New new towns

We were immensely proud to win the Planning Law Firm of the Year Award a fortnight ago.  The award recognised both the contribution that we have made to the new legislative and policy framework that within which the next generation of New Towns will come forward, as well as our practical work on emerging new garden communities.

However, even if the foundations for good progress are in place, with public and private sector communities being proposed there are still several big issues that remain unresolved:

  • how do we make sure that proposals which are “best in class” when first proposed and commenced continue to meet those high standards over a decades long build out?
  • how do we encourage development and delivery throughout the economic cycle?  Any decently sized New Town will face two or three recessions as it evolves;
  • how do we make sure that the present and future communities play a full part in the creation of the new place?

The answer to these questions is work in progress and may be different in different places.  Whatever the answers we will all need to avoid the temptation to be too prescriptive.  Good communities will not emerge from within a legal straitjacket.  We need instead to develop a new form of partnership between land owners, developers, public bodies and communities that focuses on collaboration, quality, delivery and participation.  If Dentons can continue to contribute, and can help find a sensible and workable approach, that will be a further reward.

Allotments and their protection

The housing shortage and housing affordability, particularly in the South East of England, is a near-constant media headline. Building on its manifesto pledge, in its Autumn 2017 Budget, the government announced its ambition to deliver 300,000 new homes a year by the mid-2020s. We examine the vital role that allotments play in creating communities of the future.

Read the full article

This article was first published in Property Law Journal (March 2019) and is also available at www.lawjournals.co.uk.

Consenting New Towns

Development Consent Orders are a great way to draw together the consents necessary for a piece of infrastructure.   As the locally led garden towns movement grows there are siren calls to use the DCO process to help deliver some of the housing that is needed. Could a DCO could be used for a new town or major urban extension?

Building a windfarm and creating a community are very different. Any new town worth its salt will evolve over time – both during initial development and beyond. Having the ability to evolve is crucial.  What we imagine now as the community of the future is, almost inevitably, wrong. People will live differently. They will travel differently.  Education will be delivered differently. Health and well-being will be part of daily life, to prevent the cost of medicine and elderly care becoming a national millstone.  Shopping will have undergone several revolutions. The nature of jobs, and the balance between jobs, homes and social life will probably be unrecognisable. New communities will also need be actively curated. Success will depend as much on the relationships that are created as upon the bricks and mortar. The built form of all communities will have to change, and adapt over time, to reflect these processes.

The present breed of DCOs is probably ill-suited to this type of long-term social engineering. At the moment they suffer from inflexibility.  They work well where the proposal is clear, neat, tidy and fixed – like a windfarm.  New towns are not so neat and tidy.  DCOs to date have also largely been governance free exercises – aside from a few controls on “reserved matters” and security for CPO compensation.  Delivering new towns will need the active participation of the public and private sector, as well as both existing and future communities. It will need both active and passive governance. None of this has been addressed, so far, in the DCO process.

One of the hardest lessons for those delivering new towns is that they are, and should be changeable, iterative, complicated, exercises in trial and error, buffeted by markets, politics and people. There will be many different ways to deliver them, from private sector schemes going through the traditional planning process with negotiated long term quality partnerships through to development corporations, both nationally and locally led. And there will be numerous variants in between.  A common factor to all will be the need to facilitate and encourage change.   We need to ensure that the benefits of variety and the capacity to evolve is not straitjacketed by the using DCOs if they remain as rigid as they are at present.  Remember that the sirens called ships to ruin on their rocks.

Muscular Authority

A late amendment to the Neighbourhood Planning Act 2017 amended the New Towns Act 1981 to allow locally led new towns to be designated and for development corporations to be set up to deliver them. Kept to a single section, the 2017 legislation needed regulations to put flesh on the bones. The regulations arrived yesterday. They are supported by guidance that sets out when the Secretary of State will be willing to designate a locally led new town.

