Planning Advice Note 2/2010: Affordable Housing and Housing Land Audits

SECTION 2: HOUSING LAND AUDITS

INTRODUCTION

40. This Section sets out advice on good practice in the preparation of housing land audits. Its purpose is to promote greater consistency and transparency in the content of audits and the way in which they are carried out.

41. Scottish Planning Policy ( SPP) requires that a five-year ongoing effective land supply is available to meet the identified housing land requirements. Planning authorities should therefore carry out regular monitoring of housing completions and the progress of sites through the planning process. This can be achieved through the preparation of a housing land audit, carried out annually by the planning authority in conjunction with housing and infrastructure providers.

42. An annual audit is important so that it reflects the changing nature of housing markets and market conditions. The audit is to ensure that the forecasts for estimated house completions over the five year period remain robust and realistic. In remoter rural areas, where the requirement can be of a more limited scale, the method and frequency of the audit process may be adapted to local circumstances.

43. SPP sets out the key stages in the process of identifying the housing requirements and the provision of an appropriate land supply to accommodate those requirements through the Housing Need and Demand Assessment ( HNDA) guidance, Local Housing Strategies ( LHS) and the development plan.

Research

44. Scottish Ministers are committed to ensuring a generous supply of land for housing, and recognise the value of systematic collection of information to assess the extent to which planning authorities are identifying and delivering sufficient land for housing. In order to better understand the usefulness of housing land audits in providing this information and the quality of the data collected, the Scottish Government commissioned research into monitoring housing land supply through housing land audits. A research report entitled The Effectiveness of Housing Land Audits in Monitoring Housing Land Supply in Scotland is available at http://www.scotland.gov.uk/Publications/2008/01/10103315/0. The research has assisted in identifying the scope for a more standardised approach to the audit process across local authorities in Scotland, and ways in which the value of the audit process can be maximised.

HOUSING LAND AUDITS

45. Annual housing land audits are the established means for monitoring housing land. They have two key functions: to demonstrate the availability of sufficient effective land to meet the requirement for a continuous five-year supply; and to provide a snapshot of the amount of land available for the construction of housing at any particular time. This information is vital to the preparation of the development plan and the audit process enables adjustments to the supply to be made in response to issues identified.

46. Housing land audits also provide a valuable source of information for a variety of purposes, both for the local authority and a wide range of other organisations. Homes for Scotland has indicated its support for housing land audits and its willingness to contribute to them. The data is likely to be useful to other organisations such as Transport Scotland and Scottish Water, and other bodies whose resource requirements and investment decisions are influenced by housing development, e.g. health and postal services. Local authorities are encouraged to consult widely with the house building industry and infrastructure providers in the collation of the annual audit to enhance the accuracy of the data and thus its usefulness. Organisations who are likely to find value in the audits should be willing to contribute to their preparation, which should help promote a shared understanding of the land supply among all interested parties.

47. It may be beneficial to have contributions from local house builders and landowners regarding their sites included in the audit, particularly in relation to whether or not the site is effective and the likely annual completions on that site. This may be of particular value where Homes for Scotland members are not the primary builders in an area. Those involved should consider how such engagement can be achieved, for example, through direct contact or through adverts in the local press inviting input from relevant parties.

48. Audits provide a snapshot picture in time of the land supply. Involvement in the preparation of an audit should not be viewed by contributors as an alternative means of commenting on the housing land allocations in the development plan.

49. The usefulness of the housing land supply information in audits will be enhanced through audits across Scottish local authorities containing common information about the land supply in their areas. The Housing Supply Statistics Working Group has been set up to provide an opportunity for discussion and sharing of ideas. Although desirable, it is not necessary for all local authorities to carry out audits at the same time each year; however, an annual picture of land supply across Scotland will be valuable. It is desirable that the audit is available within a reasonable period of time, preferably within 6 months of the collation of the data.

50. The way in which authorities work to produce audits may need to alter to reflect their participation in housing market partnerships and strategic development planning authorities. The agreement of relevant organisations to participate and provide timeous responses to consultation, and adjustments to the Government's requirements for statistical returns, would contribute to minimising the additional burden on local authorities and this should be considered against the improved value of the collected information.

