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Industry reaction: Housing fund offers just £20k per affordable unit

An architect has criticsed the government’s £300 million affordable housing fund for providing only £20,000 per unit

Announced this morning, the government said it hoped to deliver 15,000 new affordable homes using a new multi-million pound fund and a £10 billion guarantee to developers and housing associations.

The move was one of a raft of measures designed to boost house building which included removing affordable housing commitments thought to be hampering 75,000 new homes.

The £300 million contribution was however criticised by architect Alex Ely of Mæ who pointed out it was equivalent to just £20,000 per house. ‘That’ll be an interesting challenge’, he said.

Meanwhile opinion was divided over further reforms which could see the planning permission requirement on home extensions of up to eight metres removed.

One World Design director Chris Medland supported the move but warned it could lead to design and build outfits benefitting at the expense of architects.

He said: ‘The problem for us is that by skipping the planning process the process of design may also be skipped, meaning that architects will not benefit from this and most likely the ‘design and build’ type outfits will pick up the lion’s share of any additional work.

‘The issue the RIBA should be looking into is how to embed the skills of an architect into the planning process for the benefit of that process and the legacy in built form of such hasty statute.’

He added: ‘If planners are overloaded and slowing the process down, why not give registered architects the licence to self-certify small extensions/temporary permitted development in design terms (not taking away responsibilities for building control from the local authority) so that the non-qualified design and build type outfits must engage with the profession. I believe this is already done on the continent.’

Dan Brill of Dan Brill Architects said: ‘Any plans that dis-empower local authorities or which simplify, reduce or remove planning requirements or permissions can only be a very good thing. The biggest obstruction architects face in carrying out their work is the current planning system, which seems to be based on the presumption that new development should be refused unless proven otherwise. The system would in fact be more aptly named ‘The Development Prevention Authority’. The attitude, conduct and competence of local planning authorities across the country are wreaking havoc on the design quality of public buildings, homes and communities on a daily basis. By and large they are dysfunctional, unhelpful, uncooperative, and unaccountable for their actions. 

‘The determination of a typical planning application should be a simple matter of checking for policy compliance, but that would rely on clearly written policies based on clearly defined infrastructural strategies. Instead we have wooly, conflicting policies that are lengthy and wide open for interpretation and abuse, leaving the success or failure of any given application at the mercy of an individual case officer’s ‘personal bias, who often holds no design education or architectural training whatsoever. These are not the people we should be entrusting to determine good from bad design, or to decide what should be build or not. If LPAs cannot act responsibly then their power should be withdrawn.

‘Whether or not the new government plans will stimulate the economy is another matter; while it is undeniable that the planning system is stifling the construction industry, the bigger problem remains developers’ / homeowners’ ability to secure the loans that are needed to fund building work in the first place. This will also need to be addressed in government plans if any real change is to take place.’

Chris Wilkie of Rees Pryer Architects said: ‘From a small practice that works predominantly in the affordable housing sector we see this news as something of a mixed blessing.

‘In these challenging times for our profession we have taken on an increased number of “domestic” projects such as the small extensions potentially now being excluded from requiring planning consent.  Rather than “boosting the industry” one would argue this will in fact have a negative effect – taking this work out of the planning system, cutting out the involvement of professionals even further.  It is highly likely that not only would the planning stage be omitted, but also detailed design – builders instead looking to follow the building notice route.  This will further stifle creativity (many young architects develop their skills and showcase their abilities through these opportunities), increase the view that architects are a “luxury” and can only be detrimental in the long run.

‘Not good news, but nonetheless we believe that the main issue is funding.’

He added: ‘Conversely if the £300 million is additional funding for affordable housing then this must be beneficial to practices like ourselves.  Over the past three or four years particularly, so many schemes have faltered or failed due to lack of funding. We have a number of projects that, if funding became available, would get back off the drawing board, out to tender and subsequently onto site making a real difference to the economy and provide much needed affordable homes.

