Draft Black Country Plan

Comment

Representation ID: 43903

Received: 11/10/2021

Respondent: St Modwen

Urban Capacity Review - Identification of Additional Housing Capacity

3.0 HOUSING NEED



Introduction


3.1 In Section 2 ‘Housing Need’, the Urban Capacity Report identifies a combined housing need for the Black Country Authorities of 4,004 homes per annum which equates to
76,076 homes over the period 2020-39.


3.2 This is based upon the current standard methodology for calculating housing need which uses the 2014-based MHCLG household projections for the 2020-2030 period, new 2020 affordability ratios published in March 2021, and reflects the 35% uplift to Wolverhampton’s local housing need figure introduced by changes to the standard method in December 2020.


3.3 The Urban Capacity Report notes that this figure is subject to change, for instance when the BCP reaches its Regulation 19 Publication (Pre-submission) stage in mid-2022 the figure will reflect any changes to the inputs (such as household projections and affordability ratios) and it will cover the period 2021-2039, as the standard methodology only applies to future years.


3.4 For the purposes of this report, the housing need figure utilised by the Black Country Authorities calculated via the standard housing methodology is also used as a benchmark for calculating the anticipated housing supply shortfall. However, this does not preclude Consortium members identifying an alternative housing need figure in response to the emerging BCP.

3.5 It is important to emphasise how the standard method only provides a m inim um starting point for establishing housing need.


3.6 The Planning Practice Guidance (PPG)2 is clear that housing need is “an unconstrained assessment of the number of homes needed in an area” and “should be undertaken separately from assessing land availability, establishing a housing require ment figure and
preparing policies to address this such as site allocations” (Our emphasis).


3.7 The PPG3 is also clear in its approach that the “standard method for assessing local

housing need provides a minimum starting point in determining the number of homes





2 Paragraph: 001 Reference ID: 2a-001-20190220
3 Paragraph: 002 Reference ID: 2a-002-20190220


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needed in an area” (Our emphasis). This is emphasised throughout the ‘Housing and economic needs assessment’ section of the PPG.

3.8 The emerging BCP should therefore reflect that the proposed ‘Housing Need’ figure is only a starting point and additional housing may be required to facilitate economic growth or the delivery of affordable housing.

3.9 Paragraph 010 of the PPG also includes a number of ‘circumstances’ in which housing need could exceed the standard method minimum. These include economic growth strategies, strategic infrastructure projects, unmet housing need from neighbouring authorities, or where past levels of delivery or previous assessments of need (such as a recently-produced Strategic Housing Market Assessment) are significantly greater than the outcome from the standard method. However, the PPG is clear that this list of
‘circumstances’ is not exhaustive.


3.10 For example, in respect of affordable housing an appeal decision for up to 800 dwellings at the Former North Worcestershire Golf Club highlighted the chronic shortfall in affordable housing which has come forward within Birmingham City since 2011 (Appeal Ref: APP/P4605/W/18/3192918) – a decision which was ‘called-in’ by the Secretary of State.

3.11 Paragraph 14.108 of the Inspector’s Report states that only 2,757 new affordable homes were provided in the City over the first 6 years of the Plan period. This represents less than half of the target provision and a net increase of only 151 affordable homes if Right to Buy sales are taken into account. The Inspector goes on to state that given the heavy reliance in the five year housing land supply on City Centre apartment schemes, it is difficult to see how that trend can be reversed in the short to medium term (paragraph
14.109).


3.12 Whilst it is noted that Birmingham City Council does not form one of the Black Country Authorities, it highlights the recent difficulties with delivering homes on brownfield sites. The high proportion of flatted developments, coupled with the increased likelihood of viability issues, has led to a chronic shortfall in the provision of affordable homes. Should the Black County Authorities follow a similar approach, it may therefore be necessary to increase the housing requirement, in accordance with national guidance, to improve
affordability.











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3.13 In this context PPG4 states “An increase in the total housing figures included in the plan may need to be considered where it could help deliver the required number of affordable
homes” (Our emphasis).


3.14 The latest Black Country Housing Market Assessment (dated March 2021) advises that the total annual affordable housing need in the Black Country represents 21.6% (867 per year) of the annual dwelling growth in the housing market area.

3.15 The Housing Market Assessment considers it would be reasonable to expect this proportion of new housing as affordable to be delivered on a large housing site in the Black Country, where a figure of 25% would be plausible (subject to viability). Affordable housing delivery in the Draft Plan ranges from 10% to 30% and for the purposes of this section we have assumed 20% delivery.

3.16 The Assessment concludes by suggesting that Councils can be confident that the affordable housing need identified in the model will be addressed by the dwelling growth identified by the standard method and no adjustment is required to this figure.

3.17 However, as noted above, flatted developments and an increased likelihood of viability issues on brownfield sites could mean that meeting the total annual affordable housing need in the Black Country would be much more challenging than predicted within the Black Country Housing Market Assessment.

3.18 As such, it is considered that any shortfall in housing supply should be regarded as a minimum given that it is currently calculated against an untested housing target that may require an upward adjustment to take account of affordability.

Economic growth


3.19 As we have identified above, Paragraph ID2a:010 of the PPG states “The standard method for assessing local housing need provides a minimum starting point in determining the number of homes needed in an area. It does not attempt to predict the impact that future government policies, changing e conomic circum stances or other factors might have on demographic behaviour.”


3.20 It is therefore appropriate to consider whether the level of housing need put forward by the local authority – in this case the standard method minimum – would accommodate economic growth aspirations and align homes with jobs. Failure to do so may exacerbate unsustainable commuting patterns.



4 Paragraph: 024 Reference ID: 2a-024-20190220


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3.21 From reference to the most recent evidence base document on housing need (The Black Country Housing Market Assessment, March 2021), growth between 2020 and 2039 would create between 39,528 and 46,191 jobs.5

3.22 However, the Housing Market Assessment (HMA) only incorporates this output of job growth from the adjusted Standard Method scenario they have considered. There is no consideration of job growth forecasts from any of the forecasting houses such as Oxford Economics, Cambridge Econometrics, or Experian.

3.23 Barton Willmore would recommend that the baseline economic growth forecasts from one or all of these forecasting houses are consulted. This will help to determine whether the job growth calculated in the HMA is a robust assumption.

3.24 Furthermore, we would recommend that demographic forecasting scenarios are undertaken using software such as PopGroup. This will enable the application of assumptions such as Economic Activity Rates (EARs). The EARs are a key assumption when forecasting. This is because they make a forecast of the proportion of each age group that will be economically active over the Plan period. This can have a significant impact on the number of people, and therefore the number of homes, required to support economic growth.

3.25 Barton Willmore would recommend use of the EARs published by the Office for Budget Responsibility (OBR). The OBR was created in 2010 to provide independent and authoritative analysis of the UK’s public finances. The OBR produce detailed five-year forecasts for the economy and public finances twice a year and are an official independent fiscal watchdog. Their forecasts of economic activity are therefore considered entirely independent and highly robust.

Affordable Housing Need


3.26 At the outset, Barton Willmore do not advocate that affordable need should be met in full, given the judgment of Mr Justice Dove’s in the Kings Lynn case (High Court Judgment)6, which concluded that neither the NPPF nor the PPG suggest affordable housing need must be met in full.









5 Paragraph 5.7, page 71, The Black Country Housing Market Assessment, March 2021
6 Paragraphs 32-25, pages 10-11, High Court Judgment, Borough Council of Kings Lynn and West Norfolk v Secretary of State for Communities and Local Government, ELM Park Holdings Ltd, 09 July 2015


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3.27 However, the need should be considered in the context of PPG which states “An i n cr ea s e

i n t he t ot a l hou s i ng f i g u r es included in the plan may need to be considered where it could help deliver the required number of affordable homes” 7 (o ur e m p ha s i s ).


