Housing to 2040: island communities impact assessment

There was a strong call through our stakeholder and community engagement and consultation to recognise the distinct needs of island communities. There was clear recognition of the role that housing plays in reversing depopulation and in creating more sustainable communities, and in the need to take a holistic approach including improving accessibility, broadband, infrastructure, renewable energy technology, transport and investment.

Distinct needs of island communities were highlighted in the following areas:

1. A lack of affordable housing, with short-term lets and second homes contributing to a shortage of housing

2. High development costs and lack of skilled labour, and the need to be more energy efficient and sustainable in the way we build

3. A lack of land for affordable housing

4. Community sustainability

5. Fuel poverty, poor energy efficiency

6. Poor digital connectivity

Responding to these concerns and issues has been central to the development of the Housing to 2040 Vision and Principles and to the development of the route map, ensuring that the strategic framework for housing for the next 20 years takes the needs of island communities fully into account.

4.1      Vision and Principles

The original draft Vision and Principles, set out in a discussion paper[i], on which we consulted in 2018, did not specifically mention the needs of island communities, but the feedback we received identified that these needs are distinct from the mainland and also between island groups and should be reflected clearly in the Vision and Principles. Changes were made to two of the four themes, and included in the subsequent draft Vision and Principles document published in July 2019.

The Vision and Principles will underpin all future policy development work as the actions and commitments set out in the Housing to 2040 route map are taken forward and will play an important part in ensuring the distinct needs of island communities are taken into account in future work to deliver Housing to 2040.

Well-functioning Housing System

A new Vision statement was added:

• Rural and island communities – I live in a remote area and it is great to know there are good housing options for everyone here, from farmers and crofters to young people and those seeking to move to the area to set up home and bring employment and new opportunities to the area.  Housing supports much-needed skilled workers living and staying in my community; and local people and businesses are building the new homes.

New homes in my rural community have supported a jump in population. The future of the primary school and local shop is secure.  It’s a comfort to know that our local circumstances are taken into account when government makes decisions about housing; it feels like we’re on a level playing field with the big cities.

Principle 2 was strengthened

• Government policy (including taxes and subsidies, for example) should promote house price stability, to help underpin Scotland’s standard of living and productivity and promote a Fairer Scotland.
• House price inflation is broadly in line with wage growth and other living costs, i.e. the ratio between the cost of a house and the cost of a loaf of bread is more or less constant.  The cost of housing is under control, boosting productivity, because there is less pressure on wages and this increases Scotland’s attractiveness as a place to invest.  Policy is tailored to the different needs of urban, rural and island communities.  Housing availability in rural areas is attracting inward investment and creating employment opportunities which, in turn, is attracting people to rural communities.  People can live close to good quality schools for their children to attend.

Sustainable Communities

The Vision statement was strengthened

• Vibrant communities – The centre of my community is a lively hub with shops, services and attractive places to meet.  My community is digitally connected enabling me to work from home or hotdesk locally when I want to.  People are attracted to live and work in my island community, and local businesses are thriving.

Principle 10 was strengthened

• New housing, and the required community resources, should only be provided where they help to create safer, stronger, attractive, sustainable and integrated communities.

New housing is built to facilitate active or accessible travel to school, healthcare and employment opportunities, and enables residents to continue to be active in their community as they get older.  There is a more organic approach to new housing, with the right number and type of homes placed in such a way as to strengthen the existing community, so that both incomers and existing residents benefit.  Town centres are rejuvenated by more people living in them.  The right housing supports rural and island economies to thrive.

Further refinements were made to the new vision statement under the Well-functioning Housing System theme, after the consultation in 2019, and it now reads as follows:

Vision statement

•    Rural and island communities – I live in a rural or island area and it is great to know there are good housing options for everyone here, from farmers and crofters to young people and those seeking to move to the area to set up home and bring employment and new opportunities to the area. 

4.2      The route map

The route map commits to taking action so that rural and island communities have access to high quality, affordable and market housing which has been planned alongside the economic and physical infrastructure and helps people to live, work and thrive – and to helping to stem rural depopulation.

