Rethinking the Theory of Differential Rent, and How it Affects the Demand for Leverage

Ricardo’s theory of rent, still in the text books, denies that rent enters into prices.  It holds that rents are high because profits are high and not vice versa.

When challenged that this concept may hold for differential rent (that is natural differences in land, Ricardo stressed differing fertility), but it did not apply to extensive rent (that is application of capital to land to improve yields) he responded that this makes no difference as a ‘dose’ of added capital to land not at the margin of cultivation was substitutable for an extension at the margin of cultivation.  If the latter had no rent then the former could charge no rent either or else investment would go to the intensive margin..

The theory was ingenious, much misunderstood and often only taught in part, that is the differential rent aspect, because the argument that extensive rent is equivalent is accepted without question.

Last week in a brief post I outlined a theory regarding extensive rent that challenged whether all of extensive rent is price taking.  The fallacy often made is that an added dose of capital can be applied to land without labour, and similarly that the capital itself is not the result of prior land and labour.   When one considers rent in value terms then the addition of value must affect price. It does not matter what precise cause of value you hold, at this level of abstraction all is necessary is that an increase in value must affect long run price.  Ricardo’s original argument regarding differential rent was that natural differences was not an addition of value and so could not add to price,  Anwar Shaikh contacted me to say that he had developed a very similar theory on his forthcoming book.

Today I want to consider to what extent this applies to differential rent.

Ricardo had a number of prior assumptions.

1) That where there was free uncultivated land, labour could move to it preventing the landowner charging more rent than the value of the natural differential that this land provided.

In cases though where all feasible land was cultivated landlords can charge an additional rent monopoly rent.  This is the origin of the concept in Smith and Rodburtus of Absolute Rent, later developed by Marx.  The level of such rent being the minimum level of wages required to hire (reproduce) the labour force – assumed to be a subsistence level.  Ricardo did take this assumption from Malthus, but did not elucidate the concept of absolute rent that underlay it or set out that the margin of reproduction of an agricultural labour force depended on the  availability of non-agricultural work.

2) ‘Fertility’ was used as a cipher for all natural productivity of land.  Ricardo stressed soil fertility  but other authors have stressed other aspects of natural productivity including location and transport to market (Von Thunen).

The theory can easily be extended to include the full range of these differences as a number of Ricardo’s contemporaries pointed out (Scrope has the most useful generalisation of the ricardian theory).

3)  Ricardo did not consider the capital and labour cost of first reclaiming land at the margin of cultivation.  It is the converse of the problem covered before, you cannot create land without capital and labour.  This omission laid him open to criticism from Carey who argued that the most fertile land was often not first settled because of such costs.  It also led Carey to claim that rent was the return to those who reclaimed the land and inputted capital and labour to maintain the lands fertility.

From these three points almost all of the objections to the Ricardian theory derive.  The theory survives the first two as explained if we include absolute rent and a broad definition of natural differentials.  The problem is the third objection which is at least partially right.  Here is a case of Ricardo not following the rigorous and consistent logic of his modelling through.  If there is a difference in costs and returns at extensive and intensive margins simulataniously what are those differences?

Consider a sum of accumulated capital and a possible decision either to invest it on the extensive margin or to improve productivity of existing land.  Even if land at the margin of cultivation is free it will have a capital cost to reclaim, and an ongoing capital cost to maintain.  Now consider two such pieces of land at the extensive margin each with different costs. The owner of the less costly land will be able to charge a rent equal to the difference in reclamation costs.   This is a form of absolute rent – price setting as it arises from the addition of value to the land.  It is a form of access charge.      If there is no free land the access charge from monopoly increases accordingly.  Absolute rent is price setting not price taking.  Once land is reclaimed and costs of maintenance and reclamation deducted the proportion of rent that arises from natural differentials is pure differential rent, does not result from addition of value, and is not price setting.  Absolute rent on the other hand is a transfer of value to landowners.

One can calculate this addition to differential rent through the method of perpetuities set out in the previous post.  Once land is improved then providing it is maintained then it will permanently grant a yield.  Using the perpetuity formula one can calculate the maximum value of all rent that can be charged on the land.  Providing interest rates are positive the NPV of this addition to value will be finite.  This is will be the maximum capital cost of the land.  The area between this perpetuity curve between two points in time is the yield of services of the rent – the maximum rent that can be charged.

