Planning matters

On 5 June 2019 the Welsh Government released a publication that splits its 2018-based national and regional estimates of housing need for the years 2018/19 to 2022/23 into two tenures:

1. Market housing (defined as owner occupier [1] and private rent); and,
2. Affordable housing (intermediate and social rent) [2].
   
   

The methodology applied to generate these figures, which is based on the Housing Need and Demand Assessment (HNDA) tool developed by the Scottish Government, is illustrated in Figure 1.

This latest publication takes the overall levels of housing need published in January 2019 as its starting point and so carries forward the assumptions previously applied – assumptions which, as recognised to some extent by the Welsh Government, serve to suppress the level of need. Five different scenarios are presented, based on different demographic and migration patterns.

Of the central estimate of need of 8,300 dwellings per annum across Wales from 2017/18 to 2022/23, the Welsh Government breaks this down into:

1. 4,400 dwellings per annum (53%) as market housing; and,
2. 3,900 dwellings per annum (47%) as affordable homes.
   
   

By comparison, in the 20 years from 1999/2000 to 2018/19, affordable housing constituted only 11% of all completions. This indicates that a requirement for almost half of all housing delivery to constitute affordable homes is not realistic under current delivery mechanisms.

If increased levels of affordable housing are to be delivered this will have to be accomplished in ways outside of the traditional section 106 approach. There is also a need to consider the extent to which overall housing delivery should be increased to help deliver additional affordable homes through section 106 agreements. For example, while the delivery of 3,900 affordable homes per annum would not be feasible under a requirement for 47% affordable housing (out of a total of 8,300 homes), it would be more likely as a smaller proportion of a larger overall housing requirement (e.g. 30% of a total of 13,000 homes). Increasing overall housing delivery would also have the added benefit of improving affordability of open market housing.

The estimates of housing need broken down by tenure cover a five-year period only – to 2022/23 (at the end of which Welsh Government expects the existing levels of unmet need to have been cleared). The Welsh Government intends to review the overall estimates of need with the next publication of the household projections (due to be released in October 2019). It is not yet known when the estimates broken down by tenure are likely to be published.

Alongside the estimates, the Welsh Government has helpfully published an Excel-based tool to allow users the opportunity to test the impact of alternative assumptions on both the overall need for housing and its tenure split.

The key assumptions that can be flexed include:

1. Household projections (official projections or modelling provided by the user);
2. Existing unmet need;
3. Household income (current and future (and distribution));
4. Private rental prices (current and future); and,
5. Affordability criteria.
   
   

The tool also enables a further breakdown into a total of four tenures, with market housing split into owner occupied and private rented and affordable housing split into intermediate and social rented.

The Welsh Government has recognised that adjustments to the assumptions applied within each of the model’s criteria can make a significant difference to the estimates for Wales and its regions. For example, the default assumption is that households that can afford a 2- or 3-bedroom property based on spending 30% of their household income should be considered suitable for market housing. When considering this variable, policymakers should be careful not to assume that it is acceptable for households to spend large proportions of their income on housing out of necessity. If the affordability threshold is reduced from 30% to 25% of household income, the proportion of need for affordable housing would increase from 47% to 55% in the central estimates for Wales.

It is therefore vital that policymakers test a range of possible scenarios when setting housing requirements. This is particularly important given the current national context of economic uncertainty.

The publication of the estimates of housing need by tenure is to be welcomed as a credible starting point for the assessment of need that will inform housing requirements in the emerging NDF and forthcoming SDPs. More importantly, it is reassuring to see that the Welsh Government has acknowledged the need to test the impact of different assumptions and has highlighted a number of these sensitivities. However, it is vital that the estimates are treated as a starting point only.

What is noticeably absent from the analysis is a consideration of the links between homes and jobs, which are so important for the functioning of sustainable communities. In South East Wales, the Cardiff City Deal is seeking a step change to achieve “truly transformational change” in order to boost the local economy. This will rely on moving away from past trends (which are reflected in the 2014-based household projections) to result in different outcomes in the future.

