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Why the Housing Requirement for Neighbourhood Areas should be zero

Photo by Chris Barbalis on Unsplash
In May 2019, the government updated its national planning practice guidance on neighbourhood planning. Notably, a number of new paragraphs relating to local planning authorities' duty to set housing requirements for Neighbourhood Areas were introduced.

Whilst the guidance is welcomed, there remains uncertainty about how the housing requirement should be calculated - in particular how Local Plan site allocations should be taken into account in the calculation.

Duty to set housing requirement for Neighbourhood Areas

The idea of setting a housing target for Neighbourhood Areas was first mooted in the government's Housing White Paper for the purpose of helping Neighbourhood Plans to be produced expediently. 

The updated National Planning Policy Framework (NPPF) introduced a duty for local planning authorities to set out a housing requirement figure for designated Neighbourhood Areas through their Local Plans:
...strategic policies should also set out a housing requirement for designated neighbourhood areas which reflects the overall strategy for the pattern and scale of development and any relevant allocations.
Para. 65, National Planning Policy Framework

National planning practice guidance notes there is 'no set method' for calculating the housing requirement, and continues that 'the general policy making process already undertaken by local authorities can continue to be used to direct development' along with other relevant policies and evidence.

Advantages to identifying housing requirement through Local Plans

There are clear benefits to identifying housing requirements for designated Neighbourhood Areas through the strategic policies of the Local Plan.

Omitting the need for retesting will provide certainty for emerging Neighbourhood Plans. NPPF paragraph 65 continues:
... Once the strategic policies have been adopted, these figures should not need retesting at the neighbourhood plan examination, unless there has been a significant change in circumstances that affects the requirement.
Since the strategic policy will be subject to consultation during the process of preparing the Local Plan. All the difficult arguments around what the housing requirement should be in any given area should, in theory, be directed at the local planning authority writing its Local Plan, rather than overwhelming the neighbourhood planning group. In addition, the policy will be tested through the Local Plan examination, thereby demonstrating that the housing requirement is 'sound'.

By setting the housing target for all Neighbourhood Areas in the district at the same time should help to  provide clarity and ensure the approach is fair.

In addition, this approach could potentially make the Strategic Environmental Assessment (SEA) and Habitats Regulation Assessment (HRA) process more straight forward, as the housing requirement will have already been tested through the Local Plan process.

Must a Neighbourhood Plan meet its housing requirement?

The basic conditions require Neighbourhood Plans to be in 'general conformity' with strategic policies for the area. However, there is no specific obligation on the Neighbourhood Plan to deliver the housing requirement set by the Local Plan, so long as it does not prevent the housing requirement from being met.

For example, the Neighbourhood Plan could choose to remain silent on the issue of housing development, leaving the job of allocating sites to the Local Plan to deal with.

However, where a Neighbourhood Plan makes provision for the housing requirement in full through its policies and site allocations, NPPF paragraph 14 grants extra protection against unplanned developments. The benefits of this extra protection are discussed in Presumption-proofing Neighbourhood Plans.

For many areas, NPPF paragraph 14 will be a major incentive to producing a Neighbourhood Plan, in order to fend off unplanned developments, whilst allocating sites supported by the community.

Providing an indicative housing requirement

The duty to set a housing requirement was introduced by the revised NPPF, and is therefore a new addition to the planning system. It will therefore be some time until all Local Plans meet this new duty.

Where it is not possible to provide a housing requirement figure, for example where a new Local Plan is not being prepared, national policy requires local planning authorities to provide an indicative housing requirement figure, where requested to do so by the neighbourhood planning group.

National policy requires the indicative housing figure to be based on evidence, such as housing need and population, and to be aligned with the planning strategy for the area. However it is not clear whether an indicative housing figure will have the same status as a housing requirement set through a Local Plan policy, which will have been subject to consultation and tested through the Local Plan examination.

Indicative housing figures may be scrutinised during consultation and examination of the Neighbourhood Plan, particularly by those with land interests in the area.

Setting the housing requirement - and why it should (normally) be zero

For new Local Plans, the housing target for the whole authority area will normally be calculated using the government's Local Housing Need method.

