There is a real urgency to build new homes. However, we have seen from our visits to newly built areas, that it’s not just the total numbers of new homes that are important.
Where you build and how you build are absolutely key, as are the transport connections that enable people to live their everyday lives. What is concerning is that we are building increasingly in rural parts of England far from jobs, in places where public transport barely reaches, and where you need to drive for most journeys.
Trapped Behind the Wheel
This trend to car-dependent sprawl is well-documented in the latest research from the New Economics Foundation in the form of their report Trapped Behind the Wheel. A contributing factor to the growth of sprawl is, as the report explains, the top-down housing targets issued by central government to local authorities. Through these targets, rural local authorities are directed to build hundreds thousands of new homes each year on the greenfield sites put forward by developers. Yet proper public transport is not provided, there are limited places to safely walk or cycle to, and the planning context is roads, roundabouts and out-of-town destinations. This pattern of development is common right across England. To move to the new places we are building, you need to be prepared for a lot of driving; traffic is already building up.
Algorithms at the heart of the matter
England is, it seems, unique in Europe in that it uses a simple formula to generate the ‘targets’ for new homes that each local authority area must build each year. Rather than than a carefully considered national or regional approach as to where best to grow and accommodate the population, we use a simple piece of maths to decide where to build, an algorithm. This produces an exact figure for each local planning authority called the ‘housing need’ number. This figure is then the mandatory starting point in devising a local plan or its equivalent, a suite of documents that describe the future of a county, a district or in some cases, a wider area.
So how are the ‘housing need’ figures calculated? The algorithm is not a static thing: governments appear to like to revise the algorithm every few years.
An algorithm based on local population trends
The last government based the algorithm on the idea that local population growth – statistics showing whether people were moving into a local authority area – indicated a demand for new homes in that authority. Therefore an algorithm was chosen that generated high housing targets were given if a place was growing fast. An unintended effect was that as more car-based sprawl was built in rural and semi-rural areas, more soon came their way. In the spiral of increased targets meaning increased building – more out of town ‘cowpat’ estates and more road systems to open up the land and take the cars were built.
An algorithm based on a workplace-based affordability ratio
In July 2024 the new government proposed a new version of the algorithm. This time it is based on the idea that one should increase house-building where house prices are high and wages low, thus to bring the price of homes down to affordable values. It is remarkably simple:
- First, take 0.8% of the current housing stock of the local authority area.
- Then, increase the figure, based on a three-year average of the median workplace-based affordability ratio, with an increase of 15% for every unit above four.
What are the numerical results of this methodology? You can see a list of annual housing requirements and use the interactive map from the Local Government Association data. Meanwhile if you are interested in the number of new homes in a Local Plan, then this annual figure needs to be multiplied up by the number of years that the Plan lasts, which is generally about 15 years.
You can see from our example simple map of one area of south west England, the kind of housing requirements that the new algorithm generates for Local Plans. You will recognise from this that rural local authorities have been given a very great number of homes to build, running even into tens of thousands in a local plan period.
It could be so different…
In most European countries there are national plans and regional plans for where to build new homes and how, with a holistic approach to land use, a consideration of economy, jobs, community and environment, and ample investment in mass transit systems to make sure that expanding places remain connected as functioning economic areas.
At local level planners are much involved in finding the most suitable places to build, including at what density, which is important, and they masterplan new areas rather than leaving this aspect to the private sector.
In England – apart from in major metropolitan areas and in particular London – we seem to be behind the times. Surely the time has come to move away from ‘algorithms’, ‘targets’ and the ‘five year housing land supply’ as a metric to pressure local authorities to deliver the numbers come what may, to a more visionary approach to building the new homes we so badly need. The New Economics Foundation report Trapped Behind the Wheel makes many useful suggestions, with evidence and data. There is a growing body of other work showing that we need a real change in our planning system. The question is, will the new government take the lead? We hope it will.
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