Stonewater – Paper – Scissors

We all had a good, evidence-based, moan about CIL on clubhouse last week.

Stonewater (2) Limited v Wealden District Council (Thornton J, 15 October 2021) is of course only the latest example of the complexities and uncertainties that arise – in particular on the question of application of reliefs and exemptions (the importance and number of which has been driven by the fact that CIL liability is in most cases so significant) but also on the question of how to mesh the operation of the CIL regime with the operation of the planning system without jamming the whole thing up.

There are plenty of good summaries and critiques of the judgment by now (for instance this Town Library summary by my colleague Safiyah Islam, or this 18 October 2021 blog post by Nicola Gooch, CIL, S.106 Agreements & Affordable Housing Relief: What happens when the housing crisis hits political reality).

This is my take:

Land with planning permission for 169 houses was acquired by Stonewater, a registered provider of affordable housing. The section 106 agreement provided for 59 dwellings within the development to be affordable housing, with a specified tenure mix. The number of affordable housing units was to “comprise 35% of the Dwellings within the Phase (which shall be rounded up to the nearest whole unit”.

Stonewater’s model was more enlightened than that of the developer which had secured the permission. Stonewater “regularly acquires sites which are subject to a section 106 agreement which secure a low or policy compliant level (35%) of affordable housing, with a view to increasing affordable housing delivery to 100%. The Court was told that this is not unusual, and the Claimant is not alone in doing so. Grants from Homes England are based on the principle that registered social housing providers provide additional affordable housing over and above the levels secured in planning obligations.”

Relief from CIL is available for affordable housing via social housing relief. There are criteria set out in regulation 49 of the CIL Regulations which do not include any requirement that the affordable housing is secured by way of section 106 agreement or condition. After all, if there is a clawback period of seven years within which CIL has to be paid with interest if the occupation no longer meets the criteria for relief.

Unsurprisingly, Stonewater sought social housing relief for the whole development, given that it proposed to deliver it all as affordable housing meeting the criteria in regulation 49. The council refused relief on the basis that a varied section 106 agreement would first be required, committing in the agreement for all the dwellings to be delivered as affordable housing. The council later additionally argued that the existing section 106 agreement was to be interpreted as rendering it unlawful for more than 35% of the dwellings to be delivered as affordable housing.

It might be asked why Stonewater didn’t simply enter into the section 106 agreement required – but of course that would have been likely to destroy its entitlement to Homes England funding given that on the face of it there would then be no additionality, and why should it enter into a further agreement if that was not required by the Regulations? Stonewater challenged the council’s decision by way of judicial review. The first issue melted away once the Secretary of State was joined as an interested party and the council conceded that a section 106 agreement obligation that a dwelling be delivered as affordable housing is not a prerequisite to a claim for social housing relief (although it can be useful evidence that the dwellings will be used in a way that meets the criteria for relief) – as did any notion that the relief is discretionary on the part of the authority rather than mandatory. So the only question was whether delivery of more than 35% of the homes would be in breach of the section 106 agreement.

The judge saw the 35% requirement as fixed, not a minimum:

“In my assessment, the language of the document points to an interpretation that the agreement controls the amount of affordable housing that can come forward, by fixing a specific requirement of 59 dwellings or 35% affordable housing. Paragraph 2(iii) of Schedule 1 says that precisely 35% of the units in any phase must be affordable. Accordingly, if the development proceeds in multiple phases, there must be 35% in each phase and thus, inevitably, as a matter of maths, 35% in aggregate. This specific requirement permeates the definitions, which draw a clear distinction between the ‘Affordable Housing Units’ which are “the 59 Dwellings … which shall be for use as affordable housing” and ‘the Private Dwelling Units’ which means everything other than the 59 Dwellings. Paragraph 3 of Schedule 1 provides the mechanism whereby the Council can exercise control in all cases (not just multiple phases) over the provision of affordable housing. The, broadly defined, Affordable Housing Scheme must be submitted for approval and development may not commence until the Council has approved it.

Accordingly, a scheme which provides less, or more units, of affordable housing would not comply with the section 106 requirement to provide 59 units and hence would be contrary to its terms and to that extent unlawful, albeit the Council would have a discretion to vary the Section 106 agreement or enter into a new agreement.”

I must say I find this a strained interpretation. As the claimant pointed out, there would be no reason in policy to restrict the amount of affordable housing in the scheme – why should the developer not be free to dispose of any of the dwellings at less than market value? Indeed, although not I think mentioned in the judgment, how would such a restriction meet the test in regulation 122? Would an authority really succeed in arguing that a developer was in breach of its section 106 agreement if it disposed of market units at less than market value? Of course not.

The judge asserted that “whilst affordable housing is generally desirable in policy terms, it does not follow that more affordable housing is always desirable without limit. There may be proper planning reasons to prefer a mixed scheme. For example, in this case, the Court’s attention was drawn to extracts from the Planning Officer’s report which suggest the expected CIL receipts from a scheme with 35% affordable housing were relevant to the decision making. The highways authority had expressed concern about the potentially severe impact from the development on the local highway network and considered mitigation was required. It was common ground that the necessary mitigation was to be funded by the CIL receipts from the development. However, it is neither necessary nor appropriate for this court to evaluate any preference for a mixed scheme on the facts of this case. It is sufficient to say that it is in accord with the statutory planning context, and / or “common sense”, to have a section 106 agreement which retains control over the provision of affordable housing. This does not defeat the achievement of more affordable housing since the Council, in the exercise of its planning judgment, may vary the Section 106 to permit this, if persuaded of its desirability.” However, how does this sit with the council’s position that it would grant the relief simply if Stonewater entered into a section 106 agreement varying the previous arrangements and requiring all the dwellings to be affordable?

Surely, instead, this was an overly prescriptive reading of the Regulations on the part of the authority and a strained interpretation of the section 106 agreement on the part of the judge? It is truly depressing to think about how long commencement of development is held up on schemes until disputes such as this are resolved – and how so much money has been wasted on all sides.

Simon Ricketts, 13 November 2021

Personal views et cetera

This week’s Planning Law Unplanned delicacies on clubhouse, at 6pm on Tuesday 16 November, will be Sage and Tulip. We’ll be hearing from Kate Olley, who appeared for Mr Sage in the recent High Court case on the important and topical question as to when planning permission is needed to run a business from home, and we’ll be discussing the Secretary of State’s refusal of planning permission for the Tulip in the City of London. Aside from Kate, our guests include arch-planorak, barrister Zack Simons. Thoughts on the decisions? Then join us, to listen or participate. Link to app here.

Courtesy wikipedia

Live/Work, Repeat

Do you get that blurry feeling too?

I could have been dictating this piece for the overnight typing pool, slipping into the firm’s library to check the case references and tricky spellings, being brought printouts of drafts by a messenger in a firm-logo-branded shirt before the desktop publishing department do their weird stuff on The Firm’s Only Apple Mac.

Those were the days, working in a law factory, as we used dismissively to call our daytime workplace over an overpriced drink in a city bar after hours, incommunicado until the next morning.

Or I could be writing it at home in an hour or two of self-discipline away from an overnight stream of emails and an intertwined social media timeline of planning, law, politics, music, football and hopefully an amusing cat video or ten.

I don’t even know whether writing this blog is work or not.

We’re all grappling more than ever before with questions such as:

⁃ Where are the boundaries between work and home?

⁃ What is the continuing role for formal workspaces when the necessary components for core “office” work are simply a laptop, mobile phone and quiet space; for lockup shops when everyone can be their own etsy or e-bay business, or for studios and workshops where the work carried out may largely rely on nothing more than manual dexterity plus some tech?

⁃ In an age where the average household is having multiple home deliveries of all sorts of goods, what level of business activity is to be regarded as normal or appropriate for a residential area? Can you even generalise – or does it depend on the nature of the area and its dwellings?

⁃ Is this all a Good thing or a Bad thing and to what extent is it any business of the planning system? If it was the industrial revolution that brought about such a sharp delineation between where we live and where we work, are we now in a post-industrial revolution and are there indeed environmental, social and economic benefits to a greater degree of community, as opposed to commuter, living? How to reinvent the office so that it is about unique human communication, rather than as a left behind place, its complex physical functions, systems and gadgets long outsourced to laptop and phone?

