North Wales Regional Committee (July 2003 - March 2005)

Second report: Affordable Housing and Sustainable Communities in North Wales (NWR(2)-03 (r 2))

Introduction

1.1 The North Wales Regional Committee is one of the Assembly’s four regional committees. It covers Conwy, Denbighshire, Flintshire, Isle of Anglesey, Wrexham and the area of Gwynedd made up of the former districts of Arfon and Dwyfor.

1.2 The role of the regional committees, as defined by Standing Order 10.2, is to advise the National Assembly on matters affecting their regions, the effect of Assembly policies in those regions and the work of public bodies there.

1.3 At its meeting on 3 October 2003 the Committee considered the planning aspects associates with the provision of affordable housing and sustainable communities issues affecting the region. The points raised are summarised in this report.

Affordable housing and sustainable communities in North Wales

1.4 The Environment, Planning and Countryside Committee of the Assembly is undertaking an inquiry into the planning aspects associated with the provision of affordable housing and sustainable communities in the countryside. The terms of reference for the inquiry are: to consider the effectiveness of current planning policies in supporting the provision of affordable housing and sustainable communities in the countryside and to make recommendations for development of policy in this area. Regional committees were invited to gather the views of the public in their regions, in order to assess whether there is a need for different solutions in different parts of Wales.

Key messages

1.5 The key messages raised during the meeting were:

• Sustainable communities - the need to maintain balanced communities and sustain the language of Welsh speaking communities, through integrated affordable (private and social) and market value housing. It was stressed that planning was only one way of addressing these issues, in partnership with housing and economic development;
• Home ownership - the potential for the planning system to support the development of an affordable housing market to enable those currently priced out of the market to buy properties, and scope for using planning conditions to secure affordable housing for local people;
• Rental - concern at the decline in the social housing stock and support for resources to develop an affordable rental market.

Presentations

1.6 The Committee heard short presentations from the following organisations on different aspects of meeting this challenge. Copies of the presentations are reproduced in the Annexes.

• Cymuned - outlining how the planning system could support the sustainability of mixed communities, of which the Welsh language was an essential part (see Annex 1);
• Welsh Federation of Housing Associations (Cymdeithas Tai Clwyd and Cymdeithas Tai Eryri) - outlining ways of addressing the need for affordable rental properties as a result of the reduction in local authority housing stock (see Annex 2);
• Chartered Institute of Housing Wales - outlining ways of identifying housing need and of addressing the reduction in, and promotion of, social housing (see Annex 3).