Methodology and Content

51. A housing land audit should contain relevant information about the established and effective housing land supply, allowing for monitoring and comparison with the housing land requirement. The starting point each year will be the inclusion of:

• all land with planning permission for residential development, including the remaining capacity of sites under construction;
• land allocated for residential development (including the residential component of any mixed-use development) in adopted development plans ( LDP); and
• other land with agreed residential potential, such as land identified for housing in proposed LDPs or assessed as appropriate for housing following an urban capacity study.

52. Local authorities should consider including a range of variables in an audit including a unique site reference, site area, site capacity, site ownership, the planning status of the site, annual completions, the greenfield or brownfield status of the land, whether it is a windfall site, and the type of housing being provided.

53. It is good practice to ensure that individual sites can be tracked readily from one audit to the next until such time as development is completed. If the audit is to provide an accurate picture of housing land supply, it will be necessary to ensure that the annual completions are recorded accurately and shown in the audit, including the residential component of mixed-use developments and the unplanned contribution to the housing supply made by windfall sites and conversions. Completions on regeneration sites should be shown net of any demolitions which have taken place. All sites completed in any given year should be listed in a separate schedule and a comprehensive table of historical annual completions should also be provided.

Effective Land Supply

54. Not all of the sites in the audit will be effective, and it is important that the audit distinguishes effective, i.e. unconstrained sites, from those which are affected by constraints which cannot be overcome in time to contribute to the housing land requirement. The decisions and assumptions around effectiveness and programming are crucial to the accuracy and usefulness of the data in the audit and therefore merit careful consideration.

55. The effectiveness of individual sites should be determined by planning authorities in the light of consistent interpretation of the following criteria and through discussions with housing providers. The aim is to achieve a realistic picture of the available effective land supply which can contribute to the housing requirement so that the level of additional housing, and therefore land needed to meet the overall requirement, can be established. To assess a site or a portion of a site as being effective, it must be demonstrated that within the five-year period beyond the date of the audit the site can be developed for housing (i.e. residential units can be completed and available for occupation), and will be free of constraints on the following basis:

ownership: the site is in the ownership or control of a party which can be expected to develop it or to release it for development. Where a site is in the ownership of a local authority or other public body, it should be included only where it is part of a programme of land disposal;

physical: the site, or relevant part of it, is free from constraints related to slope, aspect, flood risk, ground stability or vehicular access which would preclude its development. Where there is a solid commitment to removing the constraints in time to allow development in the period under consideration, or the market is strong enough to fund the remedial work required, the site should be included in the effective land supply;

contamination: previous use has not resulted in contamination of the site or, if it has, commitments have been made which would allow it to be developed to provide marketable housing;

deficit funding: any public funding required to make residential development economically viable is committed by the public bodies concerned;

marketability: the site, or a relevant part of it, can be developed in the period under consideration;

infrastructure: the site is either free of infrastructure constraints, or any required infrastructure can be provided realistically by the developer or another party to allow development; and

land use: housing is the sole preferred use of the land in planning terms, or if housing is one of a range of possible uses other factors such as ownership and marketability point to housing being a realistic option.

56. Programming of sites is an important element of the audit. Programming is an indication of the expected annual completions on each site, taking account of the lead-in times, the ability of the site to be developed, and the capacity of the local housing market. The housing land audit should show the expected completions on sites over the following five years. The contribution of any site to the effective land supply is that portion of the expected output from the site which can be completed within the five-year period. It will be important that the programming is also related to the expected timing of housing land allocations in the local development plan.

57. Programming is widely recognised as a less than scientific exercise. Nonetheless it is important that assumptions do not overestimate the likely completions, as the audited effective supply forms the basis for the calculation of the additional housing land requirement to be provided through the development plan. Overestimation of the potential of the effective supply will reduce the amount of additional land allocated and therefore reduce the flexibility available in the supply to address market fluctuations and other constraints to the delivery of housing. Realistic programming will demonstrate the continued availability of sites to maintain a five-year supply and help to monitor the availability of sufficient sites to continue to meet the housing land requirement. It will also show whether the supply includes a sufficient range of sites to meet the varying requirements of different parts of the housing market. House builders are discouraged from underestimating the yield from effective sites with the aim of seeking additional land allocations, and, equally, local authorities are encouraged to become familiar with the realities of the operation of the housing market in their areas and not to overestimate the likely level of completions.

