Proposed reduction in housing could be ‘catastrophic’ for the regional economy

Businesses from across the region say that a proposed new way of calculating housing need which would significantly reduce the numbers of dwellings being built in the region could have a catastrophic effect on the economy.

The Department for Communities and Local Government strategy, ‘Planning for the right homes in the right places,’ is currently under consultation. It includes revised guidelines for calculating future housing figures. The impact of the new methodology is that some local authorities will have much higher targets than before, whilst others, including Leeds, would have a lower target.

Using these new figures, the basic housing requirement for Leeds up to 2028 would be calculated at 42,000 new homes.

The council’s Core Strategy, approved by a government inspector in 2014, identified the need for 66,000 new homes and a Site Allocations Plan has been developed to meet that need. Progression on the Site Allocations Plan, which details land where the housing could be sited and was due to move forward this week, has now been postponed due to the DCLG consultation.

Amanda Beresford, partner at Shulmans and vice president of Leeds Chamber of Commerce, said: “Leeds is a great city with fantastic potential for growth. I am concerned that, although the introduction of a standardised method is in general terms a good thing, the actual method proposed is not.

“The proposed methodology would result in decreased housing numbers in the north and increased housing numbers in the south. Specifically there would be a significant decrease in housing proposed for Leeds. This would be inconsistent with the growth ambitions of Leeds, the Northern Powerhouse agenda and will reinforce the North/South divide. I therefore hope the government amends the way that the methodology is proposed to work so that it will support growing the economy in Leeds and the North.”

She added that businesses would be pressing the government for amends and that without a revision “it could be catastrophic” for the region’s economy.

Mark Johnson of Johnson Mowatt property consultants said that he was currently compiling a response to the DCLG Methodology “on behalf of a long list of disgruntled regional developers who had in place growth plans.”

He said that across the ten council areas within the Leeds City Region, the total current annual housing target stands at 14,298 dwellings per year.Johnson added that the DCLG Housing Methodology consultation paper would cut this target to 10,777, a drop of more than 3,600 dwellings being built each year.

Johnson added: “New homes are essentially provided to serve a growing population which reflects the fact that people are living longer. In addition, jobs growth tends to retain younger households that may have previously gone south in search of employment.

“The problem with the DCLG methodology is that it does not factor in ‘employment growth’ and instead considers as an alternative ‘affordability ratios’ which are less of a housing need driver up north. In not considering employment growth in the calculation, the methodology will fail to deliver the homes needed to keep pace with recent jobs growth.”

He said that forecasts predict a further 124,000 additional new jobs will be created in the Leeds City Region on the period 2016-2030.

Johnson added: “These figures are not aspirational, they simply reflect the success of the Leeds City Region of recent years. The DCLG paper strips out any economic led housing growth such that it undermines the regional economic strategy. There is little point in increasing the number of jobs if you don’t supply the housing for those taking up those new roles.”

He said that in real terms, a drop of 3,724 new homes each year would result in a reduction in more than 11,700 direct and indirect construction jobs.

Jen Hamilton, Sweco UK’s Environment Director,said “The Leeds City Region has great momentum at the moment – business is booming but the shortage of affordable housing is an issue in attracting and retaining engineering resource into our head office in Leeds where around 300 of our team are based. While a standardised approach on what is ‘objectively assessed need’ is welcomed, the methodology proposed would have a negative impact on the allocation for the region reducing it by around 40%.

“The methodology has to support industrial strategy – the proposed methodology would be detrimental to the aim of addressing the North vs. South East imbalance. The proposals don’t support growth plans of businesses like Sweco which aims to recruit increasing numbers of graduates and apprentices who badly need affordable homes within manageable commuting distances. It would also reduce the economic growth that designing and constructing the higher volume of homes would deliver in terms of engineering and construction jobs.”

Ian Billyard, Principal at Leeds College of Building, said the housing crisis had been an issue for decades and that there needed to be focus upon the quality of homes built in the future – based on concepts in Germany , Scandinavia and Canada. He said at present it wasn’t such a worry that the future generations would run short of work because 50% of the construction industry was around repairs and maintenance.

He added: “But I do recognise there is a housing need. More people than ever are renting and debt is rising. We need more affordable homes.”

A spokesman at Leeds City Region LEP said the organisation is currently in the process of preparing a response to the consultation and as such will be taking account of the views of city region business.

Leeds City Council has contacted the Site Allocations Plan inspectors to continue with the public examination, but with a revised schedule. This would see the retail, employment and green space proposals considered in the coming weeks, with the housing element examined in February/March 2018.

A Leeds City Council spokesman said this would allow the council time to undertake further technical work to consider the implications of the latest evidence and revised government approach to housing need.

In the meantime, the council’s own review of its Core Strategy, which is now underway, is showing emerging evidence of a lower figure of around 55,000 new homes being needed. The Core Strategy Review will be subject to further public consultation before the end of the year, which will take into account local evidence and the new government consultation proposals.

Cllr Richard Lewis, of Leeds City Council, said: “It’s vital that we have the right long-term housing target for the city and that we don’t have any unnecessary loss of greenfield and green belt land.

“The government’s latest consultation proposals came out of the blue for all local authorities and we need to take the time to fully consider their implications. They are also, at this stage, part of a consultation and not necessarily the final word from government.

“Given the significance of the housing element, we are taking the appropriate and responsible step of reviewing the latest information fully in order to provide our communities and potential investors with certainty to protect our green belt from development and to be fair to all parts of the city.”

Meanwhile, Harrogate Borough Council says it is proceeding with proposed housing plans. Councillor Rebecca Burnett, of Harrogate Borough Council said: “Bearing in mind that this is a consultation, we won’t know for certain what that impact will be until we know the outcome, but there is some information we can draw from the proposals.

“The housing need figure for Harrogate suggested by the proposed new methodology is 395 homes per year and this takes into account demographic need and an uplift for affordability based on market conditions. The number does not take into account any economic factors such as local job growth. It is clear in the document that the figure is a minimum and should be treated as a baseline rather than an absolute figure.

“Although the proposed methodology itself is silent on economic factors, this is dealt with elsewhere in the document. Paragraph 46 in particular strongly supports local authorities to meet employment growth with additional housing.

“Not taking into account economic growth, our current figure is 419 and when an uplift for economic growth based on locally gathered evidence is applied we reach 669. Because our baseline figure, 419, is so close to the proposed figure and our approach to economic factors is supported by the proposals, we are proceeding as scheduled with our Local Plan.”

A DCLG spokesman said: “This Government is committed to providing more of the homes where people want to live right across the country.

“Our proposals set out the minimum numbers of homes needed in each area, and we encourage local authorities to be ambitious about planning for more homes.

“To support this we announced a £2.3bn Housing Infrastructure Fund aimed at unlocking up to 100,000 new homes by helping to support much needed infrastructure in the areas of greatest housing demand.”

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