Housing seeks real deal

A steady supply of public sector land and full use of developer contributions are key elements in the delivery of a home building programme that meets society's needs, argues Jenny Harris.

Housing: Call for public sector to benefit from surplus land
Housing: Call for public sector to benefit from surplus land

I had a shock when I picked up my copy of Planning the other week. According to the front page, the National Housing Federation said "surplus public sector land should be sold off to the highest bidder".

In fact, we want to see the opposite - surplus land sold at a minimal cost so housing associations can deliver urgently needed affordable housing. It was a simple typo. The word "not" dropped out of the sentence in transition to the page. But it got me thinking about the consequences of selling all surplus public sites to the wealthiest developers.

We would miss out on a crucial opportunity to bring the supply of affordable homes up to an adequate level for the first time in generations. In the run-up to this year's housing green paper and comprehensive spending review, we told the government that it is vital to raise social house building to 70,000 homes a year if we are to stand a chance of ending our housing shortage.

This summer, it seemed that our wish was granted. The green paper set out plans to reach that target by 2011. In total, the government aims to deliver 180,000 new social homes over the next three financial years. The national affordable housing programme will account for up to 160,000. This will be funded by at least £8 billion in public subsidy, matched by private finance and housing association resources.

But that leaves us at least 20,000 homes short of the overall target. Since the green paper was published, government officials have explained to us that the difference will be made up by land deals, planning gain and other routes. We are working through the detail with the Housing Corporation and the DCLG.

However, it is clear that delivering 180,000 social homes will depend on two things. First, former public sector land needs to be made available at low cost to housing associations. Second, local planning authorities must do their bit by securing thousands of affordable homes through planning gain agreements.

On the first issue, we need an end to the perverse situation that enables agencies such as NHS Estates to sell land at full market price. This allows housing associations to be outbid by private developers at the same time as NHS trusts require affordable homes for health care staff from separate developments.

Progress is being made by the piloting of local housing companies (Planning, 9 November, p3). These will allow councils to develop on surplus land through arm's-length partnerships with housing associations. It is such a good idea that some may be tempted to hold on to sites until they can set up their own company. It is vital that they release the land immediately and resist the temptation to auction it off to the highest bidder.

It is easy to see the predicament in which local authorities find themselves. They face shrinking budgets and see an opportunity for a quick win by selling off assets for the best price. But in terms of delivering long-term benefits to the whole community, enabling social housing to be built is often the best option.

Treasury rules allow public authorities to dispose of land for social benefit rather than monetary value, but they remain unclear. We would like to see the forthcoming planning reform bill rectify this. It should state that "the public sector's duty in disposing of surplus land is to secure the greatest public benefit".

Delivering the housing programme is dependent on local planning authorities making the best use of section 106 agreements. Planning gain deals must secure homes of the right design, quality, space and balance of tenures so problems are not stored up for the future.

Some authorities are taking the easy option by asking developers to offer one and two-bedroom flats in bulk on the cheapest land available. Unless this type of housing is needed, such an approach should be dropped. Homes must be as diverse as the people who will live in them.

To take on complex planning gain negotiations, we need professionals with an understanding of development economics and site viability. The government has announced a £500 million housing and planning delivery grant to help councils identify new sites. But London Councils found that £10 million from its predecessor, the planning delivery grant, had been swallowed up by private sector consultancy fees.

More worryingly, the Academy for Sustainable Communities has predicted that recruitment and retention problems will cause the planning sector to shrink by 46 per cent over the next five years. It warns that the greatest skills shortage is in financial management. These are exactly the skills needed if professionals are to get the most from planning gain negotiations, particularly with planning charges looming.

The government wants the planning charge to work alongside section 106, so we can enable the infrastructure to support new homes. But it is easy to see why a hard-pressed planning authority would take the money instead of entering into talks with a developer. We need planning charges to complement section 106 agreements and we need planners to deliver.

The stakes are high. The last time that housing plans aimed so high was in the 1970s. Look at the single-tenure ghettoes built then - we cannot afford to make such mistakes again.

- Jenny Harris is policy leader at the National Housing Federation.

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