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SECTION 2: IDENTIFICATION OF HOUSING REQUIREMENTS
17. Section 2 sets out the new inter-related framework for the assessment of housing requirements which forms the evidence base for housing supply targets included in local housing strategies and housing allocations in development plans. It describes the strengthened national framework for housing and planning where local authority planning and housing services are encouraged 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 covering all sectors, and provide a supply of land suitable and available for building the required housing through the development plan.
18. 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 monitoring of the implementation of the plan and the housing land supply. The core elements of this process - preparation of HNDA, local housing strategies and Development Plans - are not each viewed as end products, but as complementary workstreams. The timing and content of these documents should be aligned to more effectively achieve the aim of delivering new homes in the right places. The local housing strategy and the development plan should inform each other and should both reflect the agreed housing requirement to be met in the area.
19. These documents should also be consistent and compatible with other Scottish Government and local authority strategies including the Single Outcome Agreement and Community Plan.
Figure 1: Identification of housing requirements
ASSESSMENT OF HOUSING REQUIREMENTS
Housing Market Areas
20. 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. In some parts of Scotland, particularly around larger settlements, there may be an element of demand for housing which is capable of being met in one of a number of sub-housing market areas. Local authorities should define the housing market areas to be used in determining housing requirements, following one of a range of approaches referenced in the HNDA guidance.
21. Housing market areas may significantly overlap and will coincide rarely with local authority boundaries. The identified requirement for each housing market area should be met in full. The contribution of each local authority to the total must be set out clearly in their development plans. 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. Communities Scotland's Local Housing System Analysis Good Practice Guidance Summary provides further advice. 5
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.
Housing Need and Demand Assessment
22. The Scottish Government has published housing need and demand assessment ( HNDA) guidance to ensure greater consistency and a more robust approach to the assessment of housing requirements across all tenures. All local authorities are encouraged to use this guidance to assess both current and future housing need and demand.
23. The HNDA will provide the evidence base on which housing supply targets are defined in local housing strategies and suitable available land is allocated through development plans to meet the requirement for new housing to contribute to these targets.
24. While it is recognised that there are established practices which work well in some parts of the country, local authorities are encouraged co-operate regionally and set up Housing Market Partnerships ( HMP). Partnerships will play an important role in bringing together local authorities across housing market areas. Local authorities are encouraged to adopt this approach in undertaking all housing and planning related work, including a HNDA. A HMP should involve adjoining authorities working together where functional housing market areas cross local authority boundaries. Partnerships may also include other organisations with relevant expertise, such as housing associations and developers. In relation to strategic development plan areas the Housing Market Partnership would be expected to involve the constituent local authorities, and adjacent authorities within the same housing market area.
25. A HNDA should take clear account of the relevant components of the housing requirements in an area. Where the assessment is considered robust and credible by The Scottish Government, in that it has provided all the core outputs, has followed the recommended processes and made reasonable assumptions, the approach used will not be considered at examination. 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. 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.
26. The housing need and demand assessment guidance is available online at http://www.scotland.gov.uk/Topics/Built-Environment/Housing/supply-demand/guidance .
LOCAL HOUSING STRATEGIES
27. The Housing (Scotland) Act 2001 places a statutory requirement on local authorities to prepare a local housing strategy ( LHS) supported by an assessment of housing need and demand. As a key element of the strengthened policy and delivery framework for housing and planning it should view the housing system as a whole and address the requirement for housing of all tenures and everyone in the community, including affordable housing, and be based on the outcomes of the HNDA. It provides the strategic direction to tackle housing need and demand and to inform future investment in housing and related services across the local authority area. The local housing strategy is expected to cover a 5-year period, in line with development plans, prepared in conjunction with a range of local authority departments and involving registered social landlords, other housing providers and the local community.
28. The Scottish Government encourages local authorities to co-operate regionally in setting realistic housing targets for housing market areas, and in enabling the delivery of these targets. The local housing strategy should include housing supply targets covering all tenures, drawing on the evidence base of a housing need and demand assessment. Guidance on the preparation of local housing strategies is available at http://www.scotland.gov.uk/Topics/Built-Environment/Housing/supply-demand/lhs .
29. Local housing strategy preparation is expected to align closely with emerging new-style development plans. The outcomes from housing need and demand assessment should inform both the preparation of local housing strategies and Main Issues Reports ( MIR) of SDPs and LDPs outwith strategic development plan areas, in relation to the scale of the requirement for housing. The local authority can choose to submit their local housing strategy at any point between the conclusion of consultation on the MIR and submission of the Proposed Plan to Scottish Ministers. Further details are provided in local housing strategy guidance.
30. A pragmatic approach should be taken where local authorities have commenced or recently completed a HNDA at the time this SPP takes effect. In such cases, local authorities should use the best existing evidence to inform their local housing strategies and emerging development plans.
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.uk for online guidance on LHS.
MEETING THE HOUSING REQUIREMENT IN THE DEVELOPMENT PLAN
31. The provision of land for housing and the timely release of that land to enable building of homes is a key component of the development plan. The broader objective of development plans, in relation to housing, is the creation of sustainable mixed communities, including the provision of quality dwellings in the right places. It is vital that these considerations underpin the whole process of planning for housing even at the earliest stages of site selection. Section 3 considers these matters in more detail.
