Interesting policy nudge in North Dorset

[vivienz]

This one is just for general interest; I came across it today on the webstie for Shaftesbury Town Council, but it appears to apply to North Dorset generally.

 

Development Pressure in North Dorset

Due to circumstances beyond the control of the Local Planning Authority, North Dorset District Council no longer has the ‘five-year housing land supply’ that is essential in controlling planning applications that aren’t in line with its adopted local plan.The five-year land supply is an assessment of the number of homes that are realistically likely to be built over the next five years. The total includes any shortfall from earlier years as well as a buffer supply should housing not be delivered as planned. The district council has slipped to a housing land supply of 3.42 years’. This is a result of: A very low rate of housing development over the last year - Only 140 houses have been completed against the annual target of 285. Slower progress than anticipated on developments allocated in the local plan – such as the major development site south of Gillingham. Because of the reduced supply, the district council will have to apply the national ‘presumption in favour of sustainable development’ which will allow more development to take place. This will be applied to all planning applications immediately.Cllr David Walsh, Portfolio holder for planning, said:“This is very frustrating for the council. 10 years of hard work has gone into putting a local plan together which sets out how local residents want the area to be developed. It has been examined and approved by the Secretary of State’s Inspector.“Through this local plan we have allocated land for development and have given planning permissions to developers, but the market is neglecting to bring forward housing. This could mean we may be required to allow development in locations not identified in our current plan, which are neither desirable nor appropriate. “The current system is penalising Local Planning Authorities for the lack of development in their areas, even though they are not actually able to influence the delivery of such development.“Having met and spoken with Planning Ministers and the Town and Country Planning Association, I continue to push for Local Authorities to be given the tools with which to bring forward development on sites with permissions granted. I had hoped that these would come through the Housing White Paper.“We will continue to work with the Gillingham developers to help progress the site so that it can boost our supply in the future.”The district council, alongside West Dorset District Council and Weymouth & Portland Borough Council, has developed a programme of ‘Accelerating Home Building’ work.  This will include working with housing associations, private sector developers and land owners to promote housing development and bring sites forward at a faster pace.

[Jeremy Harris]

Living nearby, I think that they are being "gamed" by the big developers.  Certainly around here there are several large developments that have PP, but are practically on hold.

 

There is a lot of demand for housing in Dorset, particularly around the Shaftesbury area.  There's also land that had been granted PP, but which has only been partially developed, or even not developed at all, because the developers want the "housing land supply" to drop below the 5 year limit.  This works massively in the favour of developers, who can then gain PP for more land, partially develop it, or just sit on it, until once more the 5 year supply rule comes into play, when they get a virtually free hand to gain PP on yet more land.

 

Where we are (just over the border in West Wiltshire) the "real" supply of housing is around 12 years, yet the supply of housing according to the rules is just about 5 years.  If all the houses that have planning permission were built in the next three years, there would be no requirement for new houses here for at least five or six years, maybe more, but that's the very last thing the developers want.

 

I've been watching this game being played ever since we started plot hunting, around 6 or 7 years ago now.  The big developers are extremely good at what they do, so good that they even seem to have pre-empted the slow down in the market, and mothballed several large developments just before the "crash".  They delayed restarting these afterwards, too, and used the 5 year rule to get PP on more land, rather than just build the houses they already had PP for.

[ToughButterCup]

Wyre Borough, my local area is in a similar position. 

26 minutes ago, vivienz said:

 

[...]

Because of the reduced supply, the district council will have to apply the national ‘presumption in favour of sustainable development’ which will allow more development to take place. [...]

 

It will be interesting to see how the Council interprets the meaning of the word '...sustainable...'

 

I draw attention to the word as a result of our experience. We succeeded in our application for PPP whereas our neighbour failed. The differences in application between his application and ours were minor - with one notable exception the ecology strategy.  

Wyre refused the application, where a few months earlier, ours was accepted. 

 

Reason? The change in the understanding of one word ; sustainable.

Whereas before it was understood to mean (among other things)  within walking distance of the shop, bus stops and so on, now, sustainable has come to mean  be able to use a footpath to access the shop and local amenities. 

 

Why the change?  Paragraph 8.1 of this document spells it  Here's the core arguement

 

One of the key points regularly highlighted within the appeals relates to the provision of safe pedestrian environments and good levels of connectivity to community facilities and services. In this instance whilst the outline application has been approved there is very poor connection to public services with no foot paths to public transport links or to the A6 which is located to the south of the site. Furthermore the site is unrelated and disconnected in geographical terms to the facilities and services available within the Settlement of Forton

and 

The LPA now have a better understanding as to the interpretation of the NPPF and locational sustainability and each application is determined and assessed on its own merits

 

 

 

What does '...better understanding...'  mean in practice? The results of Appeals Decisions. 

