Planning matters

In their recent blog, Stephanie Irvine and Hasnain Ikram considered the implications of the latest changes to the Welsh planning system. They called upon the Welsh Government to issue a policy clarification letter that would provide support in the short term for the development of sustainable sites outside of the plan-making process. That is absolutely the right thing to do and will be critical to helping the development industry and the wider Welsh economy to recover from the effects of Covid-19.

In implementing its recent changes, the Welsh Government has exercised its right to shape the planning system in the way that it considers to be best for the sustainability and wellbeing of Wales. Whilst many in the development industry have concerns about the effectiveness of the new approach, we must work collaboratively to ensure that it does not undermine the delivery of new housing and the growth of the economy. But as we have seen demonstrated in countless ways in the past weeks and months, these extraordinary times demand responses that may previously have seemed to run counter to the Government’s strategic direction. As it is with our personal freedom, healthcare and the economy, so must it also be with policies relating to housebuilding and development in general. A short-term change to the policy approach may be necessary to stimulate development.

As we try to chart a course to the future, five things are clear:

1. The development industry has a critical role to play in the post Covid-19 recovery in Wales; but,
2. Even before the outbreak of Coronavirus, the rate of market and affordable housing development in Wales was at an historic low – and lockdown will serve to weigh the figures down even more;
3. On 25 March 2020 (the day before the latest changes were enacted), most local planning authorities in Wales were unable to demonstrate a five-year housing land supply;
4. Now, most local planning authorities are unable to demonstrate effective delivery against their LDP requirements; and,
5. We cannot wait for the next round of LDP preparation and defined housing trajectories to ramp-up delivery rates.

The question must be how development can be stimulated in the short term in a manner that is consistent with the Welsh Government’s placemaking objectives. I set out five ideas below.

First, it must be remembered that windfall sites are not inconsistent with a plan-led approach or with placemaking objectives. All LDPs include a windfall allowance, in recognition of the fact that they will contribute to the housing supply. Given that many LDPs have not delivered allocations as fast as anticipated, additional sites can play an important role in contributing towards housing requirements. They should not be disregarded as undermining the planning principles set out by the Welsh Government, although the development industry will need to demonstrate that they are sustainably located and can contribute towards placemaking aims.  Key requirements will include high quality development that makes the best use of resources, is readily accessible by a variety of forms of transport, includes high quality green space and green infrastructure, supports an inclusive and diverse population, and incorporates a mix of uses.

Secondly, whilst the Welsh Government’s preference would be for a larger proportion of housebuilding to be on brownfield land, this should not be taken to overlook the role of greenfield development. There is not enough brownfield to meet total housing requirements and technical challenges arising from historic uses of the land can give rise to viability constraints that may serve to undermine deliverability. A “brownfield first” policy is not unreasonable so long as it does not result in the reliance on land that has limited prospect of being delivered. A binary differentiation is overly simplistic. Some brownfield sites are not sustainably located and are not capable of delivery, particularly in the short term. Conversely, some greenfield sites benefit from highly sustainable locations and have the potential to deliver high quality homes – and places – in a short period of time. The focus now should be on those sites (brownfield and greenfield) that have the best prospect of delivering market and affordable homes as quickly as possible.

Third, we support the Welsh Government/Development Bank’s Stalled Sites Fund as a means by which the viability of brownfield sites might be enhanced. However, whilst the £40m fund can make a meaningful contribution to development, we would question whether the loans of between £150,000 and £2m would be sufficient to get sites moving, and whether repayment terms of up to 4 years would be sufficient for the scheme to be delivered and revenue generated to allow for repayment. Moreover, the fund is geared towards SME builders. Viability is conditioned principally by site and market factors, rather than being related to the nature of individual developers. Whilst recognising the Welsh Government’s objectives to support the SME sector, the short-term priority of restoring development activity should be viewed as an overriding objective and consideration should therefore be given to extending the Stalled Sites Fund to larger housebuilders or providing additional forms of financial support to address the viability of housing sites.

Fourth, the reality is that greenfield land will be required, but this can accord with placemaking principles, especially if it goes beyond the baseline. The Welsh Government should set out a clear statement of support for exemplar schemes that benefit from high levels of accessibility, can minimise the need to travel, respect the natural environment, and incorporate a high-quality design that is built to last. The fact that such sites are greenfield and might not have been allocated in the current LDP should not be taken as justification to prevent them from coming forward. However, it will again be important to ensure that such sites are viable and the expectations of policy (or for policy exceedance) should not be so high as to threaten deliverability. The housing market in Wales is weaker than that of many comparable parts of the UK and this creates a further risk to viability. As part of site promotion, it will be important to assess the shape of the market and ensure that the mix of types, sizes, tenures of dwellings reflects local demand.

Finally, if the aim is to boost housing delivery in the short term, there might be merit in the Welsh Government and local planning authorities considering the use of shorter planning permissions for windfall consents to ensure that they can come forward quickly. The Welsh Government should also work with local planning authorities to ensure that they continue to offer a full planning service and put measures in place to determine applications, even during lockdown. Lichfields’ live tracker on how Councils are working through the Covid-19 pandemic reveals a significant variation in the way authorities are responding. We need as much consistency as possible between authorities and, more than ever, we need applications to be determined in a timely manner.

In considering housebuilding, the focus of the Welsh Government is one of quality over quantity. This is reflected in the placemaking principles and also in the direction of travel of its estimates of housing need. The challenge in the short term is to get house building moving again, and that will involve bringing forward deliverable new sites ahead of the LDP review process. If the houses that are proposed on those sites reflect the Welsh Government’s agenda in terms of design quality, sustainability, and community well-being, then local planning authorities and the Welsh Government ought to welcome them with open arms.