3.28 Table 6.4 of the HMA concludes that net affordable housing need across the Black Country is 867 affordable dpa. This is based on a 30% affordability threshold, i.e., where rent payable constitutes no more than 30% of gross household income.


3.29 The same table also shows the HMA’s calculation of net affordable need based on a 25% affordability threshold. This would increase need to 2,188 affordable dpa and this 5% difference in affordability threshold highlights what a significant impact a judgement on affordability can have.

3.30 However, this need is also based on an affordability threshold related to rent only. The HMA confirms that total net annual need increases from 867 affordable dpa to 3,618 affordable dpa if households were tested for their ability to afford market entry owner occupation rather than market rents.

3.31 The Draft Plan8 sets out the requirements for affordable housing provision, which is dependent on the specific site characteristics. The expected provision ranges from 10% to 30%. As an average, if we were to assume provision of 20%, this would require overall housing need of 4,335 dpa. The Standard Method’s minimum need of 4,004 dpa would therefore deliver most of the affordable housing need.

Past delivery


3.32 Past delivery of affordable housing in the Black Country should be analysed. Table 1008c of the Ministry of Housing, Communities & Local Government (MHCLG) live tables provides historic data relating to affordable housing supply. We have reproduced the data on affordable housing completions for the Black Country in Table 3.3.
















7 Paragraph: 024 Reference ID: 2a-024-20190220
8 Policy HOU3, page 101, Black Country Draft Plan, July 2021


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Table 3.3: Affordable housing completions in the Black Country, 2015-2020

2016 2017 2018 2019 2020

Dudley 24 107 192 279 264

Sandwell 238 50 122 61 102

Walsall 239 207 240 236 11

Wolverhampton 48 90 157 85 176


Black Country 549 454 711 661 553
Source: Ministry of Housing, Communities & Local Government live table 1008c


3.33 Table 3.3 shows that net affordable completions have fluctuated over the past five years, with 586 affordable dpa being delivered on average.


3.34 Compared with the most recent calculation of affordable need from the HMA based on the affordability of market rents (867 affordable dpa), this means only 68% of affordable housing has been delivered.

3.35 It is important to emphasise how this is based on affordable need determined by applying a 30% affordability threshold. The application of a lower threshold would mean a much lower amount of affordable need has been delivered.

3.36 However, based on the ability to afford market entry owner-occupation rather than market rents (3,618 affordable dpa) past delivery has only provided for 16% of the affordable need.

3.37 Table 3.4 provides a comparison of affordable completions set against completions of all tenures.


Table 3.4: Affordable completions vs overall housing completions

Completions 2016 2017 2018 2019 2020

Affordable 549 454 711 661 553

All tenures 2,534 2,529 2,942 3,009 2,620

Affordable % of all completions 14% 15% 34% 40% 29%


3.38 Table 3.4 shows that over the past five years the Black Country authorities combined have delivered affordable housing at an average rate of 21%. Continuation of this same rate of delivery would require overall housing need of 4,129 dpa over the Plan
period based on the 30% threshold and market rents.







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3.39 However, as we have identified above this is dependent on an affordability threshold of

30%. An affordability threshold of 25% increases affordable housing need to 2,188 dpa, and on this basis the overall housing need would need to be over 10,000 dpa to deliver affordable housing need in full.

3.40 Furthermore, the affordable need based on affording market entry owner-occupation

(3,618 dpa) would require overall housing need of over 17,000 dpa.


3.41 It is therefore clear that affordable housing need is acute based on market entry ownership. In this context it should be emphasised how PPG states “An i ncr ea s e i n t he t ot a l h ou s i n g fi gu res included in the plan may need to be considered where it could help deliver the required number of affordable homes” 9 (our em p ha s i s ).

Afforda ble st ock losses


3.42 The historic delivery measured at 21% above is based on gross affordable stock and takes no account of losses to affordable housing provision through demolition or schemes such as Right to Buy and Right to Acquire. This is an important factor to consider.


3.43 MHCLG Live Table 1008c confirms that 2,928 affordable dwellings were completed in the

Black Country over the past five years. But this is the gross figure only.


3.44 Barton Willmore have used MHCLG live tables to determine how demolition and other housing schemes (such as Right to Buy) have affected the actual affordable housing stock on the ground in Horsham.

3.45 The data shows that stock losses amounted to 2,026 affordable dwellings over the past decade. So, despite 2,928 affordable homes being completed over the past decade, affordable stock has only increased by 902 dwellings (180 affordable dwellings per annum).

3.46 Based on this measure, affordable delivery has only been 7% (902 affordable stock increase) of delivery across all tenures (13,634 dwellings) over the past decade. Based on 7% delivery, overall housing need would have to be over 12,000 dpa to deliver the affordable need based on the affordability of rent (867 dpa).










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Summary


3.47 The following key points should be noted from our review of housing need in the Black

Country:


• The evidence base does not incorporate any forecasts of job growth; this is considered essential to determine whether the proposed housing need will support the economic growth aspirations of the Draft Plan;
• Bespoke demographic modelling scenarios should be undertaken to indicate

whether an increase to standard method is required to support economic growth;

• This should incorporate sensitivity testing using economic activity rates from independent sources such as the OBR;
• The Council’s HMA concludes affordable housing need to be 867 dpa across the

Black Country;

• However this is based on a 30% affordability threshold in respect of the cost of rent only;
• A small downward adjustment to this affordability assumption would significantly

increase affordable housing need;

• Furthermore, need is significantly higher (3,618 dpa) based on the ability to afford market entry owner-occupation rather than market rents;
• The past five years has seen 21% affordable delivery as a proportion of overall completions;
• However, this falls significantly to only 7% once losses to affordable stock are taken into account;
• Based on the Council’s own evidence of need based on market entry, and our analysis of actual stock increase in affordable housing, the Black Country authorities should seek to increase overall housing delivery beyond the proposed
standard method.























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4.0 EXISTING HOUSING SUPPLY



4.1 This section provides a critical review of the existing housing supply as identified by the Black Country Authorities in the Urban Capacity Report. A high level review of the overall methodologies employed is provided under ‘Existing Evidence Base’, followed by a review of each assumption employed related to discount rates; demolitions; density; windfall allowances; and (whilst not expressly referenced in the Urban Capacity Report) implementation rates.


4.2 Case Study examples were utilised within the previous Black Country Urban Capacity Review (dated April 2020) prepared by Barton Willmore, in order to test the assumptions and demonstrate whether it represents a robust position. These examples represented a small sample but were a cross-section based upon site size. Several of the case studies had also featured in news items related to the Black Country’s urban capacity and regeneration of brownfield sites.

4.3 Table 4.1 below includes case studies examples from SHLAAs included in the previous Black Country Urban Capacity Review (April 2020) and provides commentary following revised information contained within the recently updated SHLAAs. In addition, a new case study example of 206 Thorns Road, Quarry Bank, Dudley has been included in the table.


Table 4.1: Case Study Examples from SHLAAs

Site Name Site Details Site Scale

Within Urban

Supply


Commentary

Friar Park,

Sandwell (SHLAA Site Ref 2985)













Rattlechain Site, Sandwell

750 dwellings.

26.65ha. Subject of allocation. Within 0-5 year supply.











322 dwellings. 7.24ha. Subject of allocation.

Represents

largest scale of site within the urban supply.

The delivery

trajectory has been amended from
previous 2018/19

SHLAA – now only

50 dwellings within

0-5 years (2020-

2025) rather than the whole capacity within 5YHLS
Referenced in

SHLAA (2019/20)

as a ‘stuck site’.