Two recent cases led to these thoughts. The main one was Sage v Secretary of State (Sir Duncan Ouseley, 28 October 2021) (I know, one planning law Sage case was confusing enough and here comes another). I very much recommend and won’t repeat our Town Library case summary written by my colleague Stephanie Bruce-Smith (work-related plug: you can still subscribe for free to these brilliant weekly summaries by the Town Legal team of all Planning Court and relevant appellate judgments here).

Sir Duncan Ouseley in his ruling considers whether the advice in the Government’s Planning Practice Guidance is correct as to when planning permission is needed “to homework or run a business from home”. The guidance says this:

Planning permission will not normally be required to home work or run a business from home, provided that a dwelling house remains a private residence first and business second (or in planning terms, provided that a business use does not result in a material change of use of a property so that it is no longer a single dwelling house). A local planning authority is responsible for deciding whether planning permission is required and will determine this on the basis of individual facts. Issues which they may consider include whether home working or a business leads to noticeable increases in traffic, disturbance to neighbours, abnormal noise or smells or the need for any major structural changes or major renovations.”

Sound sensible to you? Then be wary, because the judge disagreed. He considered that the passage in brackets at the end of the first sentence is expressed too widely and also that the question of environmental impact (the matters referred to in the second sentence) is of limited relevance.

The facts as summarised by the judge were as follows:

Mr Sage, lives in a two-storey semi-detached house with a garden, about 20 metres deep, in a residential street in a primarily residential area of Beckenham in the London Borough of Bromley. At the rear of his garden is a timber out-building, with windows, which is used in part as a garden shed, and in part as a gym. Mr Sage keeps gym equipment there including a treadmill, cross-trainer, weights, balls, bench, and punch bag. It has no toilet or showering facilities. The garden, and the shed, can be accessed via a passage to the side of the house, shared with the neighbouring property. Mr Sage uses the gym himself and he permits family and friends to use it. He has used the gym part of the shed since 2016 for his business as a personal trainer, for paying clients, who attend at the premises.”

Bromley had refused Mr Sage’s application for a certificate of lawful use, disagreeing that either the use was ancillary to the primary residential use of his property or that that the use fell within section 55 (2)(d) of the Town and Country Planning Act 1990: “the use of any buildings or other land within the curtilage of a dwellinghouse for any purpose incidental to the enjoyment of the dwellinghouse as such;…

(In passing, it’s not just about working from home, be careful about your hobbies: “Wallington v Secretary of State for Wales (1991) 62 P&CR 150, CA, concerned an enforcement notice alleging that the keeping of 44 dogs as a hobby was not incidental to the use of a dwelling house “as such”, that is as a dwellinghouse. The notice was upheld and the dogs limited to 6. The fact that the owner genuinely regarded this as a hobby “cannot possibly suffice to prove by itself” that the purpose was incidental to the enjoyment of the dwelling house as a dwellinghouse. Significance had to be given to the words “as such”.”)

An inspector dismissed Mr Sage’s appeal and he challenged that decision.

“This latter Guidance suffers from two main problems. The first question is what use is being made of the land, including its ancillary uses, and, in the case of a dwelling house, whether any purposes to which it is put are reasonably incidental to its use as a dwelling house. The passage in brackets at the end of the first sentence of this guidance is correct but too readily capable of leading to the concept, of a material change of use or a purpose incidental to the use of dwellinghouse as such, being misunderstood. This is because a business use in a dwellinghouse may well be secondary to the primary residential use of the dwellinghouse; but may still create a material change of use, be for a non-incidental purpose. A secondary use will involve a material change of use of the dwellinghouse to a mixed or composite use, as was found to have occurred here, unless it is so secondary that it is merely ancillary to the residential use as a dwelling house such that there is still just that one use; or in the case of a dwelling house, the purpose at issue is reasonably incidental to the enjoyment of the dwelling house as such. This is a crucial point which the Guidance ignores or blurs badly.

Second, a material change of use can be made without any adverse environmental impact at all. Treating environmental impact as the seemingly crucial issue for the judgment as to whether a material change of use has occurred, or a purpose is reasonably incidental is not consistent with clearly established law. The crucial test is whether there has been change in the character of the use. Environmental impact can be relevant as evidence that a material change has occurred, because a use of the new character may be capable of yielding environmental impacts or have done so already. The Guidance as written is apt to mislead as to what the real question is, and as to the true but limited relevance of environmental impact.

Once the use of the outbuilding for the business of a personal training studio for paying visitors is accepted as an ancillary to or reasonably incidental to the use of a dwellinghouse as such, the difficulty of measuring the materiality of a change in the scale of the activities or their mode of operation points to the limitations of using environmental impact as the measures not of impact but of materiality of the change of use. It appears quite difficult to contend that using the garden for exercise, warming up and warming down, post-exercise conversation, refreshment, or using the outbuilding with the doors open in hotter weather or if the air-conditioning is inadequate, or enabling visitors to traipse to the lavatory and back, involves a material change of use, when use of the outbuilding for 6 days a week for personal training did not. This is the more so if others, who are not commercial clients, do so. It is difficult to see that an increase in numbers and disturbance would be of itself a material change of use. The neighbours might change; a new owner of the house could intensify the use. There could be, as here, a local difference of view about the effect of the business. This all is grist to the mill of the limitations of the role of environmental impact in resolving the materiality of a change in use and the incidental nature of the additional use. The Guidance is far too loose to reflect the true focus of the question at issue.”

There is then this final fascinating passage:

I also appreciate that there are many forms of service offered within a dwelling house, from private tuition, including in music or singing, child minding, medical services. I accept that what is normal or reasonably incidental now may have shifted with changes in work habits as a result of Covid. This is not relevant to this particular case. And an important distinction would have to be drawn between working from home, where work-related visitors were few and far between, and working from home which took the form of routine and frequent work-related visitors, notably customers. However, the question of how much actual noise the music or maths teacher and pupil make, how much actual disturbance is generated by young children or dogs being minded, is not the touchstone of the materiality of the change of use, although it may point to a nature or degree of use which is materially different from that of a dwellinghouse or its incidental purposes. One is a residential use, and the other is a residential and commercial use. Of course, they both may vary in their intensity and impact, but one cannot be controlled through the need for planning permission and the other can and should be.

How is this distinction really to be drawn, clearly, in practice?

The second case is a judgment of the Central London County Court. AHGR Ltd v Kane Laverack (HHJ Johns QC, 27 September 2021). The judgment is unreported but summarised in County Court at Central London considers Live/Work units (Landmark chambers, 27 October 2021). Nostalgia time for some of us – “live/work units” are now a rather outmoded concept but were once given favourable policy status by certain London authorities in specific areas.

In leafing through books in the library (ok, by googling) I came across this excellent 2005 report by Andrew Lainton prepared for the London Borough of Hammersmith and Fulham, Does Live/work? Problems and Issues concerning Live/Work Development in London:

“ The concept took off in London during the late 1990s. The concept was initially welcomed by many planning officers as they saw it meeting multiple employment and housing objectives. Initially proposals were by individual and artists, however developers soon became involved as it became seen as a means of securing planning permission in areas where existing zonings made development difficult.

There was a gradual disillusionment with the concept and many planners began to see the concept as a ‘fig leaf’ for primarily housing schemes. Policies in most boroughs have significantly tightened.

Some developers are quite open that Live/Work is simply a ruse for securing planning permission. There is widespread evidence of large scale residential reversion and little evidence of continued employment occupancy, other than in areas where there is a strong market for small offices where units are more likely to revert to employment use. The search for examples of good ‘work/ live’ practice has proven a largely barren one.”

AHGR was a landlord and tenant case which concerned the proper interpretation of a user clause in a lease required use “as a live/work unit in accordance with the terms and conditions of the planning permission”.

