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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.

Bar still rising for EIA challenges

There has been a steady flow of cases winding back the scope for legal challenges on the grounds of defective Environmental Impact Assessment (EIA).  The recent judgment in R (Bishop’s Stortford Civic Federation) v East Hertfordshire District Council [2014] EWHC 348 Admin is the latest.

The case concerned Henderson’s £105m retail and residential proposals for local authority land at Bishop Stortford.  The Civic Federation challenged the grant of permission on several grounds, including that the development control committee’s August 2011 approval was improperly influenced by the speech of a executive member responsible for the council’s finances, who had been instrumental in negotiating a confidential deal with Henderson.  The Court rejected the claim that his intervention made it impossible for the committee to ignore the council’s vested financial interest in the development and take a decision based on purely planning grounds. The judge notably ‘deplored’ the forensic analysis of the political debate relied on by the claimants, which risked undermining the democratic process.

The claim also related to updated EIA material submitted by Henderson but not publicised by the Council. The Environmental Statement (ES) included a substantial planning policy section and the applicant felt that it was necessary to submit a policy addendum to address the changes arising from final publication of the NPPF.  The EIA Regulations require substantive updates to an ES to be publicised (either as ‘further information’ – requested by the planning authority – or ‘other information’ – submitted voluntarily). This did not happen and the objectors sought a quashing order on the basis of a technical breach.

The court held that the submission of an ES Addendum because of the adoption of the redevelopmentNPPF did not trigger the requirement because it was not substantive information.

Importantly, the judge also held that, even if there had been a breach of the EIA Regulations, he would have exercised the discretion not to quash the permission given the technical nature of the breach and the lack of significant prejudice to the claimant. Although not part of the formal judgment, this confirms the willingness of the High Court to move away from the more restricted position adopted since Berkeley v Secretary of State for the Environment (No.1) [2001] on the availability of the discretion where there are breaches of EIA requirements, towards the more flexible position put forward by Lord Carnwarth in the Supreme Court judgment in Walton v The Scottish Ministers [2012] UKSC 44.

As well as highlighting the need to limit legalistic nit-picking over what is said during planning committee debates (in contrast to the specific resolutions resulting), the case also highlights the level of unnecessary policy information now routinely included in ES work and the potential dangers of doing so where updates then become necessary, which themselves become an issue requiring further publicity. It also underlines a judicial reluctance to grant a remedy for technical ES defects where in the real world they cause no harm.

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.

The Planning Chamber

Yesterday the Government published its response to its Autumn consultation on the reform of Judicial Review.  Following last year’s reforms, the  response affirms the Government’s intention to continue to reduce the role judicial review can play in delaying and/or frustrating development.

The response confirms:

  1. a new specialist Planning Chamber is to be set up, but within the High Court rather than the Upper Tribunal (as previously proposed);
  2. a new permission filter will be introduced to S.288 appeals in order to weed out weak claims early on;
  3. a new threshold will be set which allows the court to refuse to grant leave or relief where the outcome for the claimant is unlikely to have been substantially different from that complained of;
  4. no proposals will be introduced to restrict “standing”;
  5. cost capping and tighter rules are being introduced for the use of Protective Cost Measures, but this will not extend to proceedings relating to environmental cases;
  6. measures be put in places to allow costs to be awarded more regularly against claimants following  refusal of permission at oral hearings; and
  7. the ability to “leapfrog” cases straight to the Supreme Court will be less restricted.

Some of these measures have already found their way into the Criminal Justice and Courts Bill.  It is expected that changes to the Civil Procedure Rules will be introduced to deal with the operation of the Planning Chamber.  It will be interesting to see if the reforms have a genuine impact both in deterring third parties from lodging judicial proceedings.  The key issue is to ensure that the Planning Chamber is properly resourced so that any delays are kept to a minimum.  That will always be far more important than the other measures.

Market restrictions

housing-bubbleForeign investment is being blamed for contributing towards a “housing bubble” in London.  I was asked, while speaking at a conference last week, whether the planning system could be used to dampen the ardour of foreign buyers inflating the value of London’s property market by restricting the sale of new market units to UK residents.

Aside from the fact that we have laws which seek to police and prevent discrimination  (of which such a restriction would normally fall foul), this is not an inherent UK “problem” but rather a London-centric one.  How well does this sit with the active promotion of the UK by the Government for foreign investment?

