Periodic Reporting for period 1 - PLANAFFHO (PLANAFFHO - PLANning for AFFordable HOusing)
Reporting period: 2018-02-01 to 2020-01-31
Rising house prices and worsening affordability across the housing market have led to poor housing conditions in many capital cities. House prices often exceed the maximum that low- and middle-income households can afford, resulting in overcrowded dwellings, insecure tenures, long waiting lists for social housing, and a high number of vulnerable families who are homeless or who live in emergency or temporary accommodation.
The Planning for Affordable Housing (PLANAFFHO) project, undertaken by Sónia Alves at the Cambridge Centre for Housing and Planning Research, aimed to investigate the relationships between housing and planning systems in three capital cities – Copenhagen, Lisbon and London. The research addressed the following questions:
(1) How has the planning system been used to incorporate affordable housing and provide a mix of housing tenures within new developments?
(2) Have planning authorities mandated or encouraged developers to reserve a proportion of affordable homes within market-driven developments above a certain threshold?
(3) What has been the relevance and the effect of requiring the provision of on-site affordable housing as part of general market developments?
(4) What has been learnt so far?
The Planning for Affordable Housing (PLANAFFHO) project, undertaken by Sónia Alves at the Cambridge Centre for Housing and Planning Research, aimed to investigate the relationships between housing and planning systems in three capital cities – Copenhagen, Lisbon and London. The research addressed the following questions:
(1) How has the planning system been used to incorporate affordable housing and provide a mix of housing tenures within new developments?
(2) Have planning authorities mandated or encouraged developers to reserve a proportion of affordable homes within market-driven developments above a certain threshold?
(3) What has been the relevance and the effect of requiring the provision of on-site affordable housing as part of general market developments?
(4) What has been learnt so far?
PLANAFFHO’s goal of scrutinising planning policies and practices vis-à-vis the provision of affordable housing in Copenhagen, Lisbon, and London involved the following:
• literature reviews of the current state of research on housing and planning;
• tabulation of similarities and differences regarding governance structures in each of the three countries; and
• face to face interviews with policy-makers, local practitioners, stakeholders and consultants with experience in the formulation, implementation or evaluation of policies.
A total of 62 semi-structured interviews were conducted between January and July 2019 in London, Lisbon and Copenhagen. All interviews were digitally recorded with the consent of each interviewee, and the data were anonymised to encourage respondents to be as open and transparent about their views as possible.
Comparing these three European capital cities allowed the researcher to:
• emphasise the similar nature of many of the problems faced by policy-makers (e.g. land scarcity and housing affordability);
• highlight important historical continuities and institutional legacies embedded in a number of practices; and
• confirm trends in policy design, with some ideas more universally popular than others. The right to buy for example has travelled much faster than more progressive ideas related to inclusionary housing tools.
For example, in Copenhagen, where the not-for-profit private housing sector plays a key role in providing housing for families at below-market cost levels, the sector is financed by the municipality, the state and residents. The municipality provides 14 per cent of building costs, residents contribute 2% as a deposit when moving in, and the remaining 84 per cent of the costs are financed through a normal mortgage loan at market rates. In return for co-funding, local authorities in Copenhagen have a right to assign up to 33% of vacant dwellings to people in acute housing need. While these funding mechanisms have endured over time, the cheapest, most accessible housing options for households on low incomes have now almost disappeared, and new housing developed by not-for-profit housing associations are often unaffordable for the lowest income households because of a cap on housing allowances, limiting what low- to middle-income households can afford.
In England, where there are high levels of uncertainty regarding funding due to a reduction in housing grants since 2010, there is an increasing focus on the construction of homes for sale, with market rents being used to cross-subsidize social housing. In this context, planning obligations have been used as an important tool to extract some of the development value through attaching conditions to planning permission. The Mayor of London has an annual target for the preferred tenure split of affordable homes on new developments, requiring that that 30% be provided at low rent (homes for social rent, or the London affordable rent), 30% at an intermediate level (London living rent or London shared ownership), and 40% decided locally by the planning authority. While planning policies require a specific minimum percentage of social and affordable housing, the empirical evidence shows that the expected numbers often do not materialise. Statistical data on the number of new homes completed by tenure showed a reduction in the production of social rent units for low income householders (i.e. households at the bottom end of the income distribution), and an increase in the production of new intermediate affordable rent units for middle income households
In Portugal, where the not-for-profit sector has lost its vitality, and housing companies are owned by the public sector, caps on public spending and debt have constrained investment and pushed municipalities towards a new funding model of affordable rent targeted at households that can afford to pay higher rents. In Portugal the lack of articulation of housing and planning policies is manifest. Plans did not set developer contributions towards social and affordable housing in the form of land or dwellings – even in the case of rezoning (i.e. the reclassification of rural land to urban land). The result has been a model of state housing provision that has not tried to blend social housing with market provision and has led to the spatial concentration of social housing.
