Appendix A – Future housing provision in Hastings

This is a background paper for information only and is not available for comment as part of the consultation

1.0 Introduction

1.1 Now that the Government is planning to withdraw the South East Plan, there is an opportunity for Hastings to review its housing target for the period up to 2028.

1.2 The purpose of this paper is to set out how many new homes should be provided within Hastings up to 2028. We need to take account of (i) local housing need and demand; (ii) the level of housing needed to support the growth and regeneration agenda for the Town, and (iii) the potential developable space available in Hastings. The challenge is to provide enough new homes to meet need and demand, as far as possible, whilst still maintaining the Town’s attractive environment and ensuring the infrastructure to support the development can be provided.

1.3 This paper will look at: why we need more homes, how much can be provided within Hastings, and what the scenarios are around setting a target number. The present Government believes that in abolishing top-down regional housing targets and promoting greater community consultation and involvement in planning decisions, communities will be more willing to accept new housing because development proposals will more closely reflect the preferences of the community ¹⁶.

1.4 The question of housing numbers in Hastings is part of the ongoing consultation on the Hastings Core Strategy. Previous consultation versions of the plan have set a housing target of 4,200 net new homes between 2006 and 2026, which is equivalent to 210 net new homes annually. This figure came from the South East Plan which Hastings had to comply with. However, the Government is planning to abolish regional plans and local authorities now have the opportunity to review their housing targets.

1.5 It will still be necessary for us to justify whatever housing target is chosen and to be able to defend both the target figure and future housing supply policies during the LDF Examination process. This means continuing to build on and rely upon our evidence base. The Government says that we still need to identify enough sites and broad areas for development to deliver enough housing for at least 15 years from the adoption of our Plan (i.e. the Core Strategy) and to have a five year supply of deliverable sites¹⁷. This means we need to plan for housing needs up to 2028.

1.6 Although the Government has placed the responsibility for setting housing targets with local authorities, it has also very clearly said that it is committed to housing growth¹⁸.

2.0 Why we need more housing in Hastings?

2.1 Access to a decent home for everyone is the foundation for a decent quality of life and a key priority for the Council and its partners. It is a priority to increase the availability, affordability and quality of housing to ensure all sections of our community, in all housing tenures, enjoy housing that is affordable, accessible and appropriate for their needs and aspirations ¹⁹.

Local Economic Growth and Recovery

2.2 The supply of new homes is also critical to the town’s economic performance and the wider regeneration agenda. Hastings has been pursuing an ambitious, collaborative approach to economic and cultural renaissance. Since its formation in 2003, Sea Space and the wider Hastings & Bexhill Task Force has:

• constructed over 18,000m² of high quality business space in Hastings, including Lacuna Place and a Creative Media and Innovation Centre
• facilitated over 7,000m² of education space for higher / further education use – Hastings is now a University town;
• established Enviro21, a modern industrial park focused on the growth of environmental technology companies and advanced manufacturing;
• created capacity for 1,700 new jobs, including the recently announced SAGA investment into Hastings’ Priory Quarter, creating over 700 additional private sector jobs.

2.3 These developments offer a real and lasting opportunity to promote the town as a thriving, high quality business location and a desirable place to live and enjoy quality recreation time. We need to consider the need/demand for housing in the context of these regeneration efforts, and whether or not both the quality and type of the existing homes available in the town is a factor holding back regeneration efforts.

2.4 Both the quality and mix of new homes within Hastings will be important to the local economy in terms of (i) existing businesses and their ability to attract employees; and (ii) new businesses setting up or locating in the town. The right type of housing could also help attract more skilled workers to the town. A more skilled workforce should enhance the ability of Hastings to attract mobile business investment and thus contribute to economic development.

2.5 In relation to future housing provision, we need to continue to ensure we make provision for the right mix of housing types to support the growing employment sectors and to attract and retain higher skilled workers and their families.

2.6 In deciding how many new homes we need, we should be aiming to get the balance right between homes, jobs, workforce and population. This includes meeting the needs of those of working age, the housing needs of the growing number of people of retirement age, and meeting objectives for housing affordability and sustainable travel to work patterns.