Excitingly for us lawyers, but leading to a rather curious outcome, it revolved around the interpretation of “/“: does “live/work” means “live and work” or “live and/or work”? A salutary lesson for users of the dreaded slash…

To quote from the summary:

The live/work unit had been built out as a flat, without apparent regard to the requirements set out in building regulations for commercial premises at the time. The user clause required use “as a live/work unit in accordance with the terms and conditions of the planning permission”. The Defendants (a barrister and doctor) had resided in the live/work unit primarily as their home, albeit that they had undertaken various work-related activities in their open-plan living space and spare room, such as writing books, publishing papers, and undertaking triaging and consultation of patients by phone. There was no designated work space in the unit and despite inspections over the years, no objections had been raised by the landlord’s agents to such use.”

After a 4 day trial, HHJ Johns QC dismissed the claim. He concluded the planning permission meant “live and/or work”. The construction of the planning permission was central to the construction of the leasehold covenant and particular regard was had to: (i) the planning policy background to the permission, (ii) the absence of conditions, (iii) the fact that the plans marked the whole area as live/work, (iv) the fact that other plans referred to in the permission used a “/” to indicate “and/or”, (v) the planning framework (including the fact that a breach of planning control can have criminal sanctions) (vi) the fact that a “live and/or work” construction still serves a purpose of allowing a business to be run from the premises; and (vii) how the planning permission had been implemented. A 1999 Supplementary Planning Guidance document, which was relied on by the Claimant, did not alter that interpretation.

The Judge also held that if the clause had mandated work, the planning permission did not require running a business from the unit and the activities undertaken by the Defendants were sufficient.”

Given that the whole purpose of “live/work units” was to require an element of employment use, rather than just use for residential purposes the judgment does not sit well with any purposive approach to interpretation of the documents but life, and the nature of work, has certainly moved on.

I wrote a long time ago about the many definitional problems within the Use Classes Order C-classes, in my 1 July 2016 blog post Time To Review The “C” Use Classes? Those problems are multiplying. What new boundary lines do we need, if any?

Simon Ricketts, 6 November 2021

Personal views, et cetera

Our clubhouse session this Tuesday at 6pm will be another good one: CIL horror stories. Story tellers will include Tom Dobson, Zenab Hearn, Claire Petricca-Riding, Professor Samer Bagaeen and Graham Cridland. Link here.

Simonicity Towers

Development Embargos: Nitrate, Phosphate & Now Water

Just as solutions are beginning to emerge to unlock the development embargos that have been in place in many areas due to the nutrient neutrality issue, areas of Sussex now have a new problem: water.

For over two years now, where the integrity of special areas of conservation or special protection areas (areas of nature conservation importance previously protected at EU level) are already under stress due to nitrate or phosphate pollution (usually due to historic farming practices), Natural England has been advising local planning authorities that an appropriate assessment cannot be reached under regulation 63 of the Conservation of Habitats and Species Regulations 2017 to the effect that further development, causing additional sewage or surface water run-off will not affect the integrity of nearby SACs and SPAs unless measures will are secured to achieve neutrality, either on or off site. Under the 2017 Regulations, unless a development can pass that appropriate assessment test it’s stuffed, no go.

I first wrote about the nitrates issue over two years ago in my 29 June 2019 blog post Another Green World: The South Coast Nitrate Crisis.

Developers on large sites have increasingly looked for suitable onsite measures and some authorities have been able to make available offsite measures to allow development to proceed.

Natural England’s advice on achieving nutrient neutrality for development in the Solent region (5th edition, June 2020) survived a legal challenge from campaigners who argued that it was not stringent enough (see R (Wyatt) v Fareham Borough Council (Jay J, 28 May 2021)) and Turley’s Peter Home and James Cording provided a useful update as to progress in finding solutions to what is otherwise a complete bar to development: Solent nitrogen neutrality: 18 months on, where are we now? (Turley, 11 November 2020).

Natural England’s initial advice in relation to nitrate neutrality was then followed by advice as to the need for phosphate neutrality, for instance in certain areas of Somerset and Cornwall, eg this is Natural England letter dated 15 April 2021 in relation to potential effect of phosphates on the River Camel Special Area of Conservation

Topically, HBF’s director for cities, James Stevens, has written an article Wading through the effluent in the October 2021 edition of Housebuilder magazine as to the problems being caused to housebuilders by needing to achieve nutrient neutrality, even where a technical solution can be found – the average costs being apparently over £5,000 per dwelling.

But those involved with development in Horsham, Crawley and Chichester, which fall within the Sussex North Water Supply Zone, are all now faced with an even more challenging issue: the potential need to demonstrate water neutrality. Natural England has become increasingly concerned as to the impact of groundwater abstraction on the Arun Valley SPA, SAC and Ramsar site. It has recently published its Position Statement for Applications within the Sussex North Water Supply Zone – interim approach (September 2021):

Natural England has advised that this matter should be resolved in partnership through Local Plans across the affected authorities, where policy and assessment can be agreed and secured to ensure water use is offset for all new developments within Sussex North. To achieve this Natural England is working in partnership with all the relevant authorities to secure water neutrality collectively through a water neutrality strategy.

Whilst the strategy is evolving, Natural England advises that decisions on planning applications should await its completion. However, if there are applications which a planning authority deems critical to proceed in the absence of the strategy, then Natural England advises that any application needs to demonstrate water neutrality. We have provided the following agreed interim approach for demonstrating water neutrality:

The relevant authorities are now advising applicants accordingly. Crawley Borough Council’s website for instance now says this:

Developers / planning applicants who can demonstrate water neutrality such as having significant water efficiency measures built into their development and by providing offsetting measures to reduce water consumption from existing development, and who are able to enter into legal obligations to secure these measures, would be able to proceed, subject to the planning process. The onus is on developers and planning applicants to demonstrate that they can deliver water neutrality for their proposals. For applications in these circumstances which are not able to do this, the Local Planning Authority [the council] when determining a decision, would unfortunately have no choice but to refuse them, as a matter of law, in light of the Natural England Statement.

The Local Planning Authority [the council] has written urgently to agents of affected applicants advising them of Natural England’s position and advising them that, for the time being, all applications where a positive decision / recommendation was / is to be made on an application will have to be delayed if they are within the Southern Water supply zone, until the matter of water neutrality can be addressed.”

Without speedy solutions, this is going to create real problems both for individual developers in the area and for authorities in bringing forward deliverable local plans.

No doubt there will be solutions in due course (and questions do have to be asked as to whether the issue really lies with the water abstraction licences, which presumably were the subject of appropriate assessment under the 2017 Regulations and their statutory predecessors, rather than with those who are seeking to have access the abstraction of which has already been licensed!) but how long will that take and at whose cost?

In the meantime, what an unplanned mess.

Simon Ricketts, 9 October 2021

Personal views, et cetera

Talking of Planning Law Unplanned…our clubhouse session will tackle this subject in more detail with practical, authoritative, input from special guests including Peter Home (mentioned above), Tim Goodwin, Charlie Banner QC, Richard Turney and others. Do join us at 6 pm on Tuesday 12 October. Link to app here.

“We Can Take Some Of The Edges Off That Are Upsetting People”

A personal rant, with apologies. Did you see that quote in the Daily Mail about the long awaited Planning Bill?

“A Government source said ministers would be in ‘listening mode’ on the issue when Parliament returns in September, adding: ‘We’ll listen and we’ll move.

We can take some of the edges off that are upsetting people and still get some important changes through.

‘The bottom line is we have got to get more houses built. The average age of a first-time buyer is 34. We have to get that down and give younger people a chance to get a stake in society.’”

Listening to whom, do we think? Backbench Conservative MPs of course and voters in relevant constituencies of course. Anyone else? Shrugging shoulders emoji.

Does the Government really believe that it can make changes that materially accelerate the delivery of homes, without upsetting voters and therefore backbench Conservative MPs? (I’m only focusing on the Conservative party because it is in Government – Labour MPs are hardly falling over themselves either to support development in their constituencies, and as for the Liberal Democrats…). I see it all around me, the social norm/knee jerk reaction to a development proposal being to object and being to assume that everyone else will want to object too – whether green field development (it should be on a brown field site) or the development of a brown field site (oh not there, too high, setting, infrastructure etc etc). Of course it is hoped that exhortations as to design will make a difference in making development less unpopular, but, even travelling optimistically, that is going to take a long long time.

So what are the “edges” that are going to be taken off the white paper proposals?

