Time to home in on greener housing as market recovers from recession

Despite talk of a revival in the housing market, gaps in public funding prevail and confidence remains weak. A sustainable approach is needed to cultivate emerging green shoots, write Abi Davies and Andrew Matheson.

Chartered Institute of Housing (CIH) chief executive Sarah Webb says: "The turmoil in the housing market gives us opportunities to consider how we want to do things differently when the economy recovers. It also poses risks - we need to look at the long-term impact of today's decisions on practice."

But is there any evidence to suggest that the post-crunch market will not replicate the shortcomings before the recession? These include affordability chasms, too little house building, a heavy reliance on the private sector for social housing and costly public interventions for renewal and sustainable construction.

Attention has been given to the potential of eco-towns to change our approach, but this has been whittled down to four proposed settlements to deliver 20,750 dwellings. The numbers are insignificant against the 238,000 minimum homes required each year to 2031.

The DCLG has noted that between April and June house starts and completions have increased in comparison with the previous quarter, but are still 53 per cent down on their 2005-06 peak. The Homes and Communities Agency (HCA) has been a major contributor to sustaining any programme of a respectable size and has pulled in most of the government's support for housing.

The HCA is adept at finding ways to invest in new developments, putting in early support with the expectation of a later return for the public purse. Chief executive Sir Bob Kerslake expects this to allow development partners to take on a lower risk level for a lower rate of return.

Although the spend now, recoup later approach has been effectively developed through tax increment finance districts in the USA, could the same method work in the UK? Is anyone likely to enter the run-up to the election proposing a new tax?

Some councils have opted to defer by renegotiating planning obligation agreements. A series of RTPI network events has enabled interested parties to look at openings and illegalities (Planning, 10 April, p22).

The HCA has encouraged flexibility with its publication Investment and Planning Obligations - Responding to the Downturn. But the title indicates that the advice relates only to present circumstances. So is that until business as usual is restored? Meanwhile, the Residential Landlords Association has reinforced the construction industry's Get Britain Building campaign and called for the private rented sector to be exempted from affordable housing contributions (Planning, 21 August, p1).

Moves to exemption rather than flexibility around planning obligations could take the shine off an HCA initiative to support some of the 64 expressions of interest for a funding scheme to expand the supply of private rented housing.

Are planning obligations that cross-subsidise social and market housing sustainable? House builders' confidence is weak now that land values have fallen, costs have risen to meet on-site energy obligations and the community infrastructure levy is imminent.

One indication of house builders' thinking came from the response of BNP Paribas director Anthony Lee to Barratts' continuing legal challenge to the Wakefield core strategy over its 30 per cent affordable housing policy (Planning, 21 August, p13). "The market is cyclical. If Barratts did not expect market values to rise, it would go home," he says. Meanwhile, Barratts will build the first large development to meet level 6 of the sustainable homes' code, backed by the HCA's carbon challenge.

The emerging picture suggests that more public funds are needed to deliver the quantity, green credentials and affordability of UK housing. Although press reports express concern at the rate of HCA spending, the agency reveals that some front-loaded models might work.

The Conservative Party may argue about the sums involved, but its own approach in its housing green paper revolves around giving local authorities financial incentives for more and better housing.

We must answer two questions - first, whether the housing output target levels are achievable in light of public value for money assessment and, second, whether there will be sufficient public funding in the 2011-2014 settlement to support delivery using these models.

Abi Davies is CIH head of policy and Andrew Matheson is RTPI-CIH Planning for Housing Network manager. For more information, please visit www.rtpi.org.uk

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