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2. Identification of housing requirements
Introduction
16. The assessment of future housing requirements forms the basis of local authority housing strategies and housing allocations in development plans. Under proposals in Firm Foundations and the Strategic Housing Need and Market Assessment guidance, local authority planning and housing services will be required to work closely together, and with other council departments and a range of public and private stakeholders, to identify housing requirements. Taking account of need and demand, authorities should prepare a local housing strategy, which includes housing supply targets across all sectors, and provide a supply of land suitable and available for building the required number and type of new houses through the development plan.
17. Figure 1 outlines the process which should be followed from the assessment of the housing requirement through to the preparation of the development plan, including allocation of sites and the setting of policy guidance, and including monitoring of the implementation of the plan and the housing land supply. The core elements of this process - preparation of Strategic Housing Need and Market Assessments, Local Housing Strategies and Development Plans - are not each viewed as end products, but as complementary workstreams. These documents should be aligned to more effectively achieve the aim of delivering new homes in the right places.
18. These documents should also be consistent and compatible with other Scottish Government and local authority strategies including the Community Plan.
Figure 1: Identification of housing requirements
Assessment of Housing Requirements
Housing Market Areas
19. A housing market area ( HMA) is a geographical area where the demand for housing is relatively self-contained, i.e. where a large percentage of the people moving house or settling within the area have sought a dwelling only within that area. Planning authorities should define the housing market areas to be used in determining housing requirements. Practical advice and guidance on appropriate methodologies for defining and reviewing housing market areas is provided in chapter four of Local Housing System Analysis Good Practice Guidance. 4
20. Housing market areas may significantly overlap and will rarely coincide with local authority boundaries. Around larger housing markets, an element of "mobile demand" may overlie more specific requirements focused on a number of more local HMAs. The resultant housing market requirement should always be allocated in development plans relating to individual local authority areas. Housing market areas are dynamic and complex and they can be influenced by various factors, including improvements in infrastructure and investment in localities. Local authorities should monitor and take account of any changes to the HMA in each review of the assessment of housing requirements.
Housing market areas represent a geographical area which is relatively self contained in terms of housing demand i.e. a large percentage of the people moving home or settling in the area will have sought a dwelling only in that area.
See publications menu at www.communitiesscotland.gov.ukfor online guidance on Local Housing Systems Analysis.
Strategic Housing Need and Market Assessment
21. The Scottish Government has introduced Strategic Housing Need and Market Assessment ( SHNMA) guidance to ensure greater consistency and a more robust approach to the assessment of housing requirements across all tenures, incorporating a quality assurance process. Local authorities should move towards adopting the guidance as the basis for identifying future housing need and demand at housing market area, local authority and, where appropriate, sub-local authority levels.
22. Whilst it is recognised that there are established practices which work well in some parts of the country, local authorities should adopt a Housing Market Partnership approach to undertaking all housing and planning related work including a SHNMA. A Housing Market Partnership should involve adjoining authorities working together where functional housing market areas cross local authority boundaries. In relation to Strategic Development Plan Authority areas the Housing Market Partnership would be expected to involve the constituent local authorities, and adjacent authorities within the same housing market area. Partnerships should consider how best to engage with relevant stakeholders such as housing associations and developers as appropriate.
23. Undertaking a SHNMA should take clear account of the relevant components of the housing requirements in an area, and provide an evidence-based, robust assessment which should reduce time spent considering the merits of different methodologies. More consistent assessments of the housing requirement across Scotland are likely to assist in meeting the Scottish Government's desire to see the provision of significantly more new housing than has been the case recently. An increased supply of land where this is required should assist the continued delivery of housing even when there are delays in building on a particular site.
24. Annex A summarises the principles of the SHNMA approach and provides the link to the full guidance.
Q3: Do you agree it is desirable to achieve a more robust and consistent approach to the assessment of housing need and demand? Does the approach set out in chapter two provide an appropriate mechanism for this?