32. The delivery of housing through the development plan depends on sustainable, effective sites being made available to meet need and demand. Local authorities should give careful consideration to the scale and nature of the land supply needed to ensure delivery of the housing requirement. The use of the HNDA approach, which builds in consideration of demand for housing, demographic projections and forecast economic performance, is likely to result in a requirement for more land than under previous forms of assessment.
33. In preparing the development plan and local housing strategy, consideration of a local authority's wider strategic policy objectives around political, economic, social and environmental matters will contribute to determining the appropriate scale and distribution of the housing requirement/housing supply target for the relevant area. Combined with a realistic approach to the assessment of the effectiveness of sites for housing, this should guide authorities to allocate more than enough land, i.e. a generous supply, to help ensure delivery of homes. This approach should provide sufficient flexibility to enable the continued delivery of new housing in response to unpredictable changes to the effective land supply which will occur during the life of the plan.
Housing Land Allocations
34. This section considers factors relevant to the identification of the amount of land necessary to allow the construction of new housing to meet the identified requirements.
35. Forecasts of housing requirements, which will form part of the HNDA, are dependent on assumptions about a range of variables and are inevitably more uncertain the further they are extended into the future. Assessments should cover a range of household projections, including the high migration variant projection. The Scottish Government's national objectives, reflected in targets for greater economic and population growth, imply higher overall household growth than central projections indicate.
36. The amount of additional land required to be identified in plans will be derived by subtracting the effective supply at the plan base date (taken from the housing land audit) from the overall housing requirement. For the initial plan period, calculations should take the base year of the plan as a starting point. It should not be assumed that in the base year there is no net surplus or deficit, and allowances should be made as appropriate in order to address any backlog of housing need which exists at that point. The assumptions made and calculations used should be explained and justified clearly. These issues are addressed by the HNDA guidance.
37. In some local authority areas the housing supply may rely heavily on the contribution of small and/or windfall sites. Where this is the case, planning authorities should consider how much of the housing land requirement in their area can be expected to be met from these sources and decide whether to deduct an allowance representing such future contributions. This would have the effect of reducing the level of new land allocations required in the plan being prepared. The assumptions made should be set out clearly in development plans and supported by evidence.
38. 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 development 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 stages.
39. Strategic development plans and LDPs outwith SDP areas should consider the long-term housing requirement, as informed by the HNDA and LHS. SDPs should identify a specific housing requirement and a spatial strategy for the provision of new housing up to year 12 beyond the predicted year of approval. The SDP should be clear about how much of the requirement should be met by allocations capable of development by the end of year 7. This builds in provision of up to 2 years for the preparation of local development plans in SDP areas. In addition, SDPs should provide a broad indication of the scale and location of housing land beyond year 12, and up to year 20. All local development plans should allocate land on a range of sites to meet the housing land requirement up to year 10 from the predicted date of adoption, providing appropriate effective sites in the initial phase to accommodate the requirement for at least 5 years, and further sites capable of becoming effective, and therefore developed, by the end of year 10. LDPs outwith SDP areas should provide a broad indication of the scale and location of housing land beyond year 10 and up to year 20. This is set out in Figure 2.
Figure 2: Development plan periods (from date of adoption)
40. Local authorities should ensure that sufficient land is available to meet the housing requirement for each housing market area in full through local development plans. Irrespective of how housing market areas are defined, housing sites must be allocated within the local development plan for individual council areas to provide the basis for development control decisions. Where housing market areas cross local authority boundaries, authorities working jointly through the housing market partnership must agree the proportion of the housing requirement to be accommodated in each local authority area, and reflect this in the relevant development plan.
41. Notwithstanding the need to meet housing requirements in full in the housing market area in which they arise, where there are serious local environmental or infrastructural constraints in a particular location which cannot be resolved to allow development within the life of the plan, planning authorities may consider whether a proportion of the housing requirement can or should be met in another housing market area within the local authority boundary. Local authorities, the public sector and infrastructure providers should commit to work closely to find deliverable solutions to constraints in such situations to allow development to be committed in future plans. 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. As such the planned level or direction of growth may not necessarily reflect past trends.
42. The effectiveness and programming of sites will be monitored through the annual housing land audit (see Annex A), with the aim of maintaining sufficient effective land for at least the following 5 years at all times. The 5-yearly reviews of HNDA, LHS and development plans, and the proactive management of the land supply through annual monitoring, will ensure ongoing provision of a continuous supply of land for housebuilding 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.
43. Development plans should be capable of responding to changes as necessary. They should identify triggers for the release of future phases of effective sites, such as where the annual audit of housing land, and/or the biennial review of the development plan action programme (see paragraph 101), indicates that availability of housing land and/or completions is not keeping pace with identified requirements, and a 5-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 5-year supply. For example, this might include provision within the plan to allow the granting of permission for housing on unidentified brownfield regeneration sites (ie, windfall sites) which become available during the life of the plan, even where these would be additional to the identified supply including any existing windfall allowance. 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 5-yearly basis should, however, reduce the likelihood of additional sites being required in order to maintain a 5-year effective land supply.
44. During the transitional period as the new planning system is coming into place, 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 5-year effective land supply. It may be appropriate to grant planning permission for sites in existing plans which are intended for development in later plan periods where they are effective and capable of being developed early or for development on new sites where this would comply with the overall locational strategy and other policies of the development plan.
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