Planning matters blog | Lichfields

Planning matters

Our award winning blog gives a fresh perspective on the latest trends in planning and development.

Part 2: Households Renown for being amongst the hottest and driest places on earth, California’s Death Valley is also famous for periodically bursting into life with a “super bloom”. This explosion of golden wildflowers relies on exactly right combination of heavy rains followed by warm temperatures and lighter rain showers. In an area that is as inhospitable as Death Valley, this blend of conditions is not a common occurrence. The super bloom takes place once a decade. Just as it is with the super bloom, household growth in any area depends on the presence of the right combination of factors: in this case relating to demographic, housing and economic considerations. Fortunately, the conditions for household growth do not just occur once a decade although the decennial census does provide an opportunity to review the scale of change that has occurred and inform projections of future trends.This blog – the second in our series on the initial release of 2022 census data – considers the changing household trends in Wales and seeks to understand the implications of this for future housing need.   A greater number of smaller households Between 2011 and 2021, the number of households in Wales grew by 3.4% from 1.3 million to 1.35 million. This shows that actual household growth has slowed substantially from the 7.7% increase experienced between 2001 and 2011. It also equates to approximately half the level of household growth that has been experienced in England since the last census. A comparison with population growth, however, shows that there has been a disproportionately high level of household formation in Wales. This is an important but unsurprising trend which replicates that seen between 2001 and 2011 (albeit at a lower level) and underlines the extent to which new households are forming from within the existing population as well as resulting from population growth. Table 1 Relative population and household change in Wales Source: Lichfields analysis of Census results The implication of the rates of population and household growth is that Wales has seen a 1.9% decline in average household size over the past decade to 2.35 in 2021. This contrasts to the situation in England where average household size increased 0.3% to 2.41 in 2021 (compared with 2.4 in 2011). This decline in household size reflects a continuation of long-term trends in response to a range of social trends. It underlines the continued need for housing to attract and retain working age population but it is important that falling average household size is not conflated with the need for smaller dwellings. The provision of a range of housing types and sizes is essential to tackling the reduction in the number of working age and younger people – a significant challenge in Wales that was discussed in our previous blog post.     Regional Disparity Breaking down household change across local authorities reveals a more nuanced picture. Despite experiencing the highest population growth (accounting for 95% of the total population growth for Wales between 2011 and 2021) and being the only four counties not to suffer a decline in working age populations, Cardiff, Bridgend, Newport, and the Vale of Glamorgan only accounted for 40% of the total household growth in Wales – although three of these authorities (Bridgend, Newport, and the Vale of Glamorgan) were amongst the top five in terms of the level of household growth since the last census (along with Monmouthshire and Merthyr Tydfil). Despite experiencing the second highest population increase in the country (4.7%), the number of households in Cardiff increased by just 3.3%. This shows that despite strong economic prospects in these four authority areas and their attractiveness for younger people, household formation is falling behind and cannot keep up with population growth. Reasons for this include a failure to deliver sufficient new homes, the relative (un)affordability of housing in these areas, and the potential (un)suitability of the housing stock for newly forming households. These issues were particularly pronounced in Cardiff and Newport which were the only local authorities in Wales to experience an increase in average household size since the last census. Figure 1 Household change between 2011 and 2021 by local authority Source: Lichfields analysis of Census results Three counties experienced negative household change: Gwynedd (-2.6%), Ceredigion (-2.1%) and Blaenau Gwent (-0.4%). This reflects the trend of these being the only authority areas to experience population decline since the last census.When looking at the change in household sizes by authority, there are significant differences across the country. As set out above, there were only two local authorities – Cardiff and Newport – which experienced an increase in average household size (both by 1.3%). The previous blog noted that these were the two areas that experienced the biggest rate of population growth. This suggests that existing households have absorbed more of the influx of people, rather than population growth facilitating new household formation. By contrast, all other local authorities experienced a reduction in household sizes. The biggest decrease was in Merthyr Tydfil (6%) where there was a 0% change in population, with significant reductions also in Monmouthshire, Caerphilly, Ceredigion and Pembrokeshire. The population of Monmouthshire and Pembrokeshire increased slightly since the previous census but each of the other areas with the most significant level of decline in their average household size also experienced a loss of population since 2011. All of these authorities experienced a decline in young people and working age population and a significant increase in the number of people over the age of 65. These population trends help to explain the household patterns that have occurred as younger people tend to live in larger households (either in shared homes or families) than those of retirement age who typically live in couples or alone. Figure 2 Household size between 2011 and 2021 by local authority Source: Lichfields analysis of Census results     Implications It is instructive to consider how these trends relate to housing delivery in Wales. When comparing average housing delivery against Local Development Plan requirements, a clear pattern of under-provision emerges. Only one Welsh authority exceeded its housing target and the national average for Wales was less than 50%, as ten local authorities delivered less than half of their identified requirements. These levels of delivery are likely to have had direct implications on the population and household trends that have been seen since 2011. Under-delivery of housing can have consequences in terms of the demographic profile of an area, as well as its social and economic wellbeing.Whilst some may see census results in respect of limited rates of household growth as justification for less housing, the wider social trends and reflection in population demographics discussed in this blog series convey a different story. Boosting population growth and retaining younger age groups through the supply of housing will support a larger workforce and will inevitably offer social and economic benefits to Wales and individual local authorities. To do so there needs to support for a future step-change in housing delivery.  

