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Welsh Government housing delivery proposals: Fixing the system or hiding its failures?
Planning for housing is not an academic exercise. An insufficient supply of deliverable housing land means not enough homes will be built. House prices will rise (further). Some people will be left without a home of their own. This is why it is of paramount importance that we have a planning system in Wales that works to deliver housing. On 9 October 2019 the Welsh Government published its consultation document, “ Delivery of housing through the planning system: Revisions to Planning Policy Wales and associated advice and guidance”. Responses are due by 20 November 2019. The focus of the document is on responding to the perception that developers are taking advantage of the long-established five-year housing land supply policy (Planning Policy Wales). It implies that developers are disingenuously “querying” the deliverability of allocated sites, thereby reducing local authorities’ five-year land supply figures and swaying the planning balance in favour of obtaining permission on “speculative” sites – coded language for windfall sites, which the Welsh Government implies are undesirable. Its key proposals are: To remove the requirement in Planning Policy Wales for local planning authorities to provide a five-year supply of land for housing. To consequently revoke Technical Advice Note 1 (TAN1) in its entirety. To replace the monitoring of housing land supply by the monitoring of housing delivery based on the Local Development Plan (LDP) housing trajectory, to be reported through the Annual Monitoring Report (AMR). These latest proposed changes follow the Welsh Government’s disapplication of paragraph 6.2 of TAN1 in July 2018, which attached “considerable weight” to the lack of a five-year housing land supply as a material consideration in determining housing applications. (N.B. The disapplied paragraph did not state that this would be the overriding factor; in order to secure planning permission, proposals would still need to meet the principles of good planning and be assessed as sustainable.) This move, which was widely opposed by developers, left the matter of weight to be given to this factor to the discretion of the decision-maker when taken in the round as part of the planning balance. The lack of a five-year supply therefore remained (and still is currently) material to planning decisions. This is key to ensuring sites are brought forward to provide needed homes in the short to medium term. If the requirement for a five-year supply is taken away entirely, there would be no policy basis for supporting development proposals according to their potential to fill unmet housing needs. With 19 out of 25 local authorities currently unable to demonstrate that they have enough housing land in the pipeline to meet needs over the next five years, there is a clear imperative to bring additional sites forward. If this is not happening through the plan-led system, surely measures should be kept in place to support the delivery of housing through other routes? The Welsh Government proposals would also result in key differences in the way local planning authorities assess how their LDPs are performing and their obligations to rectify any deficiencies. Housing policies would be tested against the LDP trajectory, which would need to be updated each year through the AMR. The trajectory should set out the sources of housing land needed to meet the full housing requirement during the plan period plus a flexibility allowance (identified by the document as 10%). Delivery will be tested against projected annual and cumulative build rates based on the housing requirement (not including the buffer). There would be no hard consequences for under delivery against the trajectory. Local planning authorities would need to consider performance against all indicators of the LDP collectively and to assess the magnitude of variance (a subjective assessment) before deciding on appropriate actions to be taken. Examples of these actions in the document range from providing training to officers or members to simply conducting “further research or investigation” to triggering an early review of the plan (a process which, as we know, takes years to complete). The way in which the existing five-year supply requirement policy has been implemented has not proven adequate to deliver a sufficient number of homes through LDPs or otherwise, and this is clearly an issue that should be addressed. However, the proposals put forward in this consultation offer a significantly weaker approach, which is likely to yield even weaker housing delivery than under the current arrangements.  The proposed changes outline a system whereby the impetus for local authorities to provide enough homes would effectively be relaxed, with no hard consequences for failing to deliver and no mechanisms in place to fill the gaps. Instead of identifying ways to make the plan-led system work, they would simply re-frame the metrics to make it look as if the system is working even if it is not and cut off the only available avenue for housing to come forward. Is the current system so broken that it needs such a draconian restructure? True, changes are needed to support the delivery of housing through the plan-led system – where planning for all types of development can be considered holistically. But is the main problem an overreliance on windfall sites (in sustainable locations), or is it rather that an insufficient number of homes are being delivered to meet the needs of the nation?  


