South Hampshire. Strategic Development Areas. Deliverability Study. Final Report. The Partnership for Urban South Hampshire

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1 The Partnership for Urban South Hampshire South Hampshire Strategic Development Areas Deliverability Study Prepared by DAVID LOCK ASSOCIATES

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3 Contents Page 1.0 Executive Summary 1 Aim of the Study 1 Broad conclusions of the study Research Methodology 3 Case Studies 3 Meetings with Key Stakeholders Overview of the Fareham and north/north east of Hedge End SDAs Land Assembly and Control 9 Fareham SDA risks and opportunities 9 North/north east of Hedge End SDA risks and opportunities 12 Strategies for minimising risks to delivery 14 Summary of experience elsewhere Density and Housing Mix 16 Fareham and north/north east of Hedge End SDA risks and opportunities 16 Strategies for minimising risks to delivery 18 Summary of experience elsewhere Build rates 20 Fareham and north/north east of Hedge End SDA risks and opportunities 20 Strategies for minimising risks to delivery 23 Summary of experience elsewhere Strategic Infrastructure & Funding Options 25 Fareham and north/north east of Hedge End SDA risks and opportunities 26 Strategies for minimising risks to delivery 27 Summary of experience elsewhere Environmental Impacts and Mitigation 30 Fareham and north/north east of Hedge End SDA risks and opportunities 30 Strategies for minimising risks to delivery Employment 32 Fareham and north/north east of Hedge End SDA risks and opportunities 32 Strategies for minimising risks to delivery 35 Summary of experience elsewhere Affordable Housing 37 Fareham and north/north east of Hedge End SDA risks and opportunities 38 Strategies for minimising risks to delivery 39 Summary of experience elsewhere Strategic Delivery Issues 41 Clear Vision for Each SDA 41 Uncertainty about Site Capacities 42 Strategic Infrastructure, Funding and Deficit 43 Coordinated and Focused Approach to Technical Studies 44 Rules of Engagement with SDA promoters 44 Key Stakeholders 45 Strengthening PUSH Resources and Capacity Policy options 47 Fareham and north/north east of Hedge End SDA risks and opportunities 48 Strategies for minimising risks to delivery 49 Summary of experience elsewhere Conclusion and summary of strategies for minimising risks to delivery 52 Key Issues 53 Key Actions to Mitigate Risks 53 Appendix A: Case Studies of Major Developments 57

4 Figures Page Figure 3.1: Broad search area for Fareham SDA 7 Figure 3.2: Preferred location for north/north east of Hedge End SDA 8 Figure 4.1: Plan provided by Fareham SDA consortium 11 Figure 4.2: Plan provided by Terence O Rourke 13 Figure 4.3: Plan provided by White Young Green 14 Tables Table 2.1: Case Studies of Major Developments 3 Table 5.1: Fareham SDA landowners/promoters preliminary site capacity estimates 17 Table 5.2: Density and housing mix: experience from elsewhere 19 Table 6.1 Build rates: experience from elsewhere 24 Table 7.1 Strategic infrastructure and funding options: experience from elsewhere 29 Table 9.1 Employment provision: experience from elsewhere 36 Table 10.1 Affordable housing: experience from elsewhere 40 Table 12.1 Policy options: experience from elsewhere 51

5 1.0 Executive Summary Aim of the Study 1.1 This study has been commissioned by the Partnership for Urban South Hampshire (PUSH) as part of the evidence gathering process to support significant housing growth to It considers the deliverability of two Strategic Development Areas (SDAs) identified in the Draft South East Plan and confirmed by the Examination in Public Panel Report (August 2007) and the Secretary of State s Proposed Modifications (July 2008). One of the SDAs is within Fareham Borough and the other is north/north east of Hedge End. 1.2 The aim of this study is to identify risks to the deliverability of the two SDAs within the timescales envisaged and to consider mitigation strategies to ensure their timely delivery. A variety of topics were identified for exploration in the original brief. These included: Density and housing mix (Section 5); Build rates (Section 6); Sources of funding for strategic infrastructure, phasing of infrastructure and potential trigger points, provision of advanced infrastructure by developers, forward funding for social infrastructure, and potential mechanisms to ensure timely provision of social and physical infrastructure (Section 7); Bringing forward employment land (Section 9); Delivery mechanisms for affordable housing (Section 10); Policy options (Section 12); 1.3 Over the course of the Study several other key topics for discussion were also identified: Land assembly and control (Section 4); Environmental impacts and mitigation (Section 8); Strategic Delivery Issues (Section 11). Broad conclusions of the study 1.4 Our assessment of the deliverability of the Fareham and north/north east of Hedge End SDAs suggests that there are significant risks that may prevent the two SDAs from delivering 10,000 and 6,000 dwellings respectively by Throughout this report we have identified the key risks to their delivery and recommended both short term and long term actions to mitigate against these risks. It may be possible for the 1