Read  Appeals Decisions.  

 

Exceptions illustrate normality

[ProDave]

To solve this land banking issue, all that is needed is a policy to blanket refuse applications from major developers who already have land with PP that they are not developing.

 

Of course if that were implemented then they would get round it by an entirely "new" company applying for permission I guess.

[SteamyTea]

13 hours ago, JSHarris said:

mothballed several large developments just before the "crash"

That is in everyone's best interest though.

No good developers going bankrupt by building houses that no one is willing to buy.

[Jeremy Harris]

3 minutes ago, SteamyTea said:

That is in everyone's best interest though.

No good developers going bankrupt by building houses that no one is willing to buy.

 

 

I agree, but the curious thing was that at least one of these sites started closing up about a week or so before the Northern Rock fiasco, so the developers could clearly see the writing on the wall an acted very quickly to close down this development (followed by two other large developments shutting down shortly afterwards).  The frustrating thing is that here, house prices didn't crash, they just levelled out a bit, then started increasing again, albeit at a much slower pace.

 

To me that indicates that demand was still strong, and that finance was still available to those who wanted to buy here.  This fits with the pattern of local employment.  I was in the process of moving around 800 to 900 families into the area, the majority of whom were moving from areas where house prices were fairly high, so they had a fair bit of equity.  That alone accounts for around two to three years worth of house sales and purchases in this area.  In addition, the financial sector companies operating locally were doing much the same, albeit on a smaller scale, and rationalising operations from their local offices, so also moving people into the area on relocation schemes.

 

The problem we faced was the shortage of houses.  We dearly wanted the developers to build some houses, as there was a local shortage (it's why prices didn't crash here, I believe).  However, talking to one of the former sales people, who was laid off when the site was mothballed, her view was that her former employer had forecast profits based on the prices of the houses on the new development rising as each phase was released, and would rather sit back and wait for the "recession" to end, and house prices to start rising at a faster rate again, then sell them for a slightly reduced profit.  Given the number of local tradespeople that lost jobs over this, I'm pretty sure the build cost could have been reduced a bit in order to regain some of the lost profit, but for whatever reason that just didn't happen.  It did give local companies a tough time; our ground works chap was right on the verge of shutting up shop when we hired him.  By the end of our ground works he had a full year's order book and was expanding again.

 

We now have a situation where we have far more than the required 5 year housing supply, in terms of PP granted and developments started and then stopped, or just ticking over slowly in order to keep prices up.  Soon we will be like Shaftesbury, and drop below the deliverable 5 year target.  I'm pretty sure this is the case as one of the big developers has just made a bid for a large field nearby.  There's no way they will gain PP on it until we reach the fall back of being below the 5 year deliverable target, and given the slowing down on other developments I suspect we're only a year or so away from being in that position.

 

I'm generally in favour of a free market, but in this case we have a very distorted market, because of the combination of the near-total control of the market by suppliers, with customers not really having much of a choice.  The planning system is one of the main issues, as currently it is being gamed very effectively by developers, in order to maintain a sufficient housing shortage as to keep prices increasing.  Planning controls are artificially distorting the market, and contributing to house price inflation, and I can't help but think that there has to be a better way to do things.

 

[ProDave]

17 minutes ago, JSHarris said:

 

We now have a situation where we have far more than the required 5 year housing supply, in terms of PP granted and developments started and then stopped, or just ticking over slowly in order to keep prices up.  Soon we will be like Shaftesbury, and drop below the deliverable 5 year target.  I'm pretty sure this is the case as one of the big developers has just made a bid for a large field nearby.  There's no way they will gain PP on it until we reach the fall back of being below the 5 year deliverable target, and given the slowing down on other developments I suspect we're only a year or so away from being in that position.

 

Can the councils or government not see the flaw in this "deliverable" measurement?  Surely if 5 years worth of PP has been granted that should be enough, and the press should be used to demonstrate it is the builders restricting supply to maximise profit, rather than a failing in planning policy.

[Jeremy Harris]

23 minutes ago, ProDave said:

Can the councils or government not see the flaw in this "deliverable" measurement?  Surely if 5 years worth of PP has been granted that should be enough, and the press should be used to demonstrate it is the builders restricting supply to maximise profit, rather than a failing in planning policy.

 

Yes, they can, but they get deal of money from granting PP to sites that won't be developed for some time, in both CIL and S.106 payments.  For a cash-strapped local authority (and Wiltshire was proud of keeping Council Tax increases at 0% for 5 years, during a time when inflation was running at a couple of percent), getting a lot of infrastructure payments from big developers is a hell of an incentive to "play the game".....................

[ProDave]

I thought that while you agreed those bribe payments at PP stage, you did not pay them until work started? So giving PP and the site sitting undeveloped does not give the council those funds?