Fundamentally, the estimates do not (and cannot, as policy-neutral statistics) seek to identify the number and tenure split of homes required to attract and retain workers to support the Welsh economy. It is therefore up to policymakers to take this next step to ensure that housing and economic objectives are aligned in the emerging NDF and future SDPs.

 

Last week was Loneliness Awareness Week, a week established by the Marmalade Trust to raise awareness of loneliness and social isolation, to reduce the stigma of loneliness and to help people connect. This will be its third year and the movement is growing. This isn’t surprising when studies have shown that in the UK more than 9 million people always or often feel lonely[1]. 

The Costa Book Award winning novel Eleanor Oliphant is Completely Fine was written by its author Gail Honeyman after she had read an article on the subject of loneliness which reported on an interview with a young lady who said she would come home from work on a Friday and then wouldn’t speak to anyone again until Monday morning. Such a situation seems incredibly sad but worse yet, extensive research shows that loneliness poses a number of risks to physical and mental health, including:

National and many local planning policies seek to ensure that developments create healthy and safe communities. Many of the recent call to action publications by a variety of respected organisations, charities and commissions focus on a wide range of measures to improve loneliness and to reduce social isolation. However, not as much has been written in these documents about how the built environment can contribute to tackling its causes.

As place makers we can help to create places that encourage social connection and to create spaces that people want to use and are able to use that are safe and secure and that are accessible to all.  These are just a selection of ways that creating spaces and places can help to increase both formal and informal social interaction which may in turn help to reduce loneliness:

• Making dementia-friendly spaces that are designed to encourage people out of their homes, with connections and routes that are accessible and safe (The RTPI has published practice advice on this);
  
  
• Ensuring that amenities and facilities are in walking distance and the routes to these places are safe, legible and encourage more people to use them;
  
  
• Delivering a range of places for leisure activities and where people can meet - from community halls to bowling greens, and from public squares to public footpaths;
  
  
• Including facilities for physical activity such as formal parks and informal open spaces, playgrounds for children where parents can mingle, as well as allotments for all ages;
  
  
• Ensuring that the spaces to meet are safe, with excellent natural surveillance through active frontages and well-considered layouts;
  
  
• Creating jobs and educational opportunities with further enhancements by creating dedicated indoor and outdoor spaces for people to meet during lunch breaks (rather than eating a sandwich at a desk); and,
  
  
• Places for cultural activities through formal and informal spaces such as heritage assets, coastal paths and outdoor theatres.

Understanding why places and spaces are important in helping to combat loneliness is a good starting point. Indeed, many of the measures are integral to high quality urban design decisions but can be easily missed although our experience, from working on health impact assessments for a number of projects, is that the measures can be simple and often not costly.

Whilst we cannot solve the factors causing loneliness entirely, placemakers can be part of a range of measures that help. 

In April 2018, Holgate J handed down his decision in respect on Parkhurst Road Ltd (PRL) and Secretary of State for Communities and Local Government and the Council of the London Borough of Islington (“the Parkhurst Case”) (EWHC 991). This judgment related to a long running dispute over the proposed redevelopment of the former Territorial Army Centre on Parkhurst Road in Islington and focused in particular on the Council’s view that the scheme failed to comply with the Core Strategy requirement for 50% of new housing to be affordable.

This has become a landmark case in relation to viability, with the key issue relating to the impact of land value on the viability of development. The judge expressed concern about the “circularity” that arises from purchase prices being:

1. Based on a downgrading of policy expectation for affordable housing; or,
   
   
2. Inflated due to overly optimistic expectations about the amount of development that might be permitted on site.
   
   

Either scenario could result in argument being made that a policy-compliant scheme is not viable because of the amount paid for the land (a situation that occurred in the Parkhurst case). This concern has now been reflected in the revised NPPF and PPG which state that:

1. The price paid for land not a justification for failing to accord with relevant policies;
   
   
2. An “interpretation” of policy should not dictate the price paid for a site; and,
   
   
3. Historic land values achieved in respect of non-policy compliant schemes should not be permitted to inflate current or future values.
   