6 SDAs to be delivered in whole or in part by 2026 if PUSH and the local authorities respond quickly to the recommended actions outlined in the Conclusion and, in particular, those set out in the Section on Strategic Delivery Issues. 1.5 It is important to acknowledge that the development of the SDAs is at a very early stage and many of the issues identified in this Study are usual at this stage of the development process. The Conclusion identifies a number of high priority actions that should be dealt with as a matter of urgency and others that will need to be resolved over the longer term. Ultimately PUSH and the local authorities will determine priorities for promoting the SDAs, their preferred policy approach, the process they wish to undertake in consulting and working with promoters and key stakeholders, and the resources that can be put toward delivering the two SDAs. Some compromises will need to be made throughout the planning and implementation process, and the risks and mitigation measures identified in this report are designed to offer PUSH and the local authorities a framework to make informed choices. 2

7 2.0 Research Methodology Case Studies 2.1 The primary research methodology used in this Study is that of a Case Study approach, whereby a number of major developments across the country have been used to explore similar issues to provide a benchmark against which the SDAs can be compared. The Case Studies chosen are varied in scale, location and type, and stage of implementation. They are all significant brownfield or greenfield developments of at least 2,500 dwellings. In Section 6 Build Rates, we have drawn on additional experience from the Northern and Western Development Areas in Swindon without looking at them in more depth because of their high annual build rates. 2.2 Our analysis of the case study projects has extracted some key transferable lessons and practical experience to the risks to delivery together with mitigation strategies. The developments and their proposed housing capacity are summarised in Table 2.1 and a summary of relevant information is provided at the end of each Section. A more comprehensive description of each development is provided in Appendix A. Table 2.1: Case Studies of Major Developments Development Number of new homes proposed (most recent figure) Eastern Development Area, Swindon 12,000 Northern Development Area, Swindon 10,000 Northstowe, Cambridgeshire 10,000 Hampton, Peterborough 8,000 Cranbrook, East Devon 7,500 (initially 2,900) Great Haddon, Peterborough 6,000 Salden Chase, Milton Keynes 5,390 Priors Hall, Corby 5,100 Brooklands, Milton Keynes 2,501 3

8 2.3 It is important to note that for the majority of issues explored in this Study there is rarely a single correct answer or approach that is likely to achieve timely delivery of high quality and genuinely sustainable communities. Each case study we examined has its own social, physical, environmental and political context, as is the case for the Fareham and north/north east of Hedge End SDAs. These factors will have the greatest bearing on the preferred approach taken to achieve timely delivery of the two SDAs. 2.4 It is also important to note that it has not been within our remit to provide detailed site capacity estimates or to assess site constraints for the purposes of making detailed site capacity estimates. Meetings with Key Stakeholders 2.5 The Study also used workshop sessions and meetings with key stakeholders to learn from experience elsewhere and collect background information about the sites. The meetings and workshops with the promoters and key stakeholders have yielded a wealth of useful information. However, we have taken our conversations at face value and it has not been within our remit to assess the accuracy of the information provided to us. 2.6 The first of these was a workshop session held with PUSH team members, ATLAS, John Walker, and colleagues at on 25 th January 2008, as a preliminary discussion on the key issues investigated in this study. 2.7 The key issues discussed replicate those addressed throughout this report. However, one point identified during the workshop that is worth mentioning, but does not warrant its own section in this report, is that the master planning process should begin by identifying the broad objectives for the site and subsequently consider how to address site constraints through the process of preparing a planning application. 2.8 As part of our research we also met with known promoters and landowners from both the Fareham and the north/north east of Hedge End SDAs in February and March In relation to the Fareham SDA, we met with PRUPIM and Buckland Development Ltd representing the consortium promoting the Fareham SDA. In addition, we separately met the Southwick Estate who own a significant proportion of the land being promoted at the Fareham SDA, including land east of the A32, which is included in the broad area of search for the SDA. 4

9 2.9 In relation to the north/north east of Hedge End SDA, we met with Terence O Rourke, Miller Homes, Bloor Homes and White Young Green. These known promoters control land both within and outside of the preferred location for the north/north east of Hedge End SDA shown in Figure These meetings were invaluable in gaining an understanding of the aims and aspirations of the known promoters and landowners for delivering new housing and employment in these locations, and their attitudes to making land available for development. Their willingness to engage with PUSH and the local authorities in progressing the SDAs was tested. The findings from these meetings are provided in the relevant sections of this report A half day workshop was also held with the Highways Agency, Environment Agency, Natural England and Southern Water on 7 th March 2008 to identify any infrastructure constraints or showstoppers to delivery of the SDAs No absolute constraints to development were apparent at this stage. However, a number of key issues were highlighted during the workshop that would each require careful planning and mitigation strategies in order that they could be adequately addressed. One such issue is that water extraction/abstraction is at or over environmental capacity. This will require the development to be delivered without requiring further extraction within Hampshire, (i.e. extraction-neutral). Homes will need to be designed to high standards of water efficiency and some retrofitting of existing homes may also be necessary. In order to ensure a water supply to the new developments, the water companies may incur significant infrastructure costs which would impact upon consumer costs. In addition, groundwater quality is also an issue as Hampshire is dependant upon groundwater for drinking water The ability to achieve stringent limits on nitrogen emitted from wastewater discharge levels is also a key issue and was the only significant concern that was identified during the discussions. Further probing revealed that this is a problem that needs technical engineering solutions, and is an issue that is also faced by other European countries The Highways Agency stated that the strategic highway network is at capacity and that the development areas would have to be traffic-neutral. The cost of delivering an Active Traffic Management pilot scheme on the M27 was regarded as being beyond the scope of a tariff. However, the cost of incorporating bus lanes within the hard shoulder was more likely to be within the scope of a tariff. 5