If local authorities are intent on introducing a restriction, there will need to be justifiable and evidenced planning reasons for doing so, ideally enshrined in a local policy.  The policy will have to be justified, for example, on the basis that the local housing market is not meeting the needs of local residents.  Possible means of addressing this may be to require new development to be marketed locally for a prescribed period, or, more restrictively, require a certain percentage of units to only be made available (both of first sale and re-sale) to local residents but with cascade provisions allowing others with local connections to buy units if there is not enough local interest.  However, I question how easy such a restriction would be to monitor and control.

The fact is that foreign investment in residential property, even if largely within London for the time being, provides wider regenerative benefits for the UK as a whole in contributing to economic growth via the creation of new jobs, new homes and infrastructure. Is this not what good planning should achieve?  Whilst the UK is still coping with the effects of austerity, any investment, whether national or international, should be welcomed unless there is a very clear harm which can be “planned away”.

As Lord Rogers recently noted there is a separate issue about houses being bought but not occupied.  Care is needed not to confuse the two points.

The first or last hurrah?

Hurrah

An appeal asking for a change to affordable housing requirements has finally been refused.  Until now applications have been approved at local level and all appeals have been allowed.  A sense of balance needed to be restored, if only to re-emphasise that there remains a strong policy justification for affordable housing, and for mixed and balanced communities.

The scheme was an outline proposal in Cornwall for 14 houses, 4 of which were affordable.  The appeal was initially supported by a viability appraisal in which there were acknowledged errors.  A new appraisal was produced at the hearing.  The appraisal was based on an illustrative scheme and there was no evidence about the costs of alternative designs that might deliver 10 market homes and 4 affordable homes.  There was also an issue about the land price that should be taken into account, mainly about whether the appellants’ expectation of a notional 2011 value should be used or whether the County’s evidence of present day market values should be preferred.  The Inspector did not address the land value issue but concluded that it was impossible to conclude in the absence of a detailed scheme that a proposal with affordable housing would not be viable.

The decision is a useful reminder that the provisions in the G&IA are not just an open door.  On an outline scheme there is clearly an ability to redesign and refine the proposals to make it more viable.  However, this does rather beg a question.  If it is sensible to consider other options on a site where there is an outline consent, then surely it is sensible that there should also be some consideration of whether a different and viable scheme could be brought forward on all appeals?

Shale blockade will fail

We noted in our January fracking update (2014 – Year of shale for planners) that activist owners and interest groups are looking for ways to use the law of trespass to defeat shale gas exploration.  We also highlighted the likelihood that Celtique Energy’s conventional drilling proposals at Fernhurst would become a test bed for the use of statutory access rights under the Petroleum Act 1998.

Legal blockade

Lord Cowdray and others have now written to Celtique claiming to have established a ‘legalshale blockade’ around its drill site, by denying permission for subterranean drilling. Their lawyers describe it as “totally surrounded”, making fracking “impossible”.  Whilst it strengthens the short-term case for an injunction (albeit that Celtique have not sought permission for fracking), its genuine benefit is unclear.  Section 7 of the Petroleum Act allows holders of Petroleum Exploration and Development Licences (PEDLs) – like Celtique – to obtain rights needed to implement the PEDL.

These ancillary rights include surface and subterranean wayleaves as well as abstraction, drainage and construction rights.  Applications are made to the Department of Energy & Climate Change in the first instance and following its approval are dealt with by the High Court.  Unusually, the High Court deals the qualifying criteria and the compensation due where they are met. One criterion relates to efforts to negotiate with owners – and it is satisfied where they unreasonably refuse to grant rights or demand unreasonable terms.

Making life easier?

The Fernhurst owners’ “legal block” letter is intended to frustrate the purpose of the statutory PEDL regime – exploitation of domestic petroleum reserves.  As such, the letter arguably makes Celtique’s life easier, by establishing a strong case for the grant of compulsory wayleaves without the need to undertake long-winded negotiations with the owners.

Trespass changes

The Government is now looking at changing the law of trespass to reduce the scope for such disputes.  Given the existence of statutory rights for PEDL holders, it would be more transparent if they simply focussed on expediting the court process as and when needed. That has been the ultimate conclusion on Judicial Review of planning permissions.

Application credentials

A resident is also challenging the planning authority’s ability to continue to determine the Fernurst application (which does not seek approval for hydraulic fracturing), on the basis that the ownership certificates submitted with it were wrong. Applicants should be wary of submitting applications with defects in the ownership notices.

Ministry of relief

Lawyers generally hate unique solutions. No-one wants to be at the bleeding edge.

