Daily Mail – Ministers to Seize Power to Dedesignate Green Belt #NPPF

Daily Mail

Ministers are planning to seize chunks of the greenbelt to build housing developments and pave the way for a new hub airport, the Mail has learned.

The Treasury is prepared to ‘have a fight’ with green campaigners by pushing through rules which would let ministers redesignate areas of greenbelt as available for development.

Chancellor George Osborne plans to let ministers rather than local councils decide where to build hundreds of thousands of houses by reclassifying them as projects of national importance.

The plans are due to form a centrepiece of the Government’s new Bill to boost economic growth next month.

They will enrage groups such as the National Trust and Campaign to Protect Rural England.

But Treasury sources say they are determined to press ahead because ‘having a fight with the critics will show the public that we are serious about  taking difficult decisions to boost growth’.

In the first move towards this  ministers will today back a report on the private rental sector by venture capitalist Sir Adrian Montague.

He says councils should waive the requirement for developers to devote 40 per cent of their projects to affordable housing when they are building homes specifically for rent.

Those demands are widely thought to be stalling projects that are ready to go because they have shrunk developers’ profit margins.

The report also recommends that the Government makes public land available to build rental accommodation and underwrites some of the risk of building developments.

The proposals were described by Housing Minister Grant Shapps as a ‘blueprint’ for boosting the housing market and the economy since it will give renters more choice.

At present the limits of protected greenbelt land are set by local authorities but government sources say plans are afoot to carve areas out of the land to build houses while keeping its overall size the same.

One said: ‘You would take an area from one place and hand a bit back from somewhere else. At the moment you can do it in certain circumstances. We want to make it easier.’

Plans which affect the greenbelt will be controversial because the Tories pledged to protect it in their last election manifesto.

In addition ministers are examining plans to designate housing developments as infrastructure projects, so ministers, rather than town halls, would give final approval.

That would put them on the same footing as power stations, roads and airports, which are all regarded as developments where national need overrules local objections.

Senior Tories have also revealed that the party will also go into the next election pledging a huge expansion at either Gatwick, Stansted or Luton airports, making one of them a multiple-runway hub airport.

The Chancellor and David Cameron have ruled out a third runway at Heathrow as politically impossible because of the effect on voters in West London.

They regard Boris Johnson’s plans for a hub airport in the Thames estuary as impractical since the proposed airport will clash with air routes into Amsterdam’s Schiphol airport.

Now think about this – the article is in none technical terms but it would seem the idea is to place housing projects above a certain size in the 2008 planning act regime.

What that would mean is that the housing, and re-designation of Green Belt, would be carried through ‘National Policy Statements’  which would require SEA etc.

>So much for no national or regional planning.
>
But how would housing projects get in – take for example – and there are many – South of Oxford?

Would the SoS now have to do strategic housing assessments, strategic green belt reviews etc?   Yes of course.

The National Policy Statements route would take years – look at the rail and roads statement still not produced.  Some such as Ports have only got through for being non spatial.  This would not be possible with housing.  Also Parliament would have to under take the function now undertaken by trained inspectors, it would have the opportunity to get completely bogged down.

There is a problem, no ‘fast track’ procedure for large housing projects that integrate policy and DT issues, but this is not a practical solution.

The Basic Economic Mistake in the Montague Report

Montague – Its as bad as Beecroft

Where is the evidence that planning obligations on affordable housing should be abandoned, even if the coming review of viability for pre 2010 consents shows they are viable?

It contains the following section – which is a basic fallacy

 

• All housing other than social housing can be sold to owner occupiers by the developer – there are no restrictions on that
• The result is that all housing land prices tend to be fixed according to the price of owner occupied housing
• Developers wishing to build housing for rental will therefore compete for land with house builders that sell to the owner occupied market
• Because property can switch freely between the owner occupied and private renting markets, the opportunity cost of an investment in housing is the price it could achieve on sale to an owner occupier, not another investor

However the correct approach is as follows:

• All housing other than social housing can be sold to either owner occupiers or buy to let landlords by the developer – there are no restrictions on that
• The result is that all housing land prices tend to be fixed according to the price of whichever is most profitable at any one point in time – owner occupied housing or buy to let
• Developers wishing to build housing for one tenure will therefore compete for land with house builders that sell to the other
• Because property can switch freely between the owner occupied and private renting markets, the opportunity cost of an investment in housing is the price it could achieve on sale to another tenure, not another investor

Can there be any disputing this?  Why should Grant Shapps back so enthusiastically this report when it contains such a wopping error.

The result is that one tenure – buy to let or owner occupier will tend to crowd out the other at any one time, social housing (if the scheme is viable) has absolutely nothing to do with it- duh!

If people and investor were indifferent between renting and borrowing then economic theory tells us that a no arbitrage condition would set the same price for both.  We see different prices because people are not in different and because the type of stock built for rent and owner occupation are quite different.  indeed the overbuilding of stock for buy to let is one of the biggest reasons why it is less profitable.  Does this feature in the report – no – only one place for Montague – waste paper basket – I am indiferrent to the marginal utility of re-reading the report or recycling it.