[Jeremy Harris]

2 hours ago, ProDave said:

I thought that while you agreed those bribe payments at PP stage, you did not pay them until work started? So giving PP and the site sitting undeveloped does not give the council those funds?

 

Some payments can be due when work is started, some are on completion.  For example,  in my last job we had an S.106 for road improvements and new traffic lights.  We had to pay that up front.  Part of that was due to the requirements to provide better access for construction traffic, but a "side effect" was that it also meant a much-improved road junction and some resurfacing work that the council had scheduled to do anyway.

 

The council will also be able to account for receiving the payment of S.106 and CIL at a future date, I think.  I've never really got my head around the way accounting works, but do remember that I was allowed to take account of future guaranteed revenue when I was running a business unit within a Trading Fund.  I would assume that councils can do much the same.

Edited September 27, 2017 by JSHarris

[Ferdinand]

20 hours ago, ProDave said:

I thought that while you agreed those bribe payments at PP stage, you did not pay them until work started? So giving PP and the site sitting undeveloped does not give the council those funds?

 

You get what you negotiate.

 

There was a chap on here a few weeks ago with a slightly far fetched sounding self-build project on the Green Belt outside Bristol where he required 8 people to give him the money to do the ground works and site prep before the start.

 

That had a 250k S106 due on the commencement of works. That would be another 30k each for the members of the putative self- build group before they even start building.

 

It is normal for phased payments to be agreed on larger developments matched to the revenue profile.

 

F

[ProDave]

6 minutes ago, Ferdinand said:

 

You get what you negotiate.

 

There was a chap on here a few weeks ago with a slightly far fetched sounding self-build project on the Green Belt outside Bristol where he required 8 people to give him the money to do the ground works and site prep before the start.

 

That had a 250k S106 due on the commencement of works. That would be another 30k each for the members of the putative self- build group before they even start building.

 

It is normal for phased payments to be agreed on larger developments matched to the revenue profile.

 

F

What's needed is a boycott.  If ALL the big developers stopped applying for PP because the S106 or CIL charges were too high, then the councils would have to reduce or scrap them. Better still would be the developers only to apply for PP in LA's that do not charge such bribes.

 

We don't (yet?) have those bribes here and I really feel sorry for anyone forced to pay such punitive charges.

 

I was reading in another place of someone that has a couple of properties in an area zoned for development. If his properties and adjoining land were developed it would be about 130 houses. But he won't go to planning because of the bribes he would have to pay make it unattractive, and without his land, the scheme can't go ahead.

[Ferdinand]

15 minutes ago, ProDave said:

What's needed is a boycott.  If ALL the big developers stopped applying for PP because the S106 or CIL charges were too high, then the councils would have to reduce or scrap them. Better still would be the developers only to apply for PP in LA's that do not charge such bribes.

 

We don't (yet?) have those bribes here and I really feel sorry for anyone forced to pay such punitive charges.

 

I was reading in another place of someone that has a couple of properties in an area zoned for development. If his properties and adjoining land were developed it would be about 130 houses. But he won't go to planning because of the bribes he would have to pay make it unattractive, and without his land, the scheme can't go ahead.

 

Around here in my experience Planning Gain taxes equate to perhaps 5-10% of the GDV of a development and 30%-150% of the sale price of the land under development.

 

Policy for the last several decades has been that expenditure needed to provide community facilities and improvements for the inhabitants of a new development should largely be covered by the developers of that development (which is ultimately paid for by the seller of the land and the purchasers of the houses).

 

To me that seems more or less reasonable.

 

What happens in Scotland with (say) a 500 home development? Who pays for the new roads, the £750k (say) needed to upgrade the local primary school intake by 3 classes, the Doctors' Surgeries and so on, and how is it extracted?

 

Ferdinand

 

Edited September 28, 2017 by Ferdinand

[ProDave]

I am just back from a trip down to Oxfordshire.  I saw lots of new housing estates. I did NOT see any new roads or infrastructure (other than the roads to access the new estates, presumably paid for by the developers)  I would contend that the developers are being conned as the improvements to infrastructure do not appear to be happening.

 

What about all new occupants of the new houses paying council tax? THAT is where the council will be getting extra funding from.  Talk about cake and eating it.

 

I don't know the situation in Scotland on big estates, other than the developers appear to install the drainage and roads at their expense before they are adopted by the council.

 

In the case of a single plot like mine, there is no extra infrastructure needed, but you can bet if I was in a LA that imposes bribes, I would have had to pay many £K for nothing.

[Ferdinand]

Having checked the numbers, Oxford seems to raise a surprisingly small amount

5 hours ago, ProDave said:

I am just back from a trip down to Oxfordshire.  I saw lots of new housing estates. I did NOT see any new roads or infrastructure (other than the roads to access the new estates, presumably paid for by the developers)  I would contend that the developers are being conned as the improvements to infrastructure do not appear to be happening.