It’s obvious isn’t it? No doubt the idea that national housing targets will actually, perish the thought, have to be planned for by each local authority on a local basis, let alone find their way through to consents and development, isn’t just out of the window, it’s jumped down onto the pavement and skipped half way down the street by now.

One leading rebel said: ‘If this ends up being a developers’ free-for-all, it will be utterly toxic for Tory MPs everywhere – not just in the South East.

‘If ministers get this wrong we can kiss goodbye to our new electoral success.

‘We will be doing the Lib Dems’ job for them across the Midlands, the South and the suburbs where we’ve had massive growth in recent years.

‘People are fed up. Being seen as the party concreting over our countryside or ramming housing estates into suburban green spaces will be electoral suicide. Boris needs to get a grip on this.’ Rebels want the idea of mandatory house-building targets replaced with voluntary ones.

They also want ministers to drop ‘growth zones’ in which planning applications would be automatically approved.”

Can we be clear: no-one I know in the development and planning world wants a fudged, bodged, old failed ideas re-branded, camel of a Planning Bill. Forget the whole thing rather than waste valuable time on a set of reforms based on political trade-offs and trying to be all things to all people. If as a politician you can’t focus on the objectives – climate change, providing everyone with a decent home, a functioning economy – because you’re just worrying about holding onto power and a job, forget it, don’t even start: with that frame of mind you will make things worse not better.

Without (1) a clear articulation of how many homes need to be built across the country, with a published evidence base to support that number (whether that’s 300,000 a year, or lower, or – probably – higher) and (2) those numbers somehow being divided out across the country without local opportunities for prolonged delays, obfuscation and special pleading (a year on from the white paper it is still really difficult to work out how this can be done), the system will continue to meander on its way – through the interminable plan making local politics, through the lengthy, unpredictable, too detailed and yet too light touch, examinations and through the inevitable court challenges.

The incoming coalition government in 2010 tore up top-down planning, in the form of the regional strategies, before the system even had time to prove itself. Yes it was an slow and over-engineered process, but there was at least the opportunity for democracy at the regional level in setting and apportioning numbers. The return to a bottom up approach, together with the let’s cross our fingers and rely on the duty (not really) to co-operate, and with a semi voluntary, almost unmappable, ad hoc patchwork of local authority combinations and alliances, has led to local plans being mired in endless debates as to numbers. Even with a supposedly standard method for calculating local housing need, those endless debates continue in every green belt local authority area – see Cherwell Development Watch Alliance v Cherwell District Council & Secretary of State (Thornton J, 30 July 2021) for the most recent example.

How are we going to get out of that mire, plan quickly and positively, stabilise spiralling house prices, reduce the age at which adult working offspring can leave the parental home to live somewhere convenient (let alone buy their own home – that’s a first world problem compared to the need for an affordable home in the first place), if local housing numbers are going to be left for local authorities and communities to determine?

Pray tell, “Government source”.

Simin Ricketts, 6 August 2021

Personal views, et cetera

Two great clubhouse Planning Law Unplanned events coming up:

⁃ 6pm Tuesday 10 August: Stonehenge road tunnel consent quashed: why, how, what next – discussion led by junior counsel to Save Stonehenge, Victoria Hutton. Link to invitation here.

⁃ 6pm Tuesday 17 August: AN END TO UGLY: The Office for Place & NMDC unpacked – special guests Nicholas Boys-Smith (chair, Office for Place), Dr Chris Miele (Montagu Evans) and Vicky Payne (URBED). Link to invitation here.

People In Houses…

…really don’t want other people to have houses, do they?

FT, 19 June 2021
Times, 19 June 2021
Telegraph, 19 June 2021

The prime minister can hardly be surprised when the affluent home-owning constituents of Chesham and Amersham register a protest vote against his plans for change, thinking that in some way he is coming for their beautiful part of the country, even though it bristles with statutory protections from development. First there has been the insensitivity with which HS2 has been forced through the Chilterns AONB with the case for longer tunnelling rejected (see my 30 July 2016 blog post HS2: The Very Select Committee) and secondly, as hitherto loyal Conservatives, they will have taken the prime minister at his word when with typical hyperbole he said in his foreword to last August’s white paper:

“Thanks to our planning system, we have nowhere near enough homes in the right places. People cannot afford to move to where their talents can be matched with opportunity. Businesses cannot afford to grow and create jobs. The whole thing is beginning to crumble and the time has come to do what too many have for too long lacked the courage to do – tear it down and start again.

That is what this paper proposes.

Radical reform unlike anything we have seen since the Second World War.

Not more fiddling around the edges, not simply painting over the damp patches, but levelling the foundations and building, from the ground up, a whole new planning system for England.”

“And, above all, that gives the people of this country the homes we need in the places we want to live at prices we can afford, so that all of us are free to live where we can connect our talents with opportunity.

Getting homes built is always a controversial business. Any planning application, however modest, almost inevitably attracts objections and I am sure there will be those who say this paper represents too much change too fast, too much of a break from what has gone before.

But what we have now simply does not work.

So let’s do better. Let’s make the system work for all of us. And let’s take big, bold steps so that we in this country can finally build the homes we all need and the future we all want to see.”

How easy it must be for other parties and for campaign groups to scaremonger when such coarse analogies are used – war, tearing things down, levelling foundations, building from the ground up.

The paper itself was not nearly as radical as the foreword would suggest and we have seen no further detail since. And so he is now on the defensive:

The Independent, 18 June 2021

“What we want is sensible plans to allow development on brownfield sites. We’re not going to build on greenbelt sites, we’re not going to build all over the countryside.”

[What does this even mean? Of course there will continue to be green field development, and of course some green belt development – as there is under the current system].

This is such an unnecessarily controversial issue, carelessly caused, cynically amplified. The planning system doesn’t need to be torn up and was never going to be torn up. But where have the ministers been to explain, to persuade, to engage? Instead, a resounding, almost embarrassed, silence since that August 2020 white paper. The news vacuum as to the form that changes are likely to take has of course been filled with media speculation and campaigners’ characterisations which have now served to make the whole question more political than it ever needed to be.

We all know that what is needed is for the current planning system to work better, largely through clearer carrot and stick policies, through specific process improvements and simplifications – and with better resourcing. So as to deliver, yes, more homes, yes economic growth, yes in a planned way, yes meeting environmental and social, not just economic, goals. But none of that’s going to happen now is it? Because politics is all about retaining power, and planning is dependent on politics. So if you are relying on the planning system to enable you to move out of your parents’ house or out of an HMO; to start a family, or to grow a business, you know what? Your needs don’t matter. Not against the needs of a politician who doesn’t want to be the next Peter Fleet.

All this of course means that the current system needs to continue to work as best it can. The good news is that at least this week we had that Colney Heath appeal decision letter to demonstrate that the entire system is in fact not in total meltdown. If an area is without an up to date plan, with a severe unmet housing need, with need for affordable housing and for sites for self build homes, planning permission may be granted even if the land is, horror of horrors, politicians look away, green belt. My firm Town (well, my colleague Paul Arnett) was pleased to play at least a small role in the appeal as planning solicitors for the appellant, negotiating a section 106 agreement with the St Albans and Welwyn Hatfield councils that secured a commitment that 45% of the 100 homes proposed would be affordable housing and 10% would be self-build, delivering a strategy first formulated by Chris Young QC and developed and implemented at the inquiry itself by Zack Simons (who kindly brought us onto the team). Russell Gray at Woods Hardwick was the lead planning witness and coordinated the team.

Inspector Christa Masters determined that the following were “very special circumstances” that justified inappropriate development in the green belt:

provision of market housing

“I am aware of the Written Ministerial Statement of December 2015 which indicates that unmet need is unlikely to clearly outweigh harm to Green Belt and any other harm so as to establish very special circumstances. However, in common with the appeal decision referred to, I note that this provision has not been incorporated within the Framework which has subsequently been updated and similar guidance within the Planning Practice Guidance has been removed. I can therefore see no reason to give this anything other than little weight as a material consideration.

It is common ground that neither SADC or WHBC can demonstrate a five year supply of deliverable homes. Whilst there is disagreement between the parties regarding the extent of this shortfall, the parties also agreed that this is not a matter upon which the appeals would turn. I agree with this position. Even taking the Councils supply positions of WHBC 2.58 years and SADC at 2.4 years, the position is a bleak one and the shortfall in both local authorities is considerable and significant.