National policy requires local plans to 'provide a clear strategy for bringing sufficient land forward, and at a sufficient rate, to address objectively assessed needs over the plan period'. Through national policy, government appears to have a clear expectation that Local Plans will identify development sites to meet its Local Housing Need in full:
This should include planning for and allocating sufficient sites to deliver the strategic priorities of the area...
Para. 23, NPPF

Local Plans typically identify specific sites for development (known as site allocations) to meet and likely exceed the housing requirement for the area.

Many local planning authorities may simply tot up the supply of dwellings from site allocations in the Neighbourhood Area, and set this amount as the housing requirement.

For example, if the Local Plan's growth strategy allocates two sites each for 50 dwellings in a Neighbourhood Area, it is logical to assume that the Neighbourhood Area Housing Requirement should be 100 dwellings. In such a scenario, it would be difficult to imagine any other figure being applied.

However, the following paragraph from national planning practice guidance means this logic is flawed.
... Neighbourhood plans should not re-allocate sites that are already allocated through these strategic plans.
NPPG Paragraph: 044 Reference ID: 41-044-20190509

Not re-allocating sites which are already allocated in a Local Plan does make sense. There is no point in duplicating policies as the Local Plan and Neighbourhood Plans should be read as a whole. 

As set out in NPPF paragraph 65, the housing requirement should reflect 'the overall strategy for the pattern and scale of development and any relevant allocations'.

Therefore in my imaginary scenario with a Local Plan which allocates two sites of 50 dwellings in a Neighbourhood Area, the Neighbourhood Plan cannot 're-allocate' the sites already allocated by the Local Plan. 

The Neighbourhood Plan may be able to allocate alternative sites, but with an up-to-date Local Plan in place, this probably wouldn't make much sense. The Neighbourhood Plan would likely be able to allocate additional sites, thereby boosting the supply of housing in the area - but this would be over and above the 'requirement' for the area.

As the Neighbourhood Plan cannot re-allocate the same sites, the housing requirement cannot therefore be 100. The sum total of dwelling supply from the Local Plan site allocations should therefore be subtracted from the housing requirement.

Therefore the housing requirement should be zero.

Implications for NPPF Paragraph 14

A housing requirement of zero doesn't make a great deal of sense in the context of NPPF paragraph 14, which offers extra protection from unplanned developments in areas with Neighbourhood Plans in force (in  circumstances where the 'presumption in favour of sustainable development' applies - see Presumption-proofing Neighbourhood Plans).

To benefit from this extra protection, paragraph 14 requires Neighbourhood Plans to contain 'policies and allocations to meet its identified housing requirement'. A housing requirement of zero would therefore be illogical -  a Neighbourhood Plan cannot make site allocations for 'zero' dwellings.

Presumably to take advantage of paragraph 14, where the housing requirement is zero, a Neighbourhood Plan would have to exceed the housing requirement by allocating sites for development.

Exceptions

The scenario I've described above (a Local Plan with site allocations to meet its housing need in full) is fairly common. However there will no doubt be many exceptions to this approach.

For example, in some Local Plans site allocations may be less clearly defined - for example the Local Plan may identify 'broad locations for growth', which could reasonably be firmed up through a Neighbourhood Plan.

In other areas, the local planning authority may produce their Local Plan in two parts - with strategic policies and housing targets being set out in Part 1, and site allocations and development management policies in Part 2. This might create an opportunity for the Neighbourhood Plan to make site allocations which follow on from the Part 1 Local Plan.

In these examples, the housing requirement may be calculated in a different way.

Why the housing requirement calculation matters

How the housing requirement is calculated really matters. In some planning appeals, appellants have claimed Neighbourhood Plans have inappropriately re-allocated Local Plan sites, in an attempt to undermine the Neighbourhood Plan and argue that it does not meet its housing requirement or the criteria set out in paragraph 14.

National planning practice should be amended to provide greater clarity on how the housing requirement should be calculated for Neighbourhood Areas. Without a robust approach, Neighbourhood Plans may not provide protection against unplanned developments. 

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