10 3.0 Overview of the Fareham and north/north east of Hedge End SDAs 3.1 The Fareham and north/north east of Hedge End SDAs are intended to serve the eastern and western housing market areas around Portsmouth and Southampton respectively. The draft South East Plan indicates the broad locations of the SDAs. 3.2 The draft South East Plan also provides a maximum housing number for each SDA - up to 10,000 for the Fareham SDA and up to 6,000 for the north/north east of Hedge End SDA. The Secretary of State s Proposed Modifications indicate that the precise form and location of the SDAs is to be established through Development Plan Documents (DPDs). 3.3 The draft South East Plan, and the Panel Report on the Examination in Public into the draft South East Plan both indicate that development at the Fareham and north/north east of Hedge End SDAs is likely to be concentrated in the second half of the plan period ( ) and, if more urban brownfield sites become available than currently expected, the SDAs will be phased over a longer period with some phases built after The Secretary of State s Proposed Modifications (July 2008) have removed the reference to development coming on stream from 2016 onwards. 3.4 The draft South East Plan indicates the policy framework for taking the SDAs forward should be an Area Action Plan. The Secretary of State s Proposed Modifications now indicate that local authorities can consider alternative methods of delivery, such as Core Strategy supported by a Supplementary Planning Document (SPD). None of the three local authorities Fareham, Eastleigh and Winchester have an Area Action Plan for either SDA proposed in their Local Development Schemes. 3.5 Fareham Borough Council and Winchester City Council both closed consultation on their Issues and Options for their LDF Core Strategies earlier in 2008 (7 March 2008 and 15 February 2008 respectively). Eastleigh Borough s Local Plan covers the period to 2009 and the Borough is not scheduled to start consultation on the Issues and Options stages of their Core Strategy until later this year. 3.6 The broad location, capacity and early identification of constraints for the two SDAs were identified in studies undertaken by PUSH. The broad area of search for the Fareham and north/north east of Hedge End SDAs are indicated in the two plans below. 6

11 Figure 3.1: Broad search area for Fareham SDA 7

12 Figure 3.2: Preferred location for north/north east of Hedge End SDA 3.7 The Draft South East Plan Panel Report indicates that the SDAs would be large enough to offer some degree of self-containment, but not so large as to compete with established towns and city centres. As a result, they are expected to provide a level of employment, services and public transport on site. 3.8 The Panel Report also stresses the importance of the approach to housing allocations, which have separated the SDAs from the individual districts where they are located. The advantage of this approach, according to the Panel Report, is that it makes clear that any shortfall in housing completions in the SDAs should not fall to Eastleigh, Fareham or Winchester districts to make compensatory provision (paragraph 16.63). 8

13 4.0 Land Assembly and Control 4.1 The circumstances of land ownership and control at the two SDAs is very different. The Fareham SDA is largely under the control of two promoters. At the north/north east of Hedge End SDA the number of landowners/promoters is not yet clear, although four promoters have indicated they control the majority of the land within the broad area of search. 4.2 Delivering major development, depends on many factors, but among the most important is landownership and control. If not addressed adequately from the outset, these issues have the potential to delay development by many years. Based on major developments elsewhere in the country, the key landownership and control issues that are likely to impact on the deliverability of the SDAs are: landowner interest in releasing land for development; potential ransom situations; complexity of landownership and consortium arrangements, such as equalisation agreements; motivation and interest of promoters in developing the site themselves, acting as town developers or selling on to other developers, land traders or house builders; and expertise in promoting the development. 4.3 In this Section we will deal with each SDA separately because the landownership and control issues are significantly different and present unique risks and solutions to delivery. Fareham SDA risks and opportunities 4.4 The land within the broad area of search as described by PUSH is under the control of two promoters, PRUPIM and Buckland Development Ltd. We have met the promoters who have indicated they are in the process of agreeing a Memorandum of Understanding (MOU). They have also indicated their intentions to take a long-term view - constructing site infrastructure and selling parcels to house builders. As an institutional investor, PRUPIM would be capable of forward funding some elements of major infrastructure providing there is certainty over the planning situation. 9

