Housing and planning policy: Constraints and Options Duncan Bowie University of Westminster Somers Town 11 th June 2014

Housing Investment Government terminated central funding for new social rented homes April Government transferred HCA London investment budget to Mayor of London Mayor’s funding: Affordable rent : discounted rent (80% market rent) Affordable rent: capped rent (50% market rent) Shared ownership

Central Government controls Set limits on Local authority borrowing (part of Public Sector Borrowing Limit) Set limits on Local authority increases in council tax (currently 2% pa); LA to hold referendum if higher increase proposed. Central government subsidy to/ control over LA Housing revenue accounts removed in April 2012 (HRA Self- Financing)

2011 Localism Act and Housing Lettings policy : La flexibility – residents and employment requirements – ex servicepeople Homelessness – flexibility on acceptance policies and discharge of duties – increased use of private rented sector and out of borough provision LAs can set own policies on tenancy conditions – 2 year minimum

HRA self-financing End of central government subsidy to Las LA responsibility for HRA business plan Some LAs have capacity to borrow to fund housing investment (within overall limit) Choice of LA whether or not to borrow and how to use: stock reinvestment and/or funding new homes. Decent Homes funding

The principle of the ‘ringfence’ HRA cannot subsidise LA general fund LA general fund cannot subsidise HRA Some LAs have found holes in the fence LA should not provide social rented housing outside the HRA – though some LAs setting up directly owned companies to provide other forms of affordable housing

The Coalition Government’s other housing reforms Housing Benefit caps in higher value areas and overall £500 p w benefit cap Conversion of existing social rented stock to ‘affordable rent’ Amending the definition of affordable housing to include ‘affordable rented’ housing The impact on policies to promote mixed and balanced communities

Planning policy for housing No government targets New housing target set by London Plan Camden has 50% affordable housing target : London Plan numerical target equivalent to 40% Camden has 35% social rent target; Mayor has combined 25% social rent/affordable rent target Mayor opposes LAs setting own social rent/ capped rent targets

Growth and incentives No national govt policy on where employment/residential growth should take place Growth a matter for LA and neighbourhood groups to determine Incentives: New Homes Bonus Community Infrastructure Levy Planning obligations ( schemes over 10 units)

Neighbourhood Planning Neighbourhoods can plan for housing growth (but do not have to) Conformity with core strategy Evidence base and impact assessment Switching site allocations The neighbourhood component of CIL Potential for positive neighourhood planning

Investment options LA developing on own land Using New Homes Bonus to fund new development Using CIL receipts to support neighbourhood infrastructure Use of planning gain for off site provision

Options for Somers Town Use residential value to fund affordable homes Market rented provision to subsidise sub market rented LA equity stakes in private development Given limited development sites within area, use planning gain receipts to fund acquisition of existing private stock to provide social rented homes

Policy Themes Reducing/terminating direct public subsidy – revenue subsidy through housing benefit Residualisation of council stock Growth of housing association sector Deregulation of Private rented sector Rent flexibility in LA and HA sectors Focus on promoting home ownership (marginal h/o)/ Help to Buy Localisation/ more flexibility for Local authorities

Fundamental policy change Remove constraints on LA borrowing Restore central government investment in social rented provision Investment programme for estate regeneration Suppress land costs – LA compulsory purchase of land at close to existing use value LAs should zone sites for housing for lower and middle income groups Implement appropriate policies on density and sustainability Tax undeveloped land and underutilised property Focus on financing development for occupation rather than for investment Regulate private rented sector with transfer of ownership management to LAs and social housing organisations to protect tenants