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ITEM EX9

EXECUTIVE – 15 MARCH 2005

SOUTH EAST REGIONAL HOUSING STRATEGY

Report by Head of Sustainable Development

Introduction

  1. On 1 June 2004 the Executive endorsed a report (EX10), (Minute 141/04) which outlined the key themes put forward in a Green Paper, A Step Forward in Housing, published by the Regional Housing Board (RHB), as the basis for a formal response from the County Council to the RHB. The Green Paper was an important first step in formulating the Regional Housing Strategy. The Regional Housing Board has now prepared and is consulting on the draft Regional Housing Strategy 2006-2009. The consultation period is from 24 January to 18 March 2005.

  2. The Strategy sets out priorities for housing investment in the South East and a framework for allocating resources. It covers the period 2006 onwards and will be followed by an investment plan that will cover the two years 2006-7 and 2007-8. The final version of the strategy needs to be delivered to Ministers in May 2005.

  3. The Strategy sets out three main actions:

    • To build more houses

    • Bring decent housing in reach of people on low incomes

    • Improve the quality of new housing and the existing stock.

  1. The questions posed in the draft Regional Housing Strategy are set out in Annex 1 (download as .doc file).

  2. This report suggests a formal response to the RHB on the draft Regional Housing Strategy.

    3. Housing Need

  3. The Strategy considers the pattern and determinants of demand for housing in the region and looks at some of the main factors that need to be taken into account when deciding where to invest. The consultation draft of the South East Plan suggests that there is a need for more homes and is seeking views on three levels of housing provision: 25,500, 28,000 and 32,000 dwellings a year. The RHB suggests that the evidence of demographic change and economic forecasts indicate that at least 32,000 new homes each year are needed. The figures however, will be tested through the regional planning process.

    4. Allocation of Resources

  4. The Strategy sets out five priorities and suggests allocating funding to these priorities in the following proportions:

    • Social rented housing – 55%

    • Key worker housing – 25%

    • Other affordable housing – 8%

    • Decent homes standard – 9%

    • Private sector renewal – 3%

  1. District Councils are best placed to determine the need for each tenure, and what proportion of funds should be allocated to the decent homes standard and private sector renewal in their areas. However, from a county-wide and regional perspective, I would suggest that these proportions are supportable.

  2. The Strategy identifies 21 sub-regional housing markets. They will inform further development of the sub-regional approach for housing in the South East and will eventually be used to inform resource allocation. The Strategy asks if this is a better approach than relying upon administrative boundaries that are not necessarily linked to housing needs and markets.

  3. This raises difficulties in relation to Banbury which is included in the Warwickshire housing market sub-region and not the Oxfordshire sub-region. Not only is the Warwickshire sub-region (in the main) outside Oxfordshire, but in another Government Office Region altogether. It is Oxfordshire’s second largest urban settlement and includes the proposed Banbury Regeneration Area West and also Bankside development sites, both of which could provide a significant amount of affordable housing. Given the town’s importance to north Oxfordshire, it is recommended that the Council’s response to the RHB should seek to include Banbury within the Oxfordshire sub-region. If Banbury is not to be included, then steps would need to be taken to ensure that the town does not find itself in a funding vacuum.

  4. The Strategy proposes that 20% of funding should go to the Growth Areas, 60% to authority areas with the highest level of need (those authorities recording above average need excluding those in the Growth Areas) and 20% of funding to authorities recording below average need. Need is determined by housing affordability, levels of homelessness and use of temporary accommodation. Allocating resources on this basis is supported.

  5. All authorities in Oxfordshire, apart from West Oxfordshire, are identified as being in areas of highest need. As well as taking affordability, homelessness and temporary accommodation levels into account when allocating resources, other factors such as provision through Section 106 development agreements, deliverability and value for money will also be important. The RHB expects a sub-regional approach to investment to operate, with local authorities in each sub-regional housing market working together to meet need across the sub-region. In Oxfordshire, joint working among local authorities is well established – the Oxfordshire Members Affordable Housing Group (OMAHG) has an agreed work programme, which includes attracting funding for affordable housing provision into the county. OMAHG will be preparing a joint response on the Regional Housing Strategy to the RHB.

