The Joseph Rowntree Foundation has an extensive programme of R&D on housing and planning issues. It also convenes groups of experts to discuss the latest information and ideas on these themes. This response from the JRF's Director is based on the evidence from this body of work.

OVERVIEW OF DPM'S STATEMENT OF 18 JULY

  The Foundation accepted the DPM's analysis of the nation's twin problems in relation to sustainable housing and inclusive communities: huge shortages in the South, and city flight from the Northern conurbations. These two issues are distinct: the public perception that migration from the north is the cause of shortages in the south is inaccurate. Southern growth is based on the success of London as an international centre; "exodus" from Northern and Midlands cities is not to the South of England but to the suburbs and rural areas beyond the older, ex-industrial centres. Diminishing the attractiveness for business of London and the South is unlikely to revive the economies of northern conurbations.

  Accelerating planning decisions, encouraging a sufficient supply of (particularly brownfield) land, encouraging higher densities, concentrating on growth areas, and increasing public funding for affordable homes, are all sensible and valuable policies.

THE SPECIFICS

  Turning to the details of the DPM's statement, we would offer the following comments:

The overall scale of house building required

  JRF estimates that the UK needs some 210,000 additional homes each year—in place of current levels of under 150,000—to bring supply more in line with demand over the next 20 years. These figures take account of recent projections for inward migration.

  However, the supply needs to be in the right places: 70% of demand is currently in the Southern regions but only 50% of new house building is in these areas.

Are the proposals likely to significantly reduce house prices?

  House prices may fall back where a particular market experiences lower demand, eg when high priced accommodation in central London is affected by the fortunes of the City; when the value of low priced accommodation falls in areas where there are job losses if the economy turns down.

  But supply and demand are so out of kilter that the current expectations of additional house building will not in themselves make much impression on prices overall in London and the Southern regions. The hope must be that annual increases will move into a sensible relationship to rising incomes, giving stability and predictability to house-buying decisions.

  While significant increases in interest rates are not in prospect, the level of mortgage commitments accepted in recent years means any sharp rises in the cost of borrowing would be likely to lead to arrears and repossessions. Unfortunately today's buyers have more limited protection against the problems of maintaining mortgage payments than prevailed during the last downturn; work for the JRF by Professor Janet Ford indicates the high level of vulnerability for those who have little or no private insurance cover. This means that increased unemployment or increased interest rates could lead to hardship for those with heavy mortgage commitments at some point in the future.

Geographical distribution of new housing

  Projections for future demand continue to indicate that it is in London and the South East that pressures will be felt most acutely.

  By concentrating substantial amounts of development in specified places—where planning will need to be fast-tracked—it should be possible to achieve better master-planning, more valuable planning gains, and the creation of sustainable new communities. By linking these to existing towns and cities—"urban extensions"—the new developments can plug into the transport and infrastructure that already exists, preventing a growth in traffic congestion and pollution and the need for expensive new facilities.

  The four growth areas have been chosen on the basis of good evidence. However, if the Thames Gateway is to prove attractive to house buyers on a substantial scale, transport links and environmental improvements are going to require some serious public investment. Such investment would be well worthwhile, not least in securing a high proportion of the new homes on recycled, brownfield sites.

Will the proposals promote sustainable communities?

  By concentrating particularly on the four growth areas, urban sprawl across the whole of the Southern regions will be minimised.

  However, there is an intrinsic problem in expecting private sector house builders to achieve high quality sustainable communities. Reliance on profit-making bodies who build homes for sale and then leave, will not achieve the key elements for strong communities: house-builders are unlikely to welcome the integration of affordable homes amongst those for outright sale; they are unlikely to invest in the public realm and in the creation of valuable green spaces; and they are unlikely to leave behind governance arrangements which will help to nurture and sustain the community for many decades.

  Community building requires different skills to those of house builders. A commitment to remain with the development indefinitely, knowledge of managing mixed income and mixed tenure developments, and an understanding of how to create and manage community facilities, will be as important as knowledge of house building. Moreover, there has been disappointment with the design and layout achieved in large tracts of privately developed housing and private developers need to be working, increasingly, within carefully devised Masterplans.

  The solution may lie in drawing in intermediary bodies, who may well be operating on a not-for-profit basis like the Joseph Rowntree Foundation or other major registered social landlords: these can organise the consultation exercise that leads up to the agreement for a Masterplan, in partnership with the local authority. It may be necessary for the democratically-elected body to use its Compulsory Purchase powers to prevent some local owners holding the development to ransom; the intermediary may need to finance these processes. The intermediary agency can then engage the house builders, who operate within the Masterplan and produce affordable housing as part of the whole. (This is the model being used by the JRF for an urban extension on the east side of York, for 540 new homes with associated landscaping and facilities.)

Millennium villages

  The concept of the Millennium Village should provide a model for urban extensions, demonstrating how environmental sustainability can be achieved alongside high quality design and community building. This promise has not been completely fulfilled as yet but it seems well worth persisting with the idea. The JRF has provided some support for initiatives within the new Villages and is planning to assist a network of key people engaged in relatively large-scale new development, not least to disseminate information from our own "model" development, in partnership with the City of York, at "New Osbaldwick".

  Although the modus operandi of a competition between a number of consortia of development partners may produce a good Masterplan for a new Millennium Village (or rather major urban extension), there are potential problems in leaving the actual development process to the private sector. Long-term management and maintenance of common parts, landscaped areas and the public realm are likely to call for an intermediary body with a long life expectancy and access to "patient" finance.

Housing for sale/social housing

  Taking the balance between housing sold on the open market and housing built with some form of subsidy, the average ratio over the last 50 years has been 60:40. In recent years, however, the quantity of subsidised housing has fallen to well under half this level and the result is acute and growing shortages of affordable homes in many areas.

  The Deputy Prime Minister's July statement signalled another step in the right direction of shifting the balance, with extra funding for social housing (and for accommodation between full ownerships and fully subsidised renting). It will be necessary for the proportion of subsidised housing to rise further—meaning larger injections of public funds for Social Housing Grants—if supply is to match demand from those on average and below average incomes. The gains extracted by planners will ease the requirement for public subsidy but only to a limited extent: the main value to be gained from planning decisions which require a proportion of affordable housing may come in the access this gives to land.

The level for decision-taking

  Planning decisions are subject to intense pressure at the local level and it has sometimes proved impossible for Council Members and officers to take decisions which are unpopular with those in neighbouring homes. Few people wished to see new housing built close to where they live so, if any new homes are to be built at all, leadership is required to ensure that sufficient sites are indeed developed. Unpopular decisions may be better taken by those at some distance from the locality and this suggests greater use of planning powers at a Regional level.

  The JRF is embarking on a body of work around increasing the supply of housing, drawing on evidence from overseas as well as good practice in the UK. It is also promoting its schemes of City-centre Apartments for Single People at Affordable Rents which are intended to regenerate older urban areas and counteract city flight. And we are convening a practitioners network to spread the lessons we have learnt from planning a major new development on the edge of York. While our research work and our operational activity both indicate important and positive change in relation to planning for inclusive communities and affordable housing, we know there is much more to be done.