London Attrition Rate Shoots Up

Standard

Sadiq Khan’s ambitious new homes targets are under threat because thousands of sites with full planning consent for development have been mothballed, according to figures.

In 2014, housebuilders were given permission for schemes that would have created 54,941 new homes, but three years later work had started on only 29,701 — or just over half.

The “attrition rate” — the proportion of homes not built within councils’ standard three-year time limit — of 46 per cent is a dramatic increase from 33 per cent in 2016.

The problem is particularly acute in outer London. Only 1,029 homes were built in Zone 5 last year compared with 10,106 in Zone 2.

The Mayor’s target is for 66,000 homes to be built each year. Ian Tasker, of accountants Grant Thornton, which carried out the research, said permission rates for applications were too low to meet this target.

Jasmine Whitbread, chief executive of business group London First, which commissioned the figures, said: “Unless we get to grips with the housebuilding hold-ups, generations of Londoners will be priced out.”

Some developers accuse City Hall of making schemes unviable by setting a 35 per cent affordable housing target. Confidence in the London market has also been knocked since 2014 by higher taxes and the Brexit vote.

Antony Stark, of developer Linea Homes, said: “It is understandable why some companies would choose to freeze building plans while they wait to see if the market improves.”

A spokesman for Mr Khan said one of his priorities was building “significantly more” affordable homes and that he “has made the case to the Chancellor that more needs to be done at a national level to make sure planning permissions turn into new homes”.

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Can the English Planning System Adjust to the 25 Year Environment Plan?

Here 

Chapter 1 is the most radical

We will seek to embed a ‘net environmental gain’ principle for development to deliver environmental improvements locally and nationally. This will enable housing development without increasing overall burdens on developers.

Current policy is that the planning system should provide biodiversity net gains where possible. We will explore strengthening this requirement for planning authorities to ensure environmental net gains across their areas, and will consult on making this mandatory – including any exemptions that may be necessary. This will enable those authorities to develop locally-led strategies to enhance the natural
environment, creating greater certainty and consistency and avoiding increased burdens on developers, including those pursuing small-scale developments. We would expect this should have a net positive impact on overall development.

… We will explore the ways in which new data, tools and strategies can support development that brings wider environmental improvement, including linking with fresh initiatives, such as the Nature Recovery
Network into the planning system…

Through changes in the way we manage our land, we will develop a Nature Recovery Network providing 500,000 hectares of additional wildlife habitat, more effectively linking existing protected sites and landscapes, as well as urban green and blue infrastructure.
Such a network will deliver on the recommendations from Professor Sir
John Lawton: recovering wildlife will require more habitat; in better condition; in bigger patches that are more closely
connected.

The term ‘natural capital’ replaces ‘ecosystem services’ and, seven years late, the Lawton review gets serious attention.  Around 25 large areas for nature recovery will be designated.

The expansion of the principle of biodiversity offsetting is welcomed.  There is no mention of carbon negative development or allowable solutions although carbon fixing is mentioned as one of the main benefits of natural capital and similar structures would be necessary.

In most parts of the country there are local partnerships and studies for landscape scale restoration.  In some areas these can be linked to strategic planning exercises.  Seen at a simplistic level planning for more houses on one hand and enhancing natural capital to see net gains on the other seems an obvious win-win situation.

But it isn’t that easy.  By far the largest disbenefit of new development is emissions from transport.  This is no shortcut for strategic planning to integrate planning and transportation on a large scale and investment in infrastructure.

Secondly the structures for planning for large scale restoration are weak and informal – though great strides have been achieved.  Large scale restoration projects will require new forms of strategic planning and links through planned green infrastructure networks to new development.

New tools will also be needed to measure the dis-benefits on the one hand to benefits from linked restoration on the other – and there will always be disputes as to how closely geographically related the two need to be.

Finally it is no shortcut to avoiding tough choices.  Dieter Helm for example argues that we should not lose any Green Belt as its natural capital can be enhanced.  However he neglects the issue of opportunity costs from pushing development further out and whether the areas lost are necessarily the best areas for enhancement, and whether enhancement can be more strongly delivered locally from some loss.

This is unknown territory for modern planning – though there is a long heritage dating back to the RPA, The Tennessee Valley Project and Patrick Geddes for such joined up work at a regional level.