In very broad terms if a local authority wants to promote a new town then it will normally do so through a local plan process, securing an allocation. A request will then be made to the Secretary of State who, after consultation, will consider whether it is in the national interest for a new town to be designated. He will need to be persuaded about issues of community participation, deliverability, potential alternative delivery vehicles, and the adequacy of controls on design, sustainability and stewardship. If the application is successful then the Secretary of State will appoint the local authority or authorities as an oversight authority whose primary responsibility will be to control the designated development corporation and make sure that it delivers a high quality sustainable community with proper stewardship arrangements.

The development corporation will promote masterplans and Local Development Orders, both approved by the oversight authority, that set the planning framework. It will have CPO powers, to be confirmed by the Secretary of State, to acquire land within the new town area. The board of the development corporation has to be majority non local authority members. The emphasis, as with the old generation of new towns, is on delivery, this time however with an additional statutory focus on community participation and stewardship.

There has been a long campaign to update the 1981 Act to make it fit for purpose. The government has done a large part of the necessary work, and local authorities now have a powerful new mechanism to help deliver, and control, large scale development. There are some interesting future challenges and opportunities. How will future development corporations work alongside landowners and developers?  How will Local Development Orders be framed to secure consent for a masterplan in a way that can be properly environmentally assessed?  What approach will be taken to CPOs, where development corporations may want the security of early ownership of the entire new town area from the outset? An anticipated update to MHCLG guidance on CPOs may address this latter point.

The government has moved quickly and efficiently to put new powers in place. Local authorities now need to rise to the challenge.

Note: Dentons are advising the North Essex authorities who are promoting three new garden communities through their local plans, and are considering the possibility of a locally led new town development corporation as a delivery vehicle.

The new New Towns Revolution

In May we wrote about Lord Matthew Taylor’s clause in what became the Neighbourhood Planning Act 2017 introducing provision for locally led new towns. The clause provided a skeleton framework.

Flesh is now being put on the bones. Draft regulations have been published by DCLG setting out the way in which local authorities will step into the place of the Secretary of State and oversee locally led new towns. With the exception of the power to confirm CPOs, local authorities will be responsible for guiding and monitoring the new New Towns.

Building on the experience of the old New Towns, local authorities will be required, from the outset, to plan for the long term stewardship of the assets of the new town for the benefit of the community. As described in the consultation paper this should ensure that the powers are used to create places “that are sustainable for the long term, with the resources to reinvest both in the renewal of the physical place and support a thriving and diverse community“.

The only false note in the draft regulations is a requirement for Treasury consent if the outstanding borrowing of a development corporation is in excess of £100 million. Almost any genuine new town will, at least potentially, need more debt than £100 million. The “risk” that the Treasury may refuse consent or impose conditions on it makes it far less likely that the development corporation model will be used. Having committed capital to acquire the land and provide infrastructure, no sensible local authority would want to take the risk of not being able to complete the development and secure a return on that investment.

Since the Chancellor explicitly endorsed the idea of five new towns, without financial recourse to the Treasury, it is assumed that this “hangover” from the old New Towns will be lifted.

Planning and the General Election: keys to long term success

With the General Election drawing ever closer, planning forms the battleground for a several controversial issues close to voters’ hearts, such as fracking and safeguarding the greenbelt. In particular, persistent difficulties in delivering new housing and infrastructure unite the parties in a common cause. More homes are needed, quickly, together with greater certainty around delivery of supporting infrastructure.

The extent to which the next Government succeeds in solving these problems will be determined by its appetite to grapple with a host of underlying difficulties. These include devising an effective model for land value capture, making the CPO process fit for purpose and addressing the chronic shortfall in local authority resourcing.

Despite obvious distractions elsewhere during this campaign, housing delivery still sits atop the planning agenda, with the manifestos all setting targets and the broad route needed to reach them. The Conservatives will point to steps already taken along this long and winding road – most recently through the Neighbourhood Planning Act 2017 and its predecessor the Housing and Planning Act 2016. Similarly, the Housing White Paper affords us the rare luxury of a detailed annex to the aspirations commonly found in (deliberately) loosely drafted manifesto commitments. Whilst less “radical” than badged, it establishes a framework of policy changes aimed at speeding up housing delivery, through measures such as diversifying the market, getting local plans in place and holding the public and private sectors to account for delivery.