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Site Name Site Details Site Scale

Within Urban

Supply
Commentary

(SHLAA Site Ref

2940)




Former Caparo

Steelworks, Walsall

Within 6-11 year supply.




252 dwellings. 6.7ha. Subject of allocation, outline planning permission (Oct 2019) and recent reserved matters application.
150 dwellings within 0-

5 year and 160 dwellings within 6-15 year (SHLAA assumes
310 dwellings based upon previous outline planning permission
from 2010).






Represents

medium-large scale of site within the urban supply.

Now included in trajectory as
deliverable within

10-15 years

Now under

construction in the

2020/21 Walsall

SHLAA update


55-77 Lichfield

Street,

Wolverhampton




Former G&P

Batteries Site, Grove Street, Heath Town, Wolverhampton (SHLAA Site Ref
34400)

Vacant land rear of

2-26 Blowers
Green Crescent, Dudley
64 dwellings. 0.12ha. Expired outline
planning permission. Identified as developable (2024-29).
35 dwellings. 0.79ha. Expired outline
planning permission. Neighbourhood Plan allocation. Identified as developable (2024-
26).

22 dwellings. 0.55ha. New site identified- pre application discussions
Represents

medium- small scale of site within the urban supply









Represents smaller scale of site within the urban supply
No longer in SHLAA








Now 56 dwellings and updated outline permission
– within deliverable supply.




No longer in SHLAA




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Site Name Site Details Site Scale

Within Urban

Supply
Commentary




206 Thorns Road, Quarry Bank,
Dudley

underway. Identified as deliverable.
26 dwellings. 0.55ha. Within 0-5 year supply.


4.4 For the avoidance of doubt, we raise no comments in respect of the suitability of these sites for residential development. They have been chosen to help highlight the delivery assumptions made within the Urban Capacity Report.


4.5 However, as Table 4.1 demonstrates, the sites we considered as part of the previous Urban Capacity Report have not delivered as originally anticipated by the Black Country Authorities, with some removed entirely from the supply.


Existing E vidence Base


4.6 The Urban Capacity Report draws upon the individual Strategic Housing Land Availability Assessments (SHLAAs) for each of the Black Country Authorities. These were all updated for the monitoring year 2020/2021 to support the Urban Capacity Report Update.


4.7 The Urban Capacity Report (paragraphs 2.1.7-2.1.9) identifies that the inclusion and assessment of sites within the current SHLAAs has followed Government guidance, best practice, sustainability principles and the spatial strategy of the current BCCS. A
‘brownfield first’ principle is applied. The sites identified as deliverable or developable are mainly those with planning permission, allocations on surplus employment land and other sites in the BCCS growth network (including greenfield sites, where appropriate i.e. those with planning permission or considered to be policy compliant). The SHLAAs have been informed via a Black Country ‘call for sites’ carried out in 2017-20 to inform the BCP.


4.8 Following a high-level review of each SHLAA, it is considered that whilst they vary in their level of detail on methodology and site assessment, they do all have recourse to the appropriate national guidance and provide a relatively sound basis for identifying a range
of sites.








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4.9 At the time of writing the previous Black Country Urban Capacity Review (dated April 2020), none of the SHLAAs included reference to the involvement of development industry stakeholders, as set out within the PPG (Reference ID: 3-007-20190722 and Reference ID:
68-007-20190722). This involvement can range from the use of a ‘Panel’ to input into the

methodology and assumptions as well as more site by site detailed engagement (such as written agreements with developers on the delivery intentions for a site). The previous
2019 Wolverhampton SHLAA referred to the use of a Panel of relevant stakeholders in the formulation of the 2010 SHLAA methodology, but there was no clear reference to more recent engagement. The 2018/19 Dudley SHLAA stated it will look to involve development stakeholders further in future SHLAA updates. Whilst the SHLAAs all stated they had engaged with stakeholders via the Call for Sites process (and via further dialogue in cases) to inform deliverability assumptions on sites there was relatively limited detail contained within the SHLAA commentary on how this was undertaken (e.g. any written agreements with landowners/developers) and within the individual site tables provided (with Dudley MBC and Wolverhampton CC arguably providing the most detail).


4.10 This position has now been updated and rectified within the updated SHLAAs. For example, the Sandwell SHLAA advises (at paragraph 2.3) that a Black Country SHLAA stakeholder workshop was held during Autumn 2020, with around 50 attendees from the development industry. Attendees were invited to join a Black Country SHLAA Stakeholder Panel. A meeting of the Panel took place on 24th February 2021, to discuss and provide comments on the draft 2020 SHLAA report/tables of sites and feed into the final published reports. Indeed, Barton Willmore was invited to the stakeholder workshop and have joined the Black Country SHLAA Stakeholder Panel. It is intended to involve the Panel on any updates to the SHLAAs on an annual basis. As such, the concerns raised within the previous Black Country Urban Capacity Review regarding a lack of reporting on the involvement of development industry stakeholders have been adequately addressed within the SHLAA updates.


4.11 In addition, our previous review of the 2019 Urban Capacity Report highlighted that there was also relatively limited information with respect to how the ‘achievability’ of sites has been determined based upon more recent viability considerations. It is noted though that achievable sites are now defined within the Sandwell SHLAA update as sites where there is a ‘reasonable prospect’ that housing will be developed on the site at a particular point of time. Market forces, cost factors and delivery factors should be taken into account in assessing a site’s achievability for development. This should include site preparation costs, the inability to attract necessary funding or investment could also be a constraint to development. Market demand, the value of alternative land use, and the impact of nearby
uses could also be a constraints to development.


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4.12 However, it is noted that the Sandwell SHLAA update (at paragraphs 8.16) now states:


“All sites that are being actively promoted by a developer will be considered achievable as it is assumed an analysis of a site’s viability for development would have been completed by the developer.”


4.13 We would therefore query whether a site should be regarded as ‘achievable’ simply on the basis that this has been confirmed by the developer. Indeed, Table 4.1 above, highlights how the expectations regarding delivery of a site can change significantly over a short space of time.


4.14 Our previous Black Country Urban Capacity Review (2020) used the Rattlechain site case study example to demonstrate that the previous 2018/19 Sandwell SHLAA had relied upon a range of potentially marginal brownfield sites within the urban capacity supply. This site was included within Sandwell’s 2018/19 SHLAA developable supply (6-11 years). The Sandwell Housing Delivery Test Action Plan (August 2019) identified that this site requires remediation and is likely to require funding to bridge the viability gap for residential development to occur. However, no further actions were then identified for this site and the necessary funding, such as any opportunities from the Combined Authority. Consequently, the previous Black Country Urban Capacity Review queried the achievability of this site, particularly as the required funding position was not reflected in the SHLAA commentary. However, this site has since been moved to Sandwell’s 10-15 years developable supply in the SHLAA update as has been described as one of three stalled sites within the Borough.


4.15 As part of the evidence base to inform the preparation of the draft BCP, a Viability and Delivery Study (May 2021) has been prepared which assesses whether the housing and employment sites being considered as potential site allocations are financially viable and deliverable. The Study confirms that in order for the Black Country to achieve its housing targets, it is likely that grant funding will be required to facilitate development, particularly those brownfield sites with an industrial legacy to overcome and/or in a low value market area. It is considered that this viability assessment work will improve the robustness of future SHLAAs in terms of demonstrating the ‘achievability’ of sites.


4.16 In terms of the sites included within the SHLAA, it is considered that the assessments have been relatively comprehensive in their scope and identifying potential sources of supply. Again, whilst the SHLAAs differ in their level of detail, reference is made within each
assessment to the appropriate national guidance and the resultant supply identified is


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reflects these different sources available. The PPG (Paragraph: 011 Reference ID: 3-011-

20190722) identifies the range of sites and sources to be considered.


