National Planning Framework 4 - draft: consultation analysis

Annex B – Housing numbers

Question 57 – Do you agree with the Minimum All-Tenure Housing Land Requirement (MATHLR) numbers identified above?

Around 170 respondents made a comment at Question 57. There were a small number of very detailed comments, including comments on the figure for each of Scotland's 32 local authority areas. This information is available to the Scottish Government, and the analysis below presents only a brief summary.

Other respondents raised issues already covered under the earlier analysis at Question 31. As detailed in analysis at Question 31, 31(a) states that an LDP should identify a housing target for the area it covers, in the form of a Housing Land Requirement. Representing how much land is required, it should at least meet the 10 year Minimum All-Tenure Housing Land Requirement set out in Annex B of NPF4.

Some respondents commenting at Question 57 noted that they agreed with the MATHLR number set out for their own area. This included a number of 'Local Authority' respondents who reported that they had been consulted about, and agreed with, the MATHLR set out for their area. Further comments included that the Scottish Government took an inclusive approach to arriving at MATHLR numbers and that local authorities know their areas best and, by engaging with communities, businesses, and developers at a local level, are best placed to determine any increase beyond the minimum that the MATHLR represents.

However, some of these respondents also went on to make suggestions or to raise concerns. These included that:

• An explanation of how the MATHLR calculations are carried out, or reference and signposting to the 'Housing Land Requirement – Explanatory Report', could be useful.
• Local authorities which have already undertaken HNDAs are in a position to provide a detailed a response to the interim draft MATHLR. This raises the question of how those authorities that do not have an up-to-date HNDA could be expected to provide a similarly informed response.
• Meeting the MATHLR in the next LDPs will be challenging for some areas and could run contrary to many other NPF4 policies. An alternative view was that in some cases the figure is acceptable but unambitious.
• The decision to calculate the figure based on 2022 to 2036 housing needs estimates may cause confusion at the evidence report stage of the new process. Developers may want to go back to 2018 (as the base year of the household projections on which the HNDA is based) or to 2020 (the date at which the HNDA model has been set). This is because they want to address the failure to deliver housing in line with the household projections for those now past years. As housing need from 2020 is included in the figures, it is considered that policy should be explicit that no backlog in meeting demand for housing should be factored in.

Although most 'Local Authority' respondents did agree with the figures set out, others did not. Reasons given included that the methodology used was not effective for low volume, low population areas like the Outer Hebrides.

There was also a view that the MATHLR process does not sufficiently recognise the role of regional and local housing markets, or how markets operate across boundaries. It was suggested that the MATHLR would be more appropriately established through regional partnership working and should remain a function of the Regional Spatial Strategies.

Other respondents, including some 'Development, Property or Land Management Company or Representative Body' respondents, also had fundamental concerns and suggested that the MATHLRs and the methodology by which they have been established are inadequate and flawed. Specific concerns included that:

• The numbers set out fail to reflect the urgency and the magnitude of the challenge faced in addressing Scotland's growing housing crisis, and do not support the objective of increasing the delivery of new homes.
• Notwithstanding the impact of COVID-19, housing completions have been moving in the right direction across Scotland in recent years, but the introduction of such low targets would place this positive trend into a sharp reverse.
• The figures appear to be very low and may have a major impact upon the housebuilding industry in Scotland. Low levels of future homes means that existing stock becomes more expensive as competition increases and affordability issues become even more pronounced. The proposals appear to lack any ambition to address important matters of housing the Scottish population, irrespective of the tenure required.

More generally, it was suggested that local authorities would be expected to have undertaken significant further work by the end of the consultation period for NPF4, and that the Scottish Government could be expected to have undertaken some degree of critical analysis of the returns received to ensure they are content with presenting the figures.

It was noted that Homes for Scotland has proposed alternative MATHLRs for some authorities, and that the methodology they have used is based on the Scottish Government's own steer on considering, and not dipping substantially below, past completions levels. It was also reported that the same flexibility allowance of 25% (in urban areas) or 30% (in rural areas) as applied by the Scottish Government has been used.

It was also suggested that there are examples of good practice amongst some local authorities in revising the default MATHLR figures and these could assist in guiding a comprehensive review of the current figures. It was noted that the MATHLRs will be important, and there was a call for the Scottish Government to take time to work with local authorities and stakeholders, including home builders and housing associations, and to get the figures right.

From the housing association perspective, there was a concern that there has not been adequate time or opportunity for them to feed into the MATHLR process. Further points made were that:

• There is data on the backlog of housing need in the Scottish Federation of Housing Associations, Chartered Institute of Housing Scotland and Shelter Scotland report, 'Affordable Housing Need in Scotland Post 2021'. This should have been considered.
• Focusing on a minimum MATHLR may discourage ambition when it comes to identifying enough land to build the number of affordable homes the Scottish Government has committed to building in the next 10 years.

A contrasting position was that the approach is artificially inflating housing figures and that the calculation methodology used to reach the MATHLR always rounds the housing figures upwards and does not take into account population declines. It was suggested that this means that where aspirational increases are proposed in one area, there are no balancing reductions in housing units required and the national figure continues to rise. It was reported that the Scotland-wide MATHLR amounts to 200,342 units, which represents a 'flexibility percentage' of 77% over and above the HNDA tool result. It was suggested that this is highly concerning if considered a minimum figure. Other comments included that:

• The population data used for the MATHLR calculations needs to be up-to-date. Current figures reflect the pre-Brexit and COVID situation.
• No justification is given for the additional flexibility allowance of 25% in urban and 30% in rural areas, and that these percentages are too high.
• An all tenure target will not deliver efficiently on the affordable and specialist need housing that is really needed but will allow more market rate 'executive' homes to be given permission and built by volume house builders.

There was also a concern about the lack of detail as how the MATHLRs will translate into the delivery of provision of housing land for older people. It was noted that NPF4 provides no guidance for LDPs on how much land requires to be available to meet the housing needs of older people in each local authority area. As at previous questions, it was suggested that this runs contrary to the requirements set out within the Planning (Scotland) Act 2019, which requires LDPs to include land for housing for older people.

There was also a fundamental concern that the MATHLR process has been undertaken without reference to the climate crisis, meeting net zero targets and addressing the biodiversity crisis. As a result, the draft NPF4 appears to leave local authorities to somehow square the MATHLR with meeting climate targets.

Other concerns related to the specific figures set out and included that:

• In real terms, the figures for Highland represent a significant decrease in available land for housing. The lack of a sufficient supply of housing land is a very real threat to the housebuilding and construction industries in the Highlands, but more importantly for the growth of the area itself. Artificially restricting supply will only fuel price increases in the market, making properties more expensive, rather than more affordable.
• The MATHLR figures anticipate a continuation of recent trends of higher levels of housebuilding in the East, and lower in the West. However, the population projections for 2018-43 show population growth in five out of eight Glasgow City Region local authority areas and further consideration is needed to better convey the complexity of the dynamics of the Glasgow City region.
• In contrast, that the figure for Glasgow is over-generous, takes no account of Brexit and the pandemic's possibly permanent changes to peoples' ways of conducting their working lives, and cannot possibly be met.
• The figures for Aberdeen City and Aberdeenshire are too high and have not been reduced sufficiently to reflect the impact of changes to the energy sector.