Local housing strategies
25. The Housing (Scotland) Act 2001 requires local authorities to undertake an assessment of housing needs and conditions in their areas and to produce a local housing strategy ( LHS). The LHS should view the housing system as a whole, deal with the requirement for housing of all tenures and everyone in the community, including affordable housing, and be based on the outcomes of the SHNMA. It should set out how the identified needs of an area could be met. The LHS is expected to be a comprehensive strategy covering a five-year period, prepared in conjunction with a range of local authority departments and involving registered social landlords, other housing providers and the local community.
26. In Firm Foundations The Scottish Government has proposed that local authorities should co-operate regionally in setting realistic housing targets for housing market areas, and in enabling the delivery of these targets. The LHS should include housing supply targets covering all tenures, drawing on the evidence base of a SHNMA. Forthcoming separate guidance will provide advice for local authorities on the preparation of the next round of LHS.
27. A pragmatic approach should be taken where local authorities have commenced or recently completed housing need/demand assessments at the time this SPP comes into force. In such cases local authorities should use the best existing evidence to inform their local housing strategies.
National Standards for Community Engagement were published by Communities Scotland in 2005. These are measurable performance statements which can be used by everyone involved in community engagement to improve the quality and process of the engagement. They set out key principles, behaviours and practical measures that underpin effective engagement.http://www.communitiesscotland.gov.uk/stellent/groups/public/documents/webpages/otcs_008411.pdf
See publications menu atwww.communitiesscotland.gov.ukfor online guidance on LHS.
Mixed communities
28. Scottish Government policy encourages more diverse, attractive and mixed residential communities, in terms of both tenure and land use. A range of housing types is needed to create mixed communities which provide for the whole community and all segments of the market, from affordable housing and starter homes to executive housing, as well as homes for families, older people and people with particular housing needs.
29. Housing should be designed to meet the needs of the whole community. This includes flexible living space which can be adapted as households' needs change, storage capacity and access to outdoor space. In the past, much family accommodation in cities was in flats. There is a perception of increasing demand from families for lower density housing with gardens; however new forms of urban, high density living, whether flats or houses, may be appropriate for families and households without children.
Affordable housing
30. Affordable housing is defined broadly as housing of a reasonable quality that is affordable to people on modest incomes. In some places the market can meet all or most affordable housing needs, but elsewhere it is necessary to make housing available at a cost below market value to meet identified needs. Affordable housing may be in the form of:
- social rented accommodation;
- mid-market rented accommodation;
- shared ownership;
- shared equity;
- discounted low cost housing for sale, including plots for self-build; and
- housing without subsidy.
PAN74: Affordable Housing (2005) gives detailed guidance on the provision of affordable housing. Firm Foundations sets out proposals for encouraging more subsidised housing for mid-market rented accommodation.
31. The local housing strategy will indicate the nature of the affordable housing requirement which has been established by drawing on the evidence provided by the SHNMA, and should provide input to the development plan, which will set out how that requirement will be met. Paragraphs 78 - 81 of this SPP set out The Scottish Government's policy on Affordable Housing and how this should be addressed in development plans.
Gypsies and Travellers
32. Where there is an identified need for appropriate accommodation for Gypsies and Travellers, this will be set out in the LHS. Planning authorities should identify suitable locations for Gypsy and Travellers' sites and set out policies for dealing with planning applications for small privately-owned sites.
Gypsy and Traveller Accommodation Needs Assessments (London: Department of Communities and Local Government, 2007) (available athttp://www.communities.gov.uk/publications/housing/accommodationassessments). This replaces the previous Guidance Notes on Site Provision for Travelling People, Advisory Committee on Scotland's Travelling People, 1997.
HMOs
33. There is an increasing demand for HMO accommodation, not just from traditional sources such as students, but from migrant workers and young professionals. Much HMO accommodation is in existing buildings, and, unless planning permission is required for a change of use, will generally be a licensing issue. Planning authorities should consider the requirement for HMO accommodation to help ensure an appropriate supply of HMO property can be provided. Purpose-built HMO accommodation can help to reduce pressure on the use of existing dwellings, and should be considered. Further guidance on how the planning system can help manage HMOs is given at Annex B.
