New Ideas for Housing – Working Group

Wednesday 19 August 2015

How can we best improve the speed, scale and quality of housing supply?
That was the question posed to a group of invited experts last week at a special NLA Insight Study Working Group to try to stimulate new ideas and encourage more innovative responses to London’s housing shortage.

The session invited responses from all present around the table following a paper written by Architect and Housing Development Specialist Claire Bennie, and was kicked off by Head of Development, EC Harris, Mark Farmer, who highlighted the fact that the funding map for delivery is now a very changed one, with a further Government clamp down on public funding to come. This leads to a requirement for longer-term institutional money, with a different model around rented return, but the biggest obstacle is likely to be construction industry capacity and the ongoing reduction in traditional site based skills, meaning that long-term money backing more off-site construction could be one answer. ‘We need to do something differently, that’s for sure’ said Farmer.

HTA managing partner Ben Derbyshire said that the devolution question was key to a city region perspective and to enable the mayoralty, boroughs, and Home Counties around the Green Belt to come together to create a coherent plan about spatial development and delivery, covering the important issue of quality. Drawing on his work on ‘Supurbia’, Derbyshire suggested that a significant number of homes could come from intensifying the suburban footprint of London. Double the footprint of just 10% of that and you could provide 20,000 new homes per annum over five years.

We are in a housing crisis, said Argent partner Richard Meier, and yet the policies around Housing Zones are not enough to address that. Can we be more radical in how we use Housing Zones? The service planning authorities provide and they quality of skills delivered is also an issue, said Development Director, Grainger plc David Walters – do elected members share the vision? What can developers and others do to help skills in housing and planning teams? NIMBYism, too, will be a consideration as estates of old come to the end of their life cycle.

For Bill Price, Director, Head of UK Client Management, WSP | Parsons Brinckerhoff, the skills to create great homes exist. But the release of government land needs more clarification on terms, and density is a contentious issue – not least in an emblematic 19-storey tower project local to Price in Kingston. Further afield, it is the Netherlands that provides a number of relevant lessons, said Gerard Maccreanor, Director, Macreanor Lavington, especially as the nation really delivered following a housing shortage after the war, but over a 60-year period, suggesting that a longer-term view was required on these shores. The concept there of Doorstroming – that people move five times in their lifespan – allows for mobility, is a more effective use of space and increases living standards for all. Contrastingly in the suburbs here there are fewer transactions and movement so there is less capacity to take up. Municipalities in Holland tend to share risk, and government has a holistic approach to construction and housing need, with productivity in factories seen as an important thing, contrasting again with a lack of investment here. The UK Government has to come out and say there is a long-term view, said Maccreanor, in order to get through the dips. Any cultural difference between Holland and the UK has been informed by 50 years of policy.

Sally Lewis, Director, Stitch Studio, is interested in the way the public interfaces with housing, and believes that the public can engage with the process and quality therein, perhaps through the concept of streets, enhanced by politicians talking about them too and sites on those streets interacting with each other more.

For Neil Deely, Partner, Metropolitan Workshop, very high density housing of the sort being proposed in parts of east London with ‘absolutely no limit on density’ is an enormous time bomb ticking and a major management issue for the future; there should be a halt to some of the unrealistic densities being proposed on inappropriate sites. Looking to the Green Belt, there needs to be a more holistic review of this that recognises that there are appropriate ways of developing in the Green Belt if you take that hand in hand with other uses such as recreation and leisure, especially near underused stations. There should also be more on offer for the over 55s to free up more homes, and perhaps the corporate world should take on more responsibility on housing supply for its employees. James Felstead, Director, Child Graddon Lewis, believes that intensification in the outer zones – 3-6 – is key, offering potential residents much more than just housing. ‘I’m not sure that always gets thought about’, said Felstead. Would extending the cycle network as part of transport infrastructure allow a reappraisal of PTAL ratings too?

Dr Noble Francis, Economics Director, Construction Products Association, said that market volatility – which focuses on land value and is dominated by major housebuilders, rather than SMEs – dictates the business model of housing. Between 1968 and 1973 Great Britain was building 400,000 units a year, split equally between private and public sectors. This meant that if there was a fall off in demand the public sector could at least offset some of the fall in the private sector. In 2008-2009 there was a 52% fall in private sector housing starts and over half of all social housing was provided through Section 106, which meant that not only does public sector not offset the fall, but it exacerbates it. And if the market is that volatile and falling that much, the only business model that will help is not one which builds more houses, but which writes down the value of land. SMEs have been decimated by recessions, falling from 12,215 in 1988 to 2710 in 2013, because of those falls in demand and their dependence on cashflow. ‘So we have an incredibly volatile market, and what that doesn’t incentivise is investment’, said Francis. That is, investment in manufacturing which likes a rate of return over 30 years, and in skills. Those brick factories are hard to bring back once mothballed, after all. The business model has to change to a return of SMEs, said Francis, with public sector housing providing a help and major investment in private rental and offsite manufacturing requiring long-term stability. 

Alex Lifschutz, Director, Lifschutz Davidson Sandilands, questioned whether what has been built is up to standard anyway – and who today has the long-term view, the vision. ‘I think that’s the problem we have.’ Large tracts of land are sold to raise revenue for all sorts of subsidies that would otherwise come from government. But there is another model. In Scandinavia landowners release land they own and major landowners hold the vision, releasing it in packets that are smaller and accessible to SMEs but where the supply is controlled. Flexible tenure is also very important, said Lifschutz, and PRS is very much affected by housing values – ‘I’m afraid it is a long-term problem and does come down to the way in which land is distributed’, he said. 

