Sunday, 5 February 2017

Busting the Housing White Paper Myths

Unless there is yet another last minute delay, the governments long-awaited Housing White Paper will be published on Tuesday (7th February 2017). There have already been enough leaks to give us a good idea of what it will say. There will be measures designed to promote building on brownfield sites and lower rents, but at the same time there might be a significant relaxation of green belt planning policy. An old adage tells us that "The devil is in the details" and there will certainly be a lot of details and a lot of devils. The housing white paper is likely to be long but it will be accompanied by short press releases and executive summaries that mask the true picture behind the usual facade of misinformation known as spin. Most journalists will be concentrating on simultaneous Brexit news from parliament. They may only have time to spout the doublespeak that the government puts out without looking any deeper. The more specialist reporters and bloggers like me will however be trying to get to the truth out of it, so to give myself some breathing space to go through the long document before saying anything, I am going to debunk the obvious falsehoods in advance.


Myths about house building

"Building more houses will bring prices down"

Let's take Basildon as an example. Go onto rightmove or zoopla and search for homes for sale below £250k. What do you find? I see 200 results starting from around £100k. That's not a bad availability, but not one of them is a new build. The cheapest new build is at around £300k. Even affordable housing with a 20% discount for first time buyer will be priced at £250k. Clearly building lots more homes from that price upwards will not bring down the prices of cheaper homes that are already on the market. Affordability for most local people will not improve. In fact, new housing at higher prices could encourage the market price to move upwards. The new build houses are really being built for people coming from elsewhere, especially those moving out of London who can leverage the higher prices of their house near the city to buy a bigger home in commuter towns like Basildon.

The underlying problem is that UK house prices are determined mostly by interest rates and salaries that define how much someone can afford to pay for a mortgage each month. Demand and supply plays its part, but it is estimated that even the government's ambitious plans to build a million homes before 2020 will not have a significant effect on house prices.

Of course the government could bring house prices down in an instant simply by raising interest rates but that would not make them more affordable except to cash buyers. A typical mortgage borrower would have a cheaper house but would pay the same mortgage payments for it due to the higher rate.

Another problem with bringing house prices down is that if they start to fall, the big developers stop building. Their profits depend on high house prices so the government is having to keep interest rates down so that house prices can continue to rise keeping the developer's profits high.

"There is going to be more affordable housing"

Yes but only in terms of the definition of affordable housing that the government changed at the beginning of 2016. Affordable housing used to mean social housing like council houses where people pay an affordable rent of about £400 per month. Now it means a starter home with a 20% discount bringing it down to a sale price of £250k. This is not affordable to people on low income. It is no wonder that homelessness is rising.

The white paper promises to get private rents down by making things harder for landlords. Will that be more steps like introducing extra stamp duty for buy-to-lets? That just reduces the number of people willing to be landlords which reduces competition and therefore raises rents, especially since the landlords that do remain in the business want to recoup the extra stamp duty from the rent. Nobody should be fooled by these sham claims from the government about affordable housing.

What is really needed is more old fashioned council homes with affordable rents, but that is an ideological no-no for the present government administration. 

"The necessary infrastructure will be built first"

This is simply a lie. The government has made impressive sounding funding announcements involving billions for infrastructure around the UK, but when you hear these figures you need to divide by 326 to see what the average amount per council is. The answer is not neally enough. Furthermore, this money is not distributed evenly. So far South Essex has not received one penny for new infrastructure from the government from recent announcements, and yet they want us to build 100,000 new homes here.

Sometimes you will hear the claim that developers will pay for new infrastructure through community levies. The first problem with this is that they usually don't pay until some of the houses are already built. The second problem is that they don't have to pay it for "affordable" housing. The third problem is simply that the amounts are only sufficient to cover the most basic infrastructure needs and don't usually stretch to the kind of major road upgrade projects that are needed.

