Housing need, a fudge sandwich?

I like fudge. Gooey, sweet, caramel fudge. Some people don’t and that’s fine; it pulls out fillings, it gets caught in your teeth, some say it is just too sweet. But just like blu tack is the best thing to remove blu tack, fudge might be the best thing to deal with fudge.

What am I talking about? Well, we’re back to the perennial issue of identifying housing need, something I’ve been writing about from almost the start of this blog. Here I am calling for a more clear-cut way of calculating need, on the consultation to do exactly that based on a new methodology and here I am taking those to task who try and conflate the draft methodology with anything in the real world. My conclusion- yes it is a fudge but a fudge that provides a much higher level of certainty. With the fudge councils can go off and set local plans that can be enforceable and create plan led development rather than the alternative, which is untrammeled development.

Today the government has announced a new consultation because things haven’t exactly gone to plan. The methodology used by the government relied on two numbers. Firstly the household formation projections- which are made by the office for national statistics based on past trends. Secondly and more importantly the outcome they wanted to see, which had been created by a range of different papers and political debate.

It is important to understand this second number isn’t exactly scientifically derived, just what we as a country have in effect agreed upon as the need for new housebuilding. It went from “between 225,000 to 275,000 or more new homes a year” to the snappier “300,000 homes a year” last year.

So the equation created by civil servants sought to use the household formation figures to get to the conclusion they wanted to see. They achieved that last year by multiplying the household formation projections by another number worked out from housing affordability in the area. Oh, plus some coefficients to make it come out with around the right number. Seriously, here’s the text:

Screenshot 2018-10-26 at 3.00.40 PM

I didn’t mind this, I still don’t. I like fudge. Why? Because it gave certainty and clarity; planners could get on with planning. Really, without getting too maths-y what it meant was that the household projections and housing affordability became a way to divvy up the nearly 300,000 homes a year the government had somewhat arbitrarily decided were needed between different areas. The real politics was how that divvying up affected different areas, as I spent much of the first blog on the methodology looking at.

But now the household projections have altered, with a significant reduction compared to the last lot. There’s a couple of reasons for this, one is because people haven’t been forming new households as much in the last couple of years (the real change) and secondly because the ONS have changed the way they calculate bits of the statistic.

The equation cannot handle this change; it wasn’t designed to. It worked because it came out with the right answer in the first iteration, not because it was describing reality. This meant many areas would have seen massively different (and massively reduced) housing targets, something that isn’t in keeping with the general consensus (with some very vocal dissent) that an increase in housebuilding rates is required.

So here we are, with the news that there is a new consultation saying two important things:

  1. For now, the most recent household projections should be ignored, in favour of the previous ones. Anyone using the most up to date figures will be in serious trouble (ie. not able to adopt their preferred local plan).
  2. The government will, within roughly the next 18 months, come back with a different methodology to replace the current one, because to be honest there are lots of red faces trying to avoid the glare of ministers.

This is embarrassing and for anyone who thinks objectively assessed need should be um, objective. But I don’t, I think it should be a good enough guess that provides enough certainty for the real business of planning to get going. To put that another way, I don’t think every authoritiy will exactly hit their target, so we should probably stop worrying quite so much what the target is and work out how to try and accelerate appropriate housebuilding if that is what we agree should be hapenning. Worrying about numbers on a spreadsheet to the detriment of well planned communities is foolish. So let’s try to not get too worried about our fillings and enjoy our fudge whilst we can.

In time (before the 2018 household formation statistics come out) the government will have to consider a new way to fudge the figures. It would probably be best if they came up with something a little bit more robust. Until then, keep chewing…

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