Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by Birmingham City Council (AFH 17)


  As a result of the timing of this Inquiry, when both Planning and Housing Departments both have a number of intensive commitments, such as the review of the Unitary Development Plan (UDP), the review of Regional Planning Guidance for the West Midlands and the production of the annual Housing Investment Programme (HIP) submission, it has been difficult to amalgamate an extensive response. Therefore, the following written evidence is to be considered by the Urban Affairs Sub-Committee with reference to the enclosed relevant documents (or parts of), which are:

    —  current Housing Strategy Statement;

    —  recently completed citywide Birmingham Housing Study;

    —  recently completed City Living Study;

    —  relevant extracts from the current draft of Unitary Development Plan (UDP);

    —  supplementary Planning Guidance on Affordable Housing (SPG);

    —  a copy of the City Council's submission to the Regional Planning Guidance (RPG) Public Examination, which includes the results of a region-wide survey—carried out by the City Council—on the application of affordable housing policies; and

    —  places for living—the City Council's Residential Design Guidelines.


  Birmingham City Council Planning and Housing Departments have worked jointly in producing this written evidence to the DTLR Inquiry into affordable housing.

  Birmingham City Council considers that this is a very important inquiry, and not only to the South East of England where the problems of high demand and ever-increasing house prices are widespread, but also across the rest of the UK, where local markets are often radically different within the same local authority boundary.

  This written evidence follows the format of the inquiry's request for comments on a number of issues, but is preceded by a short section on the strategic direction of Birmingham with regard to affordable housing.


  The Council's UDP adopts the regionally agreed two-part definition of affordable housing as:

    "A: Housing provided by an organisation—such as a registered social landlord or local authority—which is allocated on the basis of need. While such dwellings will normally be made available for rent, they may also include subsidised low-cost home ownership, where a registered social landlord or local authority retains a continuing interest."


    "B: Low-cost market housing, which may help to meet the needs of first-time buyers, single people, the elderly and other low income households, who cannot afford to rent or buy houses generally available on the open market."

  In brief, Birmingham is not considered to have a "wholesale" affordability problem, although the current Housing Strategy does recognise that there are polarised markets within the City boundary. This means that there are pockets of low demand with low house prices (under £50,000), with neighbourhoods close by experiencing surging demand for traditional properties with average house prices in excess of £130,000.

  The Housing Strategy recognises the longstanding problem of out-migration of affluent households from Birmingham to areas such as Worcester, Lichfield and Solihull, and is keen to develop methods of intervention, which encourage them to remain in Birmingham. The issues to be tackled, therefore, are increasing the supply of attractive, aspirational housing for younger middle-income households in the owner occupation sector, whilst also providing adequate is this the right word? "affordable" housing for lower income households in need.

  In the light of recent research conducted on behalf of Birmingham City Council, a series of nine Housing Market Areas (HMAs) have been identified across Birmingham. These are areas within which broadly similar characteristics can be found (eg demand, tenure, weaknesses, function of area, residential stability). Cross-tenure housing strategies are in the process of being developed for each of the nine HMAs.

  When developing strategies at a more local level than local authority boundary, it then becomes apparent that the scale and location of demand for affordable housing should be considered at a more local level to truly understand the nature of the problem where it exists. For instance, whilst it may be correct to say that Birmingham has a ready supply of housing affordable to those on average incomes, the choices available at the lower end of the market may be in areas experiencing declining/low demand, dwellings in poor condition, or obsolete housing types.


4.1  The definition of affordable

  For the definitions used by Birmingham City Council, please see the enclosed references from the Supplementary Planning Guidance on Affordable Housing and Unitary Development Plan documents (which are also stated above). The region-wide definition was developed by the West Midlands Local Government Association to give individual local authorities the scope to define the levels of affordable housing it wished to see on qualifying private sector developments within its area. In the City Council's case these are set at 25 per cent under Part A of the definition and a minimum of 10 per cent under Part B, an approach that has been backed up by the results of the Birmingham Housing Study.