14 4.5 However, the consortium have also indicated that the majority of land east of the A32 is not available for development. The exceptions are a small strip of land running parallel to the M27, to facilitate an access road from the SDA to Junction 11, and a large employment area around Junction 11. The Southwick Estate own the majority of land east of the A32 and have indicated they will not release this land for development. Our meeting with the Southwick Estate, PRUPIM and Buckland Development, confirm that this is not a financial or tax issue. 4.6 The use of CPO to acquire land was not an element of the original brief. The potential to use CPO in respect of land east of the A32 was raised in subsequent discussions. CPO should only be used where the planning justification is compelling and in the full knowledge that there are not viable alternative strategies. Attempting a CPO for such a significant parcel of land would carry a high risk and demand significant resources. Prior to embarking upon such an approach, we consider there should be a very high level of certainty that: the CPO is likely to be confirmed; funds are available to pay for the CPO if it is confirmed, and an organisation is prepared to step forward and take responsibility; and other land within the SDA would not be put at risk from the promoters/developers putting their resources into projects elsewhere while the CPO is being progressed, or making their land unavailable for development altogether. 4.7 The timescales to progress a CPO are undefined and the costs would be substantial. Every effort should be made to bring forward the SDAs using partnership mechanisms. Should PUSH wish to investigate the potential impacts of using CPO powers, we would recommend they seek legal advice. John Walker endorsed this view. 4.8 Whilst there appears to be little complexity over landownership and consortium arrangements at the Fareham SDA, the willingness of the landowners to release the majority of land east of the A32 reduces the capacity of the site proposed by PUSH considerably. 4.9 The consortium has proposed an alternative boundary for the Fareham SDA, which includes some land in Winchester, and land south of the M27. In our meeting with the promoters of the Fareham SDA, the plan in Figure 4.1 was provided. This plan indicates the land ownership parcels in the consortium s control within their proposed alternative boundary for the Fareham SDA. 10

15 South Hampshire SDAs Deliverability Study Figure 4.1: Plan provided by Fareham SDA consortium 4.10 The Fareham SDA has advantages in terms of clarity about landownership, an effective and emerging consortium arrangement, an institutional investor with a longterm perspective and potential to forward fund infrastructure. The consortium is keen to progress the SDA as soon as possible and in our meeting indicated an interest in implementing early phases of development in 2012/ However, a suitable site boundary will need to be agreed with the promoters. If the site boundary remains entirely within Fareham, then it will be for Fareham Borough Council to negotiate the actual site boundary. If the site boundary extends into Winchester an additional level of complexity will be introduced. Should it prove impossible to deliver the full 10,000 dwellings at the SDA by 2026, PUSH may need to consider alternative solutions to delivering 80,000 homes in South Hampshire, but this would need to be undertaken within the wider context of delivering the PUSH strategy as a whole Our preliminary analysis of the broad area of search for the SDA indicates the current area is unlikely to reach the maximum 10,000 homes, as set out in the Draft South East Plan, the Panel Report, and the Secretary of State s Proposed Modifications, without building at very high densities. These may not be appropriate in this type of location (density is explored further in Section 5.0). One potential solution to help mitigate against the risk of not achieving the 80,000 homes in South Hampshire by 11

16 2026 would be for the next review of the South East Plan to consider where additional housing numbers could be found. This might lead to bringing forward future reserve sites prior to 2026, but would need to be considered within the wider PUSH context and not solely as a consequence of problems in delivering one or both of the SDAs. Ultimately this may not be the preferable solution since the process of identifying reserve sites, determining the development parameters and providing a sound evidence base to support them could run the risk of diverting resources away from delivering the SDAs. This issue of capacity of the broad area of search is common to both SDAs. North/north east of Hedge End SDA risks and opportunities 4.13 At the north/north east of Hedge End SDA the complete landowner/promoter picture is not yet clear. At the time of writing, much of the land within the broad search area appears to be under the control of four or more promoters - Macdonald Hotels, Taylor Wimpey, Bloor Homes and Miller Homes. These promoters are represented by two Planning Consultancies: White Young Green and Terence O Rourke who have indicated the promoters are not yet at a stage to establish a consortium arrangement Both planning consultancies stated that they were not aware of any known ransom situations and the landowners who are known in the area of search appear to be willing to release their land for development. Potential risks to the delivery of the north/north east of Hedge End SDA at this stage are unidentified landowners and the potential complexities in land assembly and control. In our research into other major developments across the country, simple land assembly and control mechanisms are able to improve deliverability and speed of delivery A further risk to delivery of the north/north east of Hedge End SDA appears to be the area of search currently promoted by PUSH. Indicative site capacity estimates undertaken by the promoters of the north/north east of Hedge End SDA, and by ourselves as part of this Study, indicate that the area is unlikely to deliver the maximum 6,000 homes implementing very high densities, which may not be appropriate in this type of location (density is explored further in Section 5.0) The known Hedge End promoters have identified further available land that could be used to reach the full 6,000 dwellings (Figures 4.2 and 4.3 below). However, the process of considering an alternative site boundary for the SDA is likely to see other land interests emerge, which has the potential to complicate or delay consortium arrangements. 12