   

Going back to Parkhurst, the site was redundant, and it was agreed by both parties that it had a negligible existing use value (EUV) and no alternative land value. This created clear difficulties in trying to determine its value for the purposes of the viability assessment. The Claimant (PRL) had held throughout the two planning appeals that preceded the litigation that “an approach based on EUV with some uplift was inappropriate where the EUV of the site was negligible” (HCJ paragraph 23). This view was supported by the 2012 RICS Professional Guidance on Financial Viability in Planning which:

“discourages reliance on the EUV Plus as the sole basis for arriving at site value, because the uplift is an arbitrary and the method does not reflect the workings of the market. Furthermore, the EUV Plus method is not based upon the value of the land if the redevelopment involves a different land use.” (HCJ paragraph 57)

The Claimant’s first ground of challenge stated that the Inspector had erred in law because he incorrectly stated that the Council was promoting an EUV Plus method of valuation when that was not the case and that he “relied upon his erroneous misunderstanding of the Council’s position as one reason for not accepting PRL’s contention that a market approach was ‘the only reasonable means by which to establish land value’.” (HCJ paragraph 94). In dismissing this ground, Holgate J accepted that the Inspector had appropriately considered the EUV Plus method to be “preferable to a purely market value approach, allowing for value to have regard to the market as a consideration rather than the determining factor.” (HCJ paragraph 97)

The relevance of the Parkhurst case is also underlined by the (rare) inclusion of a lengthy post-script by the judge. In addition to stating that the High Court was “not the appropriate forum for resolving issues of the kind” (HCJ paragraph 147), he called upon the RICS:

“to consider revisiting its 2012 Guidance Note, perhaps in conjunction with MHCLG and the RTPI, in order to address any misunderstandings about market valuation concepts and techniques, the ‘circularity’ issues and any other problems encountered in practice over the last 6 years or so.” (HCJ paragraph 147).

Following the judgment, the deputy mayor for housing of Islington Council also wrote an open letter to the RICS urging it to revise its 2012 guidance note.

These calls have fallen on fertile ground. The EUV Plus method is now enshrined in the NPPF and PPG as the approach that should be taken in relation to land valuation, and the RICS is currently reviewing its guidance note, the revised version of which is expected to be subject to consultation later in the summer. In the meantime, the RICS has recently (May 2019) published a professional statement on conduct and reporting in relation to financial viability in planning. The purpose of this is to set out mandatory requirements for those involved in the preparation of viability assessments, emphasising the importance of impartiality, objectivity and transparency. Whilst important, this may be viewed as having limited interest beyond RICS members. However, it clearly points towards an EUV Plus approach to land valuation being enshrined in the forthcoming updated guidance note.

Given the approach now required by the NPPF and PPG, this reversal of the approach previously endorsed by the 2012 note is not at all surprising. However, it will not overcome all of the problems associated with land valuation, and it will be interesting to see how the revised RICS guidance, any future changes to the PPG and the approach taken by local planning authorities and Inspectors address the following:

1. What constitutes a reasonable premium: Under this approach, the “premium” should provide incentive and represent minimum that a “reasonable” landowner would accept for land. But how is that to be quantified?
   
   
2. How to apply this approach when the existing land value is negligible or even negative (for example, due to very high remediation costs).
   
   
3. The extent to which it is possible to apply a standardisation of the EUV Plus approach (particularly in the case of the to the typology approach to viability assessment that the NPPF requires as part of plan-preparation process), bearing in mind that there may be substantial differences in acceptable/appropriate uplift across a local authority area.
   
   
4. Notwithstanding the requirements of the NPPF and PPG, how to achieve a widespread application of the EUV Plus approach by all involved in the development industry.
   
   
5. How to ensure an equal playing field in relation to the consideration of land values and policy requirements: In a competitive market, how to ensure that those seeking to acquire sites do not keep losing out to those that continue to disregard policy expectations.
   
   

The RICS consultation process will provide an opportunity to debate some of these issues, with the aim of increasing clarity for all involved in the development process – whilst also maintaining the flexibility that is essential in dealing with different sites in different areas. We will review the consultation draft of the guidance note when it is available but the debate about the appropriate land value to use for the purpose of viability assessments looks set to rumble on.