There is therefore no dispute that given the existing position in both local authority areas, the delivery of housing represents a benefit. Even if the site is not developed within the timeframe envisaged by the appellant, and I can see no compelling reason this would not be achieved, it would nevertheless, when delivered, positively boost the supply within both local authority areas. From the evidence presented in relation to the emerging planning policy position for both authorities, this is not a position on which I would envisage there would be any marked improvement on in the short to medium term. I afford very substantial weight to the provision of market housing which would make a positive contribution to the supply of market housing in both local authority areas.”

⁃ provision of self-build

“In common with both market housing and affordable housing, the situation in the context of provision of sites and past completions is a particularly poor one. To conclude, I am of the view that the provision of 10 self build service plots at the appeal site will make a positive contribution to the supply of self build plots in both local planning authority areas. I am attaching substantial weight to this element of housing supply.”

⁃ provision of affordable housing

“The uncontested evidence presented by the appellant on affordable housing for both local authorities illustrates some serious shortcomings in terms of past delivery trends. In relation to WHBC, the affordable housing delivery which has taken place since 2015/16 is equivalent to a rate of 23 homes per annum. The appellant calculates that the shortfall stands in the region of 4000 net affordable homes since the 2017 SHMA Update, a 97% shortfall in affordable housing delivery. If the shortfall is to be addressed within the next 5 years, it would required the delivery of 1397 affordable homes per annum. In SADC, the position is equally as serious. Since the period 2012/13, a total of 244 net affordable homes have been delivered at an average of 35 net dwellings per annum. Again, this equates to a shortfall also in the region of 4000 dwellings (94%) which, if to be addressed in the next 5 years, would require the delivery of 1185 affordable dwellings per annum.

The persistent under delivery of affordable housing in both local authority areas presents a critical situation. Taking into account the extremely acute affordable housing position in both SADC and WHBC, I attach very substantial weight to the delivery of up to 45 affordable homes in this location in favour of the proposals.”

I recommend Zack’s 15 June 2021 blog post Notes from the Green Belt: what’s so very special about Colney Heath?

I also recommend Chris’ earlier paper Winning an inquiry: it’s the benefits, stupid.

More decisions such as Colney Heath are inevitable where authorities, admittedly struggling at times with a sclerotic local plans system, fail to deliver, which of course makes this scaremongering about a new planning system so nonsensical.

Topically, at 6pm this Tuesday 22 June our Clubhouse Planning Law, Unplanned theme is “How can we build enough, affordable, housing?”. Our special guests are Chris Young QC, Nick Walkley (ex Homes England chief executive), Claire Dickinson (director, Quod) and Ric Frankland (founder, wudl.). Please join us. A free link to the app and event is here.

Simon Ricketts, 19 June 2021

Personal views, et cetera

“Our Number One Domestic Priority”: Taking Stock

I tweeted that yesterday was the 5th anniversary of my first simonicity blog post. 273 posts later and 496,000 words (War and Peace = 587,000 words) and to what effect?

As I also said, it can be deflating to look back. So many posts expressing frustration about the same topics, yes obviously CIL, but also the recurring debates as to how to address the country’s housing crisis and as to what the obstacles are: is it the planning system or are other factors at play? Something Must Be Done. But what?

Unpacking Use It Or Lose It (16 July 2016) was one of my first posts. It referred to that week’s House of Lords Economic Affairs Committee’s report, Building More Homes.

“Paragraphs 129 to 139 of the report’s section on Planning Reform set out the “criticism made of the large house builders…that they hold land suitable and with permission for building, yet build at a slow pace and thus maximise the profit from each development”.

The conclusion is arrived at:

“139.We recommend that local authorities are granted the power to levy council tax on developments that are not completed within a set time period. This time period should be negotiated when planning consent is sought and be varied according to the size and complexity of a development. To ensure that the local authority also has an incentive to accelerate the process, the clock should start to run only when the local authority has signed off all conditions and obligations“.”

The allegation that house builders hold unnecessarily large land banks, going slow to maximise profits, was considered in detail by Oliver Letwin in his 2018 review. Incidentally, a constant theme of my blog posts over the last five years has been reviews commissioned by the Government the recommendations of which it then ignores – my first ever post, on 3 June 2016, was about the recommendations of the CIL independent working group (sensible recommendations, ignored by Government) – and Oliver Letwin’s recommendations in his final report (summarised in my 3 November 2018 blog post Oliver’s Twist: Letwin’s Proposals For Large Housing Sites) were of course similarly ignored, but perhaps the findings in his earlier interim report (June 2018) were more interesting, where he rejects that land banking allegation:

“5.40 It is of course true that, although the land market can be highly volatile, land (unlike most assets) does not depreciate, and has generally tended to increase in value across the cycle, and has a ‘real option’ value. By holding rights over land that benefits from (or is soon likely to benefit from) some form of permission to build houses, the company which holds that land obtains a valuable ability to make profit by building on it at whatever time is thought likely to maximise the profitability of doing so. It would therefore be perfectly possible for financial investors of a certain kind to seek to make a business out of holding land as a purely speculative activity.

5.41 But I cannot find any evidence that the major house builders are financial investors of this kind. Their business models depend on generating profits out of sales of housing, rather than out of the increasing value of land holdings; and it is the profitability of the sale of housing that they are trying to protect by building only at the ‘market absorption rate’ for their products. I have heard anecdotes concerning land owners who seek to speculate in exactly this way by obtaining outline permission many years before allowing the land to have any real development upon it – and I am inclined to believe that this is a serious issue for the planning system. But it is not one that is consistent with the business model of the major house builders.

And yet here comes the allegation again in an 8 May 2021 Local Government Association press statement: Over 1.1 million homes with planning permission waiting to be built – new LGA analysis. “The LGA is calling for councils to be given powers in a Planning Bill in the Queen’s Speech to incentivise developers to build housing more quickly. Latest figures show that 2,782,300 homes have been granted planning permission by councils since 2010/11 but over the same period only 1,627,730 have been built.”

And look at their proposal, which harks back (without reference to it) to the rejected idea in that 2016 House of Lords Economic Affairs Committee Report. They say:

While there will be in some cases legitimate reasons as to why development has stalled, and it is recognised that there is a time lag between permission being granted and homes being built, new build completions have only increased by just over half as much in that time. The LGA, which represents councils, says this shows that planning is not the barrier to house-building and that it is the housing delivery system that needs to be reformed.

To help councils get developers building more quickly, the Queen’s Speech should bring forward legislation that enables councils to charge developers full council tax for every unbuilt development from the point the original planning permission expires.”

Lichfields’ Matthew Spry rebuts the idea again in his 26 May 2021 blog post Use it or lose it: the taxing problem of undelivered homes.

The wider assertions in the Local Government Association press statement that sufficient planning permissions are already being granted to achieve the Government’s target of 300,000 net additional homes a year are tackled in Lichfields subsequent report, “Taking stock: The geography of housing need, permissions and completions”, published on 1 June 2021, commissioned by the Land Promoters and Developers Federation and the Home Builders Federation. Indeed they conclude that the necessary annual figure to achieve that target is 520,000.

The report represents the first stage of their work: “Analysis of how the number of homes with planning permission relates to housing need and delivery in different parts of the country through a comparison of housing need (either as per the standard method or recently adopted local plans), planning permissions and completions at a regional and housing market area level”.

We await stages 2 and 3:

“2. Assessing how the stock of permissions relates to housebuilder pipelines, rates of build out and the number of extra sites required to meet the government’s ambition; and

3. An analysis of what happens to the stock of permissions for a number of local authority case studies. This is a more in-depth ‘deep dive’ exploration on how the stock of permissions granted is linked to the number of homes completed within a given timescale by monitoring the land supply positions across the authorities over a five year period”

It is a great shame that MHCLG has not provided any detailed methodology to support the national target of 300,000 net additional homes a year. If anything it may be an under-estimate (see the 14 January 2021 House of Commons briefing paper Tackling the under-supply of housing in England) but surely it needs underpinning to avoid any assertion that it is too high. The background to the figure is mentioned in my 10 February 2018 blog post Nothing Was Delivered – the immediate context at the time being the first meeting of then prime minister Theresa May’s “housing implementation taskforce” (always good to have a taskforce). You recall Mrs May’s promise that the housing crisis would be her “number one domestic priority”? Roll forward three years: Theresa May leads Tory revolt over push for new housing (The Times, 12 May 2021).