17 4.17 In our meetings with the promoters of the north/north east of Hedge End SDA, the plan in Figure 4.2 was provided by Terence O Rourke representing Bloor Homes, Miller Homes and Taylor Wimpey. This plan indicates their preliminary views of the broad area and location of land take required to accommodate 6,000 homes, which would include land within the red line and Hampshire County Council land west of the Hamble (not all HCC land identified in the plan is intended for inclusion within the SDA). The promoters indicated the proposed area assumes the inclusion of strategic green space integral to the development, but that the area would need to be larger than that shown if the SDA is required to include significant areas of green gap. Figure 4.2: Plan provided by Terence O Rourke 4.18 The plan in Figure 4.3 below was provided by White Young Green representing Macdonald Hotels. This plan indicates principle land ownership parcels of the currently proposed north/north east of Hedge End SDA and the surrounding area. At our meeting White Young indicated parcels 9, 4 and 5 are largely under the control of the known promoters, represented by White Young Green and Terence O Rourke. 13

18 Figure 4.3: Plan provided by White Young Green 4.19 PUSH will need to agree a suitable site boundary for the north/north east of Hedge End SDA with Eastleigh Borough Council and Winchester City Council and the promoters. If the final boundary is not likely to provide the capacity for 6,000 homes, PUSH will need to consider alternative solutions to delivering the 80,000 homes required in South Hampshire by Strategies for minimising risks to delivery 4.20 Specific boundaries for the Fareham and north/north east of Hedge End SDAs are not yet defined. Definition must take place as soon as possible and be confirmed in the LDF process. This may be undertaken through the development of Core Strategies, Area Action Plans (AAPs), Supplementary Planning Documents (SPDs) or a combination of these documents (policy options are explored further in Section 12) Through our research into the landownership and control issues at the two SDAs, and other major developments across the country, we have identified several key strategies that should be applied in the SDAs to minimise risks to delivery. PUSH, Fareham BC and Winchester CC should begin a regular and structured programme of engagement with the Fareham SDA promoters to discuss site specific issues in preparation for an outline planning application; PUSH, Eastleigh BC and Winchester CC should begin discussions with the north/north east of Hedge End SDA promoters to discuss the site s boundary, land assembly, and the realistic capacities; 14

19 Cross border discussions with Winchester CC should be progressed at both SDAs to ensure that administrative boundaries do not prevent the most sustainable boundary from coming forward; PUSH must agree site boundaries for each SDA with the promoters and the Local Authorities; PUSH must identify realistic capacities based on site boundaries and a clear vision for each SDA through dialogue with the promoters and the local planning authorities in order to inform further infrastructure requirement studies; Essential access points to each SDA should be identified to clarify landownership and avoid possible ransom situations; and If the maximum number of dwellings (16,000) is unlikely to be realised at the two SDAs, PUSH may need to consider alternative options for delivering the 80,000 new homes across South Hampshire. This would need to be part of a wider PUSH strategy context, rather than solely related to the two SDAs, but could include bringing forward reserve sites in other locations. Summary of experience elsewhere 4.22 Appendix A summarises the range of landowner/promoter experiences from the developments used in our case study. It is not possible to draw any immediate conclusion from the case studies in relation to timescales or deliverability in relation to landowner/promoter experiences. However, a key point to emerge from the case study research is the importance of having one main, clear point of contact on behalf of promoters/developers in order to drive the project forward. This point will be particularly relevant in progressing the north/north east of Hedge End SDA. 15

20 5.0 Density and Housing Mix 5.1 Density and housing mix are fundamental issues to consider in assessing the deliverability of the SDAs. Density and housing mix will be key determinants of ultimate character and attractiveness, with a direct impact on the type of community each will become in twenty years time. 5.2 The average density determined for each of the SDAs will directly impact on the housing mix. It will largely predetermine the number of one, two, three and four bedroom homes, the type of homes detached, semi-detached, terraced, or flats - and the number of family homes that will have private gardens. 5.3 The character of the SDAs that emerge from decisions about density and housing mix will have a short term impact in terms of the house buyers that are attracted to the area. This will also have a subsequent direct impact on the annual build rate that can be achieved, since it is reliant on the number of homes that house builders can construct and sell in any given year. 5.4 The density and housing mix will also have a longer term impact on the character and success of the two SDAs in their particular locations. Their success will be realised through the ultimate attractiveness of the area and the longer term demand for people to move into and remain in the area, creating a more stable community. Fareham and north/north east of Hedge End SDA risks and opportunities 5.5 At this point PUSH has not established a strong vision for the type of place that either SDA should become over the long term. Initial feasibility studies have been undertaken for each SDA and some broad assumptions about their character have been made about potential density, affordable housing provision, employment space, and linkages to Portsmouth and Southampton. 5.6 These assumptions will need to be updated as a result of the findings from this study and more extensive visioning exercises undertaken in partnership with the promoters and key stakeholders. 5.7 Promoters for the Fareham and north/north east of Hedge End SDAs have not yet begun their own master planning process for setting a vision for the type of place either SDA should become in 2026 or beyond. However, in our meetings with the landowners/promoters, they indicated that an average of dwellings per hectare (dph) is likely to be the most appropriate in these locations. 16