Views of the North Wales public

1.7 Specific points raised by members of the public were as follows:

• Wyn Roberts, Secretary of Friends of Lleyn, questioned the definitions of "affordable" and "countryside";
• A Llandudno Town Councillor said that greater funding was needed for Housing Associations, e.g. to develop shared housing schemes, and suggested that local authorities set aside land for affordable housing;
• Eifryn Davies, Isle of Anglesey Council, said that the term "affordable housing" was difficult to define as it varied according to location, and raised the need for local authorities to require developers to include affordable housing in new developments;
• Cllr Rhiannon Efans, Bethesda Community Council, said that there was a need to bring work and fair wages to the area. She also felt that funds should not be allocated for the Right to Buy social housing, but instead should be targeted at local communities;
• Gareth Winston, Isle of Anglesey Council, also raised the need to provide employment, and suggested that local authorities free up their own land for affordable housing;
• Merfyn Jones felt that affordable housing should be available to all members of the community, and should not be restricted on the basis of language spoken;
• Nicky Griffiths, a student at Coleg Meirion Dwyfor, expressed concern at the decline of Welsh language in areas where there were a high level of non-Welsh speakers who had moved from outside the area;
• Sian Davies, Cwm Cydnant Community Council, suggested discouraging development on settlement boundaries, but instead redeveloping run-down or derelict buildings within the towns and villages, e.g. via compulsory purchase;
• Gareth Hobson, an architect, said there was no social equality when some could afford second homes but others could not afford a first home, and supported restrictions on second homes;
• Geraint Roberts, Bangor City Council, said that salaries were lower in North Wales than in England, therefore young people left their communities to find better paid work. He suggested a review of the Barnett formula to address economic disparities;
• John Nicholson stressed the need to stimulate local economies, and felt that language spoken was a matter of personal choice for newcomers to Welsh speaking communities;
• Alun Griffith, Council for the Blind Cardiff, commented that many people moving to new areas were pensioners and did not contribute to the economic growth of the local communities;
• John Charlton, Isle of Anglesey Council, said it was difficult to influence house prices, as this was subject to not just the price of land but cost of development;
• Seimon Glyn, Cymuned, suggested using Section 106 Agreements on certain new houses, to develop a separate market of affordable houses for local people;
• Cllr Eve Butler, Bangor City Council, raised the difficulty in defining a "community" and said that second homes and absentee landlords were causing problems;
• Cllr William Arthur Evans, Cyngor Gwynedd, referred to difficulties encountered by those seeking mortgages for properties that were subject to Section 106 Agreements. He suggested that the Assembly establish a forum to address the range of issues associated with the sustainability of local communities;
• Huw Edwards, Caernarfon County Council, said that he hoped that the Assembly would addressed the issues raised by the Environment, Planning and Countryside Committee inquiry;
• Ivan Plumming, Coleg Meirion Dwyfor, suggested that the inquiry should look at policies adopted in the Lake District, where there were similar issues;
• Cllr Bob Barton, Llanarmon-yn-Ial Community Council, stressed the need to develop an affordable rental sector, as well as affordable housing for purchase. He said support for newcomers in learning the Welsh language should be improved;
• Cllr Richard Parry Hughes, Leader of Cyngor Gwynedd, said there was potential for local authorities to use their own land for affordable housing, e.g. through charitable trusts. He hoped the Assembly would respond positively to the report of the Environment, Planning and Countryside Committee;
• Cllr Gareth Roberts, Isle of Anglesey Council, suggested that local authorities transfer their housing stock to companies limited by guarantee to remain within the affordable and social housing market;
• Dyfed Roberts from Dyffryn Nantlle said there was a need to include the Welsh language as a factor in planning system. He supported the restriction of the Right to Buy in areas where there was a lack of affordable housing, and questioned the practical steps being taken by the Welsh Assembly Government to address housing issues;
• Eric Wyn Roberts from Pwllheli said that Right to Buy was having a detrimental effect on the rental sector. Affordable rented properties should be available, as well as affordable properties for sale;
• Janet Williams of Porthmadog indicated that there was a shortage of housing for children in local authority care;
• Meirion Llewellyn from Caernarfon expressed concerns about the sustainability of Welsh speaking communities, as the recent census had recorded only eight communities in the area where more than seventy five percent of the population spoke Welsh;
• Cllr Meurig Davies, Meirionydd, supported restrictions on the future sale of council houses bought under the Right to Buy;
• Peter Ogden, Snowdonia National Park Authority, said that in the National Park there was a growing gap between local incomes and house prices, and houses at the bottom end of the market were increasingly unaffordable. Snowdonia NPA had a policy of restricting release of land for new build to locals who could demonstrated need for housing;
• It was suggested that a message be sent back to the Assembly that there should be an end to the sale of council housing;
• A number of members of the public commented on the absence of Members from the Labour group at the meeting, and stressed the need for the Welsh Assembly Government to address the points raised.

Written comments

1.8 Written comments were submitted at or following the meeting, and are reproduced in the Annexes. The main points raised were as follows:

• Pam Corry, Mencap Cymru, asked what plans were in place for people with learning disabilities who could not afford to purchase property. She expressed concerns that many job opportunities in the area were only advertised in Welsh and not bi-lingually.
• Cllr Rhiannon Efans was concerned by the lack of affordable homes for young people, the policy of selling council houses, and lack of funding for the assisted purchase scheme. She also commented on the lack of attendance of Members from the Labour group at the meeting.
• Merfyn Jones said facilities for autistic people should be provided in both North and South Wales, and that social housing tenants and pensioners should receive help towards rent bills.
• John Nicholson stressed that issues of affordable housing were not unique to North Wales, and needed to be addressed by improvements to the local economy, not only through the planning system. He raised concerns about the bilingual policies of public services in Gwynedd and attitudes towards those who did not speak Welsh, and responded to some of the points made by Cymuned at the meeting.
• S. Ratcliffe, Save the Children, said that with relation to sustainable communities, many people who were born, bred and worked in North Wales did not speak Welsh. She felt that people had the right to communicate in the language of their choice and should not be forced to use Welsh, and that the Assembly should encourage understanding and equality, rather than perpetuate the split between English and Welsh speaking communities.
• Chris Ruane MP was concerned about the numbers of houses in multiple occupation in the seaside communities of North Wales. The vast majority of them no longer had a role in tourism and were owned by absentee landlords who had no interest in the town or community, but only in making money.

Next steps

1.9 This report forms a contribution to the inquiry of the Environment, Planning and Countryside Committee. Copies will also be made available to the Social Justice and Regeneration Committee, and to relevant Ministers.

Janet Ryder AM
Committee Chair

A copy of this report is available on the National Assembly website www.wales.gov.uk If you would like a hard copy, please email NWales.regcomm@wales.gsi.gov.uk or contact Silvia Ricondo on 029 2089 8018.

