Blink and you’ll have missed the latest piece of planning policy issued by the government. In the run up to Christmas PPS3 was published, or to give it its full title, Planning Policy Statement 3: Housing. It was followed shortly by PPS25 on flooding (the fallout from which has yet to be felt by those involved in the planning profession), and all this against the background of the final Barker report on the review of land use planning issued at the beginning of December. As a barrister once commented to me, there is almost a need to search the Communities and Local Government (CLG) website on a daily basis in order to keep up with national planning policy!

Like other PPSs and PPGs, PPS3 sets out the government’s planning policies in England. It replaces the old PPG3 published in March 2000 and its objective is to put in place a new national policy framework for housing planning at local and regional levels. The immediate effect is that local planning authorities (LPAs), already grappling with the local development framework (LDF) system, will have to assess whether their emerging LDFs will need to be reviewed.

So what’s involved?

There are five housing policy objectives that are to provide the context for planning through development plans and planning decisions. These are:

(1) high-quality housing;

(2) a mix of market & affordable housing;

(3) sufficient quantity and improved choice;

(4) provision in suitable locations; and

(5) a flexible, responsive supply of land.

To achieve these objectives, PPS3 tells us that they are based on the concepts of ‘sustainable development’, a ‘visionary and strategic approach’, ‘market responsiveness’, ‘collaborative working’, an ‘evidence-based policy approach’ and, finally, ‘outcome and delivery focus’. As a practitioner in private practice, what caught my eye were the concepts of market responsiveness and collaborative working. However, we will unfortunately have to wait until separate practice guidance is produced by CLG on ‘strategic housing market assessment’ and ‘strategic housing land availability assessment’, to see what is in the detail and, moreover, whether it properly includes developers and house builders, for example.

‘Delivering a flexible supply of land’

Back to the objectives, and whilst PPS3 does not purport to rank them, it is somewhat ironic that the delivery of a flexible supply of land for housing should appear last, as without it the achievement of the others is placed in doubt. The government’s objective is that the planning system should deliver a flexible and responsive supply of land, identifying broad locations and specific sites to ensure a continuous supply for at least 15 years from the adoption of local development documents. This includes a rolling five-year supply of ‘deliverable sites’, meaning those that are immediately available, suitable and achievable within the five years. LPAs should also identify a further supply of specific, developable sites for years 6-10 and where possible years 11-15. The significant departure from PPG3 is that LPAs will not be able to include an allowance for windfall sites within the first ten years of land supply unless robust evidence of genuine local circumstances preventing sites being identified can be demonstrated.

The removal of windfall sites from housing land supply figures sees a return to the proper planning of future housing development sites. Land is, of course, a finite resource and it has baffled me why LPAs have for so long been able to rely on past rates of windfall site developments as a way of identifying fewer sites in their local plans, or in some cases none at all.

As I discuss later, the past 18 months or so has seen a divergence from the implementation of the previous advice of PPG3 for planning applications on sites above 50 dwellings per hectare (dph), which were not in highly accessible locations. The approach of some authorities has been to develop at very high densities close to town centres and near public transport, shops and services as a mechanism for ‘meeting’ land supply requirements, thereby preventing developments at greater than the prevailing density outside of the town centres. Therefore if housing objectives are to be met, in terms of quality, mix, quantity and location, as well as supply, it is right that windfall sites should be excluded.

However, it remains to be seen whether those LPAs that have historically resisted further housing development by relying on windfalls will look to their local circumstances as a means of justifying a continuing reliance on windfalls.

‘Achieving a mix of housing’

PPS3 identifies a key characteristic of a mixed community as including a variety of housing, particularly in terms of tenure and price and a mix of different households, such as families with children, single person households and older people. To achieve this, regional spatial strategies (RSS) are required to set out the region’s approach to achieving a ‘good mix’, with LPAs planning for a mix of housing on the basis of those households likely to require housing over the plan period.

For LPAs to achieve their requirements, and based on the findings of the strategic housing market assessment (SHMA) and other local evidence, they should set out the overall proportions of households and the likely profile of household types requiring market housing. This is to be expressed in percentage terms for families, single persons and couples. On large strategic sites LPAs will need to ensure that the proposed mix reflects the proportions of households that require market or affordable housing and achieves a mix of households as well as a mix of tenure and price.