The data we have gathered on island communities and the insights we have gained from stakeholder and community engagement and consultation has influenced and shaped the commitments and actions in the route map in the following ways:

4.2.1   A lack of affordable housing, with short-term lets and second homes contributing to a shortage of housing

Housing to 2040 sets out our commitment to helping rural and island communities to thrive. We will sustain and seek opportunities to grow our population in rural areas as part of our Population Strategy[ii] and National Planning Framework 4, Scotland’s national spatial plan, is required by the Planning (Scotland) Act 2019 to help grow our rural population. The role that housing generally and affordable housing in particular have to play in this is considered as central in Housing to 2040. We know that often relatively small-scale actions can bring about significant impacts, for example a small number of additional homes can have a generational impact and help build the long term resilience of communities.

The following commitments address the lack of affordable housing and the role short-term lets and second homes play in contributing to this:

• We will continue to support the delivery of affordable homes in rural and island communities through the Affordable Housing Supply Programme, which offers appropriate subsidy levels to recognise the higher cost of development in these areas. As we emerge from the COVID-19 crisis into a new phase of affordable home delivery, we will complete a review of future grant subsidy benchmark levels.
• In addition to the mainstream programme, communities will also be supported by the continuation of the Rural and Islands Housing Fund beyond March 2021, backed by up to £30 million of investment. The fund aims to increase the supply of affordable housing across all tenures, and helps groups such as community organisations, development trusts and private landowners to build new affordable housing, refurbish existing properties and bring empty properties into use including the conversion of commercial and non-domestic properties into houses. It also provides feasibility funding to help groups explore the options and range of possibilities.
• We recognise that many young people in rural areas aspire to self-build. Our plans to scale up opportunities for self-provided housing and make this a mainstream option will support this aspiration and provide an important way to help young people to stay in the rural areas they grew up in if they want to.
• We will implement new Permitted Development Rights for the conversion of agricultural buildings to residential and commercial uses. These will come into force on 1 April 2021 and will help support the provision of new homes in rural and island communities and help succession planning on farms.
• We are already taking steps to regulate short-term lets to ensure the safety of visitors and neighbours and empower local authorities to strike a better balance between needs and concerns of local residents with that of the tourism industry, both of which are crucial to support thriving communities.
• We will also give all local authorities powers to manage the numbers of second homes where they see this as a problem in their area.
• We will establish a new fund for local authorities to apply to use in order to bring empty homes and potential empty homes back into residential use.

4.2.2   High development costs and lack of skilled labour, and the need to be more energy efficient and sustainable in the way we build

Housing to 2040 sets out our plans to extend the use of modern methods of construction. This can help to overcome some of the delivery challenges in rural areas and stakeholders were enthusiastic about their potential. Our work to promote and increase the use of these new technologies will specifically recognise the gains to be made for rural communities and put in place the conditions needed for those benefits to be realised.

Our commitment in Housing to 2040 to work with and support social housing providers to strengthen their role in community wealth building will help to develop rural economies, building new employment opportunities. In particular, programmes to develop local supply chains and the skills needed to support heat decarbonisation will be looking to maximise their impact in rural areas, where capacity and availability of local contractors has long been an issue.

4.2.3   A lack of land for affordable housing

We will work with Community Land Scotland and others to bring forward more land for housing in rural areas, and using the new National Planning Framework 4 and the development planning system to do more to identify a greater choice of land for community-led housing, self-build opportunities, affordable housing and new build homes.

4.2.4   Community sustainability

Housing to 2040 puts our ambitions for place at its core, creating not only quality homes but quality places too. This applies to all communities in Scotland, recognising that all places are distinct, but also taking account of the particular challenges faced by our remote, rural and island communities as well as our town centres and urban communities.

Beyond the commitments above, which will play their part in supporting vibrant and sustainable places, Housing to 2040 commits us to working with rural planning authorities and stakeholders to identify how our planning policies can help to sustain and grow crofting communities.

It also makes clear that a place based approach is not just something for urban areas but that the concept of 20 minute neighbourhoods can be applied in rural and island communities, delivering homes in existing communities with access to the services and amenities that community needs.