4.2  The scale and location of the demand for affordable housing

  Firstly, the big question, "is there a demand?" must be addressed, but this can only be done with an effective definition of affordability.

  In Birmingham, there is a considerable scale of demand for affordable, driven both by poverty in some areas, but also by high house prices in others. Following the Birmingham Housing Study, the Council has developed—in accordance with government guidance—a long-term housing model, which assesses and projects year-by-year demand for social and affordable housing in Birmingham. This will help the Council to assess, monitor and review as well as respond to demand for affordable housing. Factors affecting the scale and location of demand for affordable housing are varied, and include large scale clearance proposals, social landlord management policies, and the size, design, quality and popularity of new build housing, particularly where social and homeownership are built on the same site, but are distinguishable by sight. Other factors such as interest rates can affect the demand for affordable housing and tenure issues.

4.3  The quality of affordable housing

  Quality is generally believed to be poor, reflecting design and construction methods coupled with years of under-investment. This has resulted in the very poor state of social housing. This exists alongside widespread problems of low demand and stigma. In social housing areas with these problems, the knock-on effect on interspersed and neighbouring private housing areas can be substantial.

  There is a clear need to ensure that social housing reflects twenty first century aspirations and therefore needs to be desirable, in terms of being indistinguishable from owner occupation, and also having good space standards. Ironically, space standards in private housing are often more of a contentious issue, as social housing regulations need not be followed.

4.4  The adequacy of the existing supply and the amount of resources

  It is also important to recognise that quality is more of an issue than quantity. Whilst affordable housing provision may meet the numerical requirement, on a more local level, there are likely to be unmet hidden demands, for example, the need for family housing and "Difficult-to-let" accommodation, which does not meet present-day expectations.

  In terms of the existing supply of affordable housing, it is not only a lack of resources that has led to the inadequacy in the quality of social housing, but also policies such as the Right to Buy which has stripped much of the better quality stock from the social housing sector.

4.5  The extent to which planning gain can fund the level of affordable housing required

  Planning gain should be seen as a top up. In Birmingham, the PPG3 threshold of one hectare is used, and therefore only on larger sites, which form a relatively small proportion of total supply. There are numerous and conflicting demands on section 106 monies and the strength of the property market precludes all of the demands—desirable though they may be—from being met. The City Council's approach in considering planning applications, where the full provision of affordable housing is not being made, is to require an "open-book" assessment by Valuers to assess viability. The current environment, however, seems to suggest that the Housing Corporation may be willing to put grant into section 106 schemes.

  Since 1996 the record in negotiating S106 affordable housing in Birmingham is as follows:
YearUnits secured in negotiations Commuted sums for off-site provision
2001-02 (provisional)56 £912,000

  To give an idea of the contribution, the level of dwelling completions per annum averaged c1,800 dwellings of which about 700 completions per annum were by RSL/Housing Associations.

4.6  How resources should be balanced between social housing and options for owner-occupation for those who cannot afford to buy (including shared ownership), and whether any additional mechanisms are required to bring forward shared ownership-type schemes

  The current balance of resources between rent/sale in Birmingham is 80/20. Options for affordable owner occupation in Birmingham need to be extended to meet the needs of lower income households, especially those who could potentially lose their current homes under redevelopment proposals, and also the needs of middle-income households. In particular, the Council would be keen to see further use of initiatives such as the resale covenant. There may also be a market for shared ownership in the City Centre and the City Council is keen to test this through S106 negotiations.

4.7  Whether targets in Regional Planning Guidance are appropriate

  The Council believes that there should be indicative regional and sub-regional affordable housing targets set out in RPG. This would help ensure that the housing that gets built is more closely related to the needs arising and in the event of significant under-provision of affordable housing compared to the requirement of a strong pointer to the need for government intervention. Possible benefits of having a sub-regional target would be for the relevant authorities to "share" the target. This would be particularly useful in the Birmingham and Black Country sub-region, where certain areas, eg parts of Sandwell, have much greater capacity for new housing than within Birmingham's boundary. This also opens up the possibility of affordable housing needs being provided across boundaries, which must surely be desirable to open up greater flexibility in the labour market. At present residents of social housing are at a serious disadvantage in securing employment outside their "home" district.