To bring it down to hard numbers, Basildon council has calculated that its infrastructure funding shortfall for the Local Plan is over £300 million. They promise that an infrastructure delivery plan means that infrastructure will be in place first, but legislation only requires that funding should be identified for the next five years of development. If they can claim that widening the A127 and more hospital capacity will only be needed in five years time then they can start building. Even if funding for widening the A127 appears it will take at least ten years from that point to completion. Add to that the fact that the A127 cannot get central funding unless it is retrunked and even if it is, there is no room to widen it in many places.

"40% of councils have not yet produced a local plan"

This is a favourite accusation of the secretary of state Sajid Javid. The truth is that government policy has been deliberately ambiguous and dishonest in order to make it look like councils are to blame for unpopular green field developments rather than central government. Local Authorities in the green belt have found it especially difficult and their problems have been made harder by continually shifting goal posts. Last year the DCLG said that there would be repercussions for councils that did not produce a local plan by early 2017, but they themselves then delayed publication of the white paper and relevant infrastructure decisions such as the Thames Crossing and the Thames Gateway Growth Plan (we are still waiting.) Now they are publishing major changes with immediate effect just at the time they wanted councils to be finalising their plans. This follows recent changes to neighbourhood plan legislation and the New Homes Bonus scheme.  Similar changes of planning policy have been released almost continuously over the last few years. I am no friend of local councils but it is appauling that the DCLG is blaming them for delays in plan preparation.

"Actually it's the fault of the big name developers"

Again I am no fan of the big developers. They have been making huge profits from high house prices. They lobby government and councils for planning legislation and decisions in their favour. However, the government themselves decide whether to listen to the developers or to residents. They set the policies. If developers take advantage of legal measures that are in their favour then they are only doing what is expected of them in a capitalist economy. It is the government that has to set the direction they can move in and they are the ones to blame if it that not lead to the right place.

In particular look at the government policy that concentrates of promoting big green field developments when there are many smaller brownfield sites being left hanging. This has all-but killed off the industry of smaller SME builders. Now they finally recognise this mistake, but will they do enough to correct it and is it too late?

Myths about campaigners

"A survey shows that most people are now in favour of more house building, unlike 7 years ago when they were all NIMBYs"

This claim is based on a survey sponsored by the National Housing Federation, a pressure group that lobbies government on behalf of the housing construction industry. The NHF claim that the number of people backing new local homes has doubled from 29% in 2010 to 57% and that 73% back building of affordable homes for the low paid.

The first problem here is that the full survey and its questions have not been published (as far as I can tell). We don't know exactly what questions were asked and we can't even check if the same questions were asked in 2010 as now. The NHF is working to a pro-development agenda, and they set the questions according to that bias. They also have the opportunity to cherry pick the answers without opponents being able to see what the responses to other questions were. For example there is no claim of an indication that people are now more willing to build on green belt so probably the answer to that question was not in their favour, if it was even asked.

It is understandable that people are being swayed due to the government spin which tells them that more housing will solve the housing crisis and provide more affordable homes. The problem with that is of course that the reality is different as explained here.

"The people who oppose house building are old NIMBYs who only care about their house prices rather than the plight of the young who cannot get on the housing ladder."

The people who are campaigning against over-development tend to be older because they have the free time and because they have grown wise to government misinformation. Over their lifetime they have experienced the effect of population growth and lack of infrastructure to keep up with the growth. They can see the direction things are heading.

Far from being uncaring about the young, most are parents or grandparents concerned about the future of their progeny. They can see that future generations will live in dense urban areas with pollution, flooding, congestion and little countryside or wildlife to enjoy. That is what they are fighting against.

Most are not NIMBYs and are joining together in alliances of campaign groups to fight for protection of the countryside, truly sustainable development and truly affordable housing everywhere.