Annexes

Presentations

Cymuned (Annexes 1a and 1b)

Welsh Federation of Housing Associations (Cymdeithas Tai Eryri

and Cymdeithas Tai Clwyd) (Annex 2)

Chartered Institute of Housing Wales (Annex 3)

Written comments (hard copies only)

Pam Corry, Mencap Cymru (Annex 4)

Cllr Rhiannon Efans (Annex 5)

Merfyn Jones (Annex 6)

John Nicholson (Annex 7)

S Ratcliffe, Save the Children (Annex 8)

Chris Ruane MP (Annex 9)

Annex 1a

Cymuned’s oral presentation

You will recall that our written presentation stated our view that maintaining the linguistic environment is an essential part of sustainable development — and our opinion that an unrestricted free housing market in Wales is not compatible with the continuance of the Welsh language, or with the stability of society in general.

You will also recall that we suggested that the provisions of Planning Policy Wales should be made more flexible in a number of ways, in order to facilitate the creation of a community housing market which would be separate from the free market. And you will recall my suggesting that there are tendencies in the planning field in Wales, at present, towards forsaking the principle, laid down in Planning Policy Wales, that housing developments should be mixed tenure developments. The result is that there is a danger that people on lower incomes will become ghettoised within their communities.

The peril of social tension, in such a situation, should be obvious. A small community where there is total spatial separation between wealthy people and people on lower incomes, with reduced opportunities in life, is unlikely to be a healthy community.

It must also be remembered that the present situation — as sociological research has shown — is one where there is already a tendency, in majority Welsh-speaking communities, for Welsh-speakers to occupy posts of lower income and status, and for the better jobs, particularly in the private sector, to be filled by non-Welsh-speakers from outside the community.

The result is that a comparatively high proportion of affordable housing in majority Welsh-speaking communities is likely to be home to Welsh-speaking Welsh people. If affordable housing were to be banished to separate estates, the result would be to intensify the tendency for Welshness to be associated — in the mind of non-Welsh-speakers and Welsh-speakers alike — with poverty and restricted opportunities. Cymuned would be strongly opposed to any such trend.

Another reason why it is essential to adhere to the principle of ensuring that every new housing development is a mixed tenure development is that that is the best way of ensuring that in-migrants come into daily contact with the Welsh language and with Welsh-speaking people. Otherwise, every luxury housing development will be a non-Welsh-speaking ghetto, where the majority of residents are in continuous and self-satisfied secession from the community they have come to live in.

No Welsh-speaking community can remain sustainable, in linguistic terms, under such circumstances. And if the Welsh Assembly Government’s wish, as stated in Iaith Pawb, to see a constant increase in the number and percentage of people who speak Welsh and to ensure a balance in the social and linguistic composition of communities, is to be realised, it is essential that the Assembly Government uses all its legislative power and planning policies to ensure that rural communities in Wales — particularly majority Welsh-speaking communities — develop into unified and healthy communities.

Annex 1b

North Wales Regional Committee NWR(2)-02-03(p1)

Cymuned’s Written Submission to the meeting of the North Wales Regional Committee of the National Assembly for Wales, 3 October 2003

Subject: "Affordable housing and sustainable communities in North Wales"

Terms of reference of the inquiry by the Assembly’s Environment, Planning and Countryside Committee: "To consider the effectiveness of current planning policies in supporting the provision of affordable housing and sustainable communities in the countryside, and to make recommendations for the development of policy in this area"

1. The Background

By now, house-prices in Britain are rising by an average of almost 30% per year, and at a rate of almost 45% a year in certain rural areas in Wales.

In these rural areas, house-prices are not a reflection of either the needs or the income-levels of the local population, but rather of demand on the market from other areas where income-levels, and house-prices, are higher, with the result that prospective purchasers from those areas are able to pay prices that are beyond the reach of many local people. It is generally acknowledged that this is one of the most important factors leading to out-migration (either to urban areas, or out of Wales altogether) by young families from rural areas.

At the same time, there is every reason to believe that further analyses of the 2001 Census results will show that the majority of the in-migrants who take the place of the out-migrants in rural areas are people who have retired or who are in some other way economically inactive.

2. Sustainable Communities

Planning Policy Wales’ definition of sustainable development is development which "meets the needs of the present without compromising the ability of future generations to meet their own needs" (section 2.1.1).