Evidence of Local Housing Need

The Housing Register

2.7 Demand for suitable and affordable housing in Hastingsfar outweighs supply. There is an acute need for housing as many people are living in unsuitable accommodation,such as properties which are overcrowded or in a state of disrepair. There is also a high level of unemployment and deprivation in Hastings and many people cannot afford their own home or are insecurely housed, e.g. temporarily residing with friends/family. As at February 2011 there were 1,812households on the Housing Register in housing need, this includes homeless households and those where their housing is having a detrimental effect on their health. Thus more housing isrequired to enable people on the housing register to move into a home that is suitable for their needs.

2.8 Throughout a decade of rising prices (1998-2008) and through the current economic downturn, average house prices in Hastings have consistently remained below the average for the South East – the gap being around £40,000. This is due to a range of factors including the mix of housing²⁰. However, the affordability of housing is about the relationship between income and house prices. In Hastings, this ratio is on a par with many areas in the South East because of our low wage economy. The average lower quartile house price is currently 6-7 times the lower quartile income in Hastings ²¹. The need, therefore, for affordable housing still vastly outweighs the supply. After accounting for re-lets within the existing stock of social rented housing, research in 2005 identified a shortfall of 596 affordable dwellings for that year²². This significantly exceeded what had been delivered by way of new affordable housing in recent years, with the annual average over the last five years being just 65 units. In addition, this shortfall is almost three times the old annual South East Plan requirement of 210 dwellings per year for all types of housing.

The Private Rented Sector

2.9 In addition to those people who appear on our housing register, there is also a significant number of people who want a home but lack the finances to either buy or rent one without assistance, and so rely on private renting with top-up support from local housing allowance. Data on housing benefit recipients shows that 6,350 claimants in Hastings live in the private rented sector²³. This indicates that the private rented sector is playing a significant role in meeting housing need in Hastings and that the number of households on the housing register would be higher if it were not for this supply of low-cost rented accommodation. However, we also know that there is a high proportion of this privately rented accommodation, often in multiple occupation, which is well below minimum acceptable standards. There are some 2,800 Houses in Multiple Occupation (HMO) throughout the Town ²⁴. Evidence shows that 64% of all HMOs fail to meet the Government’s Decent Homes Standard. Many suffer from low standards of fire safety, management and maintenance, and in some cases, tenants are treated very poorly and the buildings are a focus for crime and anti social behaviour.

2.10 There is, therefore, a pressing need for more housing and more choice of housing in Hastings, especially affordable housing, to ensure that people have somewhere to live and somewhere that meets their needs.

Population Change

2.11 If we consider the demand for new housing arising from future population changes alone, the latest trend-based population forecast for Hastings shows the population increasing by some 12% between 2011 and 2028, and the number of households’ increases by some 18%. This is because, in line with national tends, the average household size is set to get smaller. The demand for new housing arising from this level of population and household growth would require a further 7,840 homes by 2028 ²⁵. We do not think trying to meet this level of demand is realistic. This is explored further in this paper at paragraphs 3.2 to 3.7.

Capacity to Accommodate Housing Growth

2.12 Choices with regard to the location of new housing in Hastings are very limited. Hastings is now getting close to its limits in terms of further outward growth and development. The town’s environmental assets, the nationally important Area of Outstanding Natural Beauty to the north and east of the existing built-up area, the internationally important Hastings Cliffs on the eastern boundary, and the network of important greenspaces across the town including Hastings Country Park to the east and Pebsham Countryside Park to the west, act as restraints to major outward growth.

2.13 The Council has carried out an assessment of all land/sites in Hastings to identify sites that could be suitable for housing ²⁶. Housing capacity up to 2028 as at April 2011 is calculated from:

• development in the pipeline (sites with planning permission and either under construction or not started)
• sites identified for housing in the 2004 Hastings Local Plan
• potential sites identified through the assessment.
• a windfall allowance to take into account dwellings that may come forward on sites that have not been identified.

2.14 This capacity assessment is one of the key pieces of evidence that will help support our decision on both the amount of new housing and where this will be built. Our full assessment was produced in January 2010 but will be regularly updated in order to reflect the latest information around the availability and deliverability of individual sites. Prepared against the background of the South East Plan and its specific housing requirement, the assessment has revealed, through extensive research, that there is no potential to meet housing requirements through a strategic Greenfield release on the town’s urban edges ²⁷. Instead, future housing requirements will need to be met essentially through urban sites. The current assessments indicate that the capacity for new homes in the Town ranges from a minimum of 2,480 to a maximum of approximately 3,800. The minimum figure is made up of development that is already in the pipeline – that is already, under construction, with planning permission or allocated for development. The maximum capacity includes potential new housing sites, windfall development²⁸ and the return of empty homes back in to use.