Not all of this rent will be realisable.

Firstly rent is payable in advance typically so the cash flow will need to be discounted over the rental  period (month, quarter, year) according to the prevailing interest rate.  This discount is the difference between the value of the perpetuity in advance, measured at the start of the rental period, and the value of the ordinary perpetuity at the end of it.    If the period is short enough, and real interest rates (after accounting for inflation) low enough it can be disregarded.The resulting differential rent then is the area between the ‘in advance’ and ‘ordinary’ perpetuity curves.

Secondly costs of value added need to be deducted in the manner above.  If a certain capital is invested it will have a payback period.  From the rate of interest and the results of the perpetuity calculation above one can calculate the length of this payback period.  One can then use the annuity formula over this period to calculate the value added.

Even if this land is at the margin of cultivation and the cheapest parcel of land to reclaim and maintain over this payback period there will be alternative potential investments both from the intensive margin and other investments.  Both the return on the capital advanced for improvements and to buy the land must meet the prevailing rate of profit to secure investment.  The yield differential between the least costly piece of land to reclaim and the next least costly will add to absolute rent and so to price.  The upfront capital temporarily and capital of maintenance permanently.

Consider then a case of where the cost of reclaiming the least costly piece of land to reclaim is 10,000 per hectare and the next least costly piece of land 9,000 per hectare.  The absolute rent here would be 1,000 per hectare, the investor however would need to invest 10,000 to reclaim.   This means that land investments will often have a very long payback period, especially where land is not highly differentiated and absolute rents are high.  However where opportunities for investing to create new margins (extensive or intensive) are limited yields on land can be attractive enough for this investment to take place.

This leads to a puzzle, if new capital has to be raised to pay for the improvements but only part of this new capital leads to higher prices of land where does the additional value go?  The answer is that the difference as part of the gross surplus is distributed between holders of capital as money leant – as interest payments, and owners of land (if leased) as differential rent.  The capitalist will be prepared to take a below average profit for a time period to pay back capital invested in return for the perpetuity of creating new land of higher than average profit.  If the land is leased there will be no incentive to do so unless the owner strikes land reclamation and maintenance costs from rent so an average profit is earned for the undertaker throughout – hence the concept of full repairing leases and rent free periods during initial investment periods.

So in many cases of highly differentiated land and where significant opportunities to create new land yield exist the extent of this ‘new land yield’ rent will not be high and can be disregarded.

However where land is not highly differentiated and opportunities to create new land yields are limited the extent of this ‘new land yield’ rent may be very high.  Consider a case for example where there is only one site to extend a town, or only one building where an additional story may be added.  This theory explains why in these cases the rents for this new land is so high and why this rent is added to the price of the land and raises land prices, relative to incomes, overall.

The ‘margin of development’ then, both extensively and intensively, is not absolute it depends on viability.  After all the sea may be reclaimed, mountains may be levelled and additional story’s added to buildings to the limits of engineering but it is rarely viable to do so.  If the costs of such capital improvements fall, due to new techniques ,falling interest rates or regulatory changes then the margin of development can shift.

To give one example Hong Kong has a fixed land mass and regulatory restrictions on reclamation in the harbour.  Recent increases in disposal costs of construction wastes in the PRC has led the government to consider using it instead for land reclamation.

So with this significant modification the ricardian theory of differential rent survives, providing you separate from it intensive and absolute rent and the impact of value creation separately on land price and money price. Carey was wrong in that costs of reclamation and maintenance do not explain all of rent only part, there still remains an underlying natural differential rent.

Though not the conventional ricardian story of the text books this reflects much of the valuation practice in real estate where cost of reclamation is considered a cost which comes off the residual price of land – the widely used residual method.  Indeed we have now a more sophisticated method for calculating the price of land that properly takes into account interest costs of different elements. These differential costs of interest are not considered in standard valuation practice probably because of the assumption of a perfectly differential and infinite land stock which will not occur in many markets.

The theory is able to explain for example why there are real estate booms at times of very low interest rates and available bank lending power. It is also able to explain why there are rapid increases in land prices once opportunities for ‘new land’ are restricted and why this leads to significant increases in demand for leverage.