58. Planning authorities should use the information from the audit process to ensure that at all times sufficient effective land is available to meet the housing land requirement for at least the following 5 years. Planning authorities, housing and infrastructure providers should work together to ensure that sites identified as effective are successfully developed within the expected timescale. Where constraints arise, or funding commitments necessary to delivery of the site are delayed, the status of the site should be reviewed as part of the next housing land audit.

Non-Effective or Constrained Sites

59. Where sites which form part of the established housing land supply are identified as non-effective, the audit should identify the nature of the constraint and the necessary action and time required for resolution of the constraint to allow house building. Planning authorities, housing and infrastructure providers should work together to ensure constraints inhibiting the development of sites are removed, particularly where the site is needed or expected to contribute to the housing land requirement during the life of the development plan. In a small minority of cases it may prove impossible to remove development constraints. Where this occurs, the site should be removed from the audit of housing land supply.

Land with Agreed Potential

60. Land with agreed potential includes any land which is not formally identified in an adopted development plan or which does not have planning permission. It can include land identified for housing in proposed local development plans or assessed as appropriate for housing following an urban capacity study. Careful consideration should be given as to whether to include such sites in the audit, although inclusion will not pre-empt subsequent consideration of the status of the site by the planning authority when finalising a development plan or determining a planning application. If a site ultimately is rejected by these processes, it should not be included in the next audit.

Small Sites

61. It is for planning authorities to consider how to take account of the expected contribution of small sites (i.e. sites capable of accommodating up to 4 dwellings) towards meeting the housing land supply through their development plans. Completions on small sites make a significant contribution to the land supply in some local authority areas and may be regarded as providing flexibility in addition to the supply on sites of five or more dwellings expected to meet the housing land requirement. For the purposes of auditing the contribution of these sites, there may be practical difficulties in listing each small site individually, and authorities may conclude that an aggregated figure should be included in the audit.

Windfall Sites

62. Windfall sites arise unexpectedly and are by definition not part of the planned housing supply. These are opportunities for new housing involving the reuse or redevelopment of previously developed sites, i.e. brownfield sites which were not included within the development plan and are not counted towards meeting the housing land requirement. They might be included as part of the established supply in the audit as a result of an urban capacity study where the site is considered to have potential for housing development. These sites should count towards meeting the housing land requirement only once planning permission has been granted for residential development and it is considered to be effective or is being developed. To allow planning authorities to monitor the contribution of windfall sites to the housing land supply in their area, these sites should be differentiated in the audit.

Affordable Housing

63. The categories of affordable housing are set out in Section 1 of this PAN. Housing land audits should reflect these definitions to distinguish between affordable housing sites and completions, and private market housing. The Scottish Government monitors the number of affordable housing units securing planning permission in each local authority through the Affordable Housing Securing Planning Consent survey. The Strategic Housing Investment Plan ( SHIP) has a distinct function referring specifically to those affordable housing sites which the authority has prioritised for development over the next five years. While the SHIP and the audit may both refer to common sites, they contain different information, and not all sites will be in both the audit and the SHIP. These data sets are therefore not interchangeable.

House Types

64. The collection of information on house types, in particular separating houses, flats and sheltered accommodation, may be useful in demonstrating how well the supply matches the identified housing needs which emerge from HNDA and the LHS. Local authorities may wish to consider collecting this information as part of the audit. It is likely that it will be easier to collect this data in relation to completions, since changes can occur to sites as development progresses.

Availability of Housing Land Audit Information

65. Most housing land audits are available in electronic format and can be accessed online. This provides the opportunity for easy reference and consultation, and reduces the costs associated with making the information available. This is particularly beneficial given the broad interest and value in the information they provide. All authorities are encouraged to progress towards making audits available online.