Empty Homes

2.15 Empty homes are a wasted asset, and a good deal of progress has been made by the Council in tackling empty homes in recent years. However, whilst bringing empty homes back into use does not increase the overall housing stock, it does increase the effectiveness of the existing stock.

2.16 In 2010 there was estimated to be approximately 400 long term empty homes in the town. Some vacancies are necessary to allow the normal operation of the housing market (eg a property is empty pending re-sale or re-let and some will be under repair).

2.17 The Council’s Empty Homes Strategy (2009-13)²⁹ outlines our continued commitment to bringing empty homes back into use through advice, financial assistance and enforcement. On the basis of the current Strategy, it may be realistic to assume that approximately 255 former empty homes may be returned to use over the Plan period.

2.18 Clearly, the return of long term empty properties back into use is only part of the picture and more new homes will be needed if we are to address some of the issues already outlined.

3.0 Levels of Housing Growth Considered

3.1 We have examined 3 potential growth scenarios before arriving at a recommendation on a future housing growth target:

Scenario 1 High Growth:

3.2 7,840 net new dwellings or 461 per annum to be provided to 2028

3.3 This scenario takes account of predicted trend-based population growth between now and 2028.

3.4 The main drivers of population change include natural change (births minus deaths) and migration. The latest trend based projections were compiled in April 2011 by East Sussex County Council (ESCC). Importantly, trend based projections do not take in to account planned future housing delivery.

3.5 Planning to meet the demand for new homes arising from the trend based population forecast would see the population rise by 12% between 2011 and 2028 and would require a further 7,840 new homes.

3.6 There is a degree of uncertainty that applies to aspects of these projections. Projections of future population sizes are based on the assumption that recent trends will continue in the future, which is by no means certain. In particular it is recognised that current methodology for estimating current and therefore future migration at the local level is problematic. Trend-based projections also do not take into account specific local issues, such as constraints to development, industrial changes, short-term worker migration patterns or unforeseen national circumstances such as economic downturns. Whilst the natural growth component of population projections is unlikely to change, assumptions around migration levels may well change over time, particularly in relation to both local and national economic growth.

3.7 The issues associated with pursuing this level of housing growth are that:

• it offers the biggest capacity for growth.
• since the scope for providing affordable housing is closely linked to overall housing provision, this option would provide the greatest opportunity to maximise the provision of new-build affordable homes.
• seeking to accommodate this level of growth takes no account of local factors such as environmental constraints or the ability to generate jobs locally.
• pursuing this level of housing growth would not be achievable without building at much higher densities – something which is not always popular with parts of the market but which can help improve affordability and address the housing needs of younger people such as first time buyers or, at the other end of the spectrum people looking to downsize and those whose children have left home.
• pursuing this level of housing growth would not be achievable without building in environmentally sensitive locations.
• there is a degree of uncertainty that applies to aspects of these projections.
• it relies on a level of housing delivery likely to exceed that which the market has achieved in recent years.
• this level of development will impact on the local road network and could lead, if unconstrained and unmanaged, to unacceptable levels of congestion.

Scenario 2 Lower Growth:

3.8 2,478 net new dwellings or 146 dwellings per annum to 2028

3.9 This lower scenario figure would be based on existing allocations and permissions – development already in the pipeline and would not necessarily involve the allocation of any new sites or windfall development. After allowing for homes that have already been built since 2006, this target would result in almost 1,000 fewer new homes by 2028 than the medium growth option. This lower target would be the equivalent of building 146 homes a year, a significantly lower number than average annual completions over the last five years (between 2006 – 2011 an average of approximately 200 net new dwellings have been built each year). However, this level of housing growth still relies on numerous schemes already approved for medium to high density development for 1 and 2-bedroom flats rather than houses.