‘On a lighter note, whilst we may have some gripes about local planning authorities, we’re not sure that putting them on ‘special measures’ would be the answer!  Perhaps just some better training in what makes good design would be better?’

Jerry Tate of Jerry Tate Architects thought architects might receive less work as a result of the changes but said: ‘Most of our refurbishment clients are looking for sustainability improvements and a carefully designed and managed build, planning is only a small but important part of this process.’

Commenting on the affordable housing fund, he said: ‘Clearly with affordable housing delivery so bad every bit of additional funding helps, and although this is balanced against changes in planning obligations for developers, with  UK housing completion numbers so historically low you can’t help questioning the current method of affordable housing delivery.

‘Any measures to improve housing start figures are a good thing and will help affordability overall, my guess is we need more developers like Pocket who are not operating in the standard affordable housing model but are delivering appropriate and “actually” affordable market housing.’

Stitch Studio director Sally Lewis added: ‘Financial support for housing growth is important, and this is good news, but without well-resourced and well intentioned planning authorities it will be wasted money.  Relaxing the planning requirements isn’t a great boon either, as people still need to talk to each other and make things happen. The issues don’t go away because there are a few less rules.

‘Local authorities are resource starved to the extent that all the money and political will in the world will not make things move faster. Our very positive working relationship with Ealing throughout the development of the South Acton masterplan is a great example of how efficient, effective and deliverable the development process can be - for thousands of homes, not single home extensions. And it did not depend on an “easier” planning system. It worked, and the proposals sailed through planning, because Ealing have a great team and they worked with us. Not one of the stakeholders will look back and think that they have wasted time along the process. It follows that they didn’t waste money either.’

She said: ‘I think we need a big attitude shift to go along with the political support being offered. Real collaboration is hard work but it pays off. It’s also harder for politicians to promise and deliver.’

Glenn Howells Architects director Dav Bansal said: ‘The funding on house building and ease in planning restrictions will all help to boost growth however the single most challenging issue remains to be lending/ increasing mortgages to buyers to help them extend their property or move. 

‘If the Government can focus more on the lending criteria, we may start to see significant growth in building works within this specific sector. This in turn, will help many of the smaller and struggling practices to grow their workload.

‘Planning applications for house extensions are usually not a complex process, in some cases they are undertaken by “non-architects” so I believe this would have minimal impact on practices. As such, they are neither expensive so lifting any restrictions will see little improvement.’

Chris Roche of 11.04 Architects said: ‘This is a positive, albeit small step by the government to boost the economy for the construction sector. It is a pity they did not make this conditional on householders reducing their carbon use and thereby encouraging investment in energy savings.’

He added: ‘Clearly there will be benefits to architects but this measure will not address the bigger issues of home affordability, and shortage of social housing. A reduction in VAT who have helped and the RIBA should continue to lobby the government to introduce additional changes to revive the construction sector.’

Beyond the architectural profession, the reaction to this morning’s announcement was also mixed.

Andy von Bradsky, PRP chair, commented on the government’s £300m affordable housing fund: ‘We welcome the news of greater investment across the housing spectrum. Embracing the recommendations of the Montagu Report is a significant step forward in achieving a thriving build to rent sector, however a great deal now rests on local authorities to help deliver this through local planning obligations and restrictions on public land.

‘We need to better understand the detail regarding investment in affordable housing, as this is where the need is greatest and where supply should be increased. Removing Section 106 obligations for some sites may be justified but we could see a continuing shortfall in affordable housing if this becomes widespread. Housing associations should be able to balance this by offering a wide range of products from market sale, private rent, shared ownership and social housing. The remaining barrier is the supply of consented land, particularly public sector land, at realistic values to underpin affordability. Broadly it is excellent news for architects but will not lead to an immediate increase in work.’