Myths about the green belt

"The size of the green belt has doubled in the last 20/25 years so we can afford to lose a bit now"

The total area of English green belt grew rapidly at the end of the millennium but only because green belt was being added to more cities than before. The metropolitan green belt around London stopped growing about 40 years ago. During the first decade of the 21st century the size of the green belt remained static but over the last five years it has decreased slightly as Local Planning Authorities have released small portions for development. The rate of loss is expected to accelerate in the next few years due to government pressure. This does not take into account the amount of houses that are being built on green belt at the same time. That figure has also been increasing according to independent surveys but it is not officially tracked by the government. Planning Policy since 2012 has made it very hard for cities to create new green belt, but much easier to release it. The statement that it has doubled over the last 20/25 years is intended to give the impression that it has been expanding steadily over that time so we need not worry about losing some. This is a blatant misrepresentation of the historical facts.

"Only 1% of green belt needs to be released to make room for enough houses"

The principle characteristics of the green belt are its openness and its permanence. As soon as you accept that some of it can be given up to housing the purposes of the green belt are lost. Towns start to sprawl and coalesce as the countryside is encroached. There are small areas of green belt that do not serve its purpose that could be built on without any harm, but this is much less than 1%. In Basildon the Draft Local Plan identifies 7% of the boroughs green belt to be released and there is more being lost in neighbouring regions. This percentage is likely to be revised upwards because Southend cannot meet its assessed housing need and because the government is changing the calculations to increase housing targets. The plans if fulfilled will come close to linking Basildon with London to the West, and with urban areas stretching to Southend in the East. Similar plans are being unveiled in other critical green belt regions.

The green belt was put in place to serve on the day when pressure from housing gets too high. That day is today. This is the time when the green belt is needed and it must be properly respected in order to ensure that building on brownfield land is prioritised. If it isn't then its purpose and meaning are gone and can never be reinstated.

"Much of the green belt is low quality land that is not green and can be built on"

The main characteristic of green belt is openness rather than greenness. It does not have to be green to serve its purposes defined in planning policy.

Actually much of the green belt which is being threatened with development is very high quality countryside which is good for agriculture and wildlife. Some of it has not changed in centuries but will soon be lost and can never be recovered. It is not only country parks and conservation areas that need to be preserved.

"The government is continuing to protect the green belt just as it always has"

The governments claim to protect the green belt has been no more than a vote winning ruse ever since the National Planning Policy Framework and the New Homes Bonus were introduced in 2011. The policy was carefully constructed by Conservative MP Eric Pickles to make it look like it had strong protection for the green belt when in fact it encourages local authorities to release green belt land for development. The government has gradually removed their council support grants forcing councils to plan for more house building to restore their finances with the New Homes Bonus. As a result, most green belt authorities are already planning to release large areas of green belt in their local plans.

The government will certainly be claiming that they are not changing green belt rules with this white paper but we will have to examine the details to see what legislation is being included that is likely to indirectly speed up the loss of green belt by making it harder for Local Planning Authorities to not release it.

"Theresa May / Sajid javid / Gavin Barwell is saying that green belt should only be used as a last resort and that protection is being retained"

I think it will be necessary to look at the details to see what this really means in practice. I suspect it is very different from how it sounds.

Even if the legislation remains as it is, the green belt is far from protected. Much of it has already been earmarked for development. Signing off is all that is left to do. If the Tories are serious about protecting it they urgently need to introduce measures to help. They could simply make a rule that councils cannot release more green belt than will be required during the next ten years, with reviews every five years. That would be enough to save it.

"The housing white paper is introducing protection for ancient woodlands. Be Happy!"

We are being thrown a bone from the carcase of the green belt with all the meat stripped off it. Ancient woodland is already protected (e.g. NPPF paragraph 118) Increased protection is always welcome but developers usually want to keep woodland areas as amenities in any case. The problem is that when you build all round them their biodiversity value is greatly diminished, even though they remain. Not much is likely to change.

Most wildlife protection measures in UK law have been severely degraded with the introduction of mitigation and offsetting rules. This means that developers can get round any protection with actions as simple as paying a "biodiversity offset provider" a little money. There is no traceability or oversight to tell us how much has been spent or where, or to ensure that the offsetting practices being used are effective or even adhered to. Natural England has become an organisation whose purpose is to find ways of letting development happen rather than protecting nature.