Though no one should assume anything in the world of planning, my reading of the advice on mix is that it is not intended that LPAs should be directly involved in establishing a mix of house prices on strategic developments – these will be set by the market through the provision of a range of house types, sizes and tenure to reflect the findings of the SHMA. However, it is to be expected that LPAs will seek greater control in the provision of both market and affordable housing.

Nevertheless, developers are encouraged to bring forward proposals for market housing that ‘reflect demand and profile of households requiring market housing’. It would seem, therefore, that housebuilders will still have the opportunity to put forward their own take on housing mix, based on their assessments of demand. As identified earlier, it will be of key importance that the housebuilding industry has a meaningful input into SHMAs when they are prepared.

Affordable housing

PPS3 continues the government’s commitment to the provision of high-quality affordable housing. To simplify matters the definition now says:

… affordable housing includes social rented and intermediate housing, provided to specified eligible households whose needs are not met by the market.

No longer then the need to thrash out at Examinations whether or not low-cost, market housing contributes to meeting affordable housing requirements.

There is a new indicative national ‘minimum site-size threshold’ of 15 units – previous thresholds based on site areas contained within the now cancelled Circular 6/98 are gone. LPAs will, however, be able to set lower minimum thresholds where ‘viable and practicable’, including in rural areas. There is greater emphasis in this PPS than its predecessor regarding the implications of the economics of provision, with LPAs being required to set targets that reflect the economic viability of land for housing, taking into account the risks to delivery. Also noted are the likely levels of finance available, including public subsidy and the level of developer contributions ‘that can reasonably be secured’. This is important advice as the tendency has been for some LPAs to ignore a developer’s costs by imposing lower thresholds and/or ever increasing and diverse financial contributions. A continuation of this trend would undoubtedly lead to the reduction of housing supply in general as smaller sites become economically unviable.

For the first time LPAs should identify separate targets for social-rented and intermediate affordable housing ‘where appropriate’. Intermediate housing is defined as ‘housing at prices and rents above those of social rent, but below market price or rents’, and does not exclude homes provided by private sector bodies or provided without grant funding. The rural areas exception policy is carried over from PPG3.

Providing housing in suitable locations

Perhaps of most significance to LPAs and the housebuilding industry is the identification of suitable locations for housing development. PPS3 requires that it should be developed in suitable locations that offer a range of community facilities with access to jobs, services and infrastructure. The priority remains that development should be on previously developed land with particular attention focussed on derelict sites and buildings including surplus public sector land, and vacant or derelict industrial and commercial sites. Local development documents (LDDs) will need to include a ‘local previously developed land target’ and strategies for bringing previously developed land back into use. In rural areas PPS3 refers to the need to provide housing, not just in market towns and local service centres, but also in villages in order to enhance or maintain their sustainability.

Commentary

The rural areas policy represents a more pragmatic approach to future development needs, underlining the fact that it is not just market towns that can promote sustainable patterns of development while also providing employment, shops and services. However, like an oil tanker, it may take a little time for some LPAs to change course and amend their policy approach. In any event LPAs will have to review their emerging LDFs, as they will need to ensure that the planned location of housing development (including in urban areas) meets the government’s objective of creating mixed and sustainable communities. Some LPAs have already delayed their publication of LDDs whilst the implications of PPS3 and indeed PPS25 are considered. Waverley Borough Council, for example, will be using the proposed postponement of its core strategy examination, following intervention by the Government Office for the South East, to do just that, though it should be noted that PPS3 did not force the proposed postponement.

Above all, PPS3 reminds us that LPAs will be responsible for determining, in consultation with developers, infrastructure providers and the wider community, the most appropriate strategy and policies for addressing current and future housing demand and need. Never before has it been so important for the housebuilding industry to make its views known in the formulation of LDFs.

Final thoughts

So, after much trailing, PPS3 is now with us. I feel for those working away in LDF teams across the country. After getting to grips with the new LDF system they have now to go back and start again to assess the implications of the guidance on the documents they may have been working on for the past two years or more. Like its predecessor it can mean ‘all things to all men’ and there will no doubt be nuggets used by both LPAs and appellants in public inquiries. However, that would overlook the underlying theme that PPS3 marks a call for greater co-operation between those who implement planning policy and those who seek guidance from it.  © Property Law Journal