3.10 The issues associated with pursuing this level of housing growth are that:

• it doesn’t support the regeneration agenda
• site viability will continue to be an issue in Hastings, particularly whilst the outlook for the housing market remains uncertain – inevitably in such a climate a lower target may be more achievable
• because the supply of affordable homes is closely linked to the overall supply of new dwellings, setting a lower overall target would have the effect of reducing the delivery of affordable homes for which there is a significant need in Hastings, and which is a stated priority of the Council and the Local Strategic Partnership³⁰.

Scenario 3 Medium Growth:

3.11 3,418 net new dwellings or 201 per annum to 2028.

3.12 This scenario is based on a continuation of the original South East Plan (SEP) target of 4,200 new homes which was for the period 2006-2026. The South East Plan figure for Hastings aimed to support urban renaissance, and to accommodate further development in a way that respected environmental constraints. In particular, the decision was made not to use demographic forecasts alone as a driver for housing development. This is because the relationship with the economic growth and regeneration, and environmental constraints is much more important in Hastings. The scale of housing development proposed in the South East Plan is made on the basis that housing growth should not outstrip the ability of the local economy to provide jobs at a corresponding rate. Otherwise we would simply be adding to unsustainable out-commuting³¹. The starting point for the South East Plan figure is one based on the amount of development that is already in the pipeline (that is, sites already allocated for development and with planning permission).

3.13 Although the Government plans to abolish the South East Plan, there is still a significant body of evidence underpinning the housing numbers in it. After allowing for homes that have already been built between 2006 and 2011, the revised requirement to 2028 would be 3,661 new homes following the original South East Plan rates.

3.14 Meeting this target would require the allocation of new sites in addition to development that is already in the pipeline together with some reliance on windfall and the return of empty homes back into use. Information, as at 1^st April 2011, shows that this rate of growth could be made up from the following sources:

Source of supply	No of units
(a) Development in the pipeline	2,252
(b) Potential new sites	611
(c) Windfall development	680
(d) Empty Homes	255 +
Sub total	3,798
(e) Minus 10% contingency	380 -
TOTAL	3,418

3.15 Development in the pipeline (a) includes sites under construction, with planning permission or already identified (allocated in the current Local Plan) for housing development. Aiming to meet this level of growth will mean relying to some extent on schemes already approved for medium to high density development for 1 and 2-bedroom flats rather than houses.

3.16 Potential new sites (b) have been identified via the SHLAA.

3.17 Windfall development (c) has made a significant contribution to housing delivery in the past and our research suggests we should continue to expect a good rate of delivery from this source. A figure of 680 (or 40 dwellings per year) can be assumed from our research.

3.18 Empty Homes (d) would be included under special circumstances as a source of supply. As well as recognising that empty homes are a wasted resource, the number of long term empty homes³² in the town is recognised as an issue by the Council. In a town where development opportunities are limited, the Council is committed to making the best use of resources and tackling empty homes forms an important part of our strategic approach to housing in order to help meet local housing need. The Empty Homes Strategy 2009-13 outlines the Council’s continued commitment to bringing empty homes back into use through advice, financial assistance and enforcement. The empty homes Compulsory Purchase Order (CPO) programme is a significant component of our enforcement model for bringing long term empty homes back into use and will be used return homes to use, where other approaches have been exhausted. We estimate, that Council’s efforts will result in 15 empty homes per year returning to use up to 2028

3.19 Finally, we also have to acknowledge that there is a possibility that not every scheme currently identified will necessarily be developed at the density currently envisaged and/or within the timeframe of the Plan. As well as the possibility that some existing planning permissions may lapse and remain undeveloped, potential new sites will need to be tested via the Site allocations and Development Management Plan. Because of this uncertainty and the need to retain flexibility around our ability to meet 5 and 15 year housing land supply requirement, we propose to build in a 10% contingency (e) to allow for this.

3.20 All of the above would mean working to a target of 3,418 between 2011 and 2028, which is equivalent to 201 per year.

3.21 The issues associated with pursuing this level of housing growth are that:

• the capacity work suggests that this target can be met
• 201 dwellings per annum better reflects recent levels of housing delivery
• this level of housing improves the ability to address pressing affordable housing need both in terms of numbers and the range of household needs
• the level of development is within the environmental capacity of the town
• estimates of the resultant workforce which will arise from this level of housing growth is consistent with the regeneration agenda and the capacity to provide new employment locations and attract and retain jobs locally
• it helps take into account the current downturn both nationally and locally in the housing market, and the subsequent fall in completions figures in recent times, it may be a number of years before we see house building return to more normal levels in Hastings.
• the current capacity assessment shows a sizeable reliance on high-volume schemes involving the development of flats. Whilst the outlook for the housing market locally remains uncertain, site viability will continue to be an issue in Hastings and developers may either delay or move away from the delivery of flats with a resultant fall in overall housing delivery.