Table 4.2: Summary of types of sites for consideration

Type of site (from PPG with additional BW commentary) Existing housing and economic development allocations and site development briefs not yet with
planning permission

SHLAA/Urban Capacity Report

Commentary

Housing development allocations on surplus

occupied employment land have been reviewed; identifies the need for reallocation for continued employment use. Review underway for
strategic centre allocations (Centres Study) and open spaces, but economic growth requirements and open space deficiencies mean that these
are unlikely to yield significant additional supply


Planning permissions for housing and economic development that are unimplemented or under
construction, or have been refused/withdrawn
Land in local authority’s ownership/

Surplus and likely to become surplus public sector land


Sites with permission in principle, and identified brownfield land
Vacant and derelict land and buildings (including empty homes, redundant and disused agricultural buildings, potential permitted
development changes e.g. offices to residential; subdivision of existing housing; flats above shops)





Additional opportunities for un- established uses (e.g. making
Included








States these are included. SHLAAs include examples such as car parks. Open space and other allocations are being reviewed as per above commentary
Included. SHLAAs employ brownfield land first approach of BCCS
Included. SHLAAs employ brownfield land first approach of BCCS. This supply generally
consists of smaller sites by its nature which are

included in sites with planning permission and accounted for under the windfall allowance.
May be opportunities for some larger scale, but it is considered that any of significance to the supply would have been identified via the
SHLAA process. Intensification potential addressed in density uplift assessment
Included. SHLAAs employ brownfield land first

approach of BCCS




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Type of site (from PPG with additional BW commentary) productive use of underutilised
facilities such as garage blocks)
SHLAA/Urban Capacity Report

Commentary


Business requirements and aspirations
Review of housing and economic development needs undertaken separately-has informed
SHLAA site assessment process. Identifies need
for retained, occupied employment land resulting in loss of housing allocations


Large scale redevelopment and redesign of existing residential or
economic areas
Redevelopment of existing housing has tended to result in net loss of dwellings in the Black
Country area. Demolitions are accounted for


4.17 In particular, the Urban Capacity Report (paragraph 3.1.2) identifies that it has undertaken a review of existing housing allocations, which has resulted in a reduction of housing supply from allocations on currently occupied employment land. This is reflected in each of the individual SHLAAs.


4.18 Overall, it is considered that the SHLAAs adopt a methodology that is largely in accordance with national guidance for establishing the existing housing land supply position. Previous areas of concern regarding the robustness of the SHLAAs highlighted in our previous report, particularly the involvement of other stakeholders and evidence related to viability, have been rectified within the latest SHLAA updates. A Black Country SHLAA Stakeholder Panel has been setup since the previous SHLAAs were produced, and the latest SHLAA updates have reviewed and updated the recording of stalled sites within the developable supply. However, further site-specific detail within the SHLAAs (for example, related to landownership or funding required) would provide greater transparency and enable more informed judgements to be made on the overall robustness of the supply. It is considered, therefore, that the SHLAAs continue to present a ‘best-case’ scenario at this point in time of the potential housing land supply. The remainder of this section considers the assumptions applied via the SHLAA methodology individually. Given that the matter of reallocated housing sites relates to wider employment land need considerations, it is
discussed in further detail under Section 5.









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Discount Rates


4.19 Discount rates are applied in accordance with Government guidance and best practice in SHLAAs. The PPG (Paragraph: 024 Reference ID: 3-024-20190722) advises that local planning authorities should factor in an overall risk assessment to consider if sites will come forward as anticipated. The principle of employing a discount rate is, therefore, supported.


4.20 The Urban Capacity Report (paragraph 2.1.13 - 2.1.15) notes that previously a discount rate of 10% has been applied to all committed sites (including permissions and allocations) and a discount rate of 15% applied to all unidentified sites expected to come forward within the regeneration corridors or freestanding employment sites. These rates were justified by the Black Country Authorities with reference to the BCCS where the discount rates were independently examined by the Inspector and accepted as reasonable. It is noted that the individual SHLAAs do not contain any further specific local evidence in relation to non-implementation rates.


4.21 The Urban Capacity Report states that a review of the discount rates has taken place during

2020 which has involved the use of data from only the City of Wolverhampton (the only authority with consistent monitoring records for sufficient years available). It notes that the exercise reviewed data from the past 17 years and found that 96% of homes on 33 sites granted planning permission in Wolverhampton in 2001-2004 were completed by
2021. This is considered justification for a lower discount rate of 5% (rather than the previous 10%) to be applied to sites within planning permission and not yet under construction.

4.22 The Urban Capacity Report (paragraph 3.1.4) notes that this updated position is consistent with the assumptions of the Strategic Growth Study (2018). This assumed a 15% discount rate for sites without planning permission in the Black Country, reflecting the more significant delivery challenges, and it applied a 5% discount rate to sites with planning permission. We note that at the Footnote to Table 2 the Urban Capacity Report states that in relation to the identified housing land supply, the capacity of sites with planning permission but not yet under construction is discounted by 5%, the capacity of developable allocated sites is discounted by 10% and the capacity of developable allocated sites on occupied employment land is discounted by 15%.

4.23 As such, on the basis of the information available, we would consider a 5% discount rate for sites with planning permission to be unjustified. Indeed, the approach is only supported by evidence from the City of Wolverhampton and is based on delivering sites over a short



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period of time. If a 5% discount rate was to be proposed moving forward, we would recommend that it is supported by evidence from each of the constituent authorities. Indeed, as a result of COVID-19, it is reasonable to assume that there will need to be an increase to discount rates, at least in the short-term.


Demolitions


4.24 The Urban Capacity Report (paragraphs 2.1.16 – 2.1.17) reflects on the fact that the rate of demolitions anticipated in the BCCS has not materialised. This assumed the removal of
3,340 (net) dwellings from the housing supply by 2026. However, demolitions have been a fifth of that anticipated to date. This is largely due to the previously anticipated large- scale housing renewal schemes generally coming to an end (with changes to regeneration programmes). In addition, replacement rates have been higher than expected on some schemes resulting in a lower net loss. The individual SHLAAs reflect the latest position for anticipated demolitions and replacement rates.


4.25 It is recognised that following the discontinuation of large-scale housing renewal programmes (such as the former Urban Living Housing Market Renewal Pathfinder programme, which covered areas of Sandwell and ended in 2011) the scale of demolitions has reduced from that previously anticipated. Each individual SHLAA assumes the following demolitions, however there is limited information available on the source of these assumptions.


Table 4.3: Individual authority demolition assumptions

Dudley Sandwell Walsall Wolverhampton

423 dwellings total, comprising 323 housing stock
demolitions and

100 anticipated

demolitions (BCCS

assumption of

20dpa)

340 dwellings total (no reference to source of assumption)

No overall

demolition figure expressed as figures presented as net.

513 dwellings total


4.26 Given the absence of supporting information, it is difficult to critically review the assumptions. The Urban Capacity Report (paragraph 3.1.3) does note that the Dudley MBC
10-year Housing Asset Management Strategy (October 2019) has identified that around

2,500 homes (12% of the Council’s stock) are not considered viable and are to be reviewed




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for investment, de-investment or demolition. To date, 423 demolitions are programmed to take place which have been factored into the housing land supply position. It notes that further demolitions are possible over the next 10 years which will need to be factored into future SHLAAs when the information is available.


4.27 The Dudley MBC Housing Asset Management Strategy (page 40) notes that of the 2,500 units, 37% are high rise flats and 40% are low rise flats. It identifies that the Council are looking at the longer-term viability of all of the flatted developments with a particular focus on high rise stock, and it is likely that further recommendations on disposal and/or demolition of additional stock will need to be considered (page 7). The strategy (page 7) states that property numbers overall are expected to decline through right to buy, demolitions and disposals.