This argument can also be extended to extensive rent in terms of different methods for upgrading the same piece of land.  The obvious case would be between developing agricultural land between alternative land uses, say housing and industry.  This case deserves its own article as its shines a different light on neoclassical.

In the next post I will explain the broad theory mathematically and graphically.

CPRE – Valued Landscapes Being Vandelised – So why dont they JR Decisions?

Today CPRE published a report ‘Going, going, gone? England’s disappearing landscapes’ on threats to National Parks, AONBS and Locally Valued landscapes.

The case studies in our report are a snapshot of the most significant current threats to National Parks and Areas of Outstanding Natural Beauty. We have also highlighted the dangers faced by landscapes that lack national protection but are, nevertheless, deeply valued by local communities. Government policies mean that National Parks and Areas of Outstanding Natural Beauty (AONBs), which should have the highest level of protection in planning, are increasingly threatened by damaging developments. The development proposals fall broadly within four categories: energy; housing; transport and tourism.

Cases highlighted in our report include the recent permission for 521 houses in the Kent Downs AONB and the cumulative visual impact of wind farms surrounding the Lake District National Park. Threats to locally valued landscapes include a proposed new 20km dual carriageway in open countryside in Norfolk, and a theme park in Swinley Forest, Berkshire.

We are calling on the Government to:

• strengthen national planning policy by giving greater weight to the protection of nationally designated and locally valued landscapes;

• recognise the contribution that National Parks and AONBs make to our economy and review cuts to their funding in advance of the imminent Spending Review;

• produce guidance for the Planning Inspectorate on implementing the major development test in National Parks and AONBs;

• ensure that requests for applications to be ‘called in’ by the Department for Communities and Local Government are dealt with in line with the major development test in the National Planning Policy Framework;

• exempt National Parks and Areas of Outstanding Natural Beauty from the proposed  changes to permitted development rights concerning the conversion of farm buildings; and

• review the draft planning policy guidance to ensure that best use can be made of the new Local Green Space designation.

• CPRE is also calling for an urgent Parliamentary Select Committee Inquiry to review how major development is dealt with in National Parks and Areas of Outstanding Natural Beauty in order to protect and enhance their beauty for future generations.

Without wishing to comment too much on individual sites the issue here is the way the ‘Dower test’ for major development in National Parks and AONB is being interpreted.  The recent case of Cherkley Court has highlighted the fact that this longstanding test is one of ‘need’ not demand.  That is there has to be a need for that development in the AONB or National Park.  This means that unlike the ‘ordinary countryside’ in the NPPF you have to show there are not alternative sites outside the AONB / National Park to meet the need.  Of course there will be cases where the alternative sites outside the AONB/National Park may have a greater impact on the overall landscape including the setting of the National Park /AONB, and the test allows for such exceptions.  This test is longstanding and unchanged in the NPPF, so what is the impact of the governments planning reforms?  The issue is that LPAs are so worried about not having a 5 year supply that they apply the ‘presumption in favour’ test without considering the NPPF properly as a whole including whether there are alternative sites outside the AONB/National Park.  The SoS has also at one site at Tetbury  ruled that the harm to the AONB (which was limited) was less than the benefits from housing.  This is misinterpreted however as this applies AFTER the Dower tests.  Some AONBS are so large and because they was over most villages and are tightly bound around market towns that there is no alternative but to extend into the AONB unless they re to be pickled in aspic.  One thinks here of the Cotswolds, The Weald and so on.  But for other AONBs, particularly some of the coastal ones.  There will be laternatives outside the AONB or less damaging alternative sites inside the AONB.   Some of the cases in theCPRE seem ripe for JR in not demonstrating that the Dower test has been met.  Ironically the government by withdrawing the requirement to give reasons on approval, even for cases contrary to the NPPF and recommendation for refusal, has made JR all the easier and in at least one case at Mevagissy this is happening.  Also the SoS seems peculiarly adverse to calling in AONB cases unless there is a flood of letters.  In many of these cases there has been no such flood as local campaigners fully expected cllrs to refuse the schemes and they did not.

Here is the Telegraph’s story

Sir Andrew, the rural campaigner and former poet laureate, warned that beautiful countryside landscapes “may one day only exist in the mind or on the printed page”.

