Assessing Housing Need
OCS's response to the Government's proposals
12 November 2017
This note summarises the Civic Society’s response to the DCLG paper: “Planning for the right homes in the right places”, which proposes a new formula for assessing housing need in local authority areas.
We support the principle that a clear, logical method for assessing housing need is necessary to avoid different interpretations and endless bickering over numbers. But this paper is so flawed that we can only be highly critical. Our strongest criticisms relate principally to the proposals about how housing numbers are assessed. The objective must be to make realistic estimates of how much new housing is needed to overcome our chronic housing shortage, not to just generate meaningless numbers, however simple the process.
Demand, need and affordability
Fundamentally, the Government’s paper does not distinguish between need and demand. It fails to recognise that a substantial part of the demand for housing comes from investors for whom housing is just a commodity offering security and better returns than alternative investments. Since the paper ignores the different interests of desperate home-seekers and investors with surplus assets, it fails to address properly the crux of the problem: affordability. To do this, the assessment of real need should be based on levels of rent, not house sale prices.
In the current Strategic Housing Market Assessment (SHMA) the overall assessment of Oxford’s housing need already falls well short of what is needed to provide enough affordable housing. The same applies to a lesser extent to three of the adjacent authorities. But the proposals in this paper reduce the assessment still further, meaning even fewer affordable homes would be delivered than under the present system.
Even using house prices as a basis for assessment, by using just two parameters the formula proposed is over-simplistic and fairly arbitrary. People choose where they wish to live based on factors such as workplace and travel options. These patterns disregard planning authority boundaries. The paper acknowledges this – but then assumes it is too difficult to make assessments on the basis of the real world! Yet this is exactly what the current methodology does, however flawed it is in other respects.
The supporting data for the paper show some startling projections for demographic changes, especially in age profiles. Yet although the paper refers to ‘appropriate’ housing, it contains no proposals to assess the needs for different types or sizes of accommodation.
The housing crisis is national, yet this paper does nothing to develop a national strategy for delivery of genuinely-affordable housing – it simply tinkers with the mechanics. Surprisingly, the paper makes no reference whatsoever to the study commissioned and published by the DCLG itself in 2010 entitled “Estimating Housing Need” – a much more thorough analysis which appears to have been completely ignored.
We also criticise the proposals relating to the preparation of ‘Statements of Common Ground’. These are documents to be drawn up by neighbouring Local Authorities, setting out how they will work together to plan where to build houses. Clearly such sharing is essential, but the current ‘Duty to Cooperate’ which is supposed to achieve this has not been successful. A Statement of Common Ground is supposed to strengthen cooperation, but it is not clear how this will work where authorities have entrenched opposing views.
In summary, this paper represents a missed opportunity to take effective action to address the real crisis in housing.
This note is a summary of the full response we submitted to the DCLG’s consultation. This was originally in the form of answers to an online questionnaire, but we have copied the questions and answers to this complete document.