CPRE Misleading on Why Some Local Plans undershoot OAN – would doom Plans to be unsound

CPRE

Quoted below

There are four reasons why a local plan undershoots OAN

1. It is underbounded or embedded with the heart of a large city – leaving no room to expand
2. It has binding environmental constraints (not policy constraints) such as SPA/AONB etc.
3. It is a site allocations plan carrying forward allocations from RSS numbers or numbers set in a higher level joint plan
4. The council makes a policy choice to build less – like Castelpoint citing Green Belt for example  – a strategy doomed to fail.

The research doesn’t make this distinction.  Of the list Brighton and Hove, Watford, Ipswich  Crawley Derby etc. are victims of underbounding.

South Normaptonshire is an odd inclusion as its allocations plan only covers the rural area and does not include strategic allocations on theEdge of towns in the joint West Northants core strategy.

Wealden has tough SPA constraints, much more restrictive than AONB constraints alone, Lewes has AONB and National Park surrounding most of its major towns – indeed its major town in now in the South Downs National Park.  Chichester abuts the National Park.

Hertsmere only has a recent allocations document, its core strategy from 2013 is based on old RSS numbers and is very out of date.

To my mind these fully explain the variations.

The report is dangerous in that it gives the impression that undershooting where suitable land is available is a policy choice.  It isn’t the Bole doctrine was abolished with the Housing White Paper – now you have to review local plans every five years.  Similarly though local plans have a choice to treat Green Belt as an NPPF constraint as Castelpoint shows if they do so they will need agreement from elsewhere to meet the shortfall of fail the DTC legal and soundness tests.  If Windsor and Maidenhead followed Paul Miners advice they would have an unsound plan.

 

The Campaign to Protect Rural England (CPRE) today shows that councils are failing to apply planning guidance that is designed to protect precious countryside.

Councils are expected by Government to establish and have a plan to meet an ‘Objectively Assessed Need’ (OAN) for housing in their area, which takes into account issues such as projected population growth and future employment opportunities. Yet planning rules also state that this number should take into account constraints such as protected countryside.

CPRE research today shows that, since 2012, 24 councils out of the 62 local authorities for which there is clear data have heeded national policy and established housing targets in approved local plans lower than their OAN, with the majority reducing their targets due to environmental or countryside constraints. These include Chichester, Lewes and Wealden. Chichester reduced its target by 23% and Lewes by 30%. Other local authorities, such as Brighton, Watford, Hastings and Crawley, have reduced their targets by 50% or more (see Fig 1 below).

Other councils, however, have pursued the full OAN despite a high proportion of their land being protected countryside. In East Devon, the planning inspector accepted the local authority’s contention that OAN of 17,100 houses should be met in full because of high expected levels of job creation in the district. In Christchurch and East Dorset, where the local plan meets the objectively assessed need for 8,490 houses over 15 years in full, 84% of the area of the plan is covered by Green Belt, AONB and nature conservation land.

CPRE finds that this approach is continuing elsewhere (see Fig 2 below). For example, the Royal Borough of Windsor and Maidenhead, part of which is covered by the Prime Minister’s constituency, is pursuing their full OAN target of 14,000 houses over 20 years despite 84% of the land being Green Belt. In Mid Sussex, the planning inspector has been reported as forcing the council to accept a number even higher than their OAN of 876 houses per year to help Crawley meet their ‘unmet need’. Mid Sussex has significant areas of precious countryside, particularly the High Weald AONB. Neighbouring authorities, particularly Wealden which has a similar proportion of protected land, have been able to reduce their housing targets. Campaigners and local MPs have long fought a consortium of developers who have argued for a still higher housing target.

CPRE’s planning campaign manager Paul Miner comments:

“Government planning rules state that councils should reduce their numbers if faced with significant constraints. A number of councils around the country have done just this. One has to ask, therefore, why the Government is allowing councils to ignore national guidance in places such as Maidenhead.

“We need to build more genuinely affordable homes. But current rules promote urban sprawl and cause the unnecessary loss of countryside. A more transparent and less damaging method of planning for housing is urgently needed.”

Government ministers recently pledged to create a new method for councils to calculate their Objectively Assessed Need. The proposals were expected in early summer, but the General Election is believed to have delayed their release. CPRE is calling for a method that better reflects local need, protected countryside and current building rates.

CPRE’s new research follows previous work by consultants Lichfields, who in 2016 found a further seven councils that reduced OAN due to constraints or adverse impacts (p. 15: link). Added to CPRE’s work, this would total more than 30 councils that have reduced their housing targets, most often on environmental grounds.

Figure 1: The top 15 local authorities who have set lower housing targets in adopted plans

Figure 2: 10 Local Authorities who have not reduced their housing targets in adopted and proposed plans despite high proportions of protected countryside.