He said that the Coalition’s controversial changes to the planning system have “created an atmosphere where all development is seen as good development”.

His comments came in a report from the Campaign to Protect Rural England (CPRE), which found that the Government’s desperation to loosen planning controls to fuel economic growth is “damaging” some of the most beautiful parts of the countryside.

The study warned that the controversial planning reforms are threatening “national parks and other precious landscapes” despite “repeated assurances” from ministers that they would protect the countryside.

In his most outspoken criticism yet of Government planning changes, Sir Andrew, president of the CPRE, said: “The English countryside is our great collective masterpiece – and any development that needlessly damages it is an act of vandalism.”

Sir Andrew, the rural campaigner and former poet laureate, warned that beautiful countryside landscapes “may one day only exist in the mind or on the printed page”.

He said that the Coalition’s controversial changes to the planning system have “created an atmosphere where all development is seen as good development”.

His comments came in a report from the Campaign to Protect Rural England (CPRE), which found that the Government’s desperation to loosen planning controls to fuel economic growth is “damaging” some of the most beautiful parts of the countryside.

The study warned that the controversial planning reforms are threatening “national parks and other precious landscapes” despite “repeated assurances” from ministers that they would protect the countryside.

In his most outspoken criticism yet of Government planning changes, Sir Andrew, president of the CPRE, said: “The English countryside is our great collective masterpiece – and any development that needlessly damages it is an act of vandalism.”

He added “Beautiful landscapes, which loom so large in our history and culture, and which exert such a powerful hold over our imaginations, may one day only exist in the mind or on the printed page.”

Sir Andrew said that he does not believe politicians are “deliberately setting out to degrade and destroy our landscapes”.

“However, they have created an atmosphere where all development is seen as good development,” he added. “When even our protected countryside is at risk, what hope is there for our unprotected but equally loved ‘ordinary’ countryside?”

Sir Andrew and the CPRE are now calling on ministers to toughen up protections for the National Parks, Areas of Outstanding Natural Beauty (AONBs) and locally valued landscapes.

In recent months ministers have made increasingly strident comments about the need to build on national parks and other beautiful parts of the country.

Schemes highlighted in the CPRE report include a major new road scheme through the Peak District and intrusive mobile homes in the Yorkshire Dales.

The relaxation of planning laws is “failing” rural areas and placing “unprecedented pressure on our most treasured countryside”, it warned.

England has 10 National Parks – most protected under law dating back to the early 1950s – covering nearly 5,000 square miles of the most beautiful countryside in the world, including Exmoor, the Peak District, Dartmoor and the Lake District.

David Cameron has previously been at pains to emphasise that National Parks and AONBs are safe from the planning reforms, which ripped up hundreds of pages of protections.

However, the CPRE has warned of a surge in the number of applications to build in national parks, AONBs and locally valued landscapes after the relaxation of planning rules.

The CPRE highlighted more than 20 developments which it said are threatening the countryside, including more than 500 houses almost entirely within the Kent Downs AONB area, near the White Cliffs of Dover.

The CPRE said national planning policy should be strengthened by giving greater weight to the protection of nationally designated and locally valued landscapes.

The campaigners also want planning inspectors to bring in new tests to put a check on building in national parks or AONBs.

A spokesman for the Department for Communities and Local Government said: “Strong planning protections remain in place for National Parks and Areas of Outstanding Natural Beauty, which are some of this country’s most important national treasures.

“The best way to support this is to ensure that local people who know their areas best and cherish them most are included in decisions about their future.”

scapes, which loom so large in our history and culture, and which exert such a powerful hold over our imaginations, may one day only exist in the mind or on the printed page.”

Sir Andrew said that he does not believe politicians are “deliberately setting out to degrade and destroy our landscapes”.

“However, they have created an atmosphere where all development is seen as good development,” he added. “When even our protected countryside is at risk, what hope is there for our unprotected but equally loved ‘ordinary’ countryside?”

Sir Andrew and the CPRE are now calling on ministers to toughen up protections for the National Parks, Areas of Outstanding Natural Beauty (AONBs) and locally valued landscapes.

In recent months ministers have made increasingly strident comments about the need to build on national parks and other beautiful parts of the country.

