Armitt to the Government on the ‘Growth Arc’ – Must try harder #CaMKOx

FT

Sir John Armitt, Chairman of the National Infrastructure Commission, welcomed the chancellor’s announcement, but said: “The Growth Arc is in desperate need of new homes and improved transport links, for the benefit not just of local residents but to the country as a whole. These things won’t happen without continued and concerted effort from Government, and today’s measures, while welcome, will not achieve that on their own.

Paul Miner, of the Campaign for the Protection of Rural England, said such gains remained undefined. Mr Miner added that Monday’s announcement “makes little or no commitment, from what we can tell, to the level of affordable housing”

The Red Book on Letwin and Land Value Capture

Red Book

4.57 Accelerating housing delivery – Alongside the Budget, Sir Oliver Letwin has published his independent review of the gap between housing completions and the amount of land allocated or permissioned. The review found no evidence that speculative land banking is part
of the business model for major house builders, nor that this is a driver of slow build out rates.
The review concluded that greater differentiation in the types and tenures of housing delivered on large sites would increase the market absorption rates of new homes – the binding constraint on build out rates on large sites – and has set out recommendations to achieve this aim. The
government will respond to the review in full in February 2019. In order to minimise uncertainty for housebuilders, the government confirms that Help to Buy Equity Loan funding will not be made contingent on large sites with existing outline permission being developed in conformity
with any new planning policy on differentiation. The government will honour any funding commitments made to sites with existing outline planning permission, regardless of any new planning policy on differentiation.
4.58 Planning reform – The government has already revised the National Planning Policy Framework, implementing 85 of the proposals set out in the Housing White Paper and Autumn
Budget 2017, ensuring that more land in the right places is available for housing. The Budget announces that the government has launched a consultation on new permitted development rights to allow upwards extensions above commercial premises and residential properties,
including blocks of flats, and to allow commercial buildings to be demolished and replaced with homes.
4.59 Land value uplift – The government confirms that it will introduce a simpler system of developer contributions that provides more certainty for developers and local authorities, while enabling local areas to capture a greater share of uplift in land values for infrastructure
and affordable housing. The reforms include simplifying the process for setting a higher zonal Community Infrastructure Levy in areas of high land value uplift, and removing all restrictions on Section 106 pooling towards a single piece of infrastructure. The government will also introduce
a Strategic Infrastructure Tariff for Combined Authorities and joint planning committees with strategic planning powers.

Why the Government Will Have to Implement Letwin @oletwinofficial

Imagine a South East authority that faces a doubling or tripling of its OAN under the SOAN (whether 2014 based or more up to date) – to over 1,100 a year.  It gets 300 or so from windfalls and brownfield sites and needs another 800 or so.  Large sites in the South East rarely exceed 240 dwellings a year completions, it needs around 4 such sites.  Because of its geography it can only do one, so has to assume 4 simultaneous ‘points of sale’ in a rapid delivery model (perhaps involving modular construction)  where the rate of housebuilding would be such as to exceed the absorption rate, and probably push local house prices down (from what they otherwise would have been with economic growth) .  I.e. something a rational housebuilder/landowever would not do and as Letwin rightly concludes would be more likely done in a continental model of the local state buying land at a set value and then zoning it building infra, masterplanning, subdividing and selling.

This is not an unusual situation, though most dramatic in Green Belt areas in growth corridors and areas across England dramatic SOAN rises will be the norm given the 300,000 aspiration (which wont fully work its way up from 276,000 till the new iteration of SOAN next year).  If the government want to see completions anything like 276-300,000 anytime in the next 10 years, whether or not council housebuilding is promoted (which requires land to build on) , it requires such an approach to land assembly, planning, sale and construction.

If any ‘landowners rights’ reps like the CLA, or housebuilders or lawyers who specialise in protecting rentier income, have an alternative delivery model that will hit 300,000 I challenge them, and I cahllenge them to cost it in terms of how much the taxpayer would be expected to subisidse farmers and other landowners to make it work.  They wont because there would be a public outcry if they did.  Which is why Letwin – or something like it, under this prime minister or next is inevitable