A key test will be the future plan for a Oxford-MK-Cambridge corridor and landscape scale restoration as part of this.  The sheer variety of landscapes here – from gravel extraction areas along the Thames, opportunities for marsh, forest and fen restoration, illustrates the challenge, as well as the sheer number and variety of options for enhancing natural capital across the normal pastoral landscapes of the region  which will be by far the most important natural capital restoration initiatives and will be done primarily through agricultural policy rather than planning.

Government Launches Review of Build Out


Rt Hon Sir Oliver Letwin MP
House of Commons
London
SW1A 1AA

REVIEW OF BUILD OUT
I am grateful to you for agreeing to undertake the Review announced in the Budget into build out of planning permissions into homes.
I have agreed the following terms of reference for your review with the Prime Minister andChancellor:
“The Review should seek to explain the significant gap between housing completions and the amount of land allocated or permissioned in areas of high housing demand, and make recommendations for closing it. The Review should identify the principal causes of the gap, and identify practical steps that could increase the speed of build out. These steps should support an increase in housing supply consistent with a stable housing market in the short term and so that over the long-term, house prices rise slower than earnings. The review will provide an interim report to the Chancellor of the Exchequer and the Secretary of State for Housing, Communities and Local Government in time for Spring Statement 2018 and a full report for Budget 2018.”
We have agreed that you will chair a “Panel” to support this work. The Panel members will be Richard Ehrman, Lord Jitesh Gadhia, Lord John Hutton, Baroness Usha Prashar and Professor Christine Whitehead.
The Ministry for Housing, Communities and Local Government will provide support to the Review including a base for you in 2 Marsham Street and a review team of 2-3 officials. The
Housing Minister will chair a fortnightly steering group with Her Majesty’s Treasury and No. 10 Downing Street teams to provide you with appropriate support. My officials, with Simon Gallagher as Senior Responsible Officer, will support this with an officials’ group. Should it prove necessary to involve other departments I would be happy to expand to cover broader groups.
I am copying this letter to the Prime Minister, the Chancellor of the Exchequer and to Sir Jeremy Heywood, and will make this letter available on my department’s website

Here

The City of London High Buildings Cluster is Becoming an Ugly Wall

Media preview

This is a rendering by Estates Gazette of projected tall buildings in the city by 2025.

What is interesting here is the number of mid range buildings around the same height as the Walkie Talkie.

Im no fan of the Skyline campaign however a fundamental principle of planning for tall buildings is you try to avoid a wall.  When you have a wall then tall buildings look out onto other tall buildings, have no silhouette and completely lose their landmark status through bumping up against each other.  The tall buildings are merging into one mass.

Rather it should be encouraging this kind of silhouette.

 

 

Does Any City have a Brownfield Site Large Enough for Amazon HQ no. 2?

RFP from Amazon

33 Buildings

8.1 Million Sq’

33,000 Employees

Existing buildings of at least 500,000+ sq. ft., meeting the core requirements described above and that are expandable or have additional options for development nearby.
A greenfield site of approximately 100 acres certified or pad ready, with utility infrastructure in place. The sites do not have to be contiguous, but should be in proximity to each other to foster a sense of place and be pedestrian-friendly.

Can anywhere meet this?  This is a preserviced development pad as large as Central Park.  why would you build 1/2 million sq of offices next to a huge development site?

Only a few cities are likely to be in the running.   Most US cities surprisingly don’t have huge brownfield sites, most urban abandonment being due to residential abandonment, which if you look at cities like Flint is highly scattered rarely creating large contiguous sites.

Perhaps one exception id Detroit, which has large concentrated sites in its Down Town and Midtown areas and on the waterfront, easily connected by transit and is no somewhat on the up.  Chicago maye has a large enough area in the former steelworks site known as park 56, with rail and sewer lines running to the location and offering a dramatic 4 mile long lakefront site. St Lois also has potential large riverfront sites directly north or south of its downtown.

The Economy is like Walking -A Controlled Fall – Not Lying Down

Inappropriate physical analogies have been the curse of neoclassical economics. In 1909 Walras in his article ‘Economie et Mechanique’ used the model of a mechanical lever in equilibrium as the model for prices at rest.  This physics envy, of Walras, Edgeworth and others is well documented.  In samuelson’s hands the mathematics of thermodynamics was used to describe the deviation from and return to equilibrium of a system of prices.

In doing so it adopted the model of a system at rest.  The ability for the system to break down on occasion has led to increased attention to disequilibrium models. This is a healthy corrective, however most of the time some predictability about the broad state of economic variables is the norm.  Were it not investment, saving etc. would be near impossible.  The broad stability of expectations of the economy is the norm and fascinated economist from the  classical period as to why this was so.

