Our planning system must deliver the genuinely affordable homes communities need
4 min read
Today, Helen Hayes MP will introduce the Planning (Affordable Housing and Land Compensation) Bill which seeks to ensure that our planning system can deliver the outcomes communities urgently need, especially affordable social housing.
The housing crisis is the single biggest practical issue facing communities across the country.
Planning plays a crucial role in the delivery of the genuinely affordable social housing which is desperately needed, but there are some major problems at present which limit the effectiveness of our planning system and work in favour of landowners against the interests of communities.
Our planning system has a number of mechanisms designed to broker and mediate the differences between the individual interests of landowners or developers and the collective needs of communities. These aim to ensure that new development contributes to social infrastructure needs – for affordable housing, school places, green space, NHS services, play space and public transport. But too many of the current mechanisms designed to deliver fair outcomes from the planning and development process essentially amount to shutting the door after the horse has bolted. Our planning system is therefore in need of major reform.
Today, I will introduce the Planning (Affordable Housing and Land Compensation) Bill supported by Shelter, the Town and Country Planning Association (TCPA) and a cross-party group of MPs, which seeks to ensure that our planning system can deliver the outcomes communities urgently need, especially genuinely affordable social housing, by closing important loopholes.
The government’s definition of ‘affordable’ housing includes homes to buy at up to £450,000, and homes to rent at up to 80% of market rent. The role of affordable housing has always been to meet the needs of those who couldn’t afford to rent or buy housing in the private market. Yet the current definition has completely broken the ability of the planning system to deliver sufficiently for those in the greatest housing need. My Bill re-establishes the link between the definition of ‘affordable’ and income, replacing the current definition of ‘80% of market price’ with a definition of ‘no more than 35% of net household income for lowest quartile income groups in each local authority area’.
Our planning system still provides landowners with the right to the future value of development rights (or planning permission) which are granted by the public sector. This so-called ‘hope value’ dramatically inflates the cost of land. Inflated land prices make it much more difficult for Councils to buy land to deliver social housing; and easier for developers to argue under the viability rules that they cannot afford to deliver the affordable housing required by planning policy.
In a recent example in south London, a site with an existing use value of £5m was put on the market at £25m on the assumption that it could be developed for housing, and later withdrawn from the market on the expectation that the value would rise even further – setting back the delivery of any housing at all on that site by years, and making it almost impossible to deliver affordable housing even at the current broken definition.
It is vital that our planning system provides certainty and transparency and puts an end to speculation on land values which prevents land from being used to deliver new homes. Landowners should receive fair compensation, coded in law, they shouldn’t be entitled to value derived from things they don’t own, haven’t realised, and which are not confirmed in law, as they are at present.
Finally, my Bill seeks to specify in law the key factors used for viability testing in relation to planning decisions, including placing limitations on the expectations of developer profit and land values, providing greater certainty and transparency for both landowners and communities.
Our planning system must be able to deliver the genuinely affordable homes communities need. More than this, communities must be able to trust that it will do so, and that the promises made both in Local Plans and planning applications will not be watered down later because of viability. My Bill will reform our planning system to place community need at the heart of it and increase the speed and quantum of affordable housing delivery to address the housing crisis.
Helen Hayes is Labour MP for Dulwich and West Norwood.
PoliticsHome Member, National Federation of Builders, have responded to Helen Hayes saying "Want more affordable homes? Reform the planning system!". Read the full response here.
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