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Housing shortfall down but challenge remains

Housing shortfall down but challenge remains

🕔12.Mar 2018

At the start of what could be an important week for housing in the West Midlands, Mike Best reflects on the long-awaited and much-anticipated Greater Birmingham HMA (Housing Market Area) Strategic Growth Study

As readers of my previous blogs will be aware, this is the fourth instalment of what was to be a three stage study of the housing needs of the Greater Birmingham and Black Country HMA and how they could be met. The last report in 2015 didn’t quite hit the mark so this study was commissioned last summer by the 14 HMA authorities and was due to be completed by the Autumn.

Of course, plenty has been happening in the meantime.

We had the Second Devolution Deal announced in November which established a Mayoral Housing Delivery Team with £6m funding starting in 2017/18 to help deliver 215,000 homes by 2031.

Gareth Bradford joined WMCA in December as Director of Housing and Regeneration and is busy finalising the Housing Deal with Treasury. This should release meaningful funds to support the Land Delivery Action Plan launched in September and the Spatial Investment and Delivery Plan which is emerging as an outline draft considered by the Housing and Land Delivery Board in February.

Just in case you missed that, the key word is DELIVERY and quite rightly too. Hardly a day goes by without national media talking about the rate of planning permissions being converted into real houses, about housebuilders “landbanking” (or having a pipeline sufficient to allow for the time it takes to promote land through the planning system), or developers using a viability “loophole” to avoid providing affordable housing. This week’s Government launch of the consultation on revised National Planning Policy Framework (NPPF) majored on just these issues.

In the midst of a crisis, it is understandable that we need to focus on delivery, because no-one can live in the “exceptional circumstances” needed to justify Green Belt release let alone a planning permission as the PM and her Secretary of State like to remind us.

Upping the pace of delivery, as I have said in previous blogs, requires us to Turn on all the taps, which was broadly the conclusion reached by the West Midlands Land Commission that reported over 12 months ago. I was broadly supportive of its recommendations, most significantly that there should be a strategic spatial planning framework for the West Midlands so we can make informed choices about where to direct growth and infrastructure investment, and to carry out a strategic review of the Green Belt, as it is inevitable that some land will need to be released to meet the housing shortfall.

Neither recommendation is being pursued, although it could be argued that the Strategic Growth Study represents a proxy for both. However, the report makes clear that the study is independent, is definitely not a policy document, and is merely part of the evidence base for future local plan reviews. This kind of take-it-or-leave-it approach is not strategic planning in my view. We will see where it gets us over the next couple of years.

I am however a fan of the focus on delivery and in particular bringing forward urban sites. A successful West Midlands will be one where areas which have suffered for too long from decline and disinvestment are brought back to life, with new housing and social infrastructure as well as the jobs needed to sustain thriving communities.

We are seeing some success in stronger market areas, most notably in Birmingham where my own practice is currently acting on around 3,000 residential units in Birmingham city centre alone. There are new entrants in the market, including Berkeley St Joseph and Moda Living, and probably the largest single detailed permission ever granted for housing in the city – 778 units approved recently for Barratt Homes at St Luke’s, a site acquired from the city council and HCA (now Homes England).

Regeneration, however, is a long-haul and we will inevitably see some of the more difficult sites take a long time to come forward, but the funds available now and potentially with the Housing Deal in place, will I believe see a step change in delivery and that is to be welcomed.

So what does the Strategic Growth Study tell us and will it help meet the housing shortfall?

The report is a weighty 500 pages including appendices. It is thorough and covers a lot of ground but in being strategic, it also misses some of the detail and questions abound as to how some conclusions have been reached.

The guiding principle is that we must explore all sustainable options thoroughly before considering Green Belt release as a last resort. That is consistent with the revised text in the NPPF, which was previewed in the Housing White Paper last year.

That means first of all a re-look at urban capacity. The report suggests that has increased, because the overall shortfall by 2031 has come down (to around 28,000), whilst the overall level of housing need is broadly the same as in the earlier PBA work (a minimum 208,000 since 2011). This is despite the recently published Brownfield Land Registers showing little increase in capacity on previously published SHLAAs (Strategic Housing Land Availability Assessments).

The consequence even of this first point is that we need to be careful about what we term as “the shortfall”. Birmingham’s adopted plan refers to a shortfall of 38,000 by 2031. The Black Country’s current Core Strategy Review talks of a 22,000 shortfall by 2036. Given the different timeframes, it is not simply a case of adding these together, but a rough estimate of the combined shortfall by 2031 suggests that current plans envisage it to be around 54,000.

The Strategic Growth Study therefore represents a halving of the shortfall just based on a review of urban capacity.

Then the report looks at the potential for increased densities on existing sites and particularly around transport hubs. It shows that the authorities across the HMA have varying existing assumptions on density but, by adopting consistent and higher densities, the study finds another 13,000 units by 2031.

That means the shortfall could come down to around 15,000 (across 14 authorities) which becomes much more manageable to address without significant incursions into the Green Belt. Politicians across the West Midlands will be emitting a huge sigh of relief.