The problem is not the focus on equilibrium but the wrong kind of equilibrium.  A thermodynamic equilibrium is a system at rest and at minimum energy. no external energy is necessary to maintain the system at rest.  The more common and normal situation is nature is a a steady stat, in which all state variables are constant in spite of ongoing processes that strive to change them.  This requires a continuous input of energy.  This is a dynamical system, like Sisyphus using energy to try to push his rock up a hill, only to be opposed by gravity.

Walking at a constant speed is a good example, using energy to propel the body forward through using instability, constant falling. to propel the body forward, and an input of energy to maintain the body erect and balanced.

This kind of system is a much better economic analogy as it involves the constant input of work, and a background of constant change, both factors lost in the thermodynamic equilibrium analogy, which in its most extreme form posits a universe at heat death, where nothing has changed and can ever change. Growth, change and economic cycles being essential economic attributes.

The ‘surplus/cycle’ approach of classical economics had this at its heart, and because its mathematisation involves feedback loops and state changes it is inherently suited to the modelling of dynamic systems.  Much of their usefulness is in helping us to understand the preconditions for economic growth and price stability.

Let us consider first a very simple two commodity model, or corn, a subsistence good and also acting as the numeraire, and a single capital good – lets call it lime – which increases productivity of corn production by a fixed coefficient.  This simple classical model had a hidden assumption, which Torrens as usual was first to spot.  corn was also a capital good, as it had a non zero turnover period.  As this turnover period was the same as the period of production no capital theory problems arose however.  Assuming the ‘pure’ capital good lime has the same turnover period, and fixed labour-capital inputs we produce the ricardian result that economic growth through input of capital has no overall change to the price level, as all prices are measured in terms of corn.

Let us introduce sovereign issued money, in it simplest form of a pure commodity money, fixed in supply and not produced.  The wet dream of crypto currency fans as to how it might operate.  This shows dramatically the problems with such ‘money’ with economic growth prices depreciate with a non-corn numeraire.  If you have economic growth of 3% prices depreciate by 3%.  The optimum investment rate is no longer r the rate of profit but the real rate of r (the fisher rate).  In such an economy there would be no premium on investment.  The present value of future consumption would be the same as present, so investment would be diverted to consumption.

To get investment and economic growth we need a constant depreciation of the currency at rate r.  One means of doing so is to make the currency a state currency.  if the deficit in the state currency to the private sector is equal to r then the currency will depreciate to the extent that produced the optimal investment level of r.

Introducing a multi currency model you will find that although the currency depreciates at simple interest rates the economy grows at compound interest rates.   This means that the purchasing power of a days wage in a currency with an optimum  state deficit will be greater than the equivalent amount of  a country where the numeraire is fixed but with a balanced budget.  In an important sense the central bank issuing a deficit is banking on the rising purchasing power of the currency it issues in the same way a bank loan is ‘backed’ by the expectation of productive investment. In this manner state money is backed in exactly the same way as long as deficits are run.

How does such an economy keep growing? Unless the margins of cultivation and urbanisation can continuously expand, profits will be absorbed by rent and driven to zero.  If the return from land is higher than capital then the price of land will rise and its return falls, and vice versa.  This potential arbitrage between investment and land purchase means that the natural rate of interest (as Schumpeter and Keynes argued) is only zero an economy with either no private ownership of land or where all rents are taxed, otherwise in an economy with a spatially expanding margin arbitrage will contain the rate of profit to the rate of rent at the margin of production.  In such cases there will be no differential rent, but there will be an absolute rent driven by how much the level of total production falls short of effectual demand.

Note here the ‘constraint’ on deficits is not future surpluses but future repayments of debt, the level of debt repayments being equivalent to the NPV of future repayments.  It is perfectly possible to reduce debt overhead whilst increasing a deficit.  Imagine a situation where all governments spending in one period is switched to principle repayment. But new debt if taken on to pay for some current spending.  In this case the deficit will increase but the debt decreases.  This shows how poor a metric debt/GDP is (mixing a stock and a flow).   Rather than there being a government budget constraint there is a non-binding inflation constraint.  Net flows from deficits to spending increase the denominator value of the numeraire of sovereign currency.  If this is done at a rate greater than the natural rate of interest r it is inflationary, less it is deflationary.

This kind of model is interesting in that we can produce the same class of results as a ‘Swan Solow’ growth model but without falling into capital theory traps as we are solely dealing with originary factors and technical coefficients.