4.28 Whilst precise demolition figures are not known at present, and have therefore not been factored into the supply position for Dudley, it is noted that from one scheme alone in Netherton 200 households have been rehoused from four high rise blocks which are programmed for demolition in 2019/20. There is no reference to any replacement dwellings on these sites at present within the housing asset management strategy (page 2). Considering the above commentary, it is clear there will be a further net loss going forward. The BCCS previously assumed a replacement rate of 52%. Assuming that 50-100% all of the properties are to be demolished and replaced at this rate it could result in a further
650-1,250 homes to be accounted for in the shortfall (which is in excess of the 423 dwellings currently assumed for Dudley).


4.29 The position in relation to demolitions will therefore need to be kept under review, particularly in light of any further implications arising from the housing asset management strategies of the respective Black Country Authorities and any other regeneration related programmes.


Densit y (and Net Deve lopable Area)


4.30 4.27 In accordance with BCCS Policy HOU2 the following density and net developable area assumptions have generally been applied across all four SHLAAs. There are some variations to reflect local circumstances (e.g. for Wolverhampton CC a 100% net developable area is assumed for City Centre sites, for Dudley MBC sites over 2ha assume a 75% net developable area). These are applied to sites that do not yet have planning
permission (including allocations), unless particular site-specific factors indicate otherwise.






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Table 4.4: BCCS yield assumptions

Sites of 15 dwellings or more





Surplus occupied
employment

sites

35dph is minimum expectation (net of open space and major roads). Assumes 0-
25% flatted

developments.
35dph (gross). Equivalent to 41dph assuming 85% net developable area.

45-60dph schemes that have good access to residential services by foot or public transport. Assumes 25-50% flatted developments.
50 dph (gross) in highly accessible locations.

60dph and higher within strategic or town centre.
Assumes 50% or more flatted
developments.


4.31 The Urban Capacity Report (paragraph 3.1.9) refers to the Strategic Growth Study (2018) findings and conclusions, which suggested the Birmingham and Black Country urban area should seek to apply a minimum 40dph density threshold (net area). This could yield an additional 4,000 dwellings (1,000 dwellings from sites of 200+ dwellings and 3,000 dwellings from small sites below 200 dwellings) in the Black Country (subject to further local testing) 10. The Strategic Growth Study based the findings on a sample of 750 sites across the 14 HMA Local Planning Authorities.


4.32 In 2019, a review was undertaken by the Black Country Authorities to test this conclusion more locally. It identified that from 2009-2019 approximately 86% of sites of 15 dwellings or more have been developed at a density of 35dph and higher. Around 54% have been developed at a density of 35-60dph. The Urban Capacity Report notes that it is not possible to increase densities on sites with planning permission and any increases arising from changes in policy would not take effect until 2024 (anticipated BCP adoption date). An analysis is however undertaken of the potential uplift arising from the draft BCP Policy on housing density and accessibility.


4.33 The analysis considers the potential uplift resulting from applying the draft Policy standards to sites of 10 dwellings or more that are unlikely to be the subject of planning permission before 2024. This results in a maximum additional supply of 476 dwellings which is significantly less than the Strategic Growth Study assumption of around 4,000 dwellings. The Urban Capacity Report explains this is due to a more detailed analysis of more recent date site information (paragraphs 3.1.19 of the Urban Capacity Report).




10 The Strategic Growth Study (paragraph 6.13) identified between 2008-11 the average development density within the Black Country was 40-50dph


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4.34 It should be noted that to calculate this, the analysis assumes all sites within the 35-45dph density range have a density of 35dph and can uplift to 40dph (paragraph 3.1.19 of the Urban Capacity Report). It could be the case that many of these sites are already due to deliver at near 40dph (or above). For example, the Walsall SHLAA states (page 15) that it has already applied the emerging minimum 40dph assumption to all sites (bar those considered ‘deliverable’ within the five-year supply). The previous Black Country Urban Capacity Review referred to the case study example of the Former G&P Batteries Site identified within the developable supply of Wolverhampton. At the time of writing the report in April 2020, this site was expected to deliver at a density of around 44dph (35 dwellings on 0.79ha net site area). However, since this time, an outline planning application has been granted in February 2021 for 56 2-bedroom flats, which would deliver a density of around 71dph. Therefore, some sites within the supply are already significantly exceeding some minimum densities from the BCCS and Strategic Growth Study.


4.35 The Urban Capacity Report assumes that the uplifts in density can only be assumed from

2024 onwards, given the anticipated adoption date of the BCP. However, as the BCP reaches a more advanced stage of development its draft policies will carry more weight. In the context of the NPPF drive to ensure the planning system makes the most effective use of land (NPPF, Chapter 11), the emerging BCP policies could become a material consideration helping to drive density increases ahead of 2024. This could yield some additional supply to current assumptions. However, given the current assumed figure of
476 dwellings from 2024, this is unlikely to yield any significant gains.


4.36 In terms of the potential to exceed the suggested minimum 40dph, the BCP however needs to take into account the housing mix needs of the area. The Strategic Growth Study (paragraph 6.14) identified that generally it is possible to create developments within densities of 40dph or 50dph which continue to provide for a mix of housing types and sizes, including family housing. The BCCS Policy HOU2 (Table 8) identifies that generally schemes of 35-45dph will constitute 0-25% flatted developments. The Black Country and South Staffordshire Strategic Housing Market Assessment (SHMA, 2017) concluded that given the nature of existing housing stock, the optimum housing mix overall would be 12%
1 bed; 22% 2 bed; 40% 3 bed; and 26% 4 bed properties (to vary by area and tenure). Therefore, given that 66% of the preferred tenure is for 3 bed+ homes there is limited scope to drive minimum densities further without compromising the housing needs of the community. Indeed, the case study example of the Former G&P Batteries Site comprises a
100% 2-bedroom flatted development which achieves a high density but clearly fails to

provide a mix of housing.






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4.37 The case study example of the Caparo Site (Walsall) also demonstrates the need to consider the appropriate housing mix on sites alongside density assumptions and take account of the most up to date market conditions. This site, which is now shown as under construction in the 2020/21 Walsall SHLAA update, was identified within the previous 2019/20 Walsall SHLAA (Site HO0181) as having capacity for 310 dwellings (based upon a previous outline consent from 2010). The subsequent reserved matters approval for the site permitted a capacity of 252 dwellings with a mix of housing sizes (in line with an extant outline planning consent from 2019)11. Based upon the site area of 6.7ha, this delivers approx. 35dph. If a net developable area of 85% is factored in, then this represents 44dph. In reality, the capacity of this site has reduced from that anticipated in the SHLAA and the previous outline consent, resulting in 60 fewer dwellings.


4.38 Overall, the density and net developable area assumptions are considered reasonable at present. Indeed, tenure models such as Build to Rent lend themselves to delivering high density schemes within urban centre locations. There is limited scope to go above 40dph as a minimum because of the need to ensure sustainable communities from a housing mix perspective. The case study example from Walsall demonstrates the need for assumptions on capacity that reflect historic permissions to account for the most up to date market conditions. This should be ascertained via discussions with the landowner/developers and further development industry involvement in the SHLAA process. It is therefore important to recognise that wherever a minimum density is required there will always still be the need to consider the appropriateness of this on a site-by-site basis.


Windfall Allowances


4.39 The Urban Capacity Report (paragraph 2.1.24) identifies that since 2015/16 the Black Country Authorities have applied a consistent definition of windfall sites to inform the approach. These are defined as sites of 9 homes/0.25ha or less on the basis that such sites will not be allocated as part of the BCP. Collectively the Urban Capacity Report (paragraph 2.1.24) identifies that windfall sites constitute 557 dwellings per annum of the existing housing supply from the mid-2020s onwards (not applied in first years to avoid double counting with planning permissions). This roughly equates to 7,800 dwellings (assuming from 2025 onwards). The individual SHLAAs assume the following rates and
include local evidence to justify them.





