Rearranging the seats

So the people in Range Rovers in Barbours appear to have beaten the people in Range Rovers in pinstripe suits. But it remains to be seen how much difference the new National Planning Policy Framework (NPPF) will make to new housing in general and new affordable housing in particular.

After the final version of the document was published on Tuesday, The Telegraph was quick out of the blocks to claim victory for the Barbours and its Hands Off Our Land campaign. It cited explicit protection for the green belt and encouragement for local authorities to use brownfield land first. The National Trust and the Campaign to Protect Rural England both said the government had listened to their concerns (not surprising when documents released at the same time as the NPPF revealed that planning minister Greg Clark met them five times and had another seven meetings with other environmental organisations to discuss planning between July and September).

The pinstripes also welcomed it. Both the British Property Federation (BPF) and the Home Builders Federation (HBF) called the changes ‘sensible’. The HBF added that the new system gives local authorities the power to solve the housing crisis. However, given housebuilders’ low opinion of councils in general and planners in particular that does not sound a totally positive verdict.

In between the two, the Town and Country Planning Association is hoping that it may just pave the way for some new garden cities.

What seems clear is that what happens next will depend on how the policy is implemented on the ground and that we won’t know the full impact until it has been tested in real planning applications and potentially in real court cases. The original NPPF was effectively a national counterweight to the nimbyism that is implicit in localism and the changes seem to tip rather more power to the local level.

One thing that we already know is that there are big implications for affordable housing. On top of the relaxations that the government has already made (for example, the consultation on requiring local authorities to renegotiate section 106s agreed before April 2010) it has also just changed the defintion of what ‘affordable’ means in planning terms. Existing planning guidance states that: ‘Affordable housing should: meet the needs of eligible households including availability at a cost low enough for them to afford, determined with regard to local incomes and local house prices.’ The NPPF defines affordable housing as ‘social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market. Eligibility is determined with regard to local incomes and local house prices.’ As Shelter’s Deborah Garvie points out, the deletion of ‘at a cost low enough for them to afford’ is a crucial difference.

Potentially then, the NPPF could result in fewer affordable homes or more unaffordable homes – or both. Beyond that the big question for me is whether the NPPF will make any real difference to housing numbers. That in turn depends on whether you believe that planning is the main obstacle in the way of those homes. Anything that makes the process any less tortuous that the ten-year struggle endured, for example, by Joseph Rowntree Housing Trust at Derwenthorpe, has to be welcome. However, is planning really more important than demand and affordability? If it was, then why don’t housebuilders start work on the hundreds of thousands of plots that already have planning permission.

I am going to exaggerate this argument for effect and ignore some of the nuances I know are there but it seems to me that the whole debate about the NPPF ignores an absolutely crucial point: the price of land. The post-war planning system effectively nationalised control of what owners can do with their land but privatised the huge windfall profits those owners make when that land is designated for housing. The system of green belts around major towns and cities and the concentration of economic growth in London and the South East then drove up land (and therefore house) prices even more.

You might choose to address that in several ways: by loosening controls, relaxing restrictions on the green belt and letting the market deliver (as advocated by Policy Exchange); by direct government intervention and compulsory purchase of land at a small premium to agricultural prices to allow the development of homes (as happened with the post-war new towns); by doing something radical about the South East (how about moving the government to Birmingham, for example, and giving HS2 a purpose?); or by some combination of the three.

The NPPF does none of those. It makes some minor improvements to a system struggling to cope with the competing priorities of economic growth and protecting the countryside without doing anything fundamental about affordability or supply. It is simply rearranging the seats in the back of the Range Rovers.