Rethinking residential land supply

Chris Clark, Senior Associate at Glenny, calls on the Government to change its approach to housing land supply, arguing one-size definitely does not fit all. London is in the midst of a housing crisis, with statistics predicting that the capital’s population will increase to roughly 10 million by the year 2030, meaning the city will need around 640,000 additional homes to reasonably sustain its future.  On an annual basis, approximately 49,000 houses will need to be built each year to withstand this growth, a worrying statistic when current build rates only supply around a third of this. The present system, which is based on a greenfield housing land supply model, doesn’t seem to fit. The National Planning Policy Framework (NPPF) is based on the assumption that 80 - 95% of land allocated for housing will end up being developed and is the reason why many local authorities’ housing land supply projections look healthy. However, whilst the NPPF model may work for greenfield land (few rural landowners would sit on land allocated for residential), in London the supply shortfall is acute since most land allocated for housing is brownfield and occupied by operational businesses, which have no plans to re-locate. Moreover, the loss of industrial land in London is making re-locating businesses increasingly challenging. A key reason why five-year housing land supply projections in London rarely turn into delivery is that they are based on an assumption that allocated brownfield land is highly likely to be re-developed, when this is patently untrue. Housing delivery figures that are woefully below London Plan targets and previous five-year housing land supply projections are evidence of this. It’s time for other options to be considered to ensure that brownfield land allocated for development gets delivered. One option is for local authorities to consider greater use of compulsory purchase. Of course, forcing individuals to sell land or property requires sound public policy reasons. While it can deliver very effective results, it can be a confrontational process fraught with tension and conflict. Also, for it to play a serious and sustained role in future housing delivery in London, the need for it must be well communicated to win broad public support, and it should be more embedded to make the current planning system less passive. A good example of where compulsory purchase is being used to deliver brownfield land is the ongoing regeneration of Stratford and the Olympic Park, just a stones-throw away from Glenny’s own head office. Once a combination of brownfield land and low-value industrial buildings, Stratford has become a thriving area, home to the Olympic Park, and a multitude of other business and residents. It now showcases some of the best retail, commercial, residential and leisure uses London has to offer. It would not have happened without CPO. Another option that could address the shortage of housing land is building on a small number of selected greenbelt sites. Analysis shows that more than 430,000 homes could be built at suburban densities, close to train stations, on just 2% of London’s greenbelt. There also needs to be a re-definition of ‘greenbelt’ so that it takes into account landscape and ecological value. This could help ensure that the right balance can be struck between ensuring London remains a place where high-skilled, high-wage jobs can prosper – especially in a post-Brexit context – and where the right type and scale of housing is delivered. However, if de-allocating greenbelt is not politically feasible, a brownfield-only focus for housing development will need to be coupled with higher site densification to ensure housing demand is met, backed if necessary by CPO. By increasing development density within designated Intensification Areas, Housing Zones and Opportunity Areas, that currently cover about 15% of the city, there is opportunity to build over 720,000 new homes – around double the 360,000 units currently forecast.  Central Government must change the one size fits all approach to housing land supply. If the current system prevails it will mean that the housing shortage will increase, as will overcrowding and housing costs will continue to outpace wage growth, thus reducing living standards. Getting the right system in place now will be fundamental in ensuring London is a happy, healthy place for people to work and live for years to come. The alternative would be uncomfortable indeed.   Article originally published in Public Property, October 2017