  6. The availability of land will be an additional factor that determines where resources will be allocated. The RHB expects a substantial amount of new affordable housing to be provided on strategic sites (those of 500 dwellings or more) where they fall into the areas identified as having the greatest housing need, and where the majority of funding will be targeted. In relation to Oxfordshire the Strategy identifies the following strategic sites:

    • Upper Heyford

    • RAF Bicester Airfield

    • West End of Oxford

    • Didcot Expansion Area

    • Vauxhall Barracks, Didcot

    • Ladygrove East

    • Didcot West (Part)

  1. The list of such sites is not definitive and inclusion does not guarantee funding. Consultees are invited to suggest additions of sites that will come forward during 2006-8.

  2. I have concerns about the inclusion of Bicester Airfield. In responding to consultations on the draft Cherwell Local Plan 2011, the County Council has consistently supported proposals for an urban extension at South West Bicester on transport and sustainability grounds as the preferred option for accommodating housing growth in the town and has objected to major housing development on the airfield site. Members will be aware that Cherwell District Council has abandoned work on its local plan. However, the District Council has adopted the draft Cherwell Local Plan with pre-inquiry changes as an interim policy document for development control purposes pending the preparation of a Local Development Framework under the new planning system; this informal plan proposes an urban extension at South West Bicester in line with this Council’s views. As a consequence, various developers/landowners are now in the process of submitting rival planning applications for large-scale housing development, including for land at the airfield and South West Bicester. When consulted on these proposals, officers are likely to recommend that the County Council supports development of a South West urban extension in principle and opposes the rest of the proposals. I therefore recommend that the RHB is directed to delete Bicester airfield as a strategic site and include South West Bicester.

  3. I question the inclusion of Vauxhall Barracks as a strategic site as it may not yield 500 dwellings or more. It is also not clear what is meant by Didcot Expansion Area and Didcot West (part). The County Council, in its response, should direct the RHB to refer to the urban extension to the west of Didcot as a whole as Great Western Park.

  4. Whilst I suggest that the basis for allocating resources to those areas in greatest housing need, including Oxfordshire, is supported, I consider that the Council’s response to the RHB should express concern regarding the level of infrastructure to support new housing developments, and how such infrastructure is to be funded.

    5. Key Workers

  5. The Government has stated that key worker investment will continue at current levels and be concentrated on public sector workers in the health, education and community safety sectors. Consultees are asked to consider commiting additional funds to other locally defined ‘essential workers’ when to do so would reduce funding available for the provision of social rented housing.

  6. In my view, this stance is somewhat simplistic. Although it is true that the greatest need is for social rented accommodation, as evidenced in district councils’ Housing Needs Surveys, it is also true that some local authorities, including the Vale of White Horse District Council, are experiencing difficulties in allocating key worker housing due to there not being enough key workers (as narrowly defined by the Government) in housing need to take up such housing. The RHB also seems to suggest that all key worker housing should be provided with public subsidy, and there is nothing in the Strategy to encourage large employers to help provide housing for their essential and key workers, using their own assets such as land. Furthermore, there are a number of private firms who claim to be able to develop key worker housing using private financial models – the RHB should encourage local authorities and their partners to look at more innovative ways of funding housing for key workers.

  7. The Oxfordshire Key Worker Study 2004, published by the Oxfordshire Community Partnership (OCP) found that there were more than 3,000 key workers in housing need in the county. The definition of key worker for the purposes of the study was somewhat wider than that used by the Government, so as to more properly reflect the Oxfordshire economy. The Government Office for the South East (GOSE) has expressed interest in the Oxfordshire Study and is aiming to use its principles in defining key workers at a local level on a regional basis in step with the timetable for finalising the Regional Housing Strategy. It is welcome that GOSE wishes to use the Oxfordshire Study for this purpose, but GOSE and the RHB should also be made aware of the work of the OCP Key Worker and Housing Ambition Group in encouraging large employers, especially those in the public sector, in the county to aid their key workers to access suitable accommodation without resorting to public funding.

  8. The Strategy might also refer to the funding of affordable housing from commercial development. The Inspector’s Report of the second deposit draft Oxford Local Plan supported the principle of the policy that requires a contribution to affordable housing from such development, apart from retail and not-for-profit public sector projects.

