Addressing the housing crisis - balancing numbers and affordability

Thursday, 23 July 2015

Housing Construction

Researchers at Oxford Brookes University and the University of East London have published a major report for the Joseph Rowntree Foundation on how we can deliver more affordable housing in England.

Led by Dr Sue Brownill, Reader in Urban Policy and Governance in the Department of Planning, the team researched the role of planning obligations and agreements secured between local councils and developers in the granting of planning permission to meet the housing needs of those on lowest incomes.

Finding ways to provide a better balance between numbers and affordability is essential

Dr Sue Brownill, Reader in Urban Policy and Governance

The research found that the number of homes provided nationally through planning obligations, or Section 106 (S106) agreements as they are often called, halved between 2006/07 and 2013/14.

In this time the number went from 32,000 (65 per cent of all affordable homes)  to 16,193 homes (37 per cent of all affordable homes).

Given the estimated needs of 83,000 homes per year in the social rented sector, the level of unmet need is significant. 

The report concludes that volatile housing markets and changes to the planning system, such as revised definitions of affordability in planning legislation and the increased use of mechanisms to appraise the financial viability of housing schemes, have contributed to this decline.

Speaking ahead of a national launch of the report, Dr Sue Brownill commented: “The message from this research is very simple. The country is not providing enough affordable homes to meet needs and the effectiveness of the mechanism which at one time provided the majority of these - planning obligations – has been eroded.

“In a housing crisis defined by the lack of new homes built, measures to increase numbers are taking precedence over meeting the needs of those on lowest incomes. Finding ways to provide a better balance between numbers and affordability is essential.”

Six case studies carried out in parts of the country with differing housing markets revealed a more optimistic picture with innovative approaches to increasing affordable housing provision. Examples included community land trusts in Cumbria, sub-regional planning agreements in Cambridgeshire, special purpose municipal companies in Birmingham and public-private sector partnerships in Newcastle.

However, the numbers delivered through these mechanisms are at present not sufficient to fill the gaps everywhere.

The report concludes that rebalancing the equation between numbers and affordability requires a combination of the strengthening of the operation of S106 and the empowering of local authorities and their partners to supplement S106 provision through locally driven strategies.

Key to strengthening the operation of S106 will be introducing greater transparency into the viability process, clarifying the viability parameters used to ensure appropriate capture of land value uplift and making changes to the definition of affordability in planning legislation.

Priorities for supplementing S106 are a golden triangle of i) increasing access to land (e.g. lifting the requirement to dispose of public land at the highest price and the use of compulsory purchase orders); ii) finance including devolving increased financial capacity to the local level; and iii) strategic leadership potentially through an enhanced role for City Deals, Local Enterprise Partnerships and a strengthened planning system.

The research team for the project was Dr Sue Brownill and Dr Dave Valler from the Department of Planning,  Dr Youngha Cho, Prof Ramin Keivani and Dr Ilir Nase from the Department of Real Estate and Construction, Prof Nicholas Whitehouse from the Department of Architecture and Dr Penny Bernstock from the East London Research Institute.

The full report, entitled Rethinking Planning Obligations: Achieving a Balance Between Housing Numbers and Affordability, is available from the Joseph Rowntree Foundation website.