And makes clear that a place based approach must reflect a sound understanding of the aspirations of rural and island communities.  People living and working in rural and island areas are best placed to help decide how their communities can grow in a way that meets their needs and so it is essential they are involved in planning their future development.

4.2.5   Fuel poverty, poor energy efficiency

Poor housing standards and low energy efficiency are important drivers of fuel poverty. Housing to 2040 commits us to taking action so that all homes, no matter their tenure are required to meet the same standard. Current housing standards allow for exceptions in some local circumstances, such as homes in rural areas, agricultural properties or hard to treat buildings. This results in the unacceptable position where those with the fewest options and the least recourse are more likely to have to live in sub-standard housing.

As an important first step towards tenure-neutral housing standards, we will develop a new Housing Standard, set in law. Our aim is that this will cover all homes new or existing, including agricultural properties, mobile homes and tied accommodation. We aim to ensure that there will be no margins of tolerance, no exemptions and no “acceptable levels” of sub-standard homes in urban, rural or island communities, deprived communities or in tenements. This will mean our existing homes will keep pace with new homes, with no one left behind.

A new tenure-neutral Housing Standard will ensure a clear minimum standard setting out what people are entitled to expect, and what they are expected to do, so that everybody living in Scotland can have a warm, comfortable and safe place to live. Where owners need support to improve their homes, we will take forward work to develop targeted support packages, aligning this closely with support developed to deliver heat decarbonisation.

Delivering affordable warmth and zero emission homes are central commitments in Housing to 2040. We are committed to ending Scotland’s contribution to climate change by 2045 in a fair and just way, and are just as committed to achieving our statutory fuel poverty targets.  Housing to 2040 sits alongside the draft Heat in Buildings Strategy, with both working together to deliver our statutory targets for climate change and fuel poverty, and the milestones in between, in a fair and just way. As we further develop the actions set out in the draft Heat in Buildings Strategy[iii], we will only take forward actions where they are found to have no detrimental impact on fuel poverty, unless additional mitigating measures can also be put in place.

As set out in the analysis of the Just Transition Commission’s call for evidence[iv], we have the potential in our transition to net zero to make significant improvements in the quality of homes, including improving heating and insulation of existing homes and in so doing alleviating fuel poverty. As we move to zero emissions heating in existing homes, we must take the opportunity to ensure that works to the fabric of the building and new zero emissions heating systems also serve to increase comfort and affordability for fuel poor households.

In addition to the draft Heat in Buildings Strategy, we will also publish an Islands Energy Strategy in 2021 with a focus on the resilience and sustainability of island energy systems for the future, and on supporting islands’ transition to net zero emissions. As we develop and deliver this Strategy, we will ensure that we appropriately consider the challenges facing our island communities and how they can be reflected in the delivery programmes we take forward to support the heat transition.

4.2.6   Poor digital connectivity

Housing to 2040 recognises digital connectivity as an important driver of economic and social benefits. It can allow people to work effectively from home, support children in their learning, help people to stay connected to friends and family and allow people to participate in a wide range of cultural activities. It is also an important enabler for technology-enabled care, a key dimension of supporting independent living.

In recognition of this, we have committed £600 million to the Reaching 100% broadband programme. This programme will ensure that every home and business across Scotland will be able to access superfast broadband by the end of 2021. We are also investing to improve mobile coverage by funding new masts in selected rural ‘notspots’ via the £25 Million Scottish 4G Infill Programme.

As part of Housing to 2040, we are taking early action to bring digital connectivity to new social housing, driving forward work to phase in the requirement from 2021-22 that all new build social rented homes delivered through the Affordable Housing Supply Programme are digitally-enabled.

We also need to look beyond new build social housing. As part of the new Rented Sector Strategy, we will work with social housing providers to deliver internet services to all tenants and include digital connectivity in the review of the Social Housing Charter in 2021. We will also consider digital connectivity within our consultation on the new Housing Standard to see how it can be made available in all homes, no matter what tenure