What has got in the way of a sensible debate as to how we might resolve this country’s housing crisis since I started this blog? Politics. What might get us out of it? Action based on robust factual analysis.

Simon Ricketts, 4 June 2021

Personal views, et cetera

This week’s Clubhouse Planning Law, Unplanned discussion examines the Lichfields Taking Stock report. We will be joined by Lichfields’ Matthew Spry , together with the LPDF’s chairman Paul Brocklehurst, Lambert Smith Hampton’s Mary-Jane O’Neill, the BPF’s Sam Bensted, Blackstock Consulting’s Joshua Carson and our brilliant usual panel. Do tune in to join the discussion, or just to listen. This is a free invitation to the app.

Moving Into First Homes: 3 Key Deadlines

The Government’s First Homes announcements this week mean that we all need to understand the practicalities as to how this new form of discounted market sale housing will work and to plan around three key implementation dates.

On 24 May 2021 we had the formal ministerial statement together with the publication of MHCLG guidance providing “further detail on First Homes and their implementation”. For prospective purchasers there is also the Government’s Own Your Own Home website.

The three key dates are as follows:

28 June 2021

From the guidance: “ Local plans and neighbourhood plans submitted for examination before 28 June 2021, or that have reached publication stage by 28 June 2021 and subsequently submitted for examination by 28 December 2021, will not be required to reflect the First Homes policy requirement

(However: “Planning Inspectors should consider through the examination whether a requirement for an early update of the local plan might be appropriate.”)

28 December 2021

From the guidance: “The new First Homes policy requirement does not apply for the following:

sites with full or outline planning permissions already in place or determined (or where a right to appeal against non-determination has arisen) before 28 December 2021

28 March 2022

It also does not apply to “applications for full or outline planning permission where there has been significant pre-application engagement which are determined before 28 March 2022”.

So if you wish to avoid the new requirement and you are not in an area where a plan has been adopted under the transitional arrangements, you need to have submitted your application so that it will be determined (or so that that the statutory right to appeal on the basis of non-determination has arisen) by 28 December 2021 and if there is any doubt as to whether you will meet that deadline it would be prudent to have engaged in “significant pre-application engagement” such that the deadline for achieving permission is 28 March 2022.

“If an applicant wishes to amend a planning application to include First Homes which is already submitted and likely to be granted before these dates, the local planning authority should be flexible in accepting First Homes as an alternative type of tenure.

Local authorities should have flexibility to accept alternative tenure mixes for planning applications that are determined within the timescales identified above, although they should consider whether First Homes could be easily substituted for another tenure, either at 25% or a lower proportion.”

From the guidance:

What is a First Home?

First Homes are a specific kind of discounted market sale housing and should be considered to meet the definition of ‘affordable housing’ for planning purposes. Specifically, First Homes are discounted market sale units which:

a) must be discounted by a minimum of 30% against the market value;

b) are sold to a person or persons meeting the First Homes eligibility criteria […];

c) on their first sale, will have a restriction registered on the title at HM Land Registry to ensure this discount (as a percentage of current market value) and certain other restrictions are passed on at each subsequent title transfer; and,

d) after the discount has been applied, the first sale must be at a price no higher than £250,000 (or £420,000 in Greater London).

First Homes are the government’s preferred discounted market tenure and should account for at least 25% of all affordable housing units delivered by developers through planning obligations.”

….

“Who is eligible to purchase a First Home?

A purchaser (or, if a joint purchase, all the purchasers) of a First Home should be a first-time buyer as defined in paragraph 6 of schedule 6ZA of the Finance Act 2003 for the purposes of Stamp Duty Relief for first-time buyers.

Purchasers of First Homes, whether individuals, couples or group purchasers, should have a combined annual household income not exceeding £80,000 (or £90,000 in Greater London) in the tax year immediately preceding the year of purchase.

A purchaser of a First Home should have a mortgage or home purchase plan (if required to comply with Islamic law) to fund a minimum of 50% of the discounted purchase price.

These national standard criteria should also apply at all future sales of a First Home.”

…..

How should the remaining 75% of affordable housing be secured through developer contributions?

Once a minimum of 25% of First Homes has been accounted for, social rent should be delivered in the same percentage as set out in the local plan. The remainder of the affordable housing tenures should be delivered in line with the proportions set out in the local plan policy.

For example, if a local plan policy requires an affordable housing mix of 20% shared ownership units, 40% affordable rent units and 40% social rent units, a planning application compliant with national policy would deliver an affordable housing tenure mix of 25% First Homes and 40% social rent. The remainder (35%) would be split in line with the ratio set out in the local plan policy, which is 40% affordable rent to 20% shared ownership, or 2:1. 35% split in this way results in 12% shared ownership; and 23% affordable rent.

In another example, if a local plan policy requires 80% of units to be shared ownership and 20% to be social rent, a policy compliant application would deliver 25% First Homes units, 20% social rent and 55% shared ownership.

If a local authority has an up-to-date policy on cash contributions in lieu of onsite contributions, then a planning application compliant with national policy will align with this approach.”

The requirement will be secured by our trusty friend, the section 106 agreement (or unilateral undertaking). The guidance states: “The government will publish template planning obligations for this purpose, which the local planning authority can use as a basis for agreements prepared locally.” A workable template (stress the word “workable”) would be very useful indeed.

How will this policy mechanism work across very different housing market areas across the country and what might be the unintended consequences? I recommend an excellent Lichfields blog post, First Homes: dicing with the discount (Rachel Clements and Bethan Haynes, 27 May 2021).

They ask where can First Homes potentially have the biggest impact?

“First Homes have the potential to have the greatest impact in areas where first-time buyers are currently priced out of the open market (at the entry-level) but where First Homes would be within reach, when the minimum 30% discount is applied. We estimate this represents around one in five authorities in England – around 63 in total.”

Will it avoid the problems that caused the previous Starter Homes concept to fail (e.g see my 29 February 2020 blog post Starter Homes Were A Non Starter – What Future For First Homes?)? What do we make of this continuing political decision to intervene in the market in the interests of encouraging home ownership at the expense (where viability is impacted) of affordable housing for rent, for those on a lower rung of the housing ladder?

There is plenty more to say on the subject, for instance the new opportunity arising to bring forward First Homes exception sites on allocated land outside the green belt or designated rural areas. But for now, I suspect that developers and local planning authorities alike will be wanting to do some basic number-crunching and to bear those three deadlines in mind.

Simon Ricketts, 28 May 2021

Personal views, et cetera

This Tuesday evening’s Planning Law, Unplanned Clubhouse session (6pm, 1 June) takes on a more general subject: “Has work taken over your life? Life hacks, work hacks”. Do come along and share your views, or just listen to the chat. An invitation to the app is here.

Forthcoming Commercial To Resi Rules Tightened After Consultation

I have taken care over the heading of this piece about the Town and Country Planning (General Permitted Development etc.) (England) (Amendment) Order 2021, laid before Parliament on 31 March 2021, which introduces a new class MA into the GPDO, granting deemed planning permission for change of use from commercial and business use (class E) to residential (class C3) from 1 August 2021.

I have taken care because so much of the noise this week was about how the Government hasn’t listened to the responses it received to its 3 December 2020 consultation paper, whereas for me the news is that it has listened to much of the criticism it received. The final form of the regime is significantly constrained compared to the consultation version. Give credit where credit’s due!

I summarised the initial proposal in my 4 December 2020 blog post, E = C3, expressing a number of concerns. Responses to the consultation from all quarters expressed equivalent concerns – some of course going further, in questioning more fundamentally the role of the permitted development rights process.

Aside from the Order itself which saw the light of day later on that day, we have the 31 March 2021 press statement (at the now traditional one minute past midnight) and the Government’s response to the consultation process.

