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The Challenge of Building Sustainable Urban Extensions in the UK: Resurrecting Quality from Austerity Paper for EURA 2013, Enschede, July 4 th 2013 Bob.

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Presentation on theme: "The Challenge of Building Sustainable Urban Extensions in the UK: Resurrecting Quality from Austerity Paper for EURA 2013, Enschede, July 4 th 2013 Bob."— Presentation transcript:

1 The Challenge of Building Sustainable Urban Extensions in the UK: Resurrecting Quality from Austerity Paper for EURA 2013, Enschede, July 4 th 2013 Bob Colenutt and Martin Field, Northampton Institute for Urban Affairs

2 The Crisis of Supply and Quality From all political parties in UK there are calls to substantially increase housing supply, both market and affordable, but there no clear strategy emerging of how to do it or where the money comes from or the form of spatial planning required In the recession sustainable development measures have “fallen off the end” as developers and Government demand commercial “viability” before quality or sustainability; cross subsidy to affordable rent has collapsed One of the solutions suggested is to build a new generation of Garden Cities or New Towns, or “sustainable urban extensions” on the edge of existing towns and cities This presentation puts the concept of large scale housing development under the spotlight, from the perspective of a critique of the house building industry in the UK

3 The House builders Argument In the background to the debate about new housing supply in the UK is the adversarial relationship between the house builders industry and the public sector (local authorities). Developers blame the planners and the planners blame developers for not addressing concerns about quality and sustainability The house-building companies say that long term shortages of supply are due to; (i) Not enough land allocated for housing by local authorities (ii) The planners do not give enough consents for housing and are too slow (iii) The planners make unreasonable demands on developers to provide infrastructure, sustainability measures and services which make schemes unviable (iv) Local people are against development (for environmental and community reasons) and put pressure on local authorities to be anti-development

4 Housing Supply – the reality In 2012, the top 5 UK housebuilders have 230k plots with planning consents; and 288k plots in their strategic land banks i.e. 12 years supply from just the top 5 UK housebuilders (see Table below)) So why are they complaining? Their business model is two fold; - land trading and ensuring rising values of their land asset base - keeping up prices of completed units by “drip feeding” supply (25-50 units per annum on any one site is normal) At the same time, landowners bid up prices and only release land slowly to restrict supply Thus, the developer/landowner supply system acts to: limit land coming forward; limit build out rates, and keeps up prices even if demand falls off This is the context for putting the spotlight on Sustainable Urban Extensions, as a planning model of delivery

5 CompanyPre-tax profit (£m)Completions / Sales Land (no. plots with planning permission) Strategic land holdings (plots) 201220112010201220112010201220112010201220112010 Bellway105.567.244.4522649224575223001806817602 9764 plots + 3000 acres (18000)* 13000 plots (+ acres tbc) 15200 plots (+ acres tbc) Berkeley214.8136.2110356525442201260212702628099 10000@10000 Persimmon98.7148.195.5 up 21% 11325 on 2011 93609384637866333558862 16100 acres (90000) Taylor Wimpey78.6 -71-700108861018099626540965264635561003408623677060 Barratt110.7 -11.5-162.912687110781137754209600836234010500 acres (60000) 11400 acres 11000 acres Top 5 UK House Builders Summary of Annual Reports 2009-10 to 2011-12

6 SUEs under the spotlight Urban extensions as a form of large scale housing development are regarded as less expensive and easier to deliver than Garden Cities or New Towns since they require less new infrastructure SUEs in our study are defined as urban extensions of a minimum 1000 homes (designed as new communities on the edge of existing towns) SUEs are more than just new large housing estates – they carry the concept of “sustainable” extensions with master plans, a full range of facilities, and best practice in community engagement

7 Sustainable Urban Extensions in UK Growth Areas Approx. 50% of supply in UK Growth Areas in the period 2001-2021 was to be delivered in SUEs In the Milton Keynes/Northamptonshire growth region approx 70,000 out of 144,000 homes in 2001-1021 was to be in SUEs 26 SUEs were designated in MK/Northamptonshire By 2013: of the 26 designated, most have outline planning permission; yet 17 have not started. 9 have started on site (5/12 in MK; 4/15 in Northamptonshire) though none of these are anywhere near completed In Milton Keynes where 17,400 units were designed; just 1000 units had been completed by 2012

8 Why the lack of delivery? 1.There were major infrastructure delivery problems – mainly roads/bridge access, also school funding. There was a very small Growth Areas Fund and no effective join up with Government on infrastructure planning e.g. widening of the A14 2. Most of the development land was “optioned off” to developers but they were reluctant to bring forward land for development 3.Development of SUEs depended upon housebuilders taking the lead; but they built out their sites very slowly 4. The sustainable features of SUEs were regarded by house building companies as an additional cost which prolonged negotiations and created tensions

9 Was NIMBYism a problem? All local authorities in the study area were signed up to the growth agenda; one had major reservations but in the end went along with it; all authorities contributed to Joint Planning Units in Northamptonshire Community pressure was greatest on the edge of Northampton; scepticism that community infrastructure would be delivered; one SUE was dropped; some community views were accommodated by negotiation, others could not be accommodated (e.g. STOP campaign) MK was more pro-growth but community views hardened over time though the broad growth strategy was not significantly altered. NB. MK devised a “Roof Tax “for major schemes which was regarded as an effective tool to deliver infrastructure

10 Supply side: Way forward 1 If the serious policy aim is to double supply over the next few years and provide a substantial proportion say 30% of affordable housing, the important lesson of the last 20 years, is that policy makers cannot rely on the house building sector to be the main agent of delivery of this programme, either in terms of quantity or quality and sustainability. There is limited scope for regulation, or nudge, of the house building sector that will stimulate substantial further supply because there is no effective competition to the sector Other providers (local authorities; small/medium builders; co-ops; self- build; community land trusts, RSLs) must be brought in, encouraged and substantially scaled up Public Land should be made available to these new providers- but not to the major house builders who already are hoarding land. Public authorities must consider CPOs or taxes on land banks;

11 Way Forward 2 Affordable housing as part of a housing mix and sustainability cannot be funded out of cross-subsidy from developers profits Spatial planning is essential but on its own it is no more than an aspiration Sustainable urban extensions require publicly funded infrastructure. (Only a limited proportion of infrastructure costs are likely to be funded from developers profits) Local or regional delivery vehicles that are accountable have an important role to play in leading development and acquiring land Policy makers are generally intimidated by the power of the property lobby. The question is whether they will look for alternatives - or continue to convince themselves that the market needs just a bit more nudge or liberalisation

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