Planning matters blog | Lichfields

Planning matters

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

New London Plan Panel Report: Homes for all?

New London Plan Panel Report: Homes for all?

Harry Bennett & Martin Taylor 02 Dec 2019
We’ve been digesting the Inspector Panel findings and the potential implications following the examination of the London Plan. You can view our thoughts on other topic areas here but below we take a look at the all-important issue of housing. On housing, the Panel report finds that the 2017 SHMA provides a reliable starting point for the housing needs of London, agreeing that 66,000 additional homes per year is properly calculated, a need of 660,000 homes over 2019-2029. But in respect of meeting that need, the Panel’s findings diverge from the Mayor’s approach which relied heavily on theoretical small site capacity modelling contained within the SHLAA. The submitted new London Plan (‘NLP’) proposed a 10-year capacity-based target of 649,350 homes with a target for 245,730 on small sites (below 0.25 hectares in size). But the Panel recommends cutting the small sites target to 119,250 and hence overall delivery target to 522,850 (a 19.5% reduction) citing that they are “sceptical about the delivery” from small sites and that the assumed delivery from this source was not “realistically achievable”. This cut has a disproportionate impact on outer London where the SHLAA assumed most of the small site capacity could be found - at one extreme, in the case of Bromley 72% of its housing target was made up of small sites alone. While the reduction to London’s total small sites target is 51%, this corresponds to a 61% reduction to the small sites housing targets in outer London compared to a 26% reduction in inner London, with many of those boroughs seeing no or minimal cuts (see map below). At a local scale, Bromley and Richmond’s overall ten-year housing targets have in effect been halved and as an example Havering’s overall target has fallen near a third. Despite the cut, the revised figures would still represent a 14% increase in delivery from small sites compared to the 2004 to 2016 trend for London as a whole (see table below), a still stretching target which would undoubtedly see a keen focus on increasing density at the neighbourhood level. Interestingly, the recommendations actually represent a 5% decrease on the 12 year trend for inner London boroughs. Flowing from the headline number, the Panel report confirms the principle of the housing requirement operating as 10-year targets, rather than annualised numbers, with a need for the Mayor to take a leading role in setting a trajectory for how that target will be met. Initial analysis by Lichfields indicates any trajectory will need to ramp up delivery over the decade from 32,000 new homes last year, to close to 70,000 homes per year by 2028-29: doubling output over the life of the Plan (see graph below).The implication of this suggested reduced housing target is an increase in London’s unmet housing need, particularly in outer London boroughs, which under the Panel’s recommendations would crystallise at c.14,000 homes per year. The Panel highlights that “it is a major concern that the targets are so far below the assessed need”, but whilst noting that addressing the issue would likely require considerations of Green Belt review or co-operation with local authorities in the wider south-east indicate it is better to “proceed on the basis of an adopted plan rather than one that is in limbo.” This of course leaves wider questions for how that unmet need could and should be reflected in Local Plans progressing across London and the south east. Important for plan-making at the Borough level is that the Panel conclude ‘rolling forward’ the proposed housing targets over a longer period would not be effective. This has to date been usual practice to come to minimum 15-year targets for Local Plans. The panel recommends a change such that housing targets beyond the 10-year period should be adjusted, among other considerations, to take consideration of “local evidence of identified housing capacity”. This will likely see stepped targets in Borough’s Plans and it will be interesting as to how differing authorities interpret this requirement to consider longer term capacity; some might seek to be more expansive in how they define their local capacity (perhaps hand-in-hand with potential Green Belt reviews), whilst others might seek to be more restrictive in defining this, with any targets beyond the 10-years reverting back towards something akin to a small sites windfall allowance. Either way, the panels recommendations would place this firmly in Borough’s hands, deleting the requirement for this process to be “in consultation with the GLA”. Finally, a number of key housing points remain unchanged or are agreed with by the Panel. These include: Agreeing that increasing total housing figures to assist the delivery of more affordable housing would be ineffective given the capacity-based approach to setting housing targets; Agreeing that the threshold approach to affordable housing, set at 35% for private land, and the ‘fast track route’ to viability testing in terms of affordable housing are reasonable and justified; Agreeing that the minimum tenure mix requirements in Policy H7 (30% social rent, 30% intermediate, 40% mix based on local needs) are justified allowing flexibility at a borough level; and Acknowledging that when the London Plan is adopted its housing targets will take precedence over those existing Borough plans even where they are recently adopted: with no transitional arrangements in place. This will create difficulties for certain authorities to demonstrate a five-year supply of deliverable housing sites. Following the previous Further Alterations to the London Plan in 2015, and despite the Panel’s recommendations, this still represents a further step-up in the targeted delivery of homes in London. However, the clear implication and conclusion from the Panel is that this London Plan will not result in ‘homes for all’ and still leaves some unanswered questions as to how the gaps between current housing delivery, the increased housing targets and the higher still housing needs will be bridged. See our other blogs in this series: In search of London’s future industrial land Lichfields will publish further analysis on the London Plan Panel Report and its implications in due course. Click here to subscribe for updates.