The RTPI and others were tweeting their reactions before the Order had even been published on line (although to be fair the headlines were in the press statement). A joint letter was sent yesterday, 1 April 2021, to the prime minister by the RTPI, RIBA, RICS and CIOB. I acknowledge that many have “in principle” concerns about the availability of fast-track permitted development rights procedures but isn’t the letter somewhat of an over-reaction? What do members of those organisations think? Call me a defeatist pragmatist, but the proposals could have been so much worse!

These were the Government’s objectives, as they were stated in the December consultation document:

“In his ‘Build, Build, Build’ statement of 30 June 2020 the Prime Minister said that we would provide for a wider range of commercial buildings to be allowed to change to residential use without the need for a planning application. To meet this aim, support housing delivery and bring more residential use into our high streets and town centres, boosting footfall and creating additional demand, we propose to introduce a new national permitted development right for the change of use from the new Commercial, Business and Service use class to residential use. The new right would help support economic recovery, housing delivery and the regeneration of our high streets and town centres.”

The proposals were always intended to be introduced much more quickly than the proposals in last year’s planning white paper – after all existing permitted development rights expire on 31 July 2021 in relation to changes of use from the classes that went to form the new class E:

“While Planning for the future sets out our longer-term ambitions, we want at the same time to continue to explore more immediate changes to the planning system to provide greater planning certainty and flexibility to ensure that it can effectively contribute to some of the immediate challenges facing the country.”

It is also worth remembering that the rights which expire on 31 July already include rights to convert offices (no floorspace limit), light industrial (500 sq m floorspace limit) and retail (150 sq m floorspace limit). The rules to be introduced from 1 August allow greater flexibility in a number of respects but are also significantly tighter than the existing rights in various ways.

My colleague Tom Brooks has prepared a detailed client summary in relation to all of the PD changes within the Order (this blog post is only dealing with class MA rather than the other excitements within). If you message or email me I will send it to you next week, but for the purposes of this blog post I set out below the Government’s summary of the proposed changes:

“We will introduce a new national permitted development right to create new homes through the change of use from Commercial Business and Service uses. The right will:

• have effect from 1 August 2021

• be subject to a size limit of 1,500 sq m of floorspace changing use

• apply to buildings that have been in Commercial, Business and Service uses for two years, including time in former uses now within that class

• apply to buildings that have been vacant for at least three continuous months

• apply in conservation areas, but not in other article 2 (3) land such as National Parks and Areas of Outstanding Natural Beauty

• be subject to prior approval by the local planning authority on specific planning matters

• attract a fee of £100 per dwellinghouse.”

The consultation proposals had:

• no size limit (and this size limit cuts back on what can already be achieved via the existing office to resi PD right)

• no requirement that the relevant building should have been in commercial , business and service uses (i.e. any of the uses that now make up class E) for the two years leading up to the date of the application for prior approval (for offices to residential, the cut off point in the existing rules is 29 May 2013).

• no requirement that the building must have been vacant for the three months leading up to the date of the application for prior approval (a requirement which has not existed in relation to existing PD rights).

There is also now an express carry-forward to 1 August 2022 of existing article 4 directions that restrict office to residential permitted development rights – addressing what would have been a significant loophole (see e.g. my 7 February 2021 blog post Art 4 Life).

Prior approval requirements will still include transport, contamination, flooding, noise, and adequate natural light. As trailed in the consultation proposals, prior approval will be required, where relevant, as to the impact on the character or sustainability of a conservation area caused by the change of ground floor use of a building within a conservation area. Where relevant, prior approval will also be required as to the impact on the intended residential occupiers if the area is considered important for “general or heavy industry, waste management, storage and distribution, or a mix of such uses” and as to the impact on local provision if there is a loss of services provided by a registered nursery or health centre.

Prior approval applications will need to include a floor plan indicating “the total floor space in square metres of each dwellinghouse” (and remember that the Government’s nationally described minimum space standard applies to any schemes which are the subject of a prior approval application from 6 April 2021 in any event).

For the first time, notices will need to be served on on any adjoining owner or occupier and, where the proposed development relates to part of a building, on any owner or occupier of the other part or parts of the building.

Remember that there is no exemption from CIL for permitted development, the usual rules apply – although most commonly the in-use buildings exemption will apply if at least part of the building has occupied for a use which is lawful for at least six months continuously in the last three years.

Mitigation cannot be secured as to matters that are not the subject of the prior approval process, so PD residential development is still free from affordable housing and other social infrastructure commitments (e.g. contributions to the cost of education facilities), but remember that the scale of development now permitted, with the 1,500 square metres cap, is far lower than the scale of conversions of office buildings that we have previously seen. The horse has bolted on that one.

The new rights do not limit in any way the need for planning permission for external works to the building that materially affect its external appearance, so finger-pointing as against the Government’s “beauty” aspirations is misdirected in my view.

What concerns are we left with? Yes, the new rules will allow residential development in potentially unsustainable locations. Yes, the new rules will allow commercial frontages in high streets to be converted to residential use in a way which may harm the traditional function of town centres (although subject to the need for a separate planning permission for the external treatment of the building). Yes, the new rules do limit in practice the role of the local planning authority in determining what are appropriate uses for a particular area. Yes, there will still be room for uncertainty and “gaming” of the system, particularly around the vacancy requirement. Set against these concerns, are the Government’s objectives in terms of enabling more homes to be delivered quickly and in finding new uses for redundant commercial floorspace and is the need for us all to acknowledge the various protections that are now (at last) in place, seeking to ensure that accommodation is to be delivered to at least a minimum standard (e.g. size of homes, light) and seeking to reduce the potential for the new rights to lead to unintended outcomes (e.g the floorspace cap, vacancy requirement).

Where does the balance lie? Are there now sufficient checks and balances? Are we going to see a final rush to make prior approval applications under the existing rules? Join a number of us on Clubhouse for a discussion on this very subject – from 6pm on Tuesday 6 April.

Simon Ricketts, 2 April 2021

Personal views, et cetera

London Plans

Surely planning becomes a democratic irrelevance when the plan making process is slower than the electoral cycle? That’s pretty much the position in London. After all, Sadiq Khan wouldn’t have managed it if he hadn’t been gifted a further year in post by virtue of the postponement of the May 2020 elections.

Election: 7 May 2016. First consultation document: October 2016. Adopted plan 2 March 2021.

But it doesn’t have to be that way. In fact, it shouldn’t be this way. The plan “must deal only with matters which are of strategic importance to Greater London” (section 334(5), Greater London Authority Act 1999).

My 23 April 2017 blog post Make No Little Plans: The London Plan heralded the imminent publication of initial non-statutory consultation in relation to the new London Plan. The hope at that stage was to have an adopted plan in place by Autumn 2019. I referred to the 400 pages or so of the then current plan and expressed the hope that its replacement would be shorter. Hmm, not so.

One of the issues with this process has certainly been of the Mayor’s making – the sheer bloated nature of the plan, with its excessive layers of detail. What can be done to make sure that this never happens again?

But the other issue has not entirely been of the Mayor’s making. For the whole of his period in office he has faced opposition from Government, which has been placing pressure on him to increase planned housing numbers well beyond the already ambitious and probably unachievable numbers that he has been planning for. See for instance the previous Secretary of State’s 27 July 2018 letter and Robert Jenrick’s 13 March 2020 letter directing that a series of amendments be made to the draft plan.

“I had expected you to set the framework for a step change in housing delivery, paving the way for further increases given the next London Plan will need to assess housing need by using the Local Housing Need methodology. This has not materialised, as you have not taken the tough choices necessary to bring enough land into the system to build the homes needed.

Having considered your Plan at length my conclusion is that the necessary decisions to bring more land into the planning system have not been taken, the added complexity will reduce appetite for development further and slow down the system, and throughout the Plan you have directly contradicted national policy. As you know, by law you must have regard to the need for your strategies to be consistent with national policies.

For these reasons I am left with no choice but to exercise my powers to direct changes.

Your Plan must be brought to the minimum level I would expect to deliver the homes to start serving Londoners in the way they deserve. However, this must be the baseline and given this, I ask that you start considering the next London Plan immediately and how this will meet the higher level and broader housing needs of London.”