Schemes highlighted in the CPRE report include a major new road scheme through the Peak District and intrusive mobile homes in the Yorkshire Dales.

The relaxation of planning laws is “failing” rural areas and placing “unprecedented pressure on our most treasured countryside”, it warned.

England has 10 National Parks – most protected under law dating back to the early 1950s – covering nearly 5,000 square miles of the most beautiful countryside in the world, including Exmoor, the Peak District, Dartmoor and the Lake District.

David Cameron has previously been at pains to emphasise that National Parks and AONBs are safe from the planning reforms, which ripped up hundreds of pages of protections.

However, the CPRE has warned of a surge in the number of applications to build in national parks, AONBs and locally valued landscapes after the relaxation of planning rules.

The CPRE highlighted more than 20 developments which it said are threatening the countryside, including more than 500 houses almost entirely within the Kent Downs AONB area, near the White Cliffs of Dover.

The CPRE said national planning policy should be strengthened by giving greater weight to the protection of nationally designated and locally valued landscapes.

The campaigners also want planning inspectors to bring in new tests to put a check on building in national parks or AONBs.

A spokesman for the Department for Communities and Local Government said: “Strong planning protections remain in place for National Parks and Areas of Outstanding Natural Beauty, which are some of this country’s most important national treasures.

“The best way to support this is to ensure that local people who know their areas best and cherish them most are included in decisions about their future.”

 

Boles Makes an Error and Says Reviewed Green Belt Boundaries Should Not be Permanent

With regard to the Westminster Hall debate Boles made an error with regard to the duration of local plans.  Political hay is already being made of this

The rquirement of the NPPF of course is that plans (para 167).

 be drawn up over an appropriate time scale, preferably a 15-year time horizon, take account of longer term requirements, and be kept up to date;

Boles said in the Westminster Hall debate  response to a question on the York Green Belt that:

 There is nothing in the Localism Act 2011, in the NPPF or in any aspect of Government planning policy that requires someone to plan beyond 15 years. So, anybody who is suggesting that there is any requirement to safeguard land or wrap it up in wrapping paper and ribbons for the future development between 2030 and 2050 is getting it wrong. There is no reason for it and my hon. Friend can knock that suggestion straight back to wherever it came from.

This is clearly wrong, did someone email hasty advice to his ipad?.  The NPPF requires that they should be defined over an appropriate length and ‘take account of longer term requirements’.  This is a good example of sloppy drafting in the NPPF as many pointed out, the previous requirement was ‘at least 15 years’.

One such longer term requirement of course is Green Belts.  Para. 79 of the NPPF states that ‘the essential characteristics of Green Belts are their openness and their permanence.’  This has always been taken as extending well beyond the lifespan of a local plan.  In the days of structure plans it was take as at least the lifespan of the stricture plan (20-25 years) and beyond.  Indeed this was the original justification of the areas of safeguarded land within the inner edge of the Green Belt.

Indeed para 83 of the NPPF says that

 authorities should consider the GreenBelt boundaries having regard to their intended permanence in the long term, so that they should be capable of enduring beyond the plan period.

 

 The permanence of Green Belt would be undermined if they were altered every 5 years.

This is clearly an issue for LPAs in undertaking strategic reviews of Green Belts.  However there is nothing which suggest the appropriate period is 50 years.  This is just York being excessively cautious.  Boles should be graciuous enough to write to York and clarify the matter.

Boles Extends Scope of PINS Pre-Examination Visits

Currently advisory visits happen with practicing inspectors advising is a draft submission plan has flaws which need to be improve to be found sound.  They cannot however suggest specific changes in response to soundness problems raised by objectors.

However Boles in the Westminster Hall debate yersterday said:

Regarding help for authorities, I will make an offer to everyone here in Westminster Hall who has an authority that is having difficulty resolving the final objections to a plan that is still in draft form. It is that I am very happy to ask officials in my Department and—perhaps even more usefully—the recently retired chief inspector and another recently retired very senior inspector to meet those authorities to help them, in a sense, to understand what are the practical things they have to do to get the plan to a point where it can pass examination.