"A lot of the green belt is golf courses so why not use it to build houses on?"

Golf courses are one of many perfectly good uses of green belt land. They preserve openness, enable recreation and are even havens for wildlife.

Myths about demographics

"Only a third of population growth comes from immigration"

There is a wide range of political opinions about immigration, but whatever ideology you hold to, you should at least work from hard facts on immigration numbers. These are easily sourced from official government figures supplied by the ONS so there is no excuse for getting them wrong.

The claim above can be traced back to a claim made by Theresa May in 2012 when she said that a third of all housing demand in Britain was caused by immigration. That's not quite the same thing and may or may not have been true back then, but what about now?

In 2015 (latest reliable figures) net migration into the UK was 335,000. UK population growth for the same year was 513,000. So the direct contribution from migration to population growth was about 65%, more like two thirds than one third, but that is not the whole story. Immigrants tend to be young people so they produce more children than average. 26% of live births in the UK are to mothers from outside the UK. The total number of UK births in 2015 was 755,000 so that 26% represents about 196,000 births, or another 38%. In other words more than 100% of UK population growth can be attributed to immigration. Is this a surprise? Not really. Average birth rates in the UK have been below 2.0 per couple for decades. Population projections from the 1990s before immigration was expected to rise predicted that the UK population would be stable by 2016 once the 60s baby-boom effect had levelled off.

Those are the facts, make of them what you will but don't pretend that immigration is not a major factor forming the housing crisis.

"but housing growth demand in the UK is due to an ageing population and changing lifestyles"

The ageing population has been a factor in the past, but the demographic time-bomb has done its worst and now immigration is the main factor. Lifestyle changes have also had their effect with less people per household than before due to divorces, second homes etc. In the 1960s there were 3.1 people on average per household. By 2001 that had dropped to 2.4 but in the next ten years it only dropped a tiny bit further to 2.3. There is no evidence or reason to think that it is going to fall below that level or that we would want it to, so this is no longer a contributing factor to growing house demand.

"but there is still a shortage of housing and we won't lower net migration completely even after Brexit so we still need to build"

Nobody is denying that we need to build to make up the shortfall in housing from recent years. The question is whether we need to start building on the green belt or other countryside sites because of projected population growth in the future. Local Plans typically run for 15 or 20 years so housing targets are being based on up to twenty years of growth under the assumption that population growth will continue at its present rate. This is simply looking too far ahead. If we only aimed to build for ten years of growth then brownfield sites would be nearly sufficient in many councils. Releasing large swathes of green belt now will only make it harder to benefit from the policies being set out to prioritise building on brownfield sites. In ten years time we will be living in a post-brexit Britain where population growth may slow and technological advances may affect commuter trends. To release green belt now for an uncertain future would be a terrible folly.

Finally

"There is nothing we can do. It is all a done deal. We are not being listened too. You are wasting your time. Give up."

We must always stand up for our rights. We live in a democracy and the government would not produce all this spin if they did not think they have to convince us. They have only a small majority and a backbench result could overturn these new policies or bring in some valuable amendments. We must show our MPs and Councillors that we are not being taken in and that it is important enough to us to change the way we vote.

Update: So tomorrow we will get the details we have been waiting for. The hype and spin have been pretty terrible so far, but what of the white paper itself? Perhaps there are signs that some of our worst fears for the green belt have been avoided, but what will be in their place? A mixture of good and bad? Please do return to this blog tomorrow to see my verdict. 

For press inquiries: http://seeaga.uk/press.html

3 comments:

  1. This comment has been removed by the author.

    ReplyDelete
  2. Very interesting reading for someone who is not an expert on the subject like yourself! I understood all the points raised but what can the average person do to help stop bad decisions being made by the Government ? A lot of the time I hear from residents that "its not worth getting involved as we are never listened to!"...I find it hard to not disagree with them (even at Local Council level).

    ReplyDelete
    Replies
    1. We must not give-up. I added a final point to address this.

      Delete