As noted in section 3.4 of Cymuned’s presentation to the Assembly’s Housing Committee on 7 November 2001, "The indigenous language of any area is part of the fine environmental web that makes every area unique. Sustainable development should strive to maintain the area’s linguistic environment as well as its natural environment. Often the same considerations will be relevant in both cases: over-development of housing, for example, is harmful to the environment and to the Welsh language" that is, when overdevelopment promotes a level of inmigration that endangers the continuance of Welsh as a community language because the majority of in-migrants do not assimilate themselves to the local language and culture.

The operation of the free market in the resale of houses also promotes levels of in-migration that are endangering the position of the Welsh language as a community language, for the same reasons.

Every Census in the 20^th century, and particularly since 1971, has shown a steep decline in the numbers of communities where a majority of the population speak Welsh. It is generally acknowledged that a combination of in-migration by non-Welsh-speaking people and out-migration by Welsh-speaking people unable to find suitable jobs or, by today, affordable homes is responsible for this.

By now, the operation of a free housing market is not only endangering the situation of the Welsh language in majority Welsh-speaking communities, but is also endangering the fabric of society in general. At present the crisis is to be seen most clearly in South-East England, where a wide range of public and private services are being jeopardised by the inability of essential workers in those services to afford to buy a house in the region.

As is well-known, central government’s plan for getting to grips with this problem is to build 200,000 affordable houses for lower-income families. However, unless planning conditions are imposed on the resale of these houses, so that resale prices are restricted to a level that remains affordable for people on lower income levels, resale prices will rise rapidly in line with market pressures, until these houses, in their turn, are out of the reach of precisely the kind of people they were created for in the first place.

It is only a matter of time before similar labour-market problems to those of South-East England arrive in rural areas across Britain, including those of North Wales. Communities where the operation of the housing market has given rise to an unnaturally high proportion of elderly and economically inactive residents, leaving an unnaturally low proportion of economically active people to provide the services on which those residents are increasingly dependent, are not sustainable in the long term.

3. The present Planning system

Section 9.1.2 of Planning Policy Wales states:

"Local planning authorities should promote sustainable residential environments... and make appropriate provision for affordable housing. They should promote mixed tenure communities"

Section 9.2.13 of Planning Policy Wales states:

"New settlements on greenfield sites are unlikely to be appropriate in Wales, and should only be proposed where such development would offer significant environmental, social and economic advantages over the further expansion or regeneration of existing settlements."

Section 9.2.14 of Planning Policy Wales states:

"Sites no longer likely to be needed for office or industrial purposes may be appropriate locations for affordable housing (as well as for general market housing)."

Section 9.2.15 of Planning Policy Wales states:

"A uniform quota [of affordable housing] should not be imposed on development regardless of market or site conditions. Policies must indicate that an authority will seek to negotiate with developers where it is intended to include an element of affordable housing in proposed developments."

Section 9.2.19 of Planning Policy Wales states:

"Policies should make clear that the release of small housing sites, within or adjoining existing villages, for the provision of affordable housing to meet local needs, which would not otherwise be allocated in the UDP, is an exception to the policies for general housing provision"

Cymuned fully supports the principle that new housing developments, be they in rural areas or in urban areas, should include a mixture of types of housing tenure (9.1.2), for reasons on which I shall expand in my oral presentation.

However, the effects of present policies, and some of the provisions of planning legislation, are as follows:

For all practical purposes, a local authority is only likely to be allowed to permit the development of affordable housing on brownfield sites (9.2.13, 9.2.14).

Although section 9.2.15 encourages local authorities to "seek to negotiate" with developers regarding the inclusion of an element of affordable housing in a proposed development, there is reason to believe that a number of developers are resisting mixed tenure developments, because of a fear that the presence of affordable housing will make more expensive housing less attractive to buyers, and consequently less profitable. There are signs of a tendency for developers to seek to come to arrangements with local authorities to develop affordable housing on separate sites.

The obvious effect of this, over time, will be to ghettoise lower-income families. Cymuned is totally opposed to any such tendency, for reasons on which I shall elaborate in my oral presentation.

It is probably in consideration of section 9.2.19 that the Assembly has refused Gwynedd Council (to note an example that is known to us) permission to use plots of land on the edges of villages for the development of affordable housing.

We are given to understand that it is illegal for an authority to refuse permission to build on land that has been earmarked for housing in its Unitary Development Plan, or to seek to impose conditions (for example under Section 106 of the 1990 Planning Act) on new housing on such land with a view to restricting resale to local people in need of affordable housing. Only on land not originally intending for housing development is that permitted.