But there are some planning issues that now demand legal innovation. Cities are evolving at a great pace. More people are moving into areas that were traditionally business and leisure locations. And this is creating tensions between neighbours.

Eileen_HousePlanning has always taken a pretty laissez faire attitude to these potential battles. It is taken as a self evident truth that there is no right to a view. It gives little weight to the disruption caused by building projects. It rarely refuses consent because of the existing noise environment, despite the risk that new residents might complain.  This then jeopardises the businesses who create noise and activity. As new residents move in they complain. Even though the noise levels were acceptable for planning purposes they can still be a nuisance and lead to existing businesses being shut down.

In any sensible regime the grant of planning consent would set a higher threshold before granting consent and the grant of consent would then provide protection for existing uses — after all, new residents have moved to the problem. Unhappily in the real world this does not happen; hence the need for a unique solution.

MoSlogoThe Ministry of Sound nightclub at the Elephant & Castle is the type of use that provides character in an area. When faced with a new residential development opposite the club, Ministry was understandably concerned that the development would lead to future complaints that would inhibit their operations. Acting for the developer we agreed to grant an easement to Ministry to allow them the legal right for noise to pass through the development site.  Anyone moving into the new scheme will be aware that they have accepted certain noise levels. If they still make complaints then the local authority will be aware that the resident has already “given up” their rights and that should then influence their response to the complaint.

This is the first occasion that we know of that the mechanism has been used. Hopefully that will give others the confidence to offer the same protection and help to preserve the variety and vibrancy that makes our urban areas attractive places to live.

Stopped up

This is a cheat repeal. 

We should abolish the right for statutory undertakers to object to stopping up orders.  CLG has done some good work, following the Penfold Review, to allow applications for planning permission and for orders to stop up highways to run in parallel.  That has cut much delay from the delivery of development, but still leaves a significant risk.

signStatutory undertakers object automatically to most proposed stopping up orders.  The behaviour seems almost automatic.  Often a developer can be talking to one department about the diversion of cables but those responsible for dealing with the draft order still object.  That causes delay.  It also imposes costs, not least as new easements are negotiated (to the extent that anything can ever be negotiated with someone with an effective ransom power).

So why not just remove the power?  Utilities already have protection.  They have a right to retain their equipment.  The equipment cannot be interfered with without consent.  If consent is needed then there will, genuinely, need to be a negotiation but not otherwise.

A repeal of the right to object would cut months off the time required for securing orders.  Why not?

Resisting the duty to co-operate

Joined up thinking and co-operation within, and between, local authorities is integral to successfully delivering new development.  It makes for effective decision making and engenders greater confidence in the planning system.  Those Councils which view the “duty to co-operate” as an alien concept, have been given short shrift by the Planning Inspectorate, being sent back to the drawing board on their Local Plans where there has been a failure to engage and told to play nicely with their neighbours.  It is a culture change which is welcomed and should encourage Councils to take ownership of decisions.

A recent decision of the Local Government Ombudsman is testament to the step-change needed to the internal workings of some local authorities.  The case concerned a complaint by Mr X to the Ombudsman following a refusal of his application to the Council’s highway department to construct vehicle crossovers from the highway, across a grass verge, to his driveway.  Mr X had already obtained planning permission for the crossovers on appeal (following the Council, as local planning authority, refusing his application.)  The Council’s highway department refused Mr X’s application on exactly the same grounds as the refusal of the planning application, failing to acknowledge the planning inspector’s reasons for granting planning permission and rigidly adhering to the Council’s policy that “it will refuse” any crossovers 3 metres or more in width.  The decision highlights a dogmatic determination by Council officers (in two separate departments) to ignore the merits of individual applications, even in the context of the application of the policy by an independent third party which resulted in planning permission being issued.

The Ombudsman investigator rightly concluded that there had been maladministration in how the Council had dealt with Mr X’s application.  However, the more interesting part of the decision is the veiled criticism of the failure of the planning and highway departments to coordinate with each other in making the decision and, more importantly, make a decision which was inconsistent with the decision to grant planning permission.  The principle is found in the choice quote from R v Warwickshire County Council Ex parte Powergen Plc:

“Is it reasonable for a highway authority, whose road safety objections have been fully heard and rejected on appeal, then quite inconsistently with the Inspector’s own factual judgement on this issue, nevertheless maintain its own original view?  To my mind there can be but one answer to that question: a categoric no.”

"Let’s hope this decision, and others like it, means those few local authorities who are resistant to co-operation in any form, take warning that the “computer says no” attitude is outdated and has no place in the modern planning era.