Attending the launch of the Urban Land Institute’s Best Practice Design Guide for Build To Rent, it is clear there is now the level of engagement between the operator, investor and construction/ design professions needed to drive institutional Private Rented Sector development forward.
A more persuasive approach to development viability and planning is still needed, though. Build to Let (B2L) developers need to provide a more persuasive model than cheap public land and affordable housing waivers.
We have previously highlighted the role that planning needs to take to help use the PRS as envisaged by the Montague Review. Taking a real chunk out of the million homes UK plc needs over the next decade is the goal. As Nick Jopling – UK ULI Residential Council Chair – made clear, B2L it is a real proposition for institutions where it can be delivered at the right scale.
Institutional PRS can, and should, have a key role to play in reinventing and densifying Garden Suburbs around London. Without it, the 49,000 homes needed are unlikely to arrive. In the longer term, it should also have a real role in the institutional structure of new towns. To achieve that, equity participation in long-term residential investment in new settlements should be rewarded. We should learn from aspects of the US multi-family tax regime and explore how the planning system can create investor certainty.
Powers and persuasion
The PRS sector has much to do to persuade planning authorities that the viability constraints of B2L are worth paying attention to, both in terms of more flexible application of policies which impose cost burdens and the use of planning powers to assemble land at the right values.
As we have noted before, the PRS viability debate is currently one-dimensional. The onus is squarely on the emerging B2L sector to explain:
- the demographic need for rental accommodation (and its relationship to housing need and affordability);
- the benefits of certain types of PRS in different Housing Market Areas;
- how those benefits can be secured and over what timeframe they should be locked in.
Time is on
Timing is crucial – the opportunity for embedding PRS in this way is linked to the evidence base for Local Plans, in particular the Strategic Housing Market Assessments which often fail to fully recognise the demand for new rented stock.
The sector is doing what is can to drive down build and operational costs. Persuading authorities that PRS goes beyond super prime apartment blocks and that meeting the needs of Generation Rent is a worthwhile cause is the next step in the viability process for B2L.