Stride Treglown director Dominic J Eaton said: ‘We need to put matters in perspective. The media “highlights” concerning the relaxation of permitted development rights for certain dwellings will generate little impact at the national level to deal with the need to accelerate house-building.  This will be of interest to those looking to stay put or simply increase the value of their property, possibly to re-coup the reduction in property values experienced in recent years.

‘What will “Get Britain Building”, using Cameron’s own language, is the removal of legal and financial restrictions that have, and continue to, prevent larger housing schemes with permission coming forward - notably in the form of overly restricted s106 obligations and which bear little relation to the current market situation. This is not a new problem.

‘In its “Planning for Growth” publication of March 2011, the government encouraged local authorities to renegotiate such agreements signed before April 2010. One question which is taxing planning practitioners today is how on earth can the government defend a strategy whereby decisions relating to large scale housing or mixed use schemes are to be taken out of the hands of local authorities given the importance they (the government) have placed on local decision making as part of the Localism Agenda.

‘Unless clear guidance is issued very soon, local authorities and the development industry will enter a period of even greater uncertainty at a time when what is really needed is the removal of restrictions to financial borrowing, a more positive attitude to plan making and decisions in accordance with sustainable development principles. These are the issues that have the potential to deliver tangible results, and quickly.’

National Housing Federation chief executive David Orr said: ‘This stimulus package is a major step forward. The Government’s £10 billion financial guarantees, together with the extra £300 million for affordable and empty homes, has the potential to transform the housing market.

‘It will provide homes for some of the millions of families on waiting lists, create jobs and give the UK economy a shot in the arm with a speed and effectiveness few industries can match. The only piece of the puzzle missing from this announcement is rapid access to public land.

‘Government departments are sitting on parcels of previously developed public land equivalent of two cities the size of Leicester – this land needs to be made available so that housing associations can get cracking, build more homes at scale, boost the supply of affordable homes and create local jobs.’

Nicky Gavron, Labour spokesperson for Housing and Planning at London’s City Hall, said: ‘Londoners are suffering as the government blames everybody else for their economic mess. The economy is not flat-lining because of the planning system or Section 106 agreements for much needed affordable housing, it is flat-lining because of the lack of confidence and demand, caused by the government’s failing economic plan.

‘In London alone, there are 93,000 houses with planning permission which haven’t been started or been stalled by developers. These are not being built because banks aren’t lending to developers, and because house builders want to limit supply to push up prices and increase their profits. The culprits are the big house-builders who “land-bank” – sitting on land without building - and the big banks who “don’t bank” - not providing mortgages to people.’

She added: ‘Since May 2010 the government has cut London’s affordable housing budget by 70% and introduced sky-high rents for new “affordable” homes. Now they are saying developers do not even need to deliver these. Their proposals are not a viable plan for growth; they are part of an ideological attack on affordable housing and will exacerbate London’s housing crisis.

‘On the mayor’s watch affordable housing starts in London have fallen to their lowest level for a decade. The mayor and government desperately need to adopt a plan for jobs and growth.

‘While the government are busy blaming everybody but themselves, Londoners are suffering. There is an enormous need for decent low-cost rented housing. Yet the reality is that home ownership is a distant dream for many. Private sector rents are soaring, 200,000 families now live in overcrowded housing and rough sleeping are rising rapidly after years of decline.’

Kate Henderson, Town and Country Planning Association chief executive, said: ‘The TCPA supports the Government’s ambitions to kick-start the economy and support housing delivery, however it must not be at the expense of those least able to afford decent homes.

‘The Prime Minister has described “costly affordable housing” as a barrier to housing delivery, but it is well understood that social and affordable homes are essential to creating mixed, vibrant and resilient communities.

‘The detail of how the planning inspectorate administers changes to affordable housing requirements of Section 106 agreements will be very important in ensuring we strike the right balance between bringing housing supply forward and maintaining delivery of new affordable homes. We cannot risk creating a legacy of social division. Once these places are built the long term consequences of this division cannot be easily undone.’