21 5.8 The Fareham promoters have undertaken a preliminary indicative site capacity study based on the site boundary they are promoting for the SDA. This work has considered densities at 40 dph, 45 dph, and 50 dph and was undertaken to provide an initial guideline which can be revisited as work progresses. We have not seen this study, nor was it within our remit to assess the methodology or the conclusions. We can report the site capacities as indicated to us in our meetings: Table 5.1: Fareham SDA landowners/promoters preliminary indicative site capacity estimates Density Dwellings 40 dph 7, dph 8, dph 9, It will be important to conceptualise a character and identity for both SDAs. Density and housing mix will have a significant impact on this character. In the case study research we found that densities exceeding 45 dph, as an overall site density average, experience a change in the type of character from that of suburban family community with some lower densities, private gardens, public parks and higher densities at local or district centres, to that of a more urban community with higher densities throughout the development and limited private outdoor space for residents In addition, evidence from elsewhere and discussion with the two house builders promoting the north/north east of Hedge End SDA, indicate that an average density of 50 dph can be difficult to achieve with few housing types available to choose from that would be able to achieve that average density (40 dph tend be one to two story family housing, whereas 65/70 dph are typically 3-4 storey townhouses or taller apartment buildings). Current market conditions are making house builders wary of high densities and a preponderance of flats The project brief for this Study implies that densities higher than 40 dph may need to be considered in order to minimise land take in more sensitive areas, and use resources more efficiently because more homes can be accommodated on less land. However, it is important to note that higher densities do not necessarily reduce land take, or make more efficient use of land because higher densities also bring increased open space requirements. In addition, there are also likely to be increased difficulties of meeting required parking standards in higher density developments High density development may be appropriate at a district centre or transport node at either SDA. However, in our research from other major developments across the 17

22 country, the households most likely to be seeking homes in a green field SDA are likely to want lower density family homes. As a result, a high average density across the whole SDA may bring additional risks to delivery. Strategies for minimising risks to delivery 5.13 Through our research into the density and housing mix issues at the two SDAs, and other major developments across the country, we have identified several key strategies that should be applied to minimise risks to delivery: An average density across the whole site should be identified together with density ranges allowing different character areas to be established; PUSH and the Local Authorities working with the promoters should set a vision for the two SDAs, which will determine the most suitable average and range of densities for each SDA; Large scale major greenfield developments or urban extensions of similar size to the SDAs would typically have an average density of somewhere between 35 and 45 dph to allow for areas with lower densities for family housing and private gardens, and for areas with higher densities around district centres; Above a site average of 45 dph, the character of development shifts from primarily family housing with enough area for private gardens, local centres and district centres, with higher densities around transport nodes and significant open space, to that of a far more urban environment with increasing numbers of flats without private gardens and higher densities throughout the development in addition to key transport, infrastructure and employment nodes; The density ranges will inform the housing types and therefore the character areas, and detailed housing mix can be left for subsequent determination in order to maintain a degree of flexibility over the long-term; Housing mix should remain as flexible as possible throughout the process to avoid saturating the market with a single type of home and to allow for the market to meet demand when houses are being built; Tenure (market, social rent, shared ownership) will have limited impact on density. However, it is likely to influence phasing plans, S106 agreements, and build rates, all of which are discussed in later sections of this report. 18

23 Summary of experience elsewhere 5.14 Table 5.2 below summarises density experiences from other major developments used in our case study. Table 5.2 Density and housing mix: experience from elsewhere Development Eastern Development Area, Swindon Northstowe, Cambridgeshire Hampton, Peterborough Cranbrook, East Devon Great Haddon, Peterborough Salden Chase, Milton Keynes Number new homes proposed Greenfield urban extension or free standing settlement Average density across the site (dwellings/ha) 12,000 Urban extension in Core Strategy (subject to further master planning) 10,000 Free standing settlement 40+ 8,000 Urban extension (brownfield) 7,500 Free standing (2,900 initially) settlement 6,000 Urban extension 50 5,390 Urban extension 40 Priors Hall, Corby 5,100 Urban extension 36 Emerson s Green, South Gloucestershire 2,500 Urban extension 50 (this is a policy driven density assumption) Brooklands, Milton Keynes 2,501 Urban extension 37 19

