Planning: proposals to change planning law in London

London on track?

31 August 2016

Laura Nation examines the National Infrastructure Commission’s proposals to change planning rules for London and asks whether they would work


The National Infrastructure Commission (NIC) was set up in 2015, and part of its remit is to consider the strategic case for additional large-scale transport infrastructure in London. In a report published in March, Transport for a World City, the NIC recommended that Crossrail 2 be taken forward to alleviate pressures on underground lines, on commuter rail services and on strained orbital links.

The NIC advises significant changes to planning policy to realise these proposals – but how will those changes work in practice, and what do they mean for developers seeking to capitalise on the drive for growth?

Crossrail 2

The proposed Crossrail 2 would run from north to south across the capital, connecting commuter networks in Surrey and Hertfordshire. It is envisaged that it would open in 2033, in time for the arrival of phase 2 of High Speed 2 at Euston station.

The NIC’s report recommends that Crossrail 2 should be a priority for the new London Plan, integrated with Transport for London’s wider programme of smaller works on national rail, the underground and cycling networks. The report indicates that the following planning policy changes are necessary, as part of:

'a clear, transformative plan to turn the proposed 200,000 homes into a reality':

  • an increased rate of strategic industrial location (SIL) release for housing development;
  • an increase in the housing density levels applied by the London Plan;
  • including the intensification of existing housing estates;
  • densification around Crossrail 2 stations including, where appropriate, the limited release of metropolitan open land and the green belt.

Industrial land release

Currently, SIL is protected by the London Plan for functions such as general and light industry, logistics, waste management and transport. Where the release of SIL is allowed, the plan makes clear this only applies to surplus sites

'around public transport nodes and town centres to enable higher-density redevelopment, especially for housing'.

The London Plan cautions against hasty SIL release, however, suggesting instead that this ought to be managed carefully through opportunity area planning and development frameworks, while it maintains that the power to declassify such land should lie with local planning authorities. The NIC’s proposals for release of industrial land would require co-ordination between central government, London’s mayor, transport agencies and local authorities.

The government may be wary of a top-down approach to declassification and choose to remain faithful, at least, ostensibly, to the more restrained London Plan. However, more bullish developers may familiarise themselves with SIL along the proposed route, including the sites most suited for reclassification. It would appear, though, that the winners and losers have all but been decided, with price hikes being witnessed at sites along the proposed route already.

Density

The London Plan links the declassification of surplus SIL with an increase in housing density. Unsurprisingly, the NIC promotes both as means of unlocking Crossrail 2’s potential for housing.

The London Plan is clear that density should not be applied mechanistically. Rather, other factors relevant to optimising the potential of a development site must be taken into account, having regard to transport capacity and social infrastructure with an emphasis on high-quality residential environment and public realm.

The plan also recognises:

  • the principle of higher-density residential and mixed-use development in SIL;
  • that it may be acceptable for a scheme to exceed the ranges in density, with regard to local context, existing and planned public transport connectivity, local amenities and appropriate design and management, among other factors;
  • the potential for large sites to define their own setting and accommodate higher densities, progressed through a plan-led process.

There would appear to be sufficient flexibility in the London Plan to permit the densification envisaged by the NIC. The plan also provides unitary authorities with a framework to implement a local approach, including increasing density where proposals such as Crossrail 2 will improve accessibility to public transport.

Increased densification along the route of Crossrail 2 will require the co-ordination of planning between London's boroughs and affected authorities around the capital. Until now, density outside London has been a local matter. This will be a source of tension, however, and another challenge will be to gain public support for increased densification.

Metropolitan open land and green belt release

The NIC’s most controversial proposal is the release of land in the green belt, which has gained an almost sacrosanct status, protected by the National Planning Policy Framework as well as the London Plan and all local plans.

The unaffordability of housing has been cited as the biggest risk to the UK economy, so it is perhaps disingenuous to suggest that brownfield sites are sufficient to meet the capital’s housing needs, or that short-term improvement measures such as extensions to the Croydon Tramlink and the Northern Line of the underground, can serve as a panacea for housing supply in the South East of England.

The NIC’s proposals come at a time when a number of local authorities are reviewing green belt designations and the Department for Communities and Local Government has granted consent for one of the biggest residential developments in the green belt in a decade, comprising 1,500 homes north of Brockworth in Gloucestershire. For years, authorities have carried out ad hoc, inefficient green belt reviews that allow for limited encroachment, arguably at the expense of the openness that the policy restrictions seek to protect.

While people living close to areas identified for green belt release are likely to oppose its loss of protection, the NIC suggests a more strategic approach of controlled green belt release, protecting areas of true environmental value while releasing that which seeks only to prevent sprawl.

The potential of Crossrail 2 to remove viability constraints and support increased densities will not be lost on developers, who may take a second look at green belt sites that they previously discounted. Furthermore, given that 200,000 homes only represent 4 years’ supply for London, the green belt release envisaged by the NIC will be considered against a wholesale review of such boundaries.

Collaborative working

The NIC’s recommendations are a common-sense response to the deepening housing crisis.

However, they will not be easily achieved. It will be necessary to gain the support of City Hall, the various London boroughs and other local authorities, which have been promised the power to decide those sites that can be developed through their own local and neighbourhood plans.

The NIC signposts the more extensive use of the Greater London Authority’s land acquisition powers, Crossrail 2’s potential compulsory purchase powers and the possibility of a joint plan, by compulsion if necessary, as part of its co-ordinated framework.

The prospect of the government creating its own policy framework, with the confidence that local plans must follow suit, and the establishment of one or more development corporations to co-ordinate housing delivery are also mooted. It appears, therefore, that the NIC recognises the potential for challenge and the inevitability of a top-down approach to the implementation of its recommendations – a move that is likely to meet further opposition from politicians and local residents, and, if the passage of the High Speed 2 Bill through Parliament is anything to go by, will mean that the housing crisis deepens before any benefits materialise. Local and national politics aside, and given the potential for Crossrail 2 to unlock new housing, it would seem that developers could only gain from the NIC’s suggestions.

However, prices along the proposed route are already rising, and for those who have made speculative acquisitions the report sounds a note of caution with regard to the:

'high costs associated with Crossrail 2 and the inherently uncertain nature of the benefits'.

At £28bn, Crossrail 2 would be almost double the current cost of Crossrail 1. In part, paying this will rely on an enhanced mayoral Community Infrastructure Levy at twice the existing rates; this will be borne by the developer, along with already-rising land acquisition costs.

While the Treasury is likely to recoup the benefits of Crossrail 2, the advantages for developers may not be so clear cut.

Laura Nation is an associate at global law firm Clyde & Co.

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