Wolley Planning Briefs are the Cause of Half the Planning Problems in London

The Mayor of London has called in Barret’s refused scheme for the redevelopment of the Mill Hill National Institute of Medical Resarch complex station in Barnet – refused despite an officers recommendation for approval.  It is a brownfield site in the Green Belt.  It seems the Mayor is angling to approve with an increased amount of affordable housing.  The refusal reason were excessive height and the impact of this height on the Green Belt.

The site has the kind of wolly, poor draft planning brief so common in London, lots of words, lots of policy, no urban design analysis, no clarity on height, form, layout or built volume.  The brief says the buildings dont contribute to the conservation area but none the less would like to keep them and buildings of the same height would be unlikley to be appropriate!

Hence the developer doesnt know how much to pay for the land, so put in as little affordable housing as possible and hope to negotiate once the scheme is called in by the Mayor.

This king of planning charade would be unthinkable in most countries where the zoning of the site would clearly set the bulk, floorspace, heights, ground coverage and maybe setbacks and the % of inclusive housing.

In London a planning brief should never see the light of day without setting these and determining which buildings to keep or not in a conservation area.

The question planning departments should be asking themselves is can you value the land with this brief.  if not its as useless as an ejection seat on a helicopter.

 

Valueing an Apple Tree is not the Same as Valueing an Orchard – A reply to @MacRoweNick

Yesterday there was a interesting exchange on Twitter about Capital Theory.  JW Mason asked how you distinguished price from quantity for capital – a dimensionality problem.

@JWMason1 @interfluidity Each year, one apple tree produces 100 apples plus one (one-year older) apple tree.

— Nick Rowe (@MacRoweNick) May 8, 2017

This is an interesting response because it was the same technique – reducing fixed capital to variable capital – labour – with a single dimension – as pioneered by Torrens and Malthus, endorsed by Marx and revived by Sraffa and Von Neumann,

This approach – though seemingly very attractive – produces lots of problems:

1. It can produce negative labour values (and negative surplus values) – what are the meaning of these?
2. It is very difficult to account for the required total labour split between the joint products – unless you assume fixed proportions of capital intensity and  fixing the labour input price in advance.  It is a partial equilibrium system that cannot explain the labour market.  JS MIll backed down from the LTV for joint products for this reason saying it was down to ‘supply and demand’ however this is an unsatisfactory and circular argument because it cannot explain the supply curve of labour – itself a set of prices.
3. Prices equal dated labour only at zero profits – it cannot handle expanded reproduction with accumulation.
4. What about depreciation?  The price of the capital good must include a contribution to a depreciation fund, however unless you fix its age in advance (and there is no such thing as a purely technical age as its economic age varies with labour share and interest rate) you cannot fix its age and hence price the durable capital good.

Nick is right that the land of an orchard can be valued as the NPV of each of the apple trees.  However this explain the maximum surplus as rent.  The landowner can capture that rent themselves if they farm it themselves.  However how does the farmer value the apple trees and price the apples – they need a depreciation fund to replace the trees when they get old, but when is that?

This explains why rent is different from capital, you need to price the capital before you can set a rent, you can never set a rent and then price the capital.

[Incidentally Nick Rowes approach is conceptually the same as Wicksell’s pupil Ackermann’s thesis of an ‘Axe Model’ of Capital – it was Wicksells mathematical analysis of this that first led him to discover Wicksell Effects – See Lutz’s book on Interest Rate theory]

An orchard can produce a physical surplus over a year (an own rate) but this is neither profit not interest unless and until you have accounted for the replacement of seeds (depreciation) which requires you to know the opportunity cost of the lost apples (this is the mistake in Samuleson’s critique of Schumpeter’s theory of interest). A dead stand of trees still has a value, but the same stand with the same number of lives trees has a higher value because the land is valued because of the joint production of apple trees and apples.

All of this rather sums up the many problems with capital theory and why it has hardly advanced a jot since the 1960s. One can simply abandon capital theory – go General Equilibrium and treat capital as a Crusonia tree mush.  Itself deeply unsatisfactory.  As I explain here neoclassical approaches have abandoned a theory of distribution and cannot explain profits.

This shouldn’t be a council of despair because each of these problems with joint production has a potential solution.  The staring point I think is determining the optimal economic ‘strike point’ at which you cut down the apple trees and replace them.  Then if you have a rate of interest you can calculate the depreciation fund and then the NPV of the apple trees.   It only gets us part of the way there – interest rates are still unexplained – but it is a start.  Faustmann the pioneer of forestry economics came up up the neat solution that the optimal strike point is where the flow of income from the tree is increasing at the same rate as the rate of interest.  He then valued the land as the value of it with the trees cut down and the value of the trees as the total return minus the value of the land.  Of course this implies correctly that the value of an Orchard with live trees is far more than bare land.

Of our 4 problems this solves only number 4.  However authors have come up with solutions to problems number 2 and 3, and then problem 1 can never occur as labour coefficients can never be negative once you apply these solutions.  In a future article ill apply these – including Von Staklenbergs application of vector math to the problem.