Housing delivery at scale is recognised as being paramount. This requires a commitment to supporting the growth of new towns and garden communities – where the worlds of housing and infrastructure collide most spectacularly. The Liberal Democrats propose at least 10 new garden communities whilst Labour also underline the need to start on a “new generation” of new towns. The current system already supports that drive with the introduction of a potentially significant power in the Neighbourhood Planning Act 2017 allowing Regulations to facilitate the designation of areas as new towns and for development corporations to be established.

Whichever party emerges victorious on 8th June, there is a sense that the keys to long-term success are not entirely in their hands. We are witnessing a shift in emphasis towards the increased role of the public sector as an enabler of development. The extent to which they are willing and able to embrace that role will go a long way towards determining whether the same issues – and proposed fixes – will remain on the planning agenda in 2022.

The new New Towns Agenda

The third reading of any Bill in the House of Lords is normally fantastically dull. That was not true of what is now the Neighbourhood Planning Act 2017. Lord Mathew Taylor introduced a new and apparently innocuous clause that allows a completely new and parallel way of bringing new towns forward. It authorises the rewriting of the existing new town legislation, by regulation, to allow local authorities, or groups of local authorities, to ask the Secretary of State to designate an area as a new town and for a development corporation to be set up.

If agreed by the Secretary of State, then the local authorities will, effectively, step into the role that the Secretary of State occupied in the old new towns. They will control the way in which their new town development corporation is governed, operates and delivers new communities.  They will be accountable for successes.  They will be responsible for failures. Some powers will, inevitably, be retained by the Secretary of State, at least in the short term – the power to confirm CPOs and to authorise Local Development Orders. In time, with true devolution, even these powers could be left to the parent authority.

What will this mean? Many authorities are already exploring the possibility of new towns and particularly garden communities. One of the real difficulties is educating landowners that the cost of developing the necessary community and social infrastructure up front is significant, and that the legacy costs of stewardship will eat into land values, as much as if not more than the traditional enabling costs. This means that the normal landowner model of a minimum land value + a share of net proceeds or overage does not really work.  There is also a need to ensure that all land is bound into the same broad vision and programme. If that is not the case then the allocation of costs can be unfair.  The first phases will have to bear significant infrastructure costs that then increase the value of the land in later phases. If the later phases choose to develop independently then it may be problematic making sure that they bear their fair share of the initial place-making investment. A development corporation model helps to solve this. It allows early and extensive acquisition. It also ensures that the underlying “scheme”, the new town, is more completely disregarded for valuation purposes.

In practice, development corporations should rarely be necessary. Local authorities already hold most of the appropriate powers. However, the use of, or the threat of the use of, a development corporation may well be a helpful bargaining tool. It should allow local authorities to reach agreements with reluctant landowners. It should ensure that all parties contribute and benefit equally. It should be a weapon of last resort.

Autumn Statement: mood music?

In the absence of the Housing White Paper, the industry is still left needing to mind the gap.  We have simplified budgets – abolishing the Autumn Statement – but no hint of simplified planning for growth.

The overall commitment to housing is welcome mood music, but the lack of detail on powers and fiscal incentives to support locally-led Garden Towns to deliver at the scale needed leaves a hole.  Expanding grant funding for affordable tenures is great news but at £25,000 per unit is not going to be life changing.

hamThe £2.3bn Housing Infrastructure Fund could be a game changer if it is used to reward areas for proactively planning for growth. Making an up to date housing land supply a condition for at least some of the funding would dangle the right carrot for authorities that currently only have the stick. The lack of fiscal measures for new settlements – incentivising forward funding of major infrastructure that can unlock delivery at real scale – is disappointing though.