I fully understand that there is a frustration, namely that people cannot negotiate with an inspector, because an inspector is basically like a judge; it would be like someone negotiating with a judge in court as to whether they will be found guilty or not. The inspectors cannot negotiate, but that is why we have created a resource within the Department that is able to provide that practical support, and I am very happy to offer it to Cheshire East and to other boroughs where it would be necessary.

Link to the Westminster Hall Debate on Planning and Housing Supply

Here I note the speech by Tony Baldry MP

In effect, the Secretary of State has allowed a policy of first come, first served, with planning permission being given to whichever house builders or developers happen to get their planning applications in earliest. This is not plan-led development; this is not central planning policy—this is planning anarchy.

Boles – old People to Blame for Green Belt Loss

 

Boles seems to make the basic mistake of conflating population and household growth here as of course household growth can rise whilst population is falling.  Aging also has an effect on household growth because of the ‘flow’ effect of the reduced number of households released for sale or reletting.  But of course from many confused statements we know Boles cannot distinguish between stocks and flows.  Mps seem also to think that some brand new method has been dreamt up to calculate targets.  The method has been essentially the same for two decades.  All that has changed is that now LPAs in a housing market area calculate it cooperatively whereas before they calculated it cooperatively under the discipline and aegis of a regional planning convention (big deal methodologically however the new system adds around 5 years to log jams because of disagreements under the duty to cooperate).  I note the charge that targets were arbitrary and too high was exactly the charge made by pickles before the last election.  Mps however are more on the right track when they accuse the NPPF system of being ‘planning anarchy’, ‘developer led’ and a ‘free for all’ – when their is no local plan in place – local plan in place – exactly what we predicted on his blog on many occasions.  Of course you can argue that a discipline to ensure to meet targets where LPAs are slow but that is no excuse for allowing a first come first served approach when there are much better sites.  Mps would be wise to fucus their attacks.  Are they against housing or against housing in the wrong place.

Telegraph

The planning minister singled out the rise of four-generation families for an “intense” housing crisis, saying a rapidly-ageing population was putting greater pressure on the housing market than mass immigration.

Mr Boles, speaking at a Westminster Hall debate in Parliament, faced a major backlash from Tory MPs who warned the party was haemorrhaging votes after creating “planning anarchy” that would “destroy our open countryside”.

But Mr Boles said the new targets for land supply for housing imposed on councils are too low, and said there are no longer enough brownfield sites to meet demand.

Southern England and some northern towns face an intense “housing crisis” that has left children in overcrowded homes and two-thirds of first time buyers relying on help from wealthy parents, Mr Boles said.

“Our population has grown and we have not built enough houses to keep pace with it.

“One source absolutely, that is contentious in this House and elsewhere, has been immigration, which was uncontrolled for a very long period of time,” Mr Boles said. “But it’s important to remember the majority of that population growth, has not been as a result of immigration. The majority of that growth, about two thirds, has been as a result of ageing.

“How many people now are part of families in which four generations are alive? Quite a lot of people. It used to be very rare that there was a great grandparent or a great-grandchild in family. It is now very common because people are living longer and they don’t all want to live in the same house.”

Mr Boles said he would “love” to avoid building on open countryside, but one in three developments must now take place on greenbelt land because many brownfield sites are in areas where people do not want to live.

Mr Boles faced a succession of furious Conservative backbenchers, who said the government was imposing too high housing targets on local authorities, forcing them to designate greenbelt land for housing.

“Our policies on housing are losing us many votes in rural areas,” said Laurence Robertson, MP, who said “arbitrary” targets had been set in an attempt to “engineer a recovery”.

Nick Herbert, the former policing minister, said the reforms were “developer-led” and “effectively allow for a free-for-all on our countryside”.

They risked undermining ministers’ promises to grant more power to communities under the localism agenda, he added.

Stewart Andrew, Conservative MP for Pudsey, Horsforth & Aireborough, said the greenbelt in his constituency risked being “ravaged” by overly high housing targets that demanded 74,000 new homes. Eighty per cent will have to go on green fields.

“The precious places that are the lungs within our communities, the natural barriers between our towns and villages and the green borders between the cities of Leeds and Bradford will all be gone,” he said.

Sir Tony Baldry, MP for Banbury, said a development had been allowed on greenbelt land in his constituency after Mr Boles approved an appeal by developers, against the wishes of the local council.