 

What about all new occupants of the new houses paying council tax? THAT is where the council will be getting extra funding from.  Talk about cake and eating it.

 

I don't know the situation in Scotland on big estates, other than the developers appear to install the drainage and roads at their expense before they are adopted by the council.

 

In the case of a single plot like mine, there is no extra infrastructure needed, but you can bet if I was in a LA that imposes bribes, I would have had to pay many £K for nothing.

 

It would probably go on things that you would not notice immediately. In my very local area, mine are currently hitting developments for 'improvements to the A38 corridor', in addition to the usual capital improvements for schools / parks / community facilities, which is the main industrial development zone along each side of the main road.

 

Having checked Oxford, their Section 106 contributions run at about 0.5 - 1.5 million per year for an area with 160k people. At 1.4 million it would be around £20 saved on the Council Tax, plus perhaps 2-3 times as much value again in providing newbuild subsidised housing, and whatever they raise via CiL. I can see that being £100 a year off the Council Tax per household.

 

In my area the Council do about 4-8kk per developer house on Section 106 on most developments (=1-2 million), and perhaps 60 affordables in toto some of which will be on top, in a district of 50k households. That again may be £100 or more per year off Council Tax for each household.

 

If someone is increasing the value of their chunk of land from say 100k for 10 acres to 3000k for 10 acres purely by the Council, I think that perhaps 25-30% of the uplift going to capital investment for facilities for the houses they are allowing to be built is quite fair and reasonable. I agree that new people should cover revenue costs. That seems a fair division to me, given that the policy us to attempt to capture part of the planning gain.

 

If the Council were taking say 50-75% that would be pushing it.

Ferdinand

 

Edited September 28, 2017 by Ferdinand

[Ferdinand]

On 26/09/2017 at 18:41, recoveringacademic said:

 

What does '...better understanding...'  mean in practice? The results of Appeals Decisions. 

 

It means they have been cocking it up for the previous X years. 

 

(I know one in the Peak Park where the LPA lost on Appeal when they had expected to win following a dismissive refusal at LPA level, and the developer ended up with a PP for new dwellings and no Planning Obligations at all.)

Edited September 28, 2017 by Ferdinand

[ToughButterCup]

15 minutes ago, Ferdinand said:

It means they have been cocking it up for the previous X years. 

[...]

 

I hate to be fair to the LPA; but exceptions illustrate normality.

 

When the final arbiter (the Inspector) says sustainability now means being able to walk to local services via a footpath,  whereas two years ago it meant merely being within  walking distance of the local service, it appears that the meaning of sustainability has changed.

 

What really interests me is the rationale and methodology by which the Inspectorate change their minds. As long as they do not explain that change, we can be as cynical as we like - and so have reduced confidence in the Inspectorate.

 

It is a great pity that very senior people feel they can take still take refuge in arbitrary, arrogant behaviour on the basis of mere delegated authority.

 

[Ferdinand]

13 minutes ago, recoveringacademic said:

sustainability now means being able to walk to local services via a footpath, whereas two years ago it meant merely being within  walking distance of the local service, it appears that the meaning of sustainability has changed.

 

Is that actually just the last 2 years? Is it not more likely to have been a mistake?

 

The was a case on the series "Meet the Planners" (in 2013/4?) where someone got a Housing Estate on their outlying smallholding through by meeting the sustainability criteria by building an 800m footpath down the side of a country lane. That suggests that the means of safe journey rather than just distance was being considered even then.

 

They were doing detailed Sustainability Rankings on ranking our local potential development sites back in about 2012-3 for our Local Plan using service accessibility criteria. It may even have been in the SHLAA in one form. It was a bad mistake on that evaluation that dropped our site out of the Housing Allocation and forced us to submit a Planning App. before the Local Plan was approved.

 

Ferdinand

Edited September 28, 2017 by Ferdinand

[ToughButterCup]

1 hour ago, Ferdinand said:

[...]

Is that actually just the last 2 years? Is it not more likely to have been a mistake?

[...]

 

No. Our planner told me some time later, we were the last in Wyre to have got through on the old understanding of 'sustainable'

[ProDave]

On the subject of granting PP for one house, then refusing one next door.

 

There was a case here where someone applied for permission to build at the edge of a field. There is a general presumption against building in the countryside here with a few exceptions, one being building in an established settlement.  Well there were two adjacent properties opposite this plot, and it was granted permission, the plot was sold and a house was built.

 

Then the owner tried for a second house. It was clear to anyone with half a brain cell that his intention was to slice up the field a strip at a time and sell it one plot at a time. This time it was refused. So he took it to appeal.  The appeal said it failed the established settlement test and the first house should never have been built either, but they could do nothing about that.

 

So not so much something changed, but different people interpreted the same policy in different ways.