BASE HEADER

Thank you for consulting with the Home Builders Federation (HBF) on Warwick's local plan preferred option.

The HBF is the principle representative body of the housebuilding industry in England and Wales and our representations reflect the views of our membership of multinational PLCs, through regional developers to small, local builders. Our members account for over 80% of all new housing built in England and Wales in any one year including a large proportion of the new affordable housing stock.

We would like to submit the following representations on the draft Local Plan.

Plan period

It would be helpful if the local plan clearly stated the period of time over which it is intended to operate. This should be stated on the front cover and in the first paragraph of the introduction, as well as elsewhere in the document, including the section that addresses the housing need over the plan period. We assume that the plan period proposed is 2011 to 2029 although this is not altogether clear.

Section 5: Preferred Level of Growth

It is encouraging to see the Council taking the correct approach to establishing a housing requirement that is in conformity with the NPPF (hereafter referred to as the Framework). It is the function of the SHMA to assess the full housing needs of the district over the proposed plan period.

We note the three scenarios for setting a future housing requirement. Inevitably, given the uncertainties regarding the economy, relying on any one employment-based scenario as the basis for setting a housing requirement could prove too inflexible in the event that the district (or adjoining districts) experience higher levels of employment growth than projected by a particular scenario. We note that option 1 allows for 600 homes a year, while option 2 allows for 700 homes a year. Option 3 has been discounted because the projected increase in jobs would not be matched by the increase in homes (paragraph 5.19).

We do have some qualms about assuming that there is a direct relationship between new jobs in the district and the demand for new homes. The relationship may not be as strong as the Council thinks, and to some extent, the demand for housing in the district will come from people who work elsewhere, typically in the larger employment centres of Solihull, Coventry, Birmingham etc.

We note that the Council's preferred level of housing growth is for 10,800 homes over the plan (PO1: preferred level of growth). This is inadequate since it is lower than the most recent household projections and the evidence from the most recent SHMA (2012). It also fails to take into account the decisions of adjacent local authorities.

SHMA (2012)

The SHMA indicates that the annual need for affordable housing will be 698 homes per year (paragraph 7.50). This exceeds the proposed option, and, significantly, only addresses the affordable housing need, not the demand for market housing. The report does not appear to have assessed what the market need will be in the district in addition to this affordable need. As such, the SHMA does not satisfy the requirements of the Framework, paragraph 159.

It is unclear how the three modelled housing scenarios relate to the requirement of the Framework for the SHMA to identify the scale of housing needed over the range of tenures, including housing demand (paragraphs 47 and 159). It is unclear whether the figure of 698 affordable homes per year relates to the three scenarios since it exceeds two of them and is almost comparable to the third. The SHMA needs to set out what the quantity of need is for market housing and affordable housing over the plan period.

The Council has not explained in its Preferred Option why it is choosing to discount the evidence of need identified by the SHMA. It would appear that the Council is relying upon the argument that because the SHLAA can only identify land for 11,410 homes (paragraph 5.18). This, however, would be to pursue an capacity-based approach to determining the future housing requirement of the district, rather than using the new plan as an opportunity to review the efficacy of existing policies and constraints and consider the possibility of removing these in order to meet the level of housing need identified in the SHMA. A capacity-based approach would be contrary to the Framework, as the expectation is that the Council will do all it can to meet objectively assessed needs (see paragraphs 14, 17, 47, 179 and 182).

Household projections

The 2008 based household projections indicate an increase of 13,000 households over the period from 64,000 in 2013 to 77,000 in 2028 - a period that is approximately comparable to the proposed plan period of 2011 to 2029. This is a figure that approximates to option 2 - the projected employment rate scenario of 12,888 homes. The Council suggests that this employment projection is likely to be optimistic (paragraph 5.22) owing to the most recent ONS GDP forecasts. Nevertheless, the Council may be surprised, and economic growth, and consequently housing demand, may be stronger than it expects. If this is the case the plan will need to have the capacity to respond to rising demand. This would be in accordance with the Framework which expects local plans to meet objectively assessed needs and have sufficient flexibility to adapt to rapid change.

Furthermore, while we would not dispute the Council's current pessimistic economic prognosis, it is important to remember that housing demand is not solely related to employment. Warwick will continue to experience many more affluent households moving into the district who may work elsewhere and non-economically actives households will continue to consume housing in the more desirable locations. The Council will need to cater for these tastes, but also increase the overall level of supply in order that those on low to medium incomes are not priced out of the district by affluent incomers. Citing the recession as a reason to scale-back plans to accommodate more housing would also be contrary to the Government's new, more positive, planning agenda, as set out in the Ministerial Statement Planning for Growth which sees planning has playing a pivotal role in facilitating greater levels of growth.