“What the Secretary of State has allowed is a first-come, first served policy, with planning permission given to whichever developers happen to get their applications in first. This is planning anarchy,” he said.

Martin Horwood, the Liberal Democrat MP for Cheltenham, said his town had been hit by unfairly high housing targets because of “insatiable” demand from housebuyers who want to send their children to good local schools.

But Mr Boles insisted his housing targets are too low for Britain’s growing population, and councils must be forced by Whitehall to prepare for newcomers.

“It is not that there are hugely inflated demand figures being put into local plans, adding up to something way ahead of what we need.”

He added: “We don’t say to the NHS provide as many GPs as you can afford right now. We say to the NHS, work out how many GPs are needed. The same is true of housing sites.”

Westminster Hall Debate on ‘Planning by Appeal’ today

BBC

In Westminster Hall (1.30pm – 4.30pm) there’s a backbench debate on planning, housing supply and the countryside, led by Nick Herbert, Laurence Robertson and Anne Main.

The central point they want to make is the need to keep faith with the promise of localism in planning, and to avoid a return to “planning by appeal” in which local rulings are challenged and overturned.

There is growing concern amongst MPs about this issue, and Mr Herbert will be calling for the government to give proper weight to emerging neighbourhood and local plans, and to address infrastructure issues in its new guidance.

Open Letter to Pickles on Planning Policy for Renewable Energy

Dear Eric

On a recent recovered appeal in Fenland the Inspector included a summary of official government statements on energy policy.

Your decision letter stated their have been more recent statements.

Indeed their have been many, by the PM, DPM, junior and senior ministers in DECC and DCLG.  All have been contradictory.  None have been set out as agreed coalition policy.

So then what is the official government energy policy on which you base the need for renewable energy schemes in weighing decisions?

I should note that it was stated in the commons that the recent guidance document did not present a change in policy, so what is the change in policy referred to?

Birmingham Releases Pre-Submission Development Plan With Major Green Belt Development

Here going to cabinet in December.  The plan is notable both for the scale of Green Belt development proposed in the Sutton Coldfield area and that not all of the need being met in the City, surrounding areas would have to contribute to meeting household growth.

Extraordinarily the council report gives no summary of the main issues or changes in the scale or location of development or the DTC implications.  What a poor report, do residents have to plough through 100s of pages of appendices to understand the broad strategic issues?

Nothing is More Disposable than a Preferred Options Plan

Tonight Stratford District is considering delays to its 5th version of its preferred option plan.  I know many many plans which have gone through 4 versions, but 5 or 6?  Nothing seems to be more disposable than a preferred options plan, not even Tesco bagged salads, why is that.

Reasons, many rather than a single 1 st deposit reforms meant LPAs can have as many goes as they want and nothing aids non-decision making as much as procrastination.

Reforms also niavely encouraged many LPAs to not do allocations or only allocate major sites, until Stafford/Lichfield and the SEA directive compliance and Forest Heath put a stop to that.

Also government is reasonable for first encouraging plans to reduce numbers then stopping them and revoking RS requiring whole new housing evidence base.

Also with a plan version turnaround period of around a year and national policy turnaround of only a few months national policy has changed more quickly.

Of course there is the learned helplessness of many lpas and the cowardice of many councillors in dropping controversial options, as if any sound plan were never uncontroversial, and proposing instead more controversial and more unsound alternatives despite all warnings and then disingenuously blaming PINS for their own incompetence.

Many LPA planners see a soundness fail as potentially career ending and so are more than willing to recommend yet another round of consultation, especially when they know when cllrs stubborn preferences are unsound.  Even though regs changes means that an LPA can always avoid an unsoundness finding by simply asking for recommendations to make sound.

The result is we have plans that tale a decade or longer to get through and some PIs which have lasted two years or longer.  Exactly the kind of delays which discredited the old style local plans system.  Things must change.

We need statutory timetables for plan production with a right of challenge for developers and local residents when it is not met to recharge LPAs for consultants costs for preparing a version of the plan for submission in default.  The LPA would then be required to approve a version of the plan for submission, either their own or the consultants version, within 12 months of going into default.  Then if their own version was not legally ready, tough titty.