The Court of Appeal has quashed a planning permission granted by Shropshire Council in 2017 for an intensive poultry farming facility near Bridgnorth in Shropshire. The fundamental question of the appeal was whether the LPA, when considering the application, failed to properly consider the likely effects of odour and dust arising from manure disposal.

On 1 September 2017, Shropshire Council granted permission for the erection of four poultry buildings at Footbridge Farm. The owner, also the applicant, intends to use the buildings for intensive rearing of poultry. The facility would operate on a 48-day cycle, rearing 210,000 chicks for 38 days and then cleaning the buildings to prepare for the next cycle. Roughly 1,575,000 broiler chickens would be reared over a year. This would produce approximately 2,322 tonnes of manure, which would be disposed of on the applicant’s fields, and any surplus would be spread on third party owned fields near to residential areas. The appellant is a local resident, Ms Squire, who lives about 300 metres from land on which manure might be spread.

On granting planning permission, the Council concluded that the technical assessments submitted within the ES ‘are generally satisfactory’, and that ‘adverse impacts on local amenity can be satisfactorily safeguarded’. Additionally, the environmental permit issued and regulated by the Environment Agency (EA) would provide another level of control sufficient to address dust and odour issues.

Following the High Court’s dismissal of the appellant’s claim for Judicial Review of the Council’s decision, Ms Squire appealed against the Judge’s decision on two grounds:

The Court of Appeal first addressed the interpretation and scope of the Environmental Permit, which would be a requirement for an operation of this scale. It held that there was no misunderstanding of the permit’s control, which clearly included removal of manure from the site and the EA would enforce this. The officers had simply misunderstood the role of a future ‘manure management plan’ (MMP) that was referenced in the EAs consultation advice letter as though it were an assessment to reduce the risk of pollution from manure disposal. MMPs are a requirement under the Environmental Permit Regulations (not under the site-specific permit) and must also comply with the statutory Code of Good Agricultural Practice.

However, the EA had made clear in its letter that the MMP would only relate to the applicant’s land and would not control any issues arising from activities outside of the permit boundary (drawn around the chicken sheds only). More importantly, the MMP specifically relates to risks of polluting surface or groundwater – not odour and dust. Therefore, it cannot be assumed that in enforcing the site’s permit, the EA will provide additional control contributing to minimising effects of odour and dust outside the permit area.

In relation to the soundness of the EIA, the Court considered that impacts on neighbouring properties, generated by odour and dust from manure disposal activities were indirect impacts of the proposed development therefore must be assessed through the EIA. However, the ES did not identify the third-party land on which the 1,500 tonnes of manure was going to be spread each year, nor did it attempt to provide a meaningful assessment of the likely polluting effects the manure spreading – either on the applicant’s land or any other land. The Court held that the requirement of an MMP to be produced in the future, was not a substitute for the lack of assessment in the ES, and therefore, the ES was deficient and not compliant with the EIA Regulations. The appeal was allowed, on both grounds.

Although the case’s poultry context may not be relatable to many, this decision is a reminder of the importance of ensuring that all EIAs clearly identify and fully assess all impacts of a development - direct and indirect. As the PPG states, mitigation measures are designed to limit or remove any effects of a development, consequently an ES cannot rely on mitigation to mitigate an effect that hasn’t been identified within the assessment. Furthermore, care must be taken to understand the scope, role and effect of any regulatory process, such as environmental permitting, that is considered within an ES. For instance, considering whether a permit can be relied upon as adequate mitigation, and whether mitigation is required beyond the regulatory boundary of such a permit.

The appeal could perhaps also result in more thorough scrutinisation of generalised commitments which have become commonplace within ESs for similar developments, such as compliance with the Code of Good Agricultural Practice, or the fact that the process of manure spreading, as intended in this application, is common practice in farming of this intensity.

Overall, we now know not to get over EGGcited when chickens are involved, as you should never hurry EIAs concerning slurry!