• literature reviews of the current state of research on housing and planning;
• tabulation of similarities and differences regarding governance structures in each of the three countries; and
• face to face interviews with policy-makers, local practitioners, stakeholders and consultants with experience in the formulation, implementation or evaluation of policies.
A total of 62 semi-structured interviews were conducted between January and July 2019 in London, Lisbon and Copenhagen. All interviews were digitally recorded with the consent of each interviewee, and the data were anonymised to encourage respondents to be as open and transparent about their views as possible.
Comparing these three European capital cities allowed the researcher to:
• emphasise the similar nature of many of the problems faced by policy-makers (e.g. land scarcity and housing affordability);
• highlight important historical continuities and institutional legacies embedded in a number of practices; and
• confirm trends in policy design, with some ideas more universally popular than others. The right to buy for example has travelled much faster than more progressive ideas related to inclusionary housing tools.
For example, in Copenhagen, where the not-for-profit private housing sector plays a key role in providing housing for families at below-market cost levels, the sector is financed by the municipality, the state and residents. The municipality provides 14 per cent of building costs, residents contribute 2% as a deposit when moving in, and the remaining 84 per cent of the costs are financed through a normal mortgage loan at market rates. In return for co-funding, local authorities in Copenhagen have a right to assign up to 33% of vacant dwellings to people in acute housing need. While these funding mechanisms have endured over time, the cheapest, most accessible housing options for households on low incomes have now almost disappeared, and new housing developed by not-for-profit housing associations are often unaffordable for the lowest income households because of a cap on housing allowances, limiting what low- to middle-income households can afford.
In England, where there are high levels of uncertainty regarding funding due to a reduction in housing grants since 2010, there is an increasing focus on the construction of homes for sale, with market rents being used to cross-subsidize social housing. In this context, planning obligations have been used as an important tool to extract some of the development value through attaching conditions to planning permission. The Mayor of London has an annual target for the preferred tenure split of affordable homes on new developments, requiring that that 30% be provided at low rent (homes for social rent, or the London affordable rent), 30% at an intermediate level (London living rent or London shared ownership), and 40% decided locally by the planning authority. While planning policies require a specific minimum percentage of social and affordable housing, the empirical evidence shows that the expected numbers often do not materialise. Statistical data on the number of new homes completed by tenure showed a reduction in the production of social rent units for low income householders (i.e. households at the bottom end of the income distribution), and an increase in the production of new intermediate affordable rent units for middle income households
In Portugal, where the not-for-profit sector has lost its vitality, and housing companies are owned by the public sector, caps on public spending and debt have constrained investment and pushed municipalities towards a new funding model of affordable rent targeted at households that can afford to pay higher rents. In Portugal the lack of articulation of housing and planning policies is manifest. Plans did not set developer contributions towards social and affordable housing in the form of land or dwellings – even in the case of rezoning (i.e. the reclassification of rural land to urban land). The result has been a model of state housing provision that has not tried to blend social housing with market provision and has led to the spatial concentration of social housing.
PLANAFFHO’s results show that, in the current age of globalization, in which cities and regions are increasingly interconnected and ideas circulate at both the European and global levels, policy models impose an important normative power across national borders, yet do not determine national and local policies and practices. The results highlight the selective nature of the processes of policy diffusion and policy transfer, as these are mediated by enduring power relations, politics and governance arrangements. Results suggest that liberal policy models, such as the right-to-buy policy and new kinds of affordable products typically tailored to middle-income households rather than low-income earners, are more likely to travel globally than mechanisms of inclusionary housing, which aim to capture part of the unearned “windfall” capital gains resulting from planning permission for the public benefit.
The PLANAFFHO project has tried to bridge the fields of planning and housing with a comparative cross-national perspective, and has tried to advance academic and political debates regarding the extent to which planning policy and practices can influence the volume, type, location and affordability of new housing for more inclusive cities. The results of this project have been made available to the wider public through seminars, workshops, and round tables. The written outputs are available in open access format through the websites of the University of Cambridge, University of Lisbon and Aalborg University.
The PLANAFFHO project has tried to bridge the fields of planning and housing with a comparative cross-national perspective, and has tried to advance academic and political debates regarding the extent to which planning policy and practices can influence the volume, type, location and affordability of new housing for more inclusive cities. The results of this project have been made available to the wider public through seminars, workshops, and round tables. The written outputs are available in open access format through the websites of the University of Cambridge, University of Lisbon and Aalborg University.