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RTPI new study: Zoning not a silver bullet to speeding up homes

10 April 2018

Attaching automatic planning permission to housing land allocated in local plans in England would have limited impact on increasing the supply of homes, according to planners, surveyors, developers, financiers and built environment experts interviewed for a new study commissioned by the Royal Town Planning Institute (RTPI).

Planning permission only a small part of risks

The study tested how developers would react to a system akin to the ‘zoning’ approach used in the US, and explored the impacts of ‘planning risk’ which is often cited as a major development cost and barrier to accessing finance.

It appears that while zoning-like mechanisms like PiP may be useful in limited cases, they would not make development significantly easier.

It finds that ‘planning risk’ is used to describe a wide range of impacts, with a large proportion of these not relating to the granting of the permission itself. It also found that these impacts vary according to applicant and site size.

Permission in Principle (PiP)

The research finds that the recently introduced Permission in Principle (PiP), where development rights are laid out for particular areas in advance, might make it easier for smaller developers to secure finance since lenders know development would be permitted.

But interviewees were sceptical whether PiP would speed up the planning process. They raised concerns that political and public opposition could upset the scheme later, and that it could trigger land speculation and drive up prices.

Interviewees also have significant concerns about the capacity for local authorities to undertake PiP effectively due to the need for detailed site information to make sure there are no constraints that would prevent development.

Richard Blyth, RTPI Head of Policy Practice and Research, said:

“This study offers timely insight into the delicate balance that a planning system needs to achieve between flexibility and certainty, democracy and development efficiency. It appears that while zoning-like mechanisms like PiP may be useful in limited cases, they would not make development significantly easier.

“Our planning system already has various existing ways to increase certainty for developers. Local authorities should be more proactive in deploying these means.”

The RTPI’s “Planning  Risk and Development” study is a qualitative research into the widely held assumption that sluggish housing supply is mainly due to regulatory barriers, and in particular to the operation of the planning system.

Key findings

  • Increasing certainty in the earliest stages of the process would have the greatest benefits.
  • Delays and the need to revisit permissions are seen as extremely costly especially on large sites. Expectations of problems are built into returns developers require.
  • Expectations of problems are already built into returns required by developers, which supports the draft NPPF’s statement that realisation of risk should not necessitate further viability assessment.
  • Developers generally base required returns on experience rather than on sophisticated risk modelling.
  • Small and medium-sized builders could benefit most from a zoning-type system, but they would need targeted support to take advantage of it. 
  • Politics are intrinsic to planning risk. Moving to a more zoning-type system would mean having political discussions at an earlier stage—or more likely, revisiting them when details of proposed schemes emerged.
  • PiP will reduce but not eliminate planning risk.  Similarly, it will reduce but not eliminate delay, due to the remaining requirement to negotiate conditions.
  • Lack of resources mean it would be a challenge for local authorities to assemble the information required to implement PiP to any significant degree.
  • PiP could have a negative impact on the cost of land. If the number of sites with PiP is restricted they might be priced more highly, offsetting the advantages of more certainty.
  • The planning system already has other mechanisms that help to improve planning certainty, including outline planning permission, detailed planning briefs, pre-application consultations, local development orders and development corporations. 

The research was conducted by the Bartlett School of Planning and London School of Economics. It was sponsored by the RTPI with support from University College London.