Meeting the housing requirement in the Development Plan
34. The provision of land for housing is a key component of the development plan. The delivery of housing through the development plan depends on sustainable, effective sites being available to meet need and demand. Taking account of the scale and nature of the identified housing requirements, planning authorities should allocate a generous supply of land for housing on a range of sites within each housing market area. These should provide sufficient flexibility to enable the continued delivery of new housing in response to inevitable but unpredictable changes to the effective land supply which will occur during the life of the plan. The broader objective of development plans, in relation to housing, is the creation of sustainable mixed communities, quality residential environments and the construction of quality dwellings in the right places.
35. This section considers those factors which are relevant to the identification of the amount of land necessary to allow the construction of new housing to meet the identified requirements. Firstly it sets out relevant background to changes to the development plan system in Scotland.
The development plan system
36. At the time of publication the planning system in Scotland is entering a period of transition as progress continues towards the full commencement of the Planning etc. (Scotland) Act 2006. This SPP will remain relevant throughout this process. This section provides guidance for the preparation of development plan policies and proposals for housing under both the current and proposed systems.
37. It is unlikely that many new full structure plans will be prepared under the old arrangements; therefore the term 'strategic plan' is used to refer to those plans which provide strategic guidance on housing land, i.e. structure plans under the Town and Country Planning (Scotland) Act 1997 (the 1997 Act) and strategic development plans and local development plans outwith Strategic Development Plan Authority areas under the Planning etc. (Scotland) Act 2006 (the 2006 Act). Specific references to 'local plans' should be taken to refer to both local plans under the 1997 Act and local development plans under the 2006 Act. The term 'development plan' refers to all plans.
- The Town and Country Planning (Scotland) Act 1997
38. Under the 1997 Act the two-tier system of development planning comprises structure plans and local plans. The housing land requirement to be met over the plan period is set out in structure plans, and specific sites for housing development to meet that figure are identified in local plans. Local plans also contain detailed planning policies relating to housing.
- The Planning etc (Scotland) Act 2006
39. The 2006 Act introduces a new development plan system based on each local authority preparing a local development plan. In addition, there are four proposed strategic development plan authorities ( SDPA) around Aberdeen, Dundee, Edinburgh and Glasgow which would involve a number of local authorities working together to prepare a strategic development plan ( SDP). Strategic development plans and local development plans ( LDP) outwith SDPA areas will contain a vision statement of how the development of the area should occur. The housing land requirement would be expressed in the SDP or in the LDP as appropriate.
40. The reform of the planning system reinforces the primacy of the development plan, requiring that planning decisions be made in accordance with the development plan unless material considerations indicate otherwise. This will ensure that development takes place in the context of a long-term and inclusive vision for the future. Planning is also required to contribute to sustainable development, and planning authorities are required to prepare development plans with the objective of contributing to sustainable development. Key agencies have a duty to work with local authorities in the preparation of strategic and local development plans. Development plans will also be subject to Strategic Environmental Assessment to identify, describe and evaluate the likely significant effects on the environment of implementing the plan, as well as reasonable alternatives.
41. The new system is expected to be in place by the end of 2008, with the first new-style development plans coming forward early in 2009. These plans are expected to be more directive and responsive, fit for purpose and reviewed every five years. Site specific proposals in development plans will require to be notified to owners and neighbours. Full and effective community involvement is encouraged to create a plan that has the broad support of all stakeholders, including the community. PAN 81: Community Engagement provides further guidance on how communities should be engaged in the planning process.
Q4: How should the transition between the existing housing delivery system and that proposed be handled? How best can the cycles of new development plans due from the end of 2008 and the LHS due in summer 2009 be synchronised?
Housing land allocations
42. Forecasts of housing requirements, which will form part of the SHNMA, are dependent upon assumptions about a range of variables and are inevitably more uncertain the further they are extended into the future. Population and household projections are based on extrapolation of past trends and should be regarded as indicative. The Government's aspirations for Scotland, reflected in targets for greater economic and population growth, imply higher overall household growth than current projections indicate. The amount of additional land required to be identified in strategic plans will be derived by subtracting the effective supply at the plan base date (taken from the housing land audit (Annex C provides detailed guidance on Housing Land Audits)) from the overall housing requirement. For the initial plan period, calculations should take the base year of the plan as a starting point and take account of evidence of both need and demand for private market and social housing. It should not be assumed that in the base year there is no net surplus or deficit and as appropriate, allowances should be made in order to address any backlog of housing need which exists at that point. The assumptions made and calculations used should be clearly explained and justified. For the later years, the emphasis should be on giving a broad indication of the scale of the requirement rather than firm figures. Land which has been allocated through the local plan process, and which is free from constraints but for programming reasons will not be developed until a later phase of the plan period, may be counted against the requirement for that phase. This would apply in particular to large planned releases of land which will be developed in phases.
