ERM Consolidated Review of Housing Need and Requirements: The new SoAD housing figure of 565dpa in the context of the EPB’s 4,004 total for the HMA.

The Stratford Analysis

  1. Our approach, based on national Planning Practice Guidance, is to assess the “demographic” housing need as the starting point and then adjust for employment need (and market signals) if appropriate. Demographic need, as provided initially in SNPPs and SNHPs, includes natural change and net commuting based on recent trends. This distinction between trend-based migration as “demographic” and employment –led migration is artificial and is made for convenience. In reality, employment demands are a major driver of net migration, including that part which is labelled “demographic”.
  2. The Consolidated Review is responding to the new demographic data in the 2012-based SNPP and GL Hearn’s conversion of this into housing need estimates under various scenarios in the SHMA Update. We also have a more recent migration dataset from ONS, which confirms a new ten year net in-migration ‘actual’ trend of 956 p.a. from 2004 to 2013.
  3. GL Hearn’s new demographic housing need assessment in the SHMA Update, based on the 2012-based SNPP for SoAD and its migration assumptions, is 10,160 (508 dpa). However, this starts from the past five year net in-migration at rates depressed by the 2008 recession, and this is an obvious weakness which is already being exploited by objectors.
  4. If we were to use the latest ten-year migration rate, which ERM and GL Hearn previously endorsed as the proper approach, we estimate the “demographic” housing need figure for SoADwould be 11,300 (565 dpa).
  5. Our separate analysis of the likely growth in employment in SoAD is that there will be 9,000 or so new jobs requiring “new” labour in SoAD between 2011 and 2031. Planning Inspectors at Core Strategy Examinations are being pressed by developer objectors to endorse a view that Core Strategies must balance employment growth with housing provision. We continue to take the view that this is simplistic, particularly in SoAD, which has always seen large flows of in and out-commuters and is an integral part of a wider Warwick and Stratford Travel to Work Area. That said, a growing imbalance cannot be sustained indefinitely and it is important that we can demonstrate that the resident labour force in SoAD is going to grow to meet a substantial proportion of the projected labour demand from expanded businesses in SoAD.
  6. If a “demographic” ten year migration based projection of 565dpa were adopted, a large proportion of the 9,000 new jobs, around 4,300, can be shown to be met by the demographic projection. The remainder will be met by a range of housing and labour market adjustments, including present out-commuters who decide to take jobs in SoAD. By this means, we can demonstrate convincingly, that any future increase in net in-commuting will be small and sustainable. This position is reinforced by evidence of the last decade, where job growth in SoAD has exceeded the increase in the locally resident labour supply, without any evidence of ‘stress’ in the local economy.
  7. We have greater confidence that no other adjustment needs to be made for ‘market signals’ since, although housing in SoAD is not very affordable, the situation is similar to that in other comparable districts and will not be improved by increasing housing provision.
  8. We believe that it will be difficult to sustain the argument that the previous ‘objectively assessed need’ (OAN) of 540dpa will be sufficient convince the Inspector that the Council is making sufficient effort to accommodate job growth with housing within SoAD. The advantage of adopting a figure of 565dpa is that it is tied to a coherent demographic approach. If we don’t adopt this, there are objectors arguing that the correct answer is as high as 1,000dpa, based on simple matching of employment and housing projections.
  9. The shift from 508dpa in the SHMA Update and 565dpa can be presented, legitimately, as both tied to a sensible demographic marker, but also a positive adjustment to meet employment growth. This can be presented as following the PPG advice closely.

The SHMA Analysis

  1. Concern has been expressed that any adjustment in SoAD may be seen as breaking ranks with the emerging common position being taken by the SHMA authorities through the EPB. It is difficult to get to the bottom of this point, because the housing, migration and employment circumstances across the SHMA are so diverse.
  2. This is illustrated in the table below. The 2012-based SNPP as used in the SHMA Update uses the latest five year average as a guide to starting off its net migration assumptions but does not use this as an average across the whole period. The recent five year average for Stratford is 384p.a. but the average from 2011 to 2031 actually in SNPP is 847p.a.The proposed OAN of 565 dpa is what we estimate to be the result of raising this to 956, the recent ten year average. Further data on zero net migration projections for the other HMA LAs has been requested from GLHearn. Without this, we cannot make an exact assessment about whether a shift to using ten year migration figures would affect the housing needs in other districts
  3. What the table below does show is that in all districts except Coventry, the accepted EPB ‘working’ housing requirement could probably accept such an adjustment to using the ten year averages. In particular, in Rugby and Warwick, the Housing Requirement is already been set at above the SHMA Update ‘demographic’ level. In Coventry, as set out in the SHMA Update, there are particular reasons for adopting the SNPP figures rather than any of the recent trend migration figures.

District / net migration population / dwellings p.a.
SNPP av / 5 yr trend / 10 yr trend / 10 yr minus 5yr / SHMA Update SNPP / EPB ‘working’ Housing Requirement / difference EPB minus SHMA
North Warwickshire / 237 / -5 / 32 / 37 / 204 / 175 / -29
Nuneaton & Bedworth / 295 / -120 / 45 / 165 / 422 / 495 / 73
Rugby / 521 / 472 / 763 / 291 / 453 / 660 / 207
Stratford-on-Avon / 847 / 384 / 956 / 572 / 508 / 540 / 32
Warwick / 395 / -245 / 428 / 673 / 606 / 720 / 114
Coventry / 1126 / 3812 / 2505 / -1307 / 1811 / 1,180 / -631
Shortfall / 234 / 234
Total / 4004 / 4004 / 0
  1. Our advice is that (i) any offer by SoADC to accept even a small amount of the 234dpa described as ‘shortfall’ will be well received by other authorities (ii) if the shift to 565dpa is presented as both a demographic and employment led adjustment in SoAD, it can be left to other authorities to make their own judgement on the migration issue, based on local circumstances, and (iii) it presents no obvious case why the 4004dpa ‘OAN’ for the SHMA as a whole needs to shift upwards.