4.0 Conclusions and Recommendations

4.1 The current assessments indicate that the capacity for new homes in the Town ranges from a minimum of some 2,480 to a maximum of about 3,800 dwellings.

4.2 It is recommended that scenario 3 (medium level growth) is adopted as the housing target for the Borough to 2028 (using a base date of April 2011).

4.3 It is recognised that, in recommending this medium level of growth, this is significantly less than the current trend-based population and household projections identified in scenario 1. However, Hastings is a built up town with tightly defined boundaries and not many opportunities for development. Therefore the town is limited in the amount of housing that it can provide. Scenario 1 would result in levels of housing growth which would vastly outweigh what could reasonably be delivered in both environmental and economic terms. Whilst Scenario 2 (low growth) reduces the opportunity to provide affordable homes, provides less opportunity for people to move out of poor quality housing, may lead to higher house prices by restricting supply and does not support the regeneration agenda in helping to match housing and jobs growth

4.4 Instead, we think the best way forward is to look at deriving a housing target that allows us to maximise and support the following issues whilst remaining within the environmental constraints of the town:

• the need to provide housing to support regeneration, economic and skills growth and development in the town
• that we wish to promote choice around housing, encouraging higher skilled people to move into the Town and creating opportunities for younger people to remain in Hastings. This includes providing more family homes and larger sized dwellings
• the need to provide more affordable housing
• the need to achieve a balance between meeting other competing land use requirements – chief among these is land required for employment generating purposes

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¹⁶ DCLG Localism Bill: abolition of the regional tier and introduction of the Duty to Cooperate Impact Assessment, Jan 2011 ¹⁷ DCLG Planning Policy Statement 3: Housing June 2010 paragraph 53 ¹⁸ Parliamentary Statement - Revoking Regional Strategies Rt Hon SoS Eric Pickles, 6 July 2010 ¹⁹ Hastings and St Leonards Sustainable Community Strategy, Refreshed Strategy 2009 -2026, July 2009 ²⁰Hastings and Rother Strategic Housing Market Assessment Update 2009/10 www.hastings.gov.uk/ldf/evidence.aspx ²¹As above, to measure housing market affordability in an area, the ratio of lower quartile house prices to lower quartile earnings is used, i.e. this ratio shows if people with the lowest income can afford the cheapest housing. A high ratio means that housing is less affordable ²² Hastings Borough Council Housing Needs Survey 2005, DCA www.hastings.gov.uk/ldf/evidence.aspx “Affordable housing includes social rented and intermediate housing, provided to specified eligible households whose needs are not met by the market.” DCLG PPS 3 Housing, June 2010 ²³ Hastings and Rother Strategic Housing Market Assessment Update 2009/10 www.hastings.gov.uk/ldf/evidence.aspx ²⁴ 2007 Private Sector house Condition Survey ²⁵ The latest set of trend-based population projections were produced by East Sussex County Council in April 2011. Importantly trend based projections do not reflect the impact of future housing delivery. ²⁶ This assessment is called a Strategic Housing Land Availability Assessment (SHLAA) Jan 2010 and April 2011 update, see www.hastings.gov.uk/ldf/evidence.aspx ²⁷ www.hastings.gov.uk/meetings/meetings_docs/100301~cabinet~report06~Hastings_Local_Development_Framework_-_Strategic_Housing_Options.htm ²⁸ Windfall sites are those which have not been specifically identified as available for development ²⁹ www.hastings.gov.uk/empty_homes/empty_homes_strategy.aspx ³⁰ www.hastings.gov.uk/lsp/default.aspx ³¹ Whilst commuting is inevitable given the diverse nature of employment, and a degree of net out-commuting is not necessarily detrimental to local prosperity. The trend of an increasing reliance on this, much by car – does have adverse consequences in terms of sustainability and access to housing at affordable prices. ³² These are defined as homes that are empty for 2 or more years