4. Cymuned’s Proposals

i. A policy should be established in Wales of creating a community housing market that is separate from the free market, by creating a stock of affordable housing that is managed, as regards prices and resale conditions, in the interests of local people in need of affordable housing.

ii. The Assembly should establish a system of grants for local authorities for the purchase of existing houses in order to remove them from the free market and add them to the community housing stock.

iii. In order to develop a stock of affordable housing in every community, Planning Policy Wales’ presumption against developing new housing on greenfield sites should be slackened.

iv. The principle should be established that every new housing development, both in rural areas and in urban areas, must be a mixed tenure development; and Planning Policy Wales’ presumption against setting quotas for affordable housing that is to be included in every new housing development should be annulled.

v. Planning Policy Wales’ presumption against releasing small sites within or adjacent to villages, for building affordable housing, should be relaxed.

vi. The Assembly should press central government to revise the Planning legislation in order to make it possible to impose conditions on new housing developments on all types of site with the intention of restricting resale of housing to local people in need of affordable housing.

vii. The Assembly should press central government for legislation to regulate the housing market right across Britain, in line with the system set out in the Welsh Language Society’s proposals for a Property Law.

Wyn Hobson

Cymuned Executive Committee Member

September 2003

Annex 2

North Wales Regional Committee NWR(2)-02-03 (p3)

Affordable housing and sustainable communities

A summary of key points from the Welsh Federation of Housing Associations

Introduction

Housing Associations are not-for-profit organisations which support sustainable communities through the provision of high quality affordable housing and associated support and regeneration activities. Housing Associations have a well-deserved reputation for developing innovative housing solutions to meet the needs of people in Wales who are excluded, for whatever reason, from mainstream home-ownership opportunities, offering an increasingly diverse mix of low cost home -ownership and rented accommodation options. All Association homes are built or refurbished to higher structural standards than those required by other housing sectors.

Housing Associations supplement Welsh Assembly Government Social Housing Grant through private sector loans. Our members are significant contributors to the local economy in their own right as local employers with a collective turnover in Wales exceeding £250 million on housing services alone, as well as economic contributions from support services, community regeneration initiatives and other activities.

Housing Association activity

The homes associations develop and manage reflect the diverse needs of the population of Wales and include large family homes, self-contained flats for single people, sheltered homes for older people and homes for people who need support in the community. Each year associations, in partnership with local authorities, seek to develop more homes to meet the needs and aspirations of local people. According to established procedures, local authorities normally identify those communities and needs where investment is a priority and associations find and develop sites to provide these homes.

In North Wales in 2002/3 associations received £8.9 million in grant from the Assembly, 58% of the costs of approved association schemes. With the addition of private sector loans associations this resulted in a total expenditure of £15.3 million on developing new homes across the region.

There are 9 housing associations with homes in North Wales: the Abbeyfield Society, Tai Clwyd, Clwyd Alyn HA, CT Eryri, First Choice HA, the Polish HS, CT Hafan and Wales and West HA. Together they own and manage over 9,000 homes across the region offering a wide range of general and specialist housing services.

Constraints

The development of Housing Association options is constrained by several factors, including:

• Low levels of public subsidy (Social Housing Grant levels in Wales cover only 58% of development costs, compared to 68% in England and 70% in Scotland, requiring higher levels of private finance in Wales than elsewhere), unrealistic ACG levels (which control how much associations can spend on each new scheme they develop) and high land prices. The SHG budget has remained unchanged since the Assembly was created and so resources for new association homes has fallen in real terms since 1999. In 2002 only 1,465 new association homes were completed. This compares with 2,629 in 1992.
• Little involvement in developing planning strategies
• Ineffective use of planning gain and other tools to secure affordable housing i.e. exception sites.
• Low availability of suitable development land for affordable housing because of environmental restrictions, high market prices, land price speculation, planning permission bureaucracy and associated delays.
• Right to Buy/Right to Acquire, which has seriously eroded the availability of affordable housing for rent in Wales. Returns on properties sold at subsidised prices are not matched by grant and other investment income, preventing replacement of affordable housing stock. Between 1980 and 2001 nearly 117,000 homes in Wales have been sold under Right to Buy. In the last decade, between 1990 and 2001, 38,811 homes were sold while housing associations and local authorities built only 26,156 - a net loss of over 12,000 homes, many in rural areas and cities which have seen the sharpest rise in land and property prices in recent years.