CONTINUE READING

Counting the cost of delay: The economic impact of Local Plan delay to housing delivery

Counting the cost of delay: The economic impact of Local Plan delay to housing delivery

Rachel Clements, Harry Bennett & Isla Bowman 26 Apr 2022
Local plan making seems to be in a perilous state. A slew of local plans have been withdrawn, ‘shelved’, stalled, or are not taking on the feedback of local plan inspectors in recent weeks and months. One can look at this trend as symptomatic of the political and resourcing difficulties faced by the planning system. However, these delays have a real social and economic impact.   Who and why – the plan-making delay In recent months, the following 11 authorities have either stalled, delayed, or withdrawn their local plans:  Basildon Dacorum Hertsmere Mid Sussex St Albans Dorset Ashfield Sheffield Arun Welwyn Hatfield Castle Point The emerging  hiatus in local plan preparations has been well covered (for example Simon Ricketts, Zack Simons, and a Planning Resource article). Many of the delays – particularity in the South East of England – are linked to the vexed issue of housing needs. There is a current uncertainty over how the Government intends to address the question of how many homes and where they should be provided, with rumours of a new local housing need methodology (or indeed getting rid of it altogether) which may (or may not?) reduce figures in constrained authorities in the name of ‘levelling up’. This comes on top of the perennial difficulties of planning in areas of Green Belt, uncertainty over potential changes to the planning system associated with the planning ‘White Paper’, and local political pushback on development. Under a plan-led system, the delivery pipeline of new housing is to a large extent reliant on housing allocations made in the new local plans. If local plans are delayed, then so too are homes (as equally are commercial developments and infrastructure). Delayed homes are homes not available for purchase, rent or available to meet local affordable housing waiting lists. Delayed housing schemes also won’t generate wider economic benefits arising from their construction, household spend, and council tax receipts.   How many homes are caught up in the delay from these authorities? To quantify the effect of these delays on housing supply and corresponding economic impacts, we have reviewed each of the 11 local planning authorities’ emerging local plans listed above (be that a Reg 18 or Reg 19 draft, or a recently withdrawn plan). For each plan we have calculated how much housing is (or was) proposed on new allocation sites and their expected contribution within each respective plan period. Of the 11 authorities, only eight had published a plan with specific allocations so our analysis is limited to these LPAs (and thus excludes St Albans, Sheffield, and Arun). From our review, there are currently 69,161 homes held up in the system across these eight authorities; most of which are in Dacorum and the fewest in Castle Point. Assuming that each allocation would deliver policy compliant levels of affordable housing, this means there are at least 21,471 affordable homes held up[1]. This total figure does not include any windfall allowances as it is assumed such sites may well come forward irrespective of a new local plan. An alternative way of looking at the impact is to compare the figures in the stalled Local Plans against recent rates of delivery, on the (optimistic) assumption these would continue absent an up-to-date plan. Each of the eight LPAs needs to try and prepare a plan that addresses a higher level of housing need than that for which they previously planned. Adopting this approach – comparing the ‘stalled plans’ against the rate of net additions over the past three years, the stalling of the plans means forgoing approximately c.40,000 homes.   Of course, it may be that recent rates of completions cannot be sustained without new allocations. This is because past delivery will include delivery from past allocations that the emerging stalled plans were intending to replace; therefore, the 40,000 figure represents an optimistic estimate.   What is the economic impact of these foregone homes? We have applied Evaluate – Lichfields’ economic benefit assessment framework – to each of the LPAs providing us with estimates of the economic benefits of the 70,000 homes in the proposed housing allocations. It does not capture the additional economic benefits from associated community infrastructure (i.e. schools and health centres), commercial development (retail and business uses), and green infrastructure associated with these allocations. For each LPA, we have applied a localised housing mix (taken from the relevant authorities SHMA) and assuming policy-compliant levels of affordable housing will be delivered. The results of the analysis are set out in the table below. The near 70,000 homes have an estimated combined construction value of £10.14billion (at 2022 prices, calculated on the costs of each region the LPA is in). This level of investment would support thousands of direct jobs and indirect supply chain jobs with an annual economic output of £1.9billion (GVA). For local economies, there will also be a particular hit as expected housing delivery no longer comes forward. In total, residents of these new homes would support over 9,000 retail and service jobs just by their expenditure. Not all of this expenditure will be ‘new’ as some existing local residents will move into these new developments; however, it serves to show the amount of potential spend is being held up which will be generated once these homes are delivered. Finally, for Local Authorities they are missing out on a significant quantum of Council tax. At today’s rates, once all these homes are built the eight Council will be missing out on nearly £146m per annum. This could be spent on maintaining and improving services across each Council area.     Taken together, the above shows some of the real costs of local plan delay from an analysis of just eight LPAs. It is only ‘some’ because we have not accounted for the additional benefits of commercial and other developments (which of course secure jobs which many authorities chase). Moreover, we don’t account for the wider social impacts of housing forgone. Each allocation represents social infrastructure – be it schools, health centres, community space, green space, sports provision – all not delivered. The consequences of households not forming, or people living in inadequate living conditions is a further cost. Whilst one can readily recognise the realpolitik drivers of stalled local plans – and accept that the current system has notable imperfections – it also the case that many of the areas affected are among those with the worst problems of housing affordability in the country and in locations where new housing could help support revival of local high streets. Delays thus carry economic and social negatives that are real; harming existing and future residents. The scale of impacts from just eight local plans also points to the need to arrest the contagion and get the planning system moving again; if the system as a whole grinds to a halt, the adverse consequences will be of national economic significance.     [1] Where an LPA has a range, we have applied the lower figure.

CONTINUE READING