Draft National Development Framework: Implications for Housing
The Welsh Government published its Draft National Development Framework (NDF) for consultation on 7 August 2019, with responses due by 1 November 2019. The emerging NDF is a spatial plan for addressing key national priorities in Wales through the planning system from 2020 to 2040. It will replace the Wales Spatial Plan (2008). Strategic Development Plans (SDPs) and Local Development Plans (LDPs) will be required to be in conformity with the NDF.  VIEW PDF VERSION Spatial Distribution of Development Three National Growth Areas are identified: Cardiff, Newport and the Valleys; Swansea Bay and Llanelli; and Wrexham and Deeside. The draft NDF sets out the requirement for SDPs to come forward in each of these areas, which should shape and be shaped by other regional strategies, including Economic Development Plans, and City and Growth Deals. However, it fails to recognise that these strategies call for aspirational economic growth that cannot be achieved by planning for past development trends. The emerging strategy rejects the development of new towns on greenfield land in favour of focusing development on existing settlements with good active travel and public transport connectivity. South East Wales Region In the South East Wales region, Cardiff is recognised as an internationally competitive city and a core city on the UK stage. However, the document states that Cardiff is nearing capacity due to geographical constraints and so does not support strategic housing growth in the city. Without explicitly stating it the draft framework appears to be diverting strategic growth away from Cardiff, which given its role as the economic driver of the region is a fundamental concern. Instead, the draft NDF identifies Newport as the focus for strategic housing and economic development, with emphasis placed on brownfield regeneration. However, the high level of existing brownfield allocations together with flood risk and ecological designations around Newport seemingly limits opportunity for significant new allocations. Further analysis is required but Newport potentially suffers from similar limitations to growth to those in Cardiff. Furthermore, the draft NDF requires that the SDP designate as green belt land to the north of the M4 from the Severn Crossings to North Cardiff. The designation of such a large area, which includes a significant portion of Monmouthshire, would impede growth in an area of high demand strategically located between Newport and Bristol. It is noted that this is expressed as a requirement, yet there does not appear to be an evidence base to support such a major long-term policy decision. The document recognises the interdependence of the wider region and Cardiff and underlines the need for connectivity. It states that the Metro will generate opportunities on land in close proximity to existing and committed stations. Public Land There is a focus on release of public land, particularly within town and city centres, for development and redevelopment, including for mixed use and affordable housing. The release of additional land is to be welcomed, particularly if land values are adjusted to enable delivery on sites that are currently unviable. However, it is also important that the use of public land is in addition to the identification of other, potentially more appropriate, sites. (Affordable) Housing Delivery There is a clear focus on affordable housing but no acknowledgement of the need to increase the supply of market homes. The draft NDF does not set a national housing target but it references the central estimate of need from the 2018-based Estimates of Housing Need: 8,300 additional homes per annum from 2018/19 to 2022/23. The estimates are based on the 2014-based household projections, which carry forward recession-based trends. They fall far short of actual housing need in Wales and do not reflect committed strategies for economic growth and regeneration. It is therefore vital that the estimates are applied only as a starting point and that housing policy supports prosperity and well-being through alignment with economic aspirations such as those within the Cardiff City Deal. It is proposed that SDP and LDP affordable housing targets are based on the Welsh Government estimates and local assessments. Nationally, the central estimate states that 47% of all new homes are needed as affordable (3,900 units), with the remaining 53% as market homes (4,400 units). This split takes no account of deliverability and is constrained by the low overall need figure. It is important to understand that the affordable housing element of the central estimate represents a full assessment of need, which takes into account factors such as anticipated changes in household incomes; this approach also assumes that all existing unmet need will be met within five years. By contrast, the market housing element is simply a projection of past trends and does not consider any wider factors; it therefore does not seek to provide a full assessment of need. It is therefore not appropriate to compare the results of these two elements of the estimates. The Welsh Government has made it clear that the estimates do not constitute housing targets, so the overall level of need has not yet been identified. An indication of tenure split should instead be based upon a full assessment of both affordable and market needs, taking account of demographic, social and economic factors. A requirement for 47% affordable housing would not be feasible and would instead undermine the ability of the market to drive increased housing delivery. Affordable housing policy should take account of viability and deliverability as a proportion of overall housing requirements and should seek to boost the provision of affordable homes through increasing overall supply. This would have the added benefit of improving affordability of open market housing. The draft NDF recognises that delivery of affordable housing outside of the section 106 approach will also be needed in order to boost supply. It states that the Welsh Government will support delivery by providers including local authorities and by managing the allocation of funding. However, it does not state that funding will be increased and does not indicate how this would be distributed. It is therefore unclear if and how this will assist in increasing supply. Housing and the Economy There is a need for the planning system to support the Welsh economy, which remains vulnerable, especially when compared to the other parts of the UK. However, there is a striking absence of any strategic economic policies in the draft NDF. The document neglects to make the link between housing and the economy in terms of the need to attract and retain a workforce of sufficient size. The translation of the Estimates of Housing Need into housing requirements would result in a smaller workforce and higher dependency ratios. In the context of the rapidly ageing population, this could restrict economic growth and jeopardise the maintenance of services and amenities for older people.