Then most recently, only after the Mayor had chased on 9 December 2020 for a response from Government to his April 2020 proposed amendments to address those March 2020 directions, the Secretary of State wrote again on 10 December 2020 with further directions.

But, to accentuate the positive, we now have an adopted new London Plan (542 pages of it).

This is a good Lichfields blog post on it. I did also like this Tom Pemberton post that summarised some of its implications in seven slides.

The whole process will now have to start again, as soon as we are past the 6 May elections, given the Government’s expectation of an immediate review to take into account the current NPPF and the housing numbers deriving from the revised standard method (including indeed its additional 35% figure for London and other major towns and cities). The new numbers are truly challenging/unrealistic (93,500 per annum as against the 52,000 figure in the new plan and annual delivery of less than 37,000).

What a political dilemma for the next Mayor to face – to broker some sort of solution with Government, boroughs, communities, authorities surrounding London and, for so long as there are going to be the range of onerous requirements that are set out in the new plan, developers and funders. On top of all the other challenges post-pandemic, post- Brexit and in the midst of a climate emergency.

And yet numerous candidates have thrown their hats in the ring for 6 May 2021 and we haven’t yet reached the 30 March deadline for delivery of nomination papers (fancy a go?).

I’m chairing a Planning Futures hustings event at 2pm on 9 March 2021, where we will have a number of the candidates or their representatives. It will focus on planning/housing/built environment policies. The event is free so do register and join me.

In preparation I did a little googling to see what the main candidates might be saying that might give some hope that the scale of the challenges ahead are publicly acknowledged.

⁃ Sadiq Khan’s campaign was launched on 4 March, focusing on listing the achievements of his first term rather than setting out any significant new direction or pledges.

⁃ Conservative candidate Shaun Bailey’s campaign website – 100,000 shared ownership homes to be sold at £100,000 each – a London Infrastructure Fund to fund long-term transport projects.

⁃ Green Party candidate Sian Berry’s campaign website – would set up “a People’s Land Commission to find small sites for new homes, green spaces and community support”. “In addition to using existing powers including compulsory purchase orders, I will also continue to lobby central Government for a devolved or national “community right to buy” which will create new rights for local community groups to buy any land or property that is neglected, empty and needed for community uses”.

Liberal Democrat party candidate Luisa Porritt’s campaign includes “homes in the heart of the city”, “a green roadmap” and “reinvent the high street”.

⁃ Women’s Equality Party candidate Mandu Reid: “Stand with us to make sure no woman is turned away from refuge, to close the pay gap in a generation, to balance work and family life for everyone, and to make London the first gender equal city in the world.”

⁃ UKIP candidate Peter Gammons will “will focus on new housing in every borough, holding developers accountable for providing affordable housing and prioritising Londoners.” He has apparently written a book, “London – a road map for recovery”, although I couldn’t find it on Amazon.

I think we need to get beyond these platitudes, and that is what I shall attempt to do on Tuesday….

Simon Ricketts, 6 March 2021

Personal views, et cetera

London, 1572. Those were the days.

Art 4 Life

Article 4 directions are a small but essential cog in the complicated machine that is the English planning system. With the more widespread reliance by Government on permitted development rights, it falls to local planning authorities to make article 4 directions to disapply, where appropriate, those rights in relation to specific types of developments and/or in specific areas.

From 1 August 2021, we are potentially approaching a breakdown in this machine in the face of the proposed class E to class C3 permitted development right which I wrote about in my 4 December 2020 blog post E = C3.

But first a few basic points to note about the way these cogs work:

1. Article 4 directions do not have to be approved by the Secretary of State but he can intervene where he considers that a direction is inappropriate.

2. Unless an article 4 direction takes effect at least a year after it was first publicised, in certain circumstances the authority can be liable to claims for compensation where someone can show they incurred abortive expenditure or otherwise suffered loss or damage as a result of the direction.

3. For permitted development rights where prior approval of certain matters is required before the right can be relied upon, the prior approval needs to be secured before the direction takes effect and needs to be completed within three years of prior approval.

The role of article 4 directions has increased with the gradual spread of “resi conversion” permitted development rights since 2013.

The office to residential permitted development right was first introduced in May 2013. At that time the legislation included a specific list of “excepted areas” within which the right did not apply, for instance London’s central activities zone. The Government was not adverse to threatening intervention where authorities sought to introduce blanket article 4 directions in relation to other areas, for instance its well publicised spat at the time with the London Borough of Islington.

In 2016 the right was made permanent. The list of excepted areas was scrapped but only as from 30 May 2019 so as to give affected authorities time to put article 4 directions in place as appropriate (see Lichfields’ 14 March 2016 blog post Office to Residential Permitted Development Right Made Permanent.

There is now indeed a patchwork of article 4 directions across the country, disapplying “resi conversion” permitted development rights in relation to many areas of the country. Focusing on central London, here is how the “offices to resi” rights is disapplied in RBKC and in Westminster for instance.

When Class E was introduced from 1 September 2020 (see my 24 July 2020 blog post E Is For Economy for more detail) existing permitted development rights were kept in place until 31 July 2021 (applying to what the uses would have been categorised as prior to the creation of Class E) so as to give the Government time to introduce new permitted development rights that apply to Class E.

The consultation period on the proposed new development rights closed on 28 January 2021 and the Government has come under fire from many quarters for the intended breadth of the new rights (for instance, here is the British Property Federation’s response). The statutory instrument to introduce the new rights (and in part replace the old rights, which will expire) has not seen the light of day and we are now around six months away from what might be termed PD-Day, 1 August 2021.

Some big questions arise and discussions within Town with Duncan Field and other partners and colleagues have been really useful. I’m not going to give away for free our entire Town “house view” but I’m just going to state the obvious:

⁃ the existing permitted development rights that attached to uses now within Class E will fall away after 31 July 2021, the end of the “material period” in the Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020, unless secondary legislation extends the material period for those purposes, as a stop gap.

⁃ it is questionable whether existing article 4 directions would restrict the operation of any new permitted development rights that are introduced, even where the change is still, say, offices to residential (and some changes that, according to the Government’s consultation proposals, will now be possible are entirely new, e.g. restaurant, indoor sports hall or creche to residential).

⁃ As a matter of principle an article 4 direction cannot be made in relation to a future permitted development right, so authorities’ hands are tied until the statutory instrument containing the new rights is actually made.

⁃ plainly there is no time for authorities to give a year’s advance notice in relation to any new article 4 direction that is to take effect from 1 August 2021, so any more immediate restrictions would expose authorities to the risk of compensation claims (unless there is some specific transitional arrangement in the new rights, for instance if the new rights would permit development that before 1 August 2021 have been restricted by an article 4 direction, but that will not be straight-forward at all).

It is interesting that when the “excepted areas” system was abolished in 2016 authorities were given sufficient time to put article 4 directions in place. In the rush this time round, either this issue has been overlooked or the Government is seeking to sidestep the article 4 direction process and create some kind of gold rush for prior approvals before directions can be introduced and take effect. After all its antipathy towards article 4 directions in the “resi conversions” area, save where exceptionally justified, is plain from its recent consultation on proposed changes to the NPPF:

Article 4 directions

“We also propose clarifying our policy that Article 4 directions should be restricted to the smallest geographical area possible. Together these amendments would encourage the appropriate and proportionate use of Article 4 directions.”

“The use of Article 4 directions to remove national permitted development rights should

• where they relate to change of use to residential, be limited to situations where this is essential to avoid wholly unacceptable adverse impacts

• [or as an alternative to the above – where they relate to change of use to residential, be limited to situations where this is necessary in order to protect an interest of national significance]

• where they do not relate to change of use to residential, be limited to situations where this is necessary to protect local amenity or the well-being of the area (this could include the use of Article 4 directions to require planning permission for the demolition of local facilities)

• in all cases apply to the smallest geographical area possible.”

The flexibility introduced by permitted development rights is necessary and welcome but let’s not focus on that lever without making sure that there isn’t going to be an almighty crunch when it is pulled. What am I missing here folks?

Simon Ricketts, 27 February 2021

Personal views, et cetera

PS If you’re on Clubhouse, I’ll be joined by some other friendly planning solicitors, barristers and planners to talk about this and other topical planning law issues at 6pm on Tuesday 2 March, details here. Do join us!