Housing Supply and Housing Outcomes Glen Bramley Seminar in Honour of Alan Holmans LSE 7 December 2015

1.0 Alan’s Distinctive Contributions 2.0 Household Projections in Planning 3.0 Economic Models and Planning 4.0 Towards an Outcomes Approach Contents Housing Supply and Housing Outcomes

1.0 Reflections on Alan Holmans’ Contribution Housing Supply and Housing Outcomes Consistent attempts to present a picture of national housing requirements Careful documentation of what constitutes housing need within UK policy and practice Building an evidence base through surveys Raising awareness of the significance of demographic trends and processes e.g. marriage, divorce, cohabitation Empirically grounded attempts to estimate the scale of demographic processes which may be of significance for the housing market Resisting the temptations of reductionist economic models A real historical perspective, reinforced by valuable compilation of long term data series Particular Contributions of Value

2.0 Household Projections in Planning Housing Supply and Housing Outcomes Household projections remain central in planning for new housing – but this is problematic Projections remain key in planning process under NPPG, as they have been since 1970s Also central in AH’s approach to assessing need for social housing But failure of projections to acknowledge economic processes underlying household growth causes several problems - ‘circularity’ of process, leading to persistent underprovision in high demand areas - getting out of phase with the cycle - inappropriate assignment of housing numbers between (sub-)regions In practice, adherence to projections is leading some authorities with high demand and growth potential to set targets which are too low (compounded by baffling results of recent projections)

2.1 Feedback from Supply to Household Growth Illustrative scenario of large scale increase in new housing supply across England, using Sub-Regional Housing Market Model which includes endogenous household formation and internal migration. % increase in household growth over % increase in new housing supply by broad region.

3.0Economic Models and Planning Housing Supply and Housing Outcomes New paradigm around affordability fails to fly There has been significant development of economic models of housing market and effects of planning, in UK as in US Barker (2004) Review led to enshrining of ‘affordability’ as key criterion in planning Meen’s ‘affordability model’ was used to support recommendations for enhanced supply through regional planning process up to 2010 But, as argued in my 2013 paper in Town Planning Review, this approach did not gain wide acceptance Policy changes since 2010, particularly ‘localism’, undermined this, alongside impacts of crisis/recession Still a lack of capacity to use sub-regional forecasting to test outcomes arising from different supply plans Current treatment of ‘market signals’ in planning inquiry process is tokenistic and uninformed by economic models

4.0Towards an Outcomes Approach Housing Supply and Housing Outcomes So how should we approach the problem of housing requirements? In my view, instead of deriving a single ‘need’ number from a projection, we should focus more on a range of outcomes and their relationship with supply These outcomes include affordability, tenure change, housing needs, housing-related poverty, economic growth and employment, housing & n’hood quality We should develop the capacity to forecast outcomes conditional on different level and mix of supply and other contextual & policy conditions There are prototype models but these are not widely used and need further development Government should support LAs more in terms of data and modelling There is a case for an independent body to advise and adjudicate, perhaps linked to OBR/MPC

4.1 Illustration of Outcomes Approach Housing Supply and Housing Outcomes What are the chances of a household in need getting access to social housing? Illustrates one quite useful combined outcome benchmark, under baseline forecast and ‘high social housing supply’ (+70,000 pa) In base period, chances much poorer in London & South, but not great in Mids & North By 2031, in baseline, 3 regions worse. High social rented supply improves outcomes markedly in all regions, esp South, tho’ London still worse.

References Bramley, G. & Watkins, D. (2015) 'Housebuilding, demographic change and affordability as outcomes of local planning decisions; exploring interactions using a sub-regional model of housing markets in England‘, Progress in Planning. E-published July Glen Bramley & David Watkins (2014) ‘A sub-regional housing market model for England with endogenous migration and household formation: its role in assessing the adequacy of planned new housing’ : British Society for Population Studies Conference, Winchester; Demographic projections and forecasts Session: - Wednesday 10 September 9.00am. Contact Bramley, G. (2013) ‘Housing Market Models and Planning’, Town Planning Review, Special Issue on ‘Planning and Housing Markets’, TPR, 84 (1) 2013 doi: /tpr Bramley, G., & Watkins, D. (2014) ‘Measure twice, cut once’ – revisiting the strength and impact of local planning regulation of housing development in England’, Environment & Planning B: Planning and Design, 41, doi: /b Bramley, G. (2015) ‘Pushing on String: Demand and Supply’, Built Environment. 41:2, (Special Issue: ‘Meeting the Housing Challenge: British Experience, European Lessons’). Bramley, G. (2015) ‘Housing need outcomes in England through changing times: demographic, market and policy drivers of change’, Housing Studies, e-published October 2015, Bramley, G., Pawson, H., Pleace, N., Watkins, D. & White, M. (2010) Estimating Housing Need. DCLG Research Report. Contact