Duncan Bowie, Senior Lecturer in Spatial Planning, University of Westminster, believes that the key issue is not how many units we build but what we build, where we build it, and who can actually access it. The challenge is how we use the investment that is available. To have a wider range of output, we need to use suburban capacity and urban extensions including into the Green Belt, said Bowie. But getting land into the development process at close to existing use value is absolutely critical, so local authorities’ compulsory purchase powers do need to be strengthened, he added. We also need a proper housing requirements assessment and capacity assessment across the whole of the greater south-east ‘because at the moment we’re not using the capacity effectively’, he added. But on density we do need to remember, said Bowie, that over half of the schemes given planning consent in the last decade have been above, and sometimes three times, the density policy. This ignoring of those policies has led to numerous problems, and also land price inflation. ‘It’s a very serious mistake and it’s about time we reversed that.’

Pocket design director Russ Edwards said that none of the ideas about innovation will get anywhere unless planning is addressed, whether that is ring-fencing funding for planning teams or funding them centrally. In addition, around half of London’s workforce falls into the ‘intermediate’ tenure category, but only 2% of housing stock does, so there is an obvious mismatch there. And very few London boroughs actually understand their intermediate needs – the squeezed middle – said Edwards. ‘We think that needs to change.’ GLA has invested in Pocket to help it procure land on an interest free basis, which Edwards believes is an admirable model of public private partnerships.

For Joe Morris, Director, Duggan Morris Architects, his practice has won consent for 1000s of units but less than 10% of his staff owns a property and 90% rent in an unprotected market rent so struggle. Wasn’t there something odd about that? And mightn’t we push issues away from cost and procurement and towards quality? So creating places defined by houses shops and facilities are an important factor in creating cohesive communities, in contrast to the ubiquitous, bland schemes coming forward. Different methods of delivering housing such as cooperatives, self build and community land trusts should be worth considering, he said, with schemes delivered by philanthropic means.

David Montague, Chief Executive, L&Q, said it is normally the case with reports on matters like housing that there is ‘no silver bullet’, but there is one here, he feels – and that is courageous, long-term, cross-party planning. A plan is needed which commits to 1 million homes in London over 20 years, and if it happens, that will deliver jobs and investment in offsite construction. But we have to consider affordable rent because, said Montague, because why would any housing association invest in a product in the current scenario. ‘Where will people on low incomes live in future? If I wasn’t sure before I am sure now that we will see the hollowing out of London. These are profound times we live in.’

Inspired by the Abercrombie Plan, AECOM has argued that there is a need for greater strategic planning, way beyond the boundaries of London. The firm’s director Tom Venables said it had prepared a London manifesto that looked at a need for 2.4 million extra homes by 2030, armed with a better vision led by the government, but the planning system at the moment is ‘completely broken’ outside the centre. The housing brought forward does not come anywhere near meeting population growth requirements. There is, Venables added, a role for intensification of the suburbs and Green Belt and an important role for New Towns, but only where the infrastructure is in place.

Barking and Dagenham, said the local authority’s Jeremy Grint, Divisional Director of Regeneration and Economic Development, is releasing 117 hectares of employment land for housing, which could help to deliver 11,000-12,000 homes. But social rent is indeed being ‘destroyed’, with housing revenue accounts hit by negative rent controls and other factors. Models where local authorities can generate income are thus becoming more important, although the expertise in-house in councils is lacking.

For James Cook, Planning Director, GL Hearn, London should be expanding through intensification and tall buildings, but this alone will not deliver the step change required. How about bringing the significant opportunities within the M25, which are currently outside London, under the control of the capital and the mayor? That would require a reclassification of land but will deliver relatively unconstrained development potential and support existing outer London centres and allow to plan open spaces in a considered way, he said. But ideas need to be politically palatable, and on densification in the suburbs that could be a key problem.

Building on that point, James Clark, Housing Policy Manager, Greater London Authority, said that devolution is not a panacea, and does not neutralise some of the complicated political trade-offs that need to take place if we want to deliver significant housing at scale. But devolution would give London the opportunity to tackle these issues itself. It is, after all, difficult to find the time and space to come up with a plan and deliver it when much is spent reacting to central government policy. More use of CPOs and land assembly are ‘definitely where the GLA is heading’ and more powers will come in the future. But it is also striking how successful London has been in absorbing population growth, and the capital is blessed with an ‘almost endless supply of terraced houses that can be converted to flats’. The question is whether Londoners are happy with the implications of this, or whether they would prefer properly planned growth meaning a big increase in housing supply.

Finally, the original housing report author Claire Bennie suggested that, actually, housing should best be seen like infrastructure, and absolutely necessary, as it is in Holland. But in the UK she feels we have left the public behind. ‘They don’t understand why the population is increasing; they don’t understand what their city is anymore. They see it being taken over by global forces and the whole narrative has not hit home. To me there needs to be some kind of tsar, some kind of mega housing leadership where you have a huge conversation; you tell people about land use, you tell people about population and what is London, this city we’re living in.’

- David Taylor, Editor, NLQ 

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