Action proposals

The Assembly has considerable powers and influence to affect the development of affordable housing and associated regeneration activities in Wales. The following list of action points is by no means comprehensive. Nevertheless, we believe that the following proposals would have a significant and sustainable impact on current and future programmes across Wales:

• A review of Social Housing Grant levels, programme cycles and management procedures to develop a realistic affordable housing investment strategy, reflecting variations in land and labour costs across Wales, especially in National Parks and other areas affected by land availability and planning restrictions. Consideration of measures to curtail speculative land banking, including possible minimum resale periods for land.
• An increase in the funding for the Homebuy scheme. However, while we would support more funding for Homebuy schemes through SHG budget allocations, this should not be at the expense of investment in homes for rent. Many people are unable to access low cost ownership schemes and there is a continuing need to invest in providing new rented homes. The Assembly is currently considering a preliminary review of the Homebuy scheme - we will of course seek full participation by our members to ensure that such a full review is properly informed.
• More Assembly encouragement to persuade local authorities to use their devolved powers to plan for affordable housing, including the use of planning gain and planning conditions, Section 106 agreements and exceptions sites.
• Affordable housing quotas for all new housing developments, including housing for rent and shared-ownership (e.g. Homebuy) options unless the developers are able to demonstrate that there is no need for such housing.
• Assembly requirements on local authorities to demonstrate effective and active involvement of Housing Associations and tenant organisations in spatial, economic development, community regeneration and local housing strategies.
• A significant reduction in the discount available under the Right to Buy/Right to Acquire and in the longer term an evaluation of its impact on the supply of affordable housing for local people.
• Assembly lobbying to gain exemption from Capital Gains Tax for landowners who provide land for affordable housing.
• Restrictions on the designation of "executive" homes development areas and encouragement of mixed communities in all areas to include affordable housing, smaller developments and starter homes.
• The removal of VAT on housing refurbishment by associations. At present local authorities are exempt from VAT on refurbishment. However, in a controversial ruling, the Inland Revenue has decided that non-charitable stock transfer bodies are not exempt from VAT payments on repairs which will significantly increase the cost of improving rented homes across Wales. We would urge the Assembly to call the relevant Minister to account and seek removal of VAT on all social housing refurbishment.
• More extensive housing needs assessments involving the community. The Federation has secured funding to support the first Rural Housing Enabler in Wales this year. Along with associations, local authorities, the Assembly and a number of other partners the pilot scheme in South Powys and North Monmouthshire aims to:
  • increase the supply of affordable housing
  • identify and raise awareness of rural housing needs by supporting and providing advice to rural communities, housing associations, local authorities and other agencies
  • with housing need surveys and mapping exercises to identify key housing facts
  • identify suitable sites for affordable housing provision
  • provide advice to housing, planning authorities and other agencies to help develop more coherent strategies and policies
  • build better profiles of rural communities through data collection and participation in research studies
  • ensure that rural exceptions sites are used successfully.

Following proper evaluation, we seek recognition of the model and ongoing Assembly support to establish a network of rural housing enablers across Wales.

The Federation

The Welsh Federation of Housing Associations was established in 1989 and exists to enable housing associations to work effectively and flourish in Wales by:

• positively promoting housing associations as non-statutory, non-profit, ethical providers of affordable housing, support and community regeneration services
• seeking to develop a political, regulatory and financial framework that supports housing association activities
• developing, supporting and disseminating good practice
• encouraging and enabling members to provide accessible homes in sustainable communities throughout Wales
• working in partnership with key bodies in Wales

We recognise and value:

• the principles of member ownership of the Federation agenda
• partnership with tenants and their organisations
• the principles of diversity, inclusion and equality in our work
• our responsibilities as an all-Wales organisation

For further details on housing association activities in Wales, contact the Welsh Federation of Housing Associations on 02920 303150. Key contacts include:

Howard John, Director Direct line 02920 303168

David Hedges, Assistant Director Direct line 02920 303165

Or visit our website at www.welshhousing.org.uk

Annex 3

North Wales Regional Committee NWR(2)-02-03 (p2)

Chartered Institute of Housing Cymru

Background paper

Affordable Housing and Sustainability in Rural Wales

1.0 Background

1.1 The Chartered Institute of Housing (CIH) Cymru is grateful for the opportunity to make a presentation to the Committee on this extremely important and complex issue. CIH is the only organisation representing all those working in housing and our purpose is to maximise the contribution housing makes to the well-being of communities.

1.2 CIH has over 17,000 individual members working for local authorities, housing associations, the Rent Service, educational establishments and the private sector. Over 700 of these members are based in Wales and this paper is based on information from them, partner organisations and input from the UK policy team.

1.3 CIH Cymru would like to acknowledge the contribution that the following housing professionals made to the production of this report:

Gwynne Jones - Cymdeithas Tai Clwyd

David Humphreys - Gwynedd Council

David Thomlinson - Powys County Council

2.0 Introduction

2.1 There are a number of factors which when combined make ensuring an adequate supply of affordable housing to rent and buy increasingly difficult in many parts of rural Wales. However, it is important to remember that each settlement is different - whilst commuting may be a major factor for those areas close to the M4 and A55 corridors for example, retirement patterns may put more pressure on housing in attractive coastal areas. Neither one assessment nor one response then, will fit all and in order to respond effectively, analyses of pressures must be carried out at a very local level and a range of measures will be needed to meet the specific needs of each community.