43. Strategic plans should make provision for the long-term strategic housing requirement for a period of 20 years, as determined through the SHNMA and LHS. SDPs should set a locational strategy for the provision of new housing up to year 11 beyond the predicted year of adoption or approval (estimated to be 2 years in relation to the first new development plan, but expected to reduce in subsequent reviews) and set out the requirement in two phases of 6 and 5 years. This builds in provision of a year for the preparation of local development plans which require to take account of the provisions of the SDP. In addition, the plan should provide a broad indication of the scale and location of housing land beyond year 11 and up to year 20.
44. Local authorities should ensure sufficient land is available to meet the housing requirement for each housing market area in full through development plans. Irrespective of how housing market areas are defined, housing sites must be allocated within the local plan for individual council areas to provide the basis for development control decisions. Where housing market areas cross local authority boundaries, authorities working jointly must agree the proportion of the housing requirement to be accommodated in each local authority area, and reflect this in the relevant development plan. In some circumstances, such as where there are serious local environmental or infrastructural constraints, planning authorities may consider whether a proportion of the requirement can be met in another housing market area within the local authority boundary. It is for planning authorities to consider the most appropriate planning solutions for their areas through a sustainable settlement strategy, and this may involve directing development to particular locations to achieve desired policy outcomes. The planned level or direction of growth may not necessarily reflect past trends.
45. Local plans should allocate land on a range of sites to meet the housing land requirement up to year 10, providing appropriate effective sites in the initial phase to accommodate the requirement for at least 5 years from the date of adoption, and further sites capable of development by the end of year 10. Where appropriate, it may be useful to indicate the long-term reservation of land for housing in line with the settlement strategy. The effectiveness and programming of sites will be monitored through the annual housing land audit (see Annex C), with the aim of maintaining sufficient effective land for at least the following 5 years at all times. The five-yearly reviews of LHS and development plans, and the more regular reviews of SHNMA, as well as the proactive management of the land supply through annual monitoring, will ensure ongoing provision of a continuous supply of land for house building to meet identified requirements. In reviewing the development plan, account should be taken of successes and failures in the implementation of existing sites and policies, and any new or changed circumstances, including changes in the national policy context.
46. Strategic consideration of the scale and location of the land requirement in plans well ahead of land being required for development assists in aligning investment decisions of developers, infrastructure providers and others, and allows early consultation on the probable future direction of development.
47. Medium to long-term planning is needed to allow consideration of how to accommodate future demand for growth, including the requirement for significant expansion of existing settlements or creation of new communities where infill and brownfield sites cannot provide all the land necessary for new housing.
48. Development plans should be capable of responding to changes as necessary. They should identify triggers for the release of future phases of effective sites, where the annual audit of housing land, and/or the biennial review of the development plan action programme (see paragraph 87), indicates that availability of housing land and/or completions is not keeping pace with identified requirements, and a five-year land supply cannot be maintained. Plans should also contain specific guidance on the circumstances in which new housing sites will be granted planning permission in advance of the review of the development plan where this is necessary to maintain the five-year supply. The provision of a generous supply of land from the outset, along with the future requirement for all development plans to be reviewed on a five-yearly basis should, however, reduce the likelihood of additional sites being required and remove the necessity for a plan alteration to be prepared outwith the prescribed five-year review process.
49. In the short-term, where there is an identified shortfall in meeting existing housing land requirements, planning authorities are expected to take steps to secure the delivery of housing to maintain a minimum five-year supply. It may be appropriate to identify additional sites and grant planning permission where, for example, proposals comply with the overall locational strategy and other policies of the development plan.
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