11 https://www.wmca.org.uk/news/wmca-announces-multi-million-pound-investment-to-transform-derelict-steelworks- into-252-home-community/



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Table 4.5: Individual authority windfall assumptions

Dudley Sandwell Walsall Wolverhampton

176dpa (2,816

total) from 2023 onwards supported with local
information

108dpa (1,728 total) from 2023 supported with local
information

97dpa (1,455 total) from 2024 supported with local
information

116dpa (1,652

total) from 2025 onwards supported with BCCS
Inspector Report

and local

information. 812

additional windfalls from city centre densification in
addition to this.


4.40 The figure of 557 dwellings per annum from the mid-2020s onwards (totalling around 7,800 dwellings) referenced in the Urban Capacity Report equates to approximately 20% of the total existing housing supply identified at present (39,257 dwellings including additional supply from density uplift and other sources). This is not an insignificant proportion of the supply, which remains unsecured. It also represents 10% of the Black Country local housing need overall (76,076 dwellings).


4.41 The BCCS Inspectors Report noted that in the context of an 8% surplus in supply, a windfall allowance constituting 6% of the supply overall was considered appropriate (equating to
418 dwellings per year).12 Assuming that the BCP meets all of its local housing need, plus an 8% surplus as previously in the BCCS, the current windfall allowance of 7,800 dwellings would represent around 9% of the overall supply.


4.42 The Black Country Authorities should therefore consider if the windfall allowance assumed remains appropriate going forward on this basis. Whilst the windfall rates included within the plans have been supported by local information, the overall proportion they represent as part of the supply needs to be considered to ensure a housing strategy which is as
‘secured’ as possible. Whilst the level of overall housing land supply that will be provided is still unknown, assuming the situation outlined above applies (i.e. an 8% surplus over and above local housing need of 76,076 dwellings, equating to 82,162 dwellings) the Black Country Authorities may need to reduce the windfall allowance accordingly. If a 6% windfall allowance was assumed in line with the BCCS on this basis it would mean the



12 Although it is not clear how this 6% figure was derived in the context of the BCCS requirements and anticipated supply for 63,000 dwellings (2006-2026).


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windfall supply assumption would need to reduce to around 4,900 dwellings13 (a reduction of 2,900 dwellings). At the very least, it is considered that the windfall allowance should at least be supported by a sensitivity analysis, demonstrating the effects on supply in the event that the windfall allowance is reduced.


Impleme ntation Rates


4.43 The Urban Capacity Report does not expressly reference implementation timescales in terms of lead in times and build out rates. Indeed, the supporting SHLAAs vary in their degree of reference to implementation timescales. Generally, the SHLAAs state they adhere to the NPPF and PPG in terms of determining which sites are ‘deliverable’ and
‘developable’ with reference to the existence of planning permission. In relation to major sites the SHLAAs have generally determined site-specific trajectories. However, there is limited detail on what overarching assumptions may have informed these judgements e.g. average lead in times based on planning permission status.


4.44 At the time of writing the previous Black Country Urban Capacity Review, the 2018/19

Sandwell SHLAA had assumed the whole capacity of the Friar Park site (i.e. 750 dwellings) will be delivered within five years, despite the site having no planning consent. A news article14 from the Combined Authority (October 2019) outlined that the site had just been purchased and remediation work would begin before a community consultation exercise on a masterplan, followed by discussions with potential development partners. Typically, a site with no planning consent may assume a 2-3 year lead in time (to account for relevant consents and site preparation works, particularly where site remediation is required (as is the case with Friar Park). Therefore, the previous Black Country Urban Capacity Review (April 2020) queried the deliverability of 750 dwellings within a two-year period. In particular, noting the definition of ‘deliverable’ within the PPG and that any assessment of a site should be supported by “robust, up to date evidence” (Paragraph 007, Reference ID:
68-007-20190722). However, this has since been reviewed and rectified within the

2019/20 Sandwell SHLAA update, as the delivery trajectory has been amended such that now only 50 dwellings are included within 0-5 years (2020-2025), as opposed to the whole capacity within the 5YHLS.


4.45 In respect of smaller sites, the application of the timescales specified within the SHLAAs (based upon the PPG) also needs to be more transparent and consistent. The case study example of 206 Thorns Road, Quarry Bank, Dudley demonstrates that some smaller major


13 4,900 dwellings represent around 6% of the 82,162dwellings supply required- identified as local housing need
(76,076dwellings) plus 8% surplus in supply.
14 https://www.wmca.org.uk/news/wmca-and-sandwell-council-deal-unlocks-biggest-brownfield-housing-site-in-region/


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sites with no current planning permission have been included within the five-year supply. In addition, this site is identified within the 2019/20 Dudley SHLAA update as having access constraints. It is considered sites such as these should be considered ’developable’ rather than ‘deliverable’ in accordance with the PPG.


4.46 Whilst these examples related to implementation timescales do not necessarily affect the overall supply picture for the whole Plan period, they do raise concerns about assumed deliverability in early years and any knock-on effects for the trajectory for later years i.e. reliance upon a backloaded trajectory. The Urban Capacity Report notes (paragraph
2.1.40) that the re-phasing of sites beyond 2026 to reflect realistic delivery timescales has already been done. However, this should be kept under review particularly as it is assumed that 37% of the current supply will be delivered in the first five years of the BCP (trajectory within Appendix 2 of the Urban Capacity Report). Further clarity on the assumptions and site-specific trajectories for the major sites would provide a more robust and transparent picture of the overall supply.


Sum mary of Existing Housing Supply Re view


4.47 The table below provides a summary of the review undertaken and any subsequent changes to the overall housing land supply accordingly.


Table 4.6: Summary Existing Housing Supply Review
Assumption Consortium Review commentary Potential adjustments to supply
Discount rate Discount rate should be justified further with reference to up to date local evidence on implementation.

To be confirmed


Demolitions Acceptable in principle, however it will be necessary to continue to monitor. Dudley MBC additional housing strategy demolitions not accounted for at
present.
Reduce by up to 1,250 dwellings


Density (and net developable area)
Assumptions considered generally reasonable, although additional supply from density uplift to be treated as a
maximum. Further supply could come
0 dwellings




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Assumption Consortium Review commentary Potential adjustments

to supply

from implementing policies ahead of

2023 with weight of advanced BCP,

NPPF policy context, and also from sites of less than 15 dwellings. However, any additional supply from these sources is likely to be limited.


Continue to monitor whether up to date site specific assumptions are being relied upon (rather than historic
permissions, for example).


Windfall

Allowances
Potentially overstated in context of overall housing land supply and
previous BCCS assumptions. To keep

under review.
Reduce by 2,900 dwellings


Implementation

Rates
Consider consistency of application of assumptions and implications for
trajectory i.e. backloaded trajectory.
0 dwellings




4.48 For the avoidance of doubt, the above assumptions should be considered as a ‘best case

scenario’ for the purposes of this review.


























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5.0 IDENTIFICATION OF ADDITIONAL HOUSING CAPACITY



5.1 This section provides a review of the specific types of other sources of additional land supply which forms part of the overall Urban Capacity Report supply.


Surplus O ccupied Employme nt La nd


5.2 The BCCS proposed that 25,000 new homes would be developed on surplus employment land by 2026 (with around half of this in Sandwell MBC). When factoring in a discount rate of 15% this totalled 29,400 homes to be allocated. Detailed evidence produced to support the subsequent Site Allocations (SAD) and Area Action Plans (AAP) for the individual authorities resulted in only 16,182 dwellings being allocated on surplus employment land. Since these were allocated between 2013-2019, only 679 homes have been completed. An additional 703 homes have secured planning permission.