Affordable Housing is heading towards life support – delivery in 2015-16 was 52% lower than last year.  The announcement in the Autumn Statement of a funding injection to deliver 40,000 affordable homes is welcome. It is a clear recognition that addressing the housing shortage is not simply about building more homes.  Yes, we need more but they must meet a variety of needs. There are further signals of a softening of the Government’s stance on Starter Homes – tenure flexibility replacing David Cameron’s commitment to a single tenure.

Without the Housing White Paper, there is also still a wait to see how the NPPF is going to be reshaped and in particular how housing land supply and Local Plan duties will be re-set following expert advice on accelerating delivery. If the Community Infrastructure Levy is to be replaced by a simplified flat national charge, the effect on infrastructure funding and the transitional arrangements need to be understood now, so that schemes in the pipeline do not get put into suspended animation.

The statement gives some clues about the Government’s direction of travel but, funding commitments aside, offers little substance.  We still await the detail in the Housing White Paper which we are told will be published “soon”.  Reasons for the delay are unclear. Have responses to leaks on more radical measures, such as penalising developers for slow delivery, prompted a re-think?

MIPIM 2014: London Calling for more homes

IMG-20140312-00029This year’s MIPIM is upbeat and dominated by an industry intent on making the most of intense demand for homes and increasing demand for commercial space in London.

Sir Edward Lister, the Mayor’s Chief of Staff and Deputy Mayor (Policy and Planning), emphasised that the Mayor will leave no sites out in order to deliver the 49,000 new homes confirmed as needed in the recent London Plan Further Alterations.

Speaking at the annual Dentons – London First Lunch, Sir Lister called for the development sector to ‘double up’ its current housing production. He also stressed that the Mayor is willing to explore all options to bring forward stagnant sites and new communities, including through the use of compulsory purchase powers.

Sir Lister highlighted the role of transport investment, infrastructure tariffs and TIF-style forward funding to bring forward new opportunity areas such as Old Oak Common.

The Nine Elms Battersea Vauxhall Opportunity Area would be the model, he said. He agreed with our suggestion that flexible plan policies and a board of owners and key investors would be key to making other areas as successful as the VNEB. Dentons has been recognised as a “stand out winner” among the law firms advising in the VNEB Opportunity Area. We have helped secure consents for the 4 of the largest 25 VNEB schemes approved since 2007 – Vauxhall Sky Gardens (Frasers), Vauxhall Square (CLS/ Vauxhall Square Limited), Sainsbury’s Wandsworth Road (Northern Line Extension Works Act Order) and Hampton House.  We are also working on the £2bn New Covent Garden Market regeneration scheme.  Together, these account for around 30% of the 16,000 homes envisaged within the VNEB area.

With institutional investors now seriously interested in residential and infrastructure there is a real prospect of achieving these goals.

A long hard look will be needed to ensure that the CIL regime is up to the job, since it will largely replace the S106 tariffs that have worked well at Nine Elms.  Even after recent reforms, it is a dysfunctional system not fit for purpose in relation to large scale and complex development.

Stephen Ashworth also stressed the need to look wider than London at new settlement opportunities that can both provide for London’s needs and begin to balance growth. Realism is needed on the green belt, he said.

We continue to be involved in the most complex new settlements – at Harlow North, Alconbury Weald and New Covent Garden Market – and are working with the TCPA on their New Towns Act proposals.

New Towns Act 2015?

Dentons sponsored the TCPA to produce a new version of the New Towns Act, updated to make it fit to deliver the cities that we need today.  Why is it relevant?  Because we have all talked about increasing the delivery of housing and found it difficult to achieve in the present planning system.  And because the legislation is already available to deliver several new towns like Milton Keynes if there is the courage to do so.  This could be done quickly, and we would all benefit.

One benefit of a new Act would be to force the present cross-party rhetorical commitment to new homes into legislative form.  It would allow the law to be modernised.  It can bring in duties in relation to good design, sustainable development and dealing with climate change.  Importantly, it could also start to bring back to life the real vision that lay behind the original 1946 Act – of creating better places for people to live and work.  We should seize the opportunity to do so.