    9. Travellers and Gypsies

  9. In December 2004 ODPM published for consultation draft guidance ‘Planning for Gypsy and Traveller Sites’.

  10. The Strategy proposes providing 450 extra pitches for travellers and gypsies by 2008 (for housing and residential, transit or stopping places) Consultees are asked if this is the right number of affordable homes for gypsies and travellers. Without knowing the need for such sites, this question is difficult to answer.

  11. Although it is reasonable that the housing needs of gypsies and travellers are taken into account in the Strategy, there needs to be clarity on how their needs should be incorporated into local housing needs assessments and what the requirement is for different types of permanent and transit sites.

    12. Rural Areas

  12. The Strategy proposes developing 360 affordable homes in rural areas in line with current levels of investment. Of the 2,865 affordable dwellings built in Oxfordshire between 1996 and 2993, 45% were in rural areas. The Strategy states that much of affordable housing in the region is currently delivered through rural exception policies, but due to their small scale and isolated nature schemes in such locations are likely to be less cost effective and take longer to develop than urban schemes. Only 3% of all affordable dwellings built in Oxfordshire were on rural exception sites.

    13. Use of Public Sector Land

  13. The Regional Housing Strategy sees public sector land assembly in high demand areas as a priority. It suggests that public sector ownership would enable the RHB to exercise maximum influence over the quality, sustainability and affordability of the resultant development. Retaining such land in public ownership whilst it is developed by the private sector would also allow the RHB to influence and control delivery and maximise the number of homes made available for first time buyers and key workers. To this end the RHB intend to generate proposals to fund a development portfolio of brown field sites, initially of publicly owned land, to complement the work of local authorities and their partner organisations such as the Housing Corporation.

  14. The Strategy indicates that only a small proportion (4%) of vacant brown field sites are owned by local authorities. As far as the County Council is concerned, there are clear procedures for identifying land that is surplus to requirements, and this means that it would be unusual for a supply of land to be ‘standing vacant’. Where land is surplus and vacant, it will normally have been identified for disposal with the capital receipt earmarked to fund the capital programme.

  15. The intervention of the RHB would have demonstrably to add value by providing additional affordable housing rather than recycling existing resources from the other parties such as the Housing Corporation and Registered Social Landlords (RSLs). Additional funding would be required to increase the total supply of affordable housing. Too many public bodies competing for a fixed stock of land would not necessarily enable more affordable housing and may be confusing to other parties. Local authorities may not be willing to sell land at the then market price before the planning process had defined the final market value. There would have to be clear policy and financial reasons for a Council disposing of land before its full value were known.

  16. The proposal appears to be insufficiently detailed to allow a robust technical assessment of the financial and policy consequences. Affordable housing has to compete with other equally beneficial use of the capital receipts from land disposal. These other competing uses are the Council’s primary statutory service delivery duties such as education. At this stage, the Council could generally support the intentions of the proposal, although a more considered response would have to follow a strategic option appraisal of disposal pathways.

  17. Local authorities work closely with the Housing Corporation and nominated RSLs to provide affordable housing. The proposed approach would have to be demonstrably more effective, efficient and economical than these well established funding and delivery processes. The County Council, as landowner, would have to consider carefully whether it gave the RHB first opportunity to acquire its surplus brown field land. If the proposal were to be implemented, the County Council should consider every disposal on its own merits and whether or not the RHB be given first opportunity to acquire land either before or after planning permission were secured.

  18. The amount and availability of housing subsidy needs to be certain at the earliest opportunity to allow market pricing, negotiation and transactions to operate properly. Any unknown or uncertain subsidy inhibits an optimal outcome, especially for the negotiation of Section 106 agreements. The Housing Corporation and local authorities’ Housing Strategy should clearly set out the amount, priorities, time frame and sites eligible for housing subsidy to enable other parties to price the effect of no subsidy on other affordable housing sites.

    19. Environmental Aspects of the Strategy

  19. Overall, the consideration given to environmental impacts in the Strategy seems inadequate. The focus is on sustainable construction and the impact on communities in terms of resource use (energy and water) and waste. There is no mention of other impacts, such as on biodiversity, transport, air quality or green spaces. The RHB should acknowledge the environmental impacts of housing development by referring to the appropriate policies in the South East Plan.