5.3 As part of the evidence base work for the BCP a Black Country Employment Area Review (BEAR) has been prepared, which has been informed by a landowner engagement exercise (as noted in the Landowner Engagement Exercise Technical Report (August 2021)). The BEAR seeks to identify the current intentions for existing employment sites and business needs to inform the BCP approach on the protection and retention of employment land. The report reviews the extent to which existing housing allocations involving the redevelopment of employment land should be deleted, with those sites retained for employment activity. The BEAR has concluded that many of the occupied employment sites currently allocated for housing contain businesses which have either invested in their premises and/or intend to remain in situ in the long term, and specifically throughout the new Plan period. In addition, it should be noted that the re-allocation of employment sites to housing would impact negatively on the ability of the Black Country to provide sufficient employment land to meet its identified needs, as any employment land lost to alternative uses would need to be replaced elsewhere and added to the land requirement. Therefore, the BEAR strongly suggests that these sites should be retained for employment uses and current housing allocations deleted through the Black Country Plan review. The overall effect of this would be a significant reduction in housing capacity compared to when the allocations were made, potentially by around 10,974 homes.


5.4 The Black Country Economic Development Needs Assessment (EDNA) Update (Stage 2,
2021) also identifies a requirement for a net increase in employment land over the new BCP period, which is likely to require the retention of more existing employment land than previously anticipated (Urban Capacity Report, Section 2.2). As a result, the expected




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supply from occupied employment which is currently allocated for housing development is to be significantly reduced via the BCP. Of the 14,800 homes currently allocated on occupied employment land, only 3,826 homes are to remain (included within the 2020
SHLAA housing supply). This represents a significant reduction in housing capacity of

10,974 homes (Urban Capacity Report Table 1 and paragraph 2.1.36).


Table 5.1: Reduction in housing supply on employment land in Black Country
Relevant source and plan period
Expected housing supply from occupied employment land

BCCS (2006-2026) 29,400 dwellings (includes discount) SADs/AAPs (2006-2026) as adopted 16,182 dwellings (488ha)
SAD/AAPs (2006-2026) as at 2020* 14,800 dwellings (444ha/167 sites)

SHLAA (2020)** (2006-2039) 3,826 dwellings (102ha/48 sites)

*Taking into account completions and planning permissions. Figures are undiscounted.
** Taking into account results of the BEAR and EDNA. Figures are undiscounted.


5.5 The Urban Capacity Report (Section 2.2) identifies that there is a potential shortfall in employment land needs for the BCP Plan period, based on the previous EDNA (Stage 1,
2017). However, it should be noted that the EDNA Stage 2 (2021) was released following the publication of the Urban Capacity Report, and therefore we have reviewed the most up to date information contained within the EDNA 2 below.


5.6 EDNA 2 notes that there have been some significant changes in the use of employment space since the publication of EDNA 1 and, in particular, in the last 18 months. Whilst manufacturing remains an important sector for the Black Country Economy, the COVID-19 pandemic has fuelled e-commerce, resulting in increased demand for logistics space requirements (B8 use). Accordingly, there is projected to be an undersupply of employment land of 149-169ha. It has been estimated that the potential loss of employment land over the next planning period would be 62.7ha based on the detailed review of employment sites (including losses to residential uses and other alternative forms of development for employment spaces in the Black Country). Allowance for this loss will need to be factored in planning for the future provision of employment space in the Black Country, bringing the level of employment land requirement to meet employment needs in the Black Country to 30-31ha per annum over the next planning period (equivalent to between 212 and 232 ha undersupply over the next planning period).

5.7 The Urban Capacity Report (at Section 3.2) concludes that, at this stage, a significant shortage of employment land will remain. This is after consideration of the potential for additional sources of employment land to meet the shortfall, such as current non-



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employment allocations which have not yet been developed for the alternative use; intensification of existing sites; any vacant land; and contributions from outside of the Black Country e.g. within South Staffordshire and Shropshire. It is concluded that these potential additional sources will not fully accommodate the need for employment land and the gap in supply will remain significant in scale.


5.8 Overall, the findings of the EDNA and BEAR collectively identify a need for the BCP to continue safeguarding a wide range of local employment areas and promote the recycling of brownfield land within existing employment areas (as well as intensifying their use). The Urban Capacity Report (paragraph 2.2.11) notes that even in the context of a need for a net increase in employment land for the BCP, there may be some employment areas which are not ‘fit for purpose’ to meet future needs and could therefore be considered for alternative uses. However, the Urban Capacity Report notes that these could only make a very limited contribution towards meeting housing land requirements and are subject to overcoming significant viability issues. Therefore, it is reasonable to conclude that no further or minimal additional housing land supply will arise from occupied employment land.


5.9 We consider that the anticipated circa 3,800 dwellings which are assumed to come forward on existing employment sites should be kept under review given the evident employment land gap going forward, and the viability of such sites (as recognised in the Urban Capacity Report paragraphs 2.1.29 – 2.1.30). It is questionable whether these 3,800 dwellings on surplus employment land can be delivered in the context of an employment land shortfall; competing uses for land for housing and employment supply shortfalls; and the issue of the viability of redeveloping sites of this nature. Indeed, the Viability and Delivery Study (May 2021) confirms that in order for the Black Country to achieve its housing targets, it is likely that grant funding will be required to facilitate development, particularly those brownfield sites with an industrial legacy to overcome and/or in a low value market area.


Strategic Ce ntre s


5.10 The Urban Capacity Report (paragraph 3.1.22 and Table 5) identifies that the Strategic Centres are not included in the review of existing allocations at present, but they provide a potential source of new supply. They form part of the identified supply for the BCP, as identified within the respective SHLAAs of the Black Country Authorities, providing around
8,100 dwellings (undiscounted, including windfall allowances). It notes that as the BCP
plan period up to 2039 extends beyond that of many Area Action Plans for the centres, there may be the potential to identify further sites for housing.




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5.11 The BCP will set indicative housing targets for each of the Strategic Centres (Brierley Hill Town Centre, Walsall Town Centre, West Bromwich Town Centre, Wolverhampton City Centre). The targets will draw upon the most up to date SHLAA information and will take into account the Centres Study, which is currently underway, and more detailed information being prepared for Brierley Hill and West Bromwich. The Urban Capacity Report (paragraphs 3.1.27 – 3.1.31) assumes the following potential uplifts from this work.


Table 5.2: Summary of existing and uplift capacity in Strategic Centres

Strategic

Centre

Existing

Capacity as at

2020

(dwellings)

Additional review Uplift in Capacity

(dwellings)

Brierley Hill 2,804 Area Action Plan (2011)

to be reviewed alongside BCLP. Will review existing housing allocations and capacity for further supply. Potential for uplift
based existing

allocations and recent evidence base work (Centres Study and DY5
Enterprise Zone

Review)

350


Walsall 937 Up to date assessment of capacity via Area
Action Plan and SHLAA (both 2019). Further capacity may arise from surplus retail sites due to impact of Covid-19 pandemic, but this
requires further

evidence to quantify.
No uplift assumed








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Strategic

Centre
Existing

Capacity as at

2020

(dwellings)
Additional review Uplift in Capacity

(dwellings)

West Bromwich 201 Review of capacity underway with masterplan due for consultation in late
2021 followed by

Interim Planning
Statement. Potential for uplift.