24 6.0 Build rates 6.1 Build rates at the two SDAs will have an impact on their deliverability within the proposed timescales. The draft South East Plan proposes up to 10,000 homes at the Fareham SDA and up to 6,000 homes at the north/north east of Hedge End SDA. This is confirmed by the Panel Report, which supports the concentration of development in the second half of the South East Plan by indicating that work could not commence on the SDAs before 2013 even if planning and design continues at full pace (paragraph 16.70). The Secretary of State s Proposed Modifications indicate that pace of housing development should be coordinated with improved transport management and infrastructure provision (paragraph 16.8). 6.2 The project brief for this Study proposed potential annual build rates for the two SDAs of 770-1,000 per annum at Fareham, and per annum at Hedge End in order to complete the SDAs to their ultimate capacity by 2026, and assuming a start date for the SDAs of The Panel Report on the draft South East Plan acknowledges that assumed completion rates of up to 1,000 dwellings per year at each SDA will be very challenging (paragraph 16.71). Fareham and north/north east of Hedge End SDA risks and opportunities 6.4 Market conditions will be prime determinants of future build rates. The annual build rate at both SDAs will be directly reliant on the rate at which private market homes can be built, sold and occupied, and the rate at which affordable homes can be built and occupied. House builders will not saturate the market to the extent that they have a large number of new homes empty and waiting for buyers for a significant period of time; they will build the number of new homes they can sell. Affordable housing is part of the build rate, and a lack of available funding will directly affect the annual total. 6.5 A wide variety of factors are important, including the character and attractiveness of an area, availability and quality of jobs for potential residents, strategic highways and public transport routes to the development, overall quality of transport infrastructure, and availability of labour to build the homes. However, the issues especially relevant to the two SDAs, will be the strength of the market at the time the houses are being built, the number of development fronts or character areas within the SDA, the housing mix, and the approach to and availability of funding for affordable housing. 20

25 6.6 The actual influence of these factors will not be known for some time. For example, the strength of the market in 2016 cannot be known today. The full effect of the recent credit crunch on the UK and South Hampshire housing market remains to be seen. However, what is clear from this recent crisis is that unforeseen circumstances can impact on purchasing power, the property market and build rates in unexpected ways. With a 20 year horizon over the Plan period there is a high degree of uncertainty about what could potentially affect build rates into the future. An unforeseen economic downturn could limit the number of homes that can be sold annually in South Hampshire. 6.7 Our research demonstrates that build rate trajectories tend to start and end slowly, and peak for a number of years at the height of construction. We have also found that a peak build rate of 700-1,000 dwellings/annum can be achieved in a very strong market at a location with high demand. However, this rate is not sustainable over the entire period of construction and an economic downturn has the potential to reduce purchasing power, and annual build rates. 6.8 Our research also reveals that house builders will not saturate the market they will build what can be sold. At the two SDAs this will be influenced by the density and housing mix since the character and desirability will be key determinants of demand. Our meetings with the Hedge End promoters indicated the market for selling higher density flats in South Hampshire is close to saturation. This may or may not be relevant in 8-10 years. However, it highlights the risk that a particular type of home in demand at one time may not be in demand years later and flexibility is important when planning many years in advance. 6.9 The potential risks from affordable housing can be demonstrated by considering the proposed 1,000 dwelling/annum build rate at the Fareham SDA, and a potential 40% affordable housing target. This would require RSLs in South Hampshire to deliver 400 new affordable housing dwellings per year at the Fareham SDA in order to maintain the 1,000 dwelling/annum average. Since Housing Corporation (HCA) funding is provided in 3 year periods, the certainty of funding for affordable housing at the SDAs will not be known for sometime. Should funding for affordable housing not be forthcoming, the annual build rate is likely to be reduced proportionately. 21

26 6.10 Potential approaches to minimising the risk of affordable housing provision on annual build rates include inviting several RSLs to get involved, seeking an early agreement on funding from Government and the Housing Corporation (HCA), or encouraging promoters/house builders to build some or all of the affordable housing. This final approach brings its own advantages of facilitating consistent quality and delivery, but would require upfront costs to promoters/house builders which is likely to impact their cash flow and may impact on the total funds available for infrastructure A further risk to annual build rates is that overall build rates can be affected if private sector build rates are tied directly to affordable housing completions in a given year. Should funding not be available for affordable housing, annual build rates for both private and affordable homes would be significantly reduced and delayed (affordable housing explored further in Section 10) The provision of advanced infrastructure to release more development fronts or character areas for construction will help to increase build rates. However, more resources will also be required by the determining authority to process Reserved Matters applications from the house builders. The relevant development control teams for the SDAs will need to ensure adequate resources are in place to provide efficient processing of applications to reduce delays and consequent reductions in the annual build rates The level of growth and demand that has been seen in the UK housing market over the last years may continue. However, should an adjustment take place, the aspirations for build rates at the Fareham and north/north east of Hedge End SDAs will be highly ambitious Whilst the build rates will not ultimately affect the long-term construction of the two SDAs, they will affect their deliverability within the proposed timescales. The level of uncertainty over a 20 year horizon suggests that a degree of caution should be used. 22

27 Strategies for minimising risks to delivery 6.15 Through our research into build rates issues at the two SDAs, and other major developments across the country, we have identified several key strategies that should be applied to minimise risks to delivery. More development fronts and character areas being developed at a given time can assist in delivering higher build rate; The average large green field site can accommodate approximately house builders, each building 50 homes per year (approximately ). This level could increase over a peak period if the right factors are in place; PUSH and the Local Authorities may wish to reconsider the ambitious average annual build rates currently indicated for the two SDAs to factor in potential risks to delivery; If PUSH and the Local Authorities reduce assumptions about annual build rates which results in some development continuing beyond the 2026 plan period, PUSH may wish to consider contingency options in the context of the overall PUSH strategy in order to deliver the full 80,000 new homes needed in South Hampshire by 2026, such as bringing forward reserve sites earlier in the Plan period; PUSH and the Local Authorities should anticipate resourcing requirements to maintain speed and efficiency when processing outline planning applications and reserved matters applications; and The significant scale and complexity of the SDAs should require the use of GIS from the very outset to ensure a very high level of accuracy in defining the development boundary and land use parcels. This will reduce the scope for delay from any errors in later stages, especially in processing Reserve Matters applications once parcels are sold onto house builders. Summary of experience elsewhere 6.16 Table 6.1 below summaries build rate experiences from other major developments used in our case study. 23