Mark Leeson, Director of Design at McBains Cooper said: ‘There’s going to be a collective sigh of relief in council planning departments across the country if these proposals are brought on to the statute books – the current planning process can be likened to using brain surgeons to treat bumps on the head.

 ‘Case officers are completely swamped by home and small business extension applications, and that is likely to grow as people and businesses extend rather than move - and it’s no secret that many local authorities have been cutting headcount as well to potentially compound the issue.

 ‘Taking house and shop extensions off their workload will have a massive impact on re-focusing case officers’ efforts. It’ll be a double benefit: small scale projects will simply take off, case officers will be freed up to drive progress on the big projects which will have a truly positive economic impact. It’s basic business: the faster the rate of turnover, the greater the income, the more reinvestment in the economy.

‘But, most critically, we still need to see and encourage a step-change in proactivity and pro-development stances adopted by Local Authorities, and a greater drive to balance the need for housing with wider community interests.

‘While the proposals are being described as ‘emergency’ and temporary measures to boost growth, they will, as a result of the need to consult and make changes to the law as it stands, all take time which the industry simply doesn’t have. The NPPF already contains provisions that require and stress the need for the scale of obligations imposed on developers not to threaten schemes’ viability; this now just needs to be worked through and tested on the ground.

‘But the announcement, would not actually appear to offer much that could be called “new”. The Harman Report (Local Housing Delivery Group) published in June 2012 set out some very clear and sensible advice on viability testing in relation to Local Plans.

‘However, the so-called new proposals - whilst focusing on viability - also seem to overlook the major issue, which remains the lack of available bank funding.

‘But viability and Section 106 are complex issues, not just a question of the percentage of affordable housing incorporated into proposed developments, but matters such as density, energy targets, standards generally, the availability and funding of new infrastructure, cost of finance, acceptable returns for developers, and construction and material costs.

‘In the final analysis, we still need to work with Local Authorities. What the NPPF means in terms of viability, and revisiting existing consents with a new approach to considerations around viability, is key to unlocking sites that currently don’t work.’

Paul Everall, chief executive of LABC, said: ‘Whilst we welcome the Government’s move to boost the economy through a programme of house building and the removal of planning red tape, we stress that this only addresses part of the problem and more needs to be done to improve the mortgage market so that people are able to buy.

‘Changes in planning laws have not removed the requirement for property owners to follow building regulations which ensure buildings are safe and sustainable. Building regulations are separate from planning permission and our primary concern is that safety in and around buildings is maintained.

‘There still needs to be an awareness that Building Regulations will still apply to many of these extensions where the property owner is looking to make structural changes to an existing property. A building notice will need to be submitted to the local building control department for approval to ensure building regulations are met. Our local authority building control teams are used to working quickly with developers and homeowners to help them through this process and ensure that construction work leads to healthy, safe and sustainable buildings.

‘The removal of planning law could impact the sustainability agenda as new buildings must be sustainable and energy efficient and the Government must not weaken in its desire to be the greenest Government ever.’

Civic Voice chair Paula Ridley said: ‘We are concerned that after an extensive debate and a thorough review of the planning system over the past year, leading to the introduction of the new National Planning Policy Framework, the Government has chosen to make further changes on an ad-hoc basis to the system which may well result in damaging not just the green belt, but other places and settings of our most attractive buildings, ancient and modern. We welcome the increased investment in housing and infrastructure and we recognise the need to get the economy moving, but we think that short-term measures to rush proposals through the planning system will be counter-productive.’

Nicola Furlonger of Nathaniel Lichfield and Partners said: ‘The relaxation of permitted development rights in this way is a bold move by Government, in the face of some vocal opposition, to speed up the delivery of housing by loosening planning controls. This could help breathe new life into a stock of ageing commercial buildings – where the circumstances are right – bringing with it important planning benefits. The report provides practical advice on how to find those opportunities and bring them to fruition’.

 

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