  20. The tools for achieving more sustainable homes are the new code for Sustainable Building, and the requirement for Ecohomes ‘very good’ rating for affordable housing funded via the Housing Corporation. Although welcomed, there is no mention of how these will be enforced, other than reliance, which may be misplaced, on the private sector to provide a key voluntary leadership role in effecting a ‘step change’ in improving sustainability. Affordable housing may constitute only a small percentage of total development; the Ecohomes rating should therefore be ‘Excellent’, and it (or its commercial equivalent) should be applied to all new development.

  21. Similarly, although the Strategy does identify the additional resource pressures (energy, water, domestic and construction waste) it offers no definite proposals on how these issues will be addressed, other than through the voluntary code mentioned above.

  22. The environmental impact of developing such a large number of dwellings is not set in the wider, and urgent, context of climate change and environmental degradation, and the Strategy does not allude to the Government’s Sustainable Development Strategy. Other than Planning Policy Guidance for flood risk, the Strategy makes no mention of other national and regional policy guidance on energy, renewable energy and climate change. It predicts a 25% increase in CO2 emissions, yet fails to promote renewable energy, in particular the unprecedented opportunity for routine installation of on-site renewables (e.g. solar, photovoltaic power) on new build. There is also no mention of proposals to encourage use of public transport and reduction of private car use, or of reducing the impact of new transport infrastructures that will presumably be required.

  23. The above implications are expressed in the South East Plan but in my view such issues need to be mentioned in the final Strategy and cross referred to policies in that Plan.

    24. Homelessness, Health and Housing Support

  24. The section on homelessness could highlight the impact of temporary accommodation moves from one area to another on the health and well-being of families and individuals, and the difficulties of health and care agencies to be able to monitor them consistently. There is a need for emergence accommodation locally so that families and young people are not being offered accommodation away from family and other support networks, unless there is a need, e.g drug dependency.

  25. The funding formula applied to Oxfordshire for Supporting People funding is in conflict with all the Government’s supported housing objectives and the prevention of homelessness agenda. The Strategy states that capital and revenue should keep up with each other but the reality in Oxfordshire is that it will experience a significant reduction in Supporting People grant over the next 10 years or so. I am aware that Group Leaders have written to the ODPM about this issue but the County Council should also express its concern in its response to the RHB.

    26. Quality Design and Modern Methods of Construction

  26. The Strategy states that new housing should be of high quality construction that enhances the living environment. Social housing should be indistinguishable in external appearance from its market counterparts, and developers should also factor in other considerations such as maintenance and management costs. To help ensure this, the RHB is proposing that all schemes of more than 30 dwellings (funded through the Housing Corporation) should be referred at an early stage of development to design review by the Regional Design Panel (operated for the region by the Kent Architecture Centre and funded by SEEDA), CABE or an equivalent design-based organisation. This approach is should be supported in principle as long as it can be demonstrated that it will not cause unwarranted delay.

  27. The Housing Corporation will shortly produce guidance on levels for modern methods of construction (MMC). The principles behind the support for MMC in the Strategy are welcomed as long as high standards of design and sustainability are not compromised.

    28. RECOMMENDATIONS

  28. The Executive is RECOMMENDED to:

          1. thank the Regional Housing Board for the opportunity to comment on the draft Regional Housing Strategy;

          2. agree the five priorities for the allocation of funds as set out in paragraph 7 of the report;

          3. support the 60% funding allocation for affordable housing to local authority areas (outside the Growth Areas) with the highest level of need;

          4. seek to include Banbury within the Oxfordshire sub-region for the purposes of funding for affordable housing;

          5. request that the Regional Housing Board deletes Bicester Airfield from the list of strategic sites, clarify the sites in Didcot, and include the development sites in Banbury referred to in paragraph 10 of the report;

          6. support the notion that key workers should be defined locally;

          7. express concern about the lack of detail in terms of funding for the infrastructure (apart from affordable housing) which will be needed;

          8. support the points made in the report in paragraphs 23 to 40 of the report concerning travellers and gypsies, rural areas, the use of public sector land, the environmental aspects of the strategy, homelessness, health and housing support, and quality design and modern methods of construction.

CHRIS COUSINS
Head of Sustainable Development

Background papers: Nil

Contact Officer: Dawn Pettis, Affordable Housing Project Leader, 01865 816082

March 2005

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