28 Table 6.1 Build rates: experience from elsewhere Development Eastern Development Area, Swindon Western Development Area Swindon Northern Development Area, Swindon Northstowe, Cambridgeshire Hampton, Peterborough Cranbrook, East Devon Great Haddon, Peterborough Salden Chase, Milton Keynes Number new homes proposed Anticipated annual build rates (dwellings/year) Actual average annual build rates (dwellings/year) Actual peak annual build rates (dwellings/year) 12, ,000 N/A N/A 10,525 (actual) N/A ,036 10,000 N/A 524 1,000-1,100 10, (at least) N/A N/A 8,000 N/A 300 (first five years) 500 (first five years) 7, N/A N/A (initially 2,900) 6, N/A N/A 5, N/A 500 (anticipated) Priors Hall, Corby 5, N/A N/A Brooklands, Milton 2, N/A 300 (anticipated) Keynes 24

29 7.0 Strategic Infrastructure & Funding Options 7.1 Each SDA will require a package of strategic infrastructure to allow development to proceed. Detailed technical investigations on both SDAs are at an early stage. Professional teams are either in the early stages of their work or remain to be instructed. There is no defined and comprehensive infrastructure package for each site. It is likely to be some time before they emerge. At this early stage there is a clear opportunity and obvious need for PUSH to take a lead and pro-active role in coordinating infrastructure delivery and acting as honest broker where there are competing priorities. 7.2 The focus of the infrastructure debate is invariably upon transportation issues. Two draft reports have been produced by Mott Gifford that identify a set of transportation measures for each SDA. Transportation is the most visible, high profile and often the most expensive infrastructure element to deliver. Where there are impacts upon the strategic highway the Highways Agency becomes involved and it has other objectives in addition to facilitating development. 7.3 The identified list of transportation projects to address the problem is unlikely to deliver the freedom from congestion that many residents would regard as the ideal situation. In effect this may mean managing expectations because increased congestion may still occur, but to a lesser extent than would have been the case without substantial investment. Any increase must be within parameters acceptable to the local community. New investment in public transportation systems will, however, provide alternative modal choices. Both studies use a 40% containment factor which may be optimistic and assume significant demand management measures in the wider area. Failure on either count will have dramatic effects on transportation impacts. 7.4 There will also be requirements for advanced site specific infrastructure to release parcels of land for house builders to begin constructing houses. Social infrastructure must be provided in a timely way to ensure community facilities, such as health, education, and public transport are in place when residents move into their new homes. Site specific infrastructure differs from strategic infrastructure in that it is specifically related to development within the site boundary, whereas strategic infrastructure is also influenced by development in a wider geographic area. 7.5 In our research on major developments elsewhere, many developers are capable and accept the need to provide site specific advanced infrastructure, where it is within the 25

30 scope of their financial arrangements, in order to release more development fronts and facilitate a quicker return on investment. Similarly, they may be ready to provide essential social infrastructure themselves when it is needed rather than providing funds and relying on public agencies to build the required facilities. This approach is becoming particularly common in relation to education facilities because developers realise that new residents want to know these facilities are in place before purchasing a home in a new community. Promoting an open book approach to development viability with promoters/developers can facilitate negotiations about development costs and the level of funding available for site and strategic infrastructure. 7.6 This approach by developers to provide advanced infrastructure and forward funding for some elements of social infrastructure does bring a number of advantages, such as economies of scale, speed of delivery and project management expertise. However, it also requires additional up front costs that will affect the developer s cash flow, and is part of the whole infrastructure package for the development. 7.7 The solution that many developers seek to offset these cash-flow challenges is to identify a threshold of development in the early phases that can proceed without triggering requirements for strategic infrastructure. 7.8 Some of the generic infrastructure issues to be considered are: Scoping, defining and costing the strategic infrastructure packages for each SDA; Testing the appropriateness of the package; Agreeing the timing of delivery of key elements; Determining what amount of development can proceed in advance of major infrastructure provision in order to expedite development, establish new locations and ease cash flow problems the threshold question; Managing expectations about major investment and addressing all perceived area development problems (particularly true of transportation); the deficit issue Who moderates the list? Preparing an iterative spatial infrastructure/investment plan; Minimising the potential for planning delays if infrastructure is not delivered on time; Bridging the infrastructure funding gap and programming; and Providing programme certainty. Fareham and north/north east of Hedge End SDA risks and opportunities 7.9 The consortium at the Fareham SDA bring two significant advantages. Firstly, there are only two promoters involved who appear to be at an advanced stage of 26