Official planning policies for housing are inadequate to sustain an improving economy. A fragile market lacks the necessary dynamic for change. Two features of official policy pose particular problems.
First, planning policy guidelines, making provision for housing need, have been specified on unambitious and a static set of planning assumptions for the forthcoming local development plans, especially in Belfast. These conservative calculations have produced the Housing Growth Indicators. Second, the viability of the housing market is threatened with the possible imposition of developer contributions on those developers prepared to submit planning applications in an already constrained housing market.
Town planners could potentially commend planning agreements including financial commitments, over and above the core project, to add social value to the deal.
Housing Growth Indicators
The Housing Growth Indicators suggest that the number of new housing units each year to meet need in Northern Ireland should be 7,200.
This updated planning ambition, prepared in the uncertain market after the crash in housing prices, is nearly 3,000 fewer new dwellings each year than envisaged seven years ago.
The planners assume that Northern Ireland will replace and demolish less than 0.5% of the total stock of housing each year. Given the inherited stock of older housing, an assumption that houses (on average) will remain adequate for over 100 years is remarkable.
Without going into greater detail, the plan for Belfast is for 1,000-plus new housing units each year. However, that assumes that regeneration calls for less than 200 houses each year to be closed or demolished. Belfast merits a more ambitious planning framework.
The legislation providing for developer contributions is an attempt to collect (or divert) some of the profit earned by developers to ensure that new house building projects make a contribution to the addition of socially affordable new housing, alongside normal private sector units, either by integrating a mix of types of household in a development or by a contribution (such as making available a site or making a commuted financial payment) to another affordable development.
The Department for Social Development (DSD) published a 90-page report last December, prepared by consultants Three Dragons and Heriot-Watt University, on the practicalities of introducing developer contributions for housing.
These contributions are socially laudable by expecting to use some of the profits of house building to make alternative housing more affordable. Of course, the concept does not appeal to the developer as a new 'taxpayer'.
The DSD case for this 'Robin Hood' form of penalty has not been helped by the report from Heriot-Watt. On the core proposition that there should be a Northern Ireland-wide developer contribution, possibly of 15% of the profit margin on a project, the consultants recommend that contribution rates should not be uniformly applied across NI, but should be set locally by the Local Government planning process, with ability to be varied according to the viability of individual schemes.
Then the consultants offer evidence that developer contributions could only be levied on schemes in the Belfast region. This is the only local authority area where viability is likely.
The case for developer contributions is already established elsewhere in the UK and Ireland. Northern Ireland has been slow to design a scheme and is now in the unhelpful environment of a recovering economy after the most serious house price instability of any UK region. If a Northern Ireland scheme is likely, then there are further questions to be resolved. Could such a scheme be used to arrange mixed tenure areas with private sector housing integrated with affordable housing?
If developers' contributions can be separated physically for a specific development, is it acceptable for the possible contribution to be commuted into an earmarked capital sum?
The local development plans for each local authority are critical to a coherent housing development process. To date, new definitive plans do not meet that ambition.