Draft London Plan EiP: Heritage and culture are now dusted

Draft London Plan EiP, Affordable Housing: 3D snakes and ladders

Stand and deliver…

Draft London Plan EiP: ‘Willing Partners’ or not?

Draft London Plan EiP: Design – fit for purpose?

Lichfields will publish further analysis on the draft London Plan Examination in Public in due course. Click here to subscribe for updates.

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