CONTINUE READING

In search of London’s future industrial land

In search of London’s future industrial land

Ciaran Gunne-Jones 28 Nov 2019
Last month’s London Plan Panel Report confirms what was widely suspected – that London’s future industrial land needs are probably higher than first thought, mainly because of growth in demand for storage and warehousing within and close to urban locations. Whilst the evidence indicates a modest reduction in the amount of land needed for manufacturing uses (c.170 ha), this is more than counterbalanced by predicted growth of land needed for distribution uses (c.280-400 ha), driven by a combination of London’s population growth and the shift to online retailing and e-fulfilment centres. The draft Plan assumes achieving a 65% plot ratio average to accommodate the future balance of industrial needs. But evidence submitted to the Examination pointed to this being challenging (indeed, our research last year across a sample of sites in Outer London found the current average ratio closer to 33%), and not necessarily applicable in all cases. This led the Panel to conclude, “whilst this does not mean that the average of 65% could not be achieved in the future, it does suggest it may be challenging in some locations and for some types of development.” In other words, intensification of industrial land is not in itself likely to absorb the full level of industrial land needs identified, and in any event there is uncertainty about how deliverable this would be in practice. To complicate matters, the pipeline of industrial land release is also now much greater than was originally assumed. In 2015 about 12% of existing industrial land, equating to 838ha, either had planning permission for non-industrial development or had been identified by boroughs has having potential for redevelopment, with no certainty that any industrial capacity would be retained. The 2017 SHLAA indicated that this figure had increased by 106ha to 944ha, implying that future losses of industrial land will probably be higher than was first thought – much to help meet the Plan’s housing requirements. Furthermore, the Panel noted that the vacancy rate of existing industrial land and premises in most boroughs is less than 5% – referred to as “a reasonable benchmark to assume in an efficiently operating market” – so there’s not even much slack within the current land supply to provide more capacity (apart from a small number of east London boroughs where vacant supply is potentially higher). Taken together, these factors led the Panel to report, “there is likely to be a need, in quantitative terms, for more industrial land to meet future demand over the plan period to 2041 than assumed in the Plan.”  However, it’s not just a quantitative issue. Whilst existing industrial land supply may be distributed across property markets and in locations that are generally suitable for the types of industrial use that are expected, the Panel also identified that there will almost certainly be a need to meet new locational and site specific requirements of some businesses including in and around the CAZ and other accessible locations. So not only does London need more industrial land, but it needs to broaden the portfolio of sites and locations it has to offer. In this context, the Panel concluded: “We consider that the approach to meeting [industrial land] needs set out in E4 to E7 is aspirational but may not be realistic. This is for a number of reasons relating to the practicalities and viability of significant intensification of SIL and LSIS, the continuing pressure to redevelop non-designated sites for other uses, and the likely need for new sites in certain locations, including in and around the CAZ.” There was significant debate about the policy detail at the hearing sessions in March, as we reported in an earlier blog. Modifications are suggested to help the effectiveness of these policies E4 to E7 in the short to medium term, but the Panel is unequivocal that planning for medium to longer term industrial land needs should fall within the remit of the future strategic, London-wide Green Belt review that is recommended. The context for this is that in the 15 years since the first London Plan was adopted, there has been a general presumption in favour of industrial land release across London within specified benchmarks. However those benchmarks were significantly exceeded, with the end result being far greater release of industrial land than was ever anticipated (Figure 1). The effect of this has been not only to reduce London’s industrial capacity beyond what structural trends allowed for, but also to narrow the range of industrial locations (particularly within inner London) available to accommodate the wide range of business uses that can exist on industrial sites. Figure 1: Change in London’s industrial floorspace supply (2000-2016) In response, the draft Plan proposes a far more stringent approach to better guide the management of remaining industrial capacity, but relies heavily on intensification and co-location of industrial uses (plus introduces – but doesn’t really articulate in any detail – the concept of ‘substitution’ whereby industrial needs could be met outside of London). However, the Panel was evidently not convinced that the capital’s current and likely future demand-supply balance for industrial land could be met solely in this way, and indicates a bolder approach is called for in the longer-term. The risk is that the issue simply ends up in the long grass, whilst in the meantime a buoyant industrial market adds more pressure. It will be interesting to see how the Mayor responds. See our other blogs in this series: New London Plan Panel Report: Homes for all? Lichfields will publish further analysis on the London Plan Panel Report and its implications in due course. Click here to subscribe for updates.  

CONTINUE READING