2.2 This paper attempts to address some fundamental issues on affordable and sustainable housing in the following sections:

Section 3 provides an Overview of Key Issues

Section 4 considers the role of housing in Delivering Balanced and Sustainable Communities

Section 5 suggests some Areas of Action to secure sufficient affordable and sustainable housing in the future.

3.0 Overview of Key Issues

3.1 A number of factors impact on the supply of affordable housing in rural Wales. They can be categorised as follows:

3.2 Demographic issues such as:

• Inward migration, particularly of commuters and people retiring to rural areas;
• outward migration, particularly of young people; and
• population changes putting Welsh language and culture under threat in some settlements.

3.3 Housing issues including:

• high levels of Right to Buy (RTB) sales;
• limited scale of Registered Social Landlord (RSL) development;
• poor supply of housing, especially of affordable and social rented housing;
• rapidly increasing house prices;
• stigma attached to social housing; and
• resistance in some settlements to further social housing development.

3.4 Planning and Land issues including:

• lack of availability of suitable sites for development; and
• high land values.

3.5 Economic issues such as:

• some settlements are in decline and, contrary to the overall picture of pressure on housing, social housing can be hard to let;
• imbalances between low wage local economies and comparatively high house values; and
• high development costs due to under capacity of the construction industry.

4.0 Delivering Balanced and Sustainable Communities

4.1 Ensuring an adequate supply of affordable housing for rent is key to creating sustainable rural communities for a number of reasons:

• rural economy salaries are often insufficient to support a mortgage;
• rural employment is often seasonable or temporary;
• low income and benefit dependent households cannot obtain or sustain a mortgage; and
• the inability of the private rented sector to fill gaps in provision. Unfitness standards are higher in rural Wales across all tenures with 23.2% of the private rented sector found to be unfit by the 1998 House Conditions Survey.

4.2 Clearly then, social rented housing has a crucial role to play in meeting the needs of rural communities and it is also therefore fundamental to ensuring sustainability. Outward migration of younger people is a feature of many rural communities. Often young people will move away for lifestyle reasons, but when life cycle changes occur, young families would often like to return to their home village if they could secure employment that could support a home. With high prices and low availability and quality in the private rented sector, and with home ownership out of the question in areas of high demand, this is increasingly difficult to do.

4.3 Communities can easily become unbalanced with disproportionate concentrations of older people. This has considerable implications for maintaining local services and amenities such as shops and post offices, schools and public transport, and can also put pressure on local health provision. Ensuring a supply of affordable rented housing then, can help to keep communities that are under pressure from other factors, balanced and sustainable.

4.4 The Right to Buy (RTB). Many rural properties, particularly in popular and attractive areas, have been taken out of the affordable renting market through the RTB scheme. Once sold, properties become out of reach for those on local salaries who wish to buy a home on the open market. For example:

• Vale of Glamorgan County Council has calculated that if the number of homes lost through the RTB continues at its current level, there will be no more council housing left in the authority within ten years.
• Gwynedd Council has lost an average 120 properties per year since1996 to RTB sales with a significant recent increase in the trend (average per quarter sales have increased from 33 in December 2000 to 60 in December 2002). RTB has completely altered the balance of communities and removed some estates from the social housing sector in their entirety. With property prices ranging from £70 to in excess of £100 thousand. not only have they been removed from the sector but they are increasingly unaffordable for local people
• Powys County Council sold 179 properties under RTB in 2002. Sales between April and August 2003 were 126 giving projected annual sales in the current year of over 300.

4.5 Social Housing Grant (SHG).There is growing evidence to suggest that the current level of social housing grant is insufficient to meet the increasing demands. Although this may seem contradictory given that SHG budget is under-spent, factors such as difficulties in acquiring land at a viable cost and securing planning permission mean that it is almost impossible to spend the allocated funds. Where these obstacles are overcome, evidence from areas such as Powys and Gwynedd suggests that due to the increasing demands for specialist and supported housing, little remains to provide general needs affordable rented accommodation.