Except the study of course was asked to look at two other factors:

  • one being the WMCA’s own SEP which adopts an “Economy Plus” ambition to create half a million jobs by 2031, which would necessitate 245,000 homes in the Greater Birmingham HMA by 2031 (another 37,000 added to the shortfall). We are told that this is only aspirational but it has been signed up to by the WMCA (and therefore its constituent authorities).
  • the second factor is that the Government’s requirement is that local plans should have a time horizon of 15 years which takes us beyond 2031, so the key date is now turning to 2036. The Growth Study assesses the shortfall, adding those extra five years, to be 60,000 even before considering the SEP’s loftier ambition.

As a consequence, the remainder of the report identifies Strategic Locations for Growth, after maxxing out on urban capacity and increasing densities, which could accommodate as many as 90,000 homes. The report acknowledges these are long term options which won’t all be needed, so there is an element of choice for local authorities – agree and allocate the recommended locations in your patch; disagree and propose alternative locations but justify them to your Local Plan Inspector; or disagree altogether and refuse to allocate anything.

That is the beauty of the Duty to Co-operate and its failing.

There is too much detail in the report to cover in this blog, suffice to say that it is bold enough not to restrict itself only to locations beyond the Green Belt. These are in the main less sustainable due to their distance from the source of the housing need (it is after all Birmingham’s demographics which are driving the numbers), although locations east of Lichfield and north of Tamworth are identified due to their proximity to good rail links to Birmingham.

A series of rail corridors and less strategic bits of Green Belt are considered for new settlements including around Bromsgrove, Balsall Common, Shenstone and Hockley Heath. These will be the most contentious in my view as they are prime Green Belt.

There are three locations identified and recommended for employment-led growth – south of the Airport/UK Central, east of Birmingham between Peddimore and Hams Hall, and north of Wolverhampton next to i54.

By contrast, there is only one recommended urban extension (south of Dudley).

The study report says it has not considered locations for less than 1,500 homes, so it leaves the door open for locations for fewer homes to come forward through local plan reviews including by releasing Green Belt. That will disappoint some local politicians and communities who might have thought the game was up for some of those sites being promoted in their patches.

There has already been some political outfall from the report being published, with Chris Saint, Leader of Stratford on Avon District Council saying:

While we acknowledge we have a Duty to Co-operate with other authorities in the surrounding Birmingham area, we have no plans for a new settlement as outlined in the report.  The Green Belt land within the district plays no part in our plans in terms of helping to meet current or projected housing need in the district.  Nor is it being considered as an option in any obligation to support Birmingham.

In Solihull, Caroline Spelman MP said:

I am.. deeply concerned that the report has provisionally identified the Meriden gap as an area for future developments; including a proposal for another new settlement.

Councillor Ian Courts, Deputy Leader of Solihull MBC said:

…there is a clear tension between the study suggesting that areas in Solihull may be suitable for consideration for new development, whilst also recognising the significant role the green belt in Solihull is already playing in the region.

Bromsgrove Council leader Geoff Denaro said:

The GL Hearn Study is only one piece of evidence amongst many. It cannot be stressed strongly enough the council has not accepted the findings of the study but is looking to the residents and other interested parties of Bromsgrove to help inform its view on the study through a full consultation on the issues and options which will be consulted on in June. …This process is to ensure that the GL Hearn study does not dictate the future of the district as is being suggested.

Not surprisingly, Bromsgrove’s MP, one Sajid Javid declined to comment to the local paper.

What I can say about the report is that it’s a step in the right direction whether you like the recommendations or not. We now have something spatial to get our teeth stuck into. There are up to date figures for the “shortfall” but these will be contested. We are seeing higher densities work in some locations but not all, and urban capacity is only theoretical. Is there the demand for market housing, or the means by which affordable housing can be delivered in all of these locations over the next 15-20 years?

It is however the lack of commitment from the authorities who commissioned the study which is disappointing. It was always going to be this way, so that is no surprise, but there are other conurbations where greater consensus exists and strategic planning is proceeding on a statutory basis.

Will we end up with a joined-up approach to housing, employment and infrastructure or will there be a combination of fudges and compromises which bridge the gap in the lowest shortfall but land well short of the scale of ambition set out in the SEP?

In the short term, I believe the focus on delivery and the reduced headline shortfall will encourage authorities (and the Metro Mayor) to regard the problem as something which will only come to the fore post-2026, so the next round of local plan reviews will be the time to identify strategic locations. Some authorities however will find it more difficult to escape the immediacy of the challenges it poses, including Solihull and Bromsgrove.

I look forward to reading the new Statements of Common Ground which will be required by the NPPF to set out how the duty to co-operate is being applied. They could be quite short.

Mike Best is Senior Director of Turley and Chair of the Place Marketing Group for the Colmore Business District. This post is a version of an article first published on his own blog and reproduced here with his kind permission:

Main pic: Recommended Areas of Search for Strategic Development, Greater Birmingham HMA Strategic Growth Study, Greater Birmingham & the Black Country, A Strategic Growth Study into the Greater Birmingham and Black Country Housing Market Area, February 2018, Prepared by, GL Hearn 

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