Thi simple model illustrates how fragile capitalist growth is, depending as it does on the ability to expand without shortages of land and labour and with a state supported currency regime optimal for growth.

 

 

No the London Plan does not Protect Gardens as ‘Greenspace’ Nor Should it

Sorry I have taken so long to blog on this.

In a debate a coupe of weeks ago deputy London Mayor Jules pipe claimed – as now that the LOndon plan has no policy on ‘Garden Grabbing’ it was protected as ‘Greenspace’.

A reference to London Plan policy G4

‘Local green and open spaces should be protected’

As defined in Table T1

Small Open
Spaces
These include gardens, sitting out
areas, children’s play spaces or other
areas of a specialist nature, including
nature conservation areas.

Open spaces being defined in the

Town and Country
Planning Act 1990 S336:
[1]http://www.opsi.gov.uk/acts/acts1990/Ukp…

“open space” means any land laid out as a public garden, or used for the  purposes of public recreation, or land which is a disused burial ground;

The NPPF definition is not of much use defining open space as open space – so one is forced back on the statutory definition.

All open space of public value, including not just land, but also areas of water (such as rivers, canals, lakes and reservoirs) which offer important opportunities for sport and recreation and can act as a visual amenity.

Note the lack of an Oxford comma in the London Plan, Its not ‘Local Greenspace, and local openn space  ‘t think the authors of the London Plan know what a comma is.  Even if they did word it this was as it would be all encompassing protecting every last blade of grass in London, a stupid policy.

May to Create Dept of Housing and Infrastructure

Telegraph

THERESA MAY will use Damian Green’s downfall as an opportunity to relaunch her premiership in the new year by creating a legacy that goes beyond Brexit.

The Prime Minister is considering creating a new Whitehall department to concentrate on a major domestic issue, such as housing and infrastructure, rather than replacing Mr Green with another First Secretary of State.

She will also make a third major speech on Brexit to set out exactly what she wants Britain’s future relationship with the EU to be.

This comes as allies of Mr Green said his 40-year friendship with Mrs May had “cooled” as a result of his enforced resignation because he resented the way she had handled the matter.

After a turbulent 2017, Mrs May wants to seize the initiative after her Christmas break. She is desperate to avoid being remembered as “the Brexit Prime Minister” and wants to make meaningful progress in areas such as housing, education and social mobility.

One option under consideration is the creation of a new Department for Housing and Infrastructure, merging some of the responsibilities currently held by Sajid Javid, the Communities and Local Government Secretary, and Chris Grayling, Transport Secretary.

A Whitehall source said: “The Prime Minister has two weeks over Christmas to think about what to do next. She will start the new year wanting to keep moving forward on Europe but she also has a lot of domestic priorities. One possibility is creating a new Whitehall department with a new Cabinet post to go with it. It would be something big, such as housing and infrastructure. That is really important to her.”

A Ministry of Housing was created in 1951 to rebuild Britain’s housing stock after the Second World War, and was headed by Harold Macmillan before he became prime minister. It was merged with the Ministry of Transport in 1970 to form the Department for the Environment.

Mrs May could yet decide to replace Mr Green with another First Secretary of State. Mr Green feels bitter after it emerged that Mrs May had waited two days to inform him he had been found in breach of the ministerial code of conduct. A friend of Mr Green said: “It’s fair to say he was not overly happy with the way this has dragged on and been dragged out. I hope when the dust settles he and Theresa will be able to speak again as friends, but in the short term he is disappointed with the way this has played out. His relationship with Theresa May has cooled.”

Knowley Puts on Hold Plans to Sell 10% of its Parks

MJ

Knowsley Council’s cabinet ‘unanimously’ agreed last month to sell 10% of the borough’s parks and green spaces for new development over the next 15 years.

The decision was taken after the Knowsley Parks and Green Spaces Review Board said the income generated from the sale would help maintain the rest of the borough’s parks.

However, the plan will be put on hold after its scrutiny committee suggested a full public consultation was necessary.

‘The Sustainable Borough Scrutiny Committee met to consider the call-in of the cabinet decision regarding the future funding of Knowsley’s parks and green spaces,’ said a council spokesperson.

‘Following in-depth consideration, the Scrutiny Committee have unanimously decided to refer the decision back to cabinet for reconsideration — this will take into consideration the additional information and evidence presented at Scrutiny Committee.

‘Members of cabinet can consider all details before making a final decision.’