4.6 This has meant for example:

• In Gwynedd, £2.5 million SHG was allocated this year but the authority has only been able to spend £1.3 million and most of this was allocated for the Homebuy scheme, however, difficulties such as finding properties within the cost limits and the prospective purchasers being caught up in home-buying chains limit what the scheme can deliver. Since 2000 the average prices for homes purchased through the Homebuy scheme have risen from £45,496 to £57,163 in 2002-2003. The average level of support has also risen from £20,923 in 2002-2003 to an estimated £24,533 in 2003-2004. It is the view of Cymdeithas Tai Eryri, who administer the Homebuy scheme in Gwynedd, that if house prices continue to rise as they are currently in some areas of Gwynedd that even with 50% assitance towards the purchase prices salary levels are insufficient within the area to be able to service the required mortgage.
• In Powys, the SHG budget in 2002 was substantially taken up by the provision of supported housing. It is clear that while the supply of affordable rented housing is reduced through RTB and taking into account other factors such as high land values, SHG is failing to compensate.
• Ynys Mon has lost 686 units of its social rented stock through RTB since April 1997. In contrast, since 1996, SHG has only provided 133 homes for rent and 80 through Homebuy.

4.7 The Stigma of Social Housing. Social rented housing suffers from stigmitisation and as a consequence local communities fear increasing the provision. While the pursuit of home-ownership for everyone dominates both policy and public opinion, providing affordable rented homes will continue to face opposition, and the opportunity for social rented housing to contribute to the creation of stable, sustainable and balanced communities will be missed.

4.8 Development Costs - This affects both housing for rent and purchase but is particularly difficult to contend with when attempting to provide affordable rented accommodation. For example, in Bangor planning permission was recently granted for ten houses, but the high cost of the land accompanied by high labour costs due to demand in the construction sector greatly outstripping supply, meant that the houses would need to be sold for £300,000 each to make the project viable. Consequently a growing proportion of building being carried out in rural areas is aimed at the executive end of the market, which in turn undermines the developing of balanced and sustainable communities.

5.0 Areas for Action

5.1 General Recommendations. Before addressing specific issues, CIH Cymru would like to make the following suggestions:

• All Assembly legislation and guidance should be subjected to Rural Proofing to assess whether there are specific issues relating to rural areas that need to be highlighted.
• Wales should consider establishing a Rural Housing Enabler in place for each rural local authority building on similar schemes in England and drawing on the lessons learnt from the Powys pilot.
• The Assembly should consider establishing a body similar to the Countryside Agency in England which has proved successful in ensuring that affordable housing plays a full role in sustaining rural communities.

5.2 Right to Buy. There is a strong case for further restrictions on RTB in areas of high pressure for rented accommodation, by for example, reducing the discount available and allowing councils to invest receipts in new homes for rent and increasing SHG levels.

5.3 Social Housing Grant. The Assembly has been trying to address the problems of allocating SHG for some time and research into how best to allocate funding is likely to begin later this year. Whatever the outcome, it is important that the allocation of SHG is based on a thorough assessment of housing need at a local level.

5.4 Promoting Social Rented Housing.More needs to be done by the Assembly and Its partner organisations to challenge the stigmatisation of social rented housing and the cultural obsession with home ownership. Local communities need to be convinced of the key role affordable rented housing can make to the sustainability of their area. For example, planning powers have been used in South Shropshire to provide affordable homes and the local authority has implemented a number of measures to ensure land is provided at an affordable cost by designating possible sites either for affordable or market rate development. Specifically this has meant for example that, where demand is high, for every two to four market value properties built, two affordable ones must also be provided.

5.5 Rural Housing Enabler. The Assembly should consider establishing a Rural Housing Enabler (RHE) for each rural local authority building on similar schemes in England and drawing on the lessons learnt from the Powys pilot. RHEs will act independently, adopting the role of 'honest broker between local communities, housing and planning authorities and housing associations in order to:

• identify housing needs
• identify sites
• identify and support alternative approaches
• arrange development of sites

Experience in England suggests that the issue of independence for RHEs is critical to their success. It is fundamentally important that the internal priorities of local authorities or housing associations are not allowed to dominate. The creation of a truly independent RHE would help alleviate the concerns of local residents that landlords are seeking to meet their own objectives and not those of the community.

5.6 Overcoming Barriers. Specific measures that would help overcome barriers to providing affordable and sustainable rural housing include:

• linking the supply of affordable housing with training and job creation in construction an related areas. We recommend that the Assembly promotes and supports such schemes.
• The assembly should consider supporting schemes that use planning powers to ensure land is provided at an affordable cost by designating sites which can only be developed for affordable housing.
• The Assembly should encourage local authorities to make land they own available for less than full market value, perhaps by providing compensation.
• Self build funded through Homebuy could provide assistance to some households, but the current guidelines need to be made more flexible.
• The Assembly, through its forthcoming Empty Homes Strategy should encourage the re-use of empty and redundant properties so as to increase the supply of affordable rural housing.