Duty to cooperate

There is also the matter of the duty to cooperate to consider and how Warwick's plan will provide for its own unmet needs that cannot be addressed through the plan (paragraph 179 of the Framework) as well as potentially the unmet needs of adjoining councils (paragraph 182). If the council is unable to meet its objectively assessed housing need through its plan (once it has properly identified this, and once it has reviewed existing policy constraints) it will need to plan to ensure that these needs can be met elsewhere without the district. To do so, it will need to plan in concert with adjoining councils.

The draft plan appears to be silent on this question. We note that at least two of Warwick's neighbours - Solihull and Stratford Upon Avon - are advancing plans that will not meet their own 'objectively' assessed housing needs (although there is an issue with the soundness of their own SHMA assessments when judged against the NPPF). Solihull is proposing only 525 homes per year when its SHMA indicates a need for 904 affordable homes. Stratford is proposing a plan requirement of 7,500 homes yet its own housing requirements study recommends between 11 and 12,000 homes over the plan period. Clearly if Solihull and Stratford are not proposing to meet their own requirements then it is very unlikely that they will be willing to accommodate any of Warwick's unmet needs. This suggests that Warwick will need to fully accommodate it own housing requirement since it cannot rely on anyone else to pick up the tab.

The location of new housing

It is unclear why the Council feels it needs to phase the delivery of sites (paragraph 7.20). Surely, if all the sites have been assessed as being suitable for housing, and thus sustainable in terms of the Framework, it should be immaterial when these sites come forward for delivery.

PO5: Affordable housing

I am concerned that the Council is disregarding the evidence of its own viability study in setting an affordable housing target of 40% when the study would appear to indicate that a figure of 35% may be more appropriate. The Council maintains that it can ignore the evidence since it will be flexible in how it applies its policy to ensure viability. This would be contrary to the approach of the Framework which now requires that the cost of affordable housing policy and other policy requirements of the plan are deliverable and to ensure that these do not render developments unviable and thus the plan undeliverable.

This will require the Council to ensure that all its policies applied to be applied to sites, especially those earmarked to contribute in the first five years from the date of adoption of the plan are subject to a reasonable level of policy demands and planning obligations. The onus should not be placed on the developer to demonstrate viability but for the Council to ensure that the cumulative impact of all its policies and demands will ensure that the majority of sites, and especially all those earmarked for the first five years, are viable (see the footnote to paragraph 47 of the NPPF and pages 26 and 27 of the Viability Testing of Local Plans report).

We are also concerned that the study has not modelled-in properly the true costs of development, including those costs to be added to development by the proposed local plan. We note that the study has only factored-in the cost of building to Code 3 and Code 4, but building to the Part L Building Regulations (equivalent to Code 5) will be a requirement from 2016 onwards. This will represent a significant additional cost. The Council should refer to the most recent DCLG report: Cost of Building to the Code for Sustainable Homes: An update cost review, August 2011. This is a significant future but known cost that will impinge upon the viability of sites over the plan period but also in first five years, and must be factored into a new viability assessment (see page 26 of the Viability Testing of Local Plans report).

The viability assessment has also not taken into account the cost of building Lifetimes Homes which is a requirement of policy PO6. A revised viability assessment will need to take account of this.

The viability assessment has not accounted for the cost of the requirement of policy PO12 for developments to provide on-site renewable energy plant to provide a 20% reduction in carbon emissions. A revised viability assessment will need to take account of the costs of doing so.

The viability assessment has not accounted for the cost of biodiversity offsetting which is a requirement of policy PO15. A revised viability assessment will need to take account of this.

The viability assessment has not accounted for the cost of flood mitigation measures as stipulated by policy PO18. A revised viability assessment will need to take account of this.

The report uses BCIS costs, but this is based on Gross Internal Area and does not account for external and landscaping costs and local site works (see page 34 of the Viability Testing of Local Plans). A revised viability assessment will need to take account of this.

The figure for site acquisition costs is rather low at 5.75%. This is more likely to be between 6.5 to 7.5%. We would refer the Council to page 35 of the Viability Testing of Local Plans report.

The viability assessment also assumes a total planning gain package (S106 and/or CIL) of £6,650 per unit. This seems modest. I have commented previously on this in my letter to the council dated 20 September 2010 in which I recommended an average of £15k per dwelling is applied as a more realistic figure. Ideally the Council should prepare a CIL Charging Schedule alongside the Local Plan to ensure an integrated viability assessment and avoids the risk of the CIL setting an unrealistically high charge that has not been reflected in the viability assessment for the local plan. Under the current arrangement, if the plan was adopted, then the Council would need to ensure the levy of any CIL introduced after the plan, in combination with S106, exceeded no more than £6,650 per dwelling otherwise the plan would immediately be rendered undeliverable.

We are also unconvinced by the interpretation of the evidence. We do not feel that the council's conclusions are legitimate ones to reach since the evidence does not support the assertion that either 35% or 40% affordable housing is viable. However, this is really a matter of secondary importance compared to the need for the Council to undertake a Framework compliant viability assessment that takes into account the costs of development, local policies and plan requirements.