4.8  Whether targets on decent and affordable housing will be met by central and local government

  Birmingham is unlikely to meet the Government's decent homes target by 2010 (or the interim 2004 target). Following a negative LSVT ballot result, the issue of the decent homes target has become even more challenging for Birmingham to meet.

4.9  Whether current policies and practices are leading to the creation of mixed communities

  Birmingham City Council's policies are aiming to create mixed communities in the wider theme of sustainability. This is both at a corporate level with the Community Strategy and the Local Neighbourhood Renewal Strategy, but also more specifically within individual Departmental strategies, such as Housing.

  There are some good practice examples of where proactive management on new estates can help to create sustainable communities. However, the design of new estates needs to be at the forefront of any aim to create mixed and balanced communities. Other good examples of where mixed communities have been created through estate redevelopment are in Pype Hayes and Castle Vale, where mixed dwelling type and tenure have been developed following the breaking up of monolithic council estates.

  Whilst policies and practices can assist in the development of mixed communities, market forces work against it. In some cases, the market operates entirely in contradiction, for example where there are a multitude of social and private rented landlords operating in a local area. Market forces also encourage more affluent households to live alongside each other, whilst leaving social housing residents in "ghettos". On individual development sites, this problem is compounded through the segregation of the affordable allocation from the owner occupied section.

  Perhaps mixed communities can only be created where there are real opportunities for change because, in reality, where affluent families continue to move out, polarisation will develop.

4.10  Whether more Greenfield development is needed to meet housing need

  Some Greenfield development is inevitable, but there is also tremendous scope to reverse longstanding trends for decentralisation through more balanced redevelopment following clearance and demolition. The review of RPG in the West Midlands is seeking to increase house building within the Major Urban Areas. This strategy is aimed at tackling decentralisation and it is important that a tight grip is kept on Greenfield developments within and beyond the City's boundary if the aspirations for urban renaissance are to be achieved. Evidence from the success of "City Living" within Birmingham City Centre suggests that the private sector is more than willing to invest within the urban area when there is a clear vision, strong leadership and certainty.

  In seeking to increase housing capacity within the urban area it is very important that very great emphasis is placed on the quality of design. To this end the City Council has recently produced new residential design guidelines (Places for Living) to assist developers. An obvious further point, perhaps, is that the Council resists development on Public Open Space for playing fields and generally considers that relaxation on this point would, in the longer run, work against the achievement of urban renaissance.

4.11  The cost to individuals, businesses and the economy resulting from any shortfall in the provision of decent, affordable housing

  There may well be an impact on the economy of undesirable social housing. A shortfall in the provision of affordable housing can cost individuals in restricting their housing choices and ability to meet their aspirations. This is also the case, most notably in London and the South East, with regard to key workers who cannot afford to freely purchase homes on the open market but arguably need to be close to their place of work. Whilst Birmingham has an abundance of "affordable" housing, local area demand and popularity are key factors. Particularly, in the City Centre, prices are too high for most to afford and this is a specific issue that the City Council intends to pursue through the application of the PPG3 affordable housing policy.

  It is also the case that greater mobility for residents of the social housing sector could help address the needs of business.

  Conversely, certain policies can have an impact on housing. Traditionally, through a neglect of housing issues, economic strategies may create longer journeys to work and disillusionment within local communities. Ultimately, through inadequate provision of aspirational housing within Birmingham, employers may choose to "up-sticks" and relocate to the "shire" districts, where their workforce have been commuting from. Currently, AWM have recognised this as an issue, and are trying to address this through partnership working, particularly in the Regeneration Zones initiative.

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