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Housing zones - an opportunity, but with issues
Housebuilder – November 2014

Mark Smulian looks at what is meant by housing zones and finds out whether they are a true opportunity to deliver increased numbers of new homes

Government initiatives to get more homes built usually manage to antagonise one or more of housebuilders, local authorities, social landlords or amenity groups because of some measure they contain that is perceived to threaten their interests.

Thus housing zones already enjoy a head start by having so far encountered very few opponents.

The idea began as an initiative in London but was then adopted by chancellor George Osborne and offered across England.

Large brownfield sites

Zones are intended to bring large brownfield sites into use for housing. There is some public money available for remediation and infrastructure, and a somewhat vague requirement that local authorities must expedite planning.

They depend on local agreements being reached between councils and developers over what should be built and what planning regime is needed to achieve this.

The government plans to create ten housing zones outside London on brownfield sites across the country backed by 200 million investment funding and cheaper borrowing for successful local authority bidders.

Communities and local government secretary Eric Pickles said when bids for zones were invited last summer: "We're determined to make the very best use of derelict land and former industrial sites to provide the homes this country desperately needs in a way that protects our valued countryside.

"By ensuring commitments to housing development are in place early and having dedicated housing zones, building becomes quicker and easier for homebuilders, businesses and councils."

The initial focus is, though, likely to be in London, where the idea originated among mayor Boris Johnson's housing initiatives and where there is significantly more cash available than in the rest of England - 400 million to fund 20 zones to provide up to 50,000 new homes.

Johnson's prospectus says that housing zones "will be areas where home building will be accelerated by working in innovative partnerships with boroughs, landowners, investors and builders".

Tenure requirements are rather imprecise, with the prospectus saying that homes built "will be expected to be geared towards meeting a range of housing needs", with both homes for open market sale "that are affordable for Londoners" and the slightly strange concept of an obligation, but enforced only "where possible", to prioritise the sale of homes to Londoners wishing to become owner-occupiers.

There should also be homes for long-term market rent and for affordable rent and low cost ownership. One requirement for successful bids is that good transport accessibility is available - which would rule out a number of inaccessible brownfield sites.

London's housing zones are expected to have a ten year life but deliver their first new homes in the 2015-18 period as proof of progress.

The prospectus leaves it to the Greater London Authority, boroughs and developers to agree a package of financial and planning measures to get sites working.

One such measure could be local development orders (LDOs), which the London prospectus simply proposes as a planning tool that could be used where appropriate, but outside the capital has plainly caught Osborne's eye.

This could be the cause of some "one size fits all" problems.

LDOs are used to give planning permission in advance to certain types of development. Their main use has been on large industrial projects - for example, at the London Gateway Logistics Park the LDO allows developers to build warehousing with minimal demands for further planning consent because with an LDO in place the hard work of public consultation, infrastructure requirements, planning gain and compliance with policies has all been done upfront.

Applications that fit into the LDO are granted automatically unless something exceptional happens.

That sounds like a developers' dream, but it means the time to carry out all the planning work happens before the LDO is in place, and thus there could be a delay until it is ready.

London's prospectus says: "Adopting [LDOs] in housing zones could have the potential to significantly minimise the planning risk attached to development by specifying the type of development that is desirable and expediting permission for any development that meets this standard." Osborne by contrast said in a speech last summer about the rest of England: "Councils will be required to put local development orders on over 90% of brownfield sites that are suitable for housing.

"This urban planning revolution will mean that in effect development on these sites will be preapproved - local authorities will be able to specify the type of housing, not whether there is housing."

HBF director of external affairs John Slaughter broadly welcomes the zones: "Housing zones are interesting but not straightforward. They are meant to be additional to other housing and a way of speeding things up, with the finance upfront to pay for land remediation and infrastructure and with simplified planning.

"But these are large brownfield sites and if they have not been built on for housing before there may be a good reason for that.

Sites in London

"Sites in London are supposed to be capable of taking 750 or more units and so that raises a question of land assembly, which could be a challenge."

British Property Federation policy director Ian Fletcher says that after a period with very little public money available for remediation of development sites, the zones represent a welcome step in the right direction. But he says: "It's rather vague on planning and it's not clear the extent to which local authorities will use different planning arrangements like LDOs that have not to date been widely used. They've not been used for housing yet, and that is more complex than industrial sites.

"Flexible solutions are needed in each area and exactly the same powers will not be right everywhere. It may be that in some places planning performance agreements are more appropriate."

Planners fear that "simplified" planning may put them under pressure, although one factor in determining winning bids will be the level of resources a council will put into its planning service.

Royal Town Planning Institute policy officer Joe Kilroy says: "LDOs can make things happen quicker but the time taken to prepare them is similar to handling a major planning application.

"They want 90% of brownfield sites to have LDOs but that goes against localism, it is central government saying what is best for an area not those that know it, and it may be that housing is not always the best use.

"This is also very much about speeding up planning, but that is a big ask as teams are under pressure." Housing zones should present housebuilders with an opportunity as the combination of speeded-up planning and public money sounds tempting.

These are though large brownfield sites on which all manner of unknown industrial processes may have taken place, and sites contaminated like that have a well-known habit of springing unpleasant surprises.

London leads on housing zones

One focus of the early bids made for housing zones in London is the middle of the Lea Valley, between the 2012 Olympic Games site and the capital's boundary.

Haringey council has entered a bid for the Tottenham Hale area described by its cabinet member for regeneration and housing Alan Strickland as intended to make it "the heart of affordable living, where thousands more Haringey families have a chance to get on the housing ladder", while living in "a greener, safer and well-connected community".

The Tottenham Hale bid is for 5,500 homes by 2025 around a new town centre in an area at present largely occupied by older housing and retail sheds.

According to Haringey, the support available from having a housing zone would mean that 1,700 more homes could be built than would otherwise be the case, and if its bid succeeds it would gain 28 million for infrastructure works.

The bid commits the council to work "collaboratively with landowners to stitch together plans for existing sites to make sure that any new developments meet the council's ambitions and planning guidelines for the area".

There would also be associated mixed use developments intended to bring 4,000 new jobs in the leisure, arts and retail industries.

Adjacent Enfield Council has bid for a zone at the 85 hectares Meridian Water, a few miles north of Tottenham Hale and also an old riverside industrial site.

Its bid is for 8,420 new homes, and for buildings that would allow for 3,000 new jobs. Lead councillor for economic development Alan Sitkin says: "Meridian Water is a major regeneration project that will help redefine north London as a place to live, visit and work."

The original plan was for some 5,000 homes and gaining zone status would allow the remainder to be added, he said.

Among other bidders, Brent Council wants zone status for part of Alperton, which it describes as "a strip of brownfield land along the Grand Union Canal, encompassing some of the poorest quality industrial land in the borough".

This 12.25 hectares site could accommodate at least 1,600 new homes to 2026, the council has said.

A council report stated that while some progress had been made part of the proposed zone "is more challenging to deliver", with work having been frustrated by a number of factors including acutely fragmented land ownership, difficulty in relocating existing businesses, a high likelihood of land contamination and poor public transport links. Brent will also bid for a separate zone at Wembley.