200


Wolverhampton 4,412 Area Action Plan (2016) provides detailed allocations, and also
makes additional

allowance for

residential on other sites and windfall for upper floor
conversions. Impact of Covid-19 pandemic and regeneration schemes (e.g. Future High Streets Fund) leading
to increases in

capacity.
750




5.12 The Urban Capacity Report (paragraphs 3.1.24 – 3.1.25) also notes that whilst the Strategic Centres may have a role to play in accommodating uplifts in supply, the need for them to continue functioning as key sources of employment, retail, leisure, commercial and civic uses should be borne in mind. The issue of more complex site assembly for centre developments is recognised. The need for the housing mix requirements of the emerging BCP should also be a key consideration i.e. a large proportion of the future housing needs
cannot be readily accommodated in high density centre developments.






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5.13 The Urban Capacity Report (paragraph 3.1.32) states there is some uncertainty with regards to the uplift whilst awaiting the completion of the Centres Study and more detailed evidence for West Bromwich and Brierley Hill. The Viability and Deliverability Study will also test the potential for supply from strategic centres. We would note that as these studies are not available at present, it is not possible to fully review the validity of the assumed uplift in supply. Furthermore, as the Urban Capacity Study (paragraph 3.1.33) notes there is uncertainty with regards to the full impacts of the Covid-19 pandemic and national planning guidance changes e.g. whilst the pandemic may give rise to reduced demand for retail space, there may be increased demand for dwellings of sufficient size with good access to public open space. Further supply to that already identified, and the
1,300 total dwelling uplift, is unlikely to be significant in scale. Other Sources
5.14 The Urban Capacity Report (paragraph 3.1.34) concludes that open spaces within the BCP area are unlikely to yield any additional housing supply. The updates to the Open Space Assessments and Strategies to support the BCP are now largely completed and confirm that most existing open space should be retained. Releasing any significant amounts of open space for housing would result in a significant under-provision of open space. It is, therefore, concluded minimal additional housing supply is likely to be derived from this source. We also note that some of the SHLAAs do already include greenfield sites within the overall housing land supply, where they are policy compliant. This source of supply has therefore already been accounted for to a degree.


5.15 In respect of any other vacant land, we note that the SHLAAs have already considered a wide range of sources of sites. However, should any further vacant land (including surplus public sector land) become available it is clear there will be competing priorities given the shortfall in employment land. It cannot therefore be guaranteed any such additional land would be brought forward for housing.


5.16 In relation to further sources of additional brownfield sites from employment land and strategic centres, it is considered that the SHLAAs and Urban Capacity Report have sought to identify as far as possible all existing potential sites. The BCCS and emerging BCP continue to promote a ‘brownfield land first’ approach. The crux of the housing supply issue is that the Black Country Authorities have now identified the need to retain employment land that was previously identified for housing redevelopment.

5.17 It is recognised that the Combined Authority focus on bringing forward long-standing problematic brownfield sites will help to secure housing delivery. However, it is unable to


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identify ‘new’ sites where these simply do not exist. The sites which have been the subject of funding announcements by the Combined Authority (for example the Friar Park and Former Capero sites) are accounted for within the Black Country housing supply already; the funding position does not therefore identify new sites, it is helping to secure the delivery of existing sites in the supply going forward. This is to be welcomed as it demonstrates that historically difficult sites can be brought forward with such funding mechanisms in place. However, it does not serve to deliver any new sites. It also highlights the continued challenges the Black Country urban capacity supply faces as these sites would not be coming forward without public sector intervention.


5.18 The Black Country has historically been, and continues to be, a focus for brownfield regeneration funds and schemes as outlined in the Urban Capacity Report (paragraph
2.1.30). A range of mechanisms already have and continue to be deployed via the Black

Country Local Enterprise Partnership and Combined Authority, such as the West Midlands Housing Deal Land Fund of £100m focused on the Wolverhampton to Walsall corridor. Furthermore, the Urban Capacity Report (at paragraph 2.1.30) states that the current funding mechanisms are time limited and are not capable of addressing the viability gap associated with the delivery of sites of former employment land; there is a need for continued engagement with the relevant agencies to secure additional support. Further funding is required to bridge the viability gap for those sites that are already accounted for in the existing supply, as illustrated by the Rattlechain site in Sandwell. For the avoidance of doubt though, it is again emphasised that this funding is being used to deliver sites already within the urban capacity supply i.e. allocations in SADs and AAPs; not identify and deliver additional brownfield sites. The supply gap identified within the Urban Capacity Report will therefore remain despite the sources of funding.


5.19 In relation to densification, it should be noted that the Black Country Area (outside of strategic centres) remains largely suburban in character. It is therefore questionable how far the exercising of any such permitted development rights would go towards generating any significant additional supply.


5.20 From a national perspective, the government has made clear that it intends to progress with introducing new permitted development rights of relevance to brownfield land developments and to provide potential for ‘densification’. For example, new permitted development rights for upward extensions to dwelling houses and for buildings in commercial or mixed use came into force in August 2020, whilst a new Class MA, permitting the change of use of a building from Class E (commercial, business and service) to residential, has replaced the previous Class O (office to residential conversions). However,
as these new permitted development rights only came into force in August 2020, it is too


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early to determine how successful these legislative changes are in providing additional housing supply. Indeed, the scope for office to residential conversions has actually reduced, owing to a capping of total floor space that can be converted under Class MA (development is not permitted if the cumulative floor space of the existing building changing use under Class MA exceeds 1,500 sqm). However, Class MA does enable the conversion of other community uses (i.e. commercial, business and service uses) as opposed to only business/office uses. Therefore, the resultant impact on additional housing
supply and windfalls will need to be monitored.


























































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Blac k Count ry Ur ban C apacity Review Summar y of Key Fin din gs


6.0 SUMMARY OF KEY FINDINGS



6.1 The summary table below provides an overview of the potential adjustments to the housing land supply position arising from this critical review. In light of the findings, an additional shortfall of around 4,000 dwellings is identified as a result of potential further demolitions in Dudley MBC and an unjustified windfall allowance. No further discounts have been applied so far however, as the accompanying commentary demonstrates, this figure still represents a ‘best case’ scenario for future housing delivery.


Table 6.2: Summary of Consortium adjustments to Black Country shortfall

Existing
Total
Housing
Supply
(2020-39)

Maximum potential uplift

Total Local
Housing
Need
(2020-39)

Potential Shortfall (2020-
39)

Consortium
Review
Adjustment (to existing housing
supply)

Consortium
Review
Adjustment to Potential Shortfall

Dudley 11,064 584 11,648 11,989 341 Additional demolitions
-1,250

-909

Sandwell 8,510 344 8,854 27,873 19,019 0 19,019
Walsall 7,807 0 7,807 16,568 8,761 0 8,761
Wolverhampton 10,100 848 10,948 19,646 8,698 0 8,698

Black Country 37,481* 1,776 39,257 76,076** 36,819 - 2,900
Windfall rate
reduction

38,469

*Supply from 2019 Urban Capacity Report was 42,171 dwellings. The reduction of 4,690 dwellings is mainly as a result of reductions in supply in Dudley (2,486 dwellings) and Sandwell (1,902 dwellings).
**Local Housing Need from 2019 Urban Capacity Report was 71,459 dwellings. Increase of 4,617 dwellings is largely due to the 35% urban uplift via the standard method for Wolverhampton.


6.2 In the first instance, it is noted that the standard method only provides a minimum starting point for establishing housing need. The PPG outlines a number of ‘circumstances’ in which housing need could exceed the standard method minimum. This can include economic growth as well as the provision of affordable housing. As set out in Section 2.0, affordable delivery has only been 7% (902 affordable stock increase) of delivery across all tenures (13,634 dwellings) over the past decade. Based on 7% delivery, overall housing need would have to be over 12,000 dpa to deliver the affordable need based on the affordability of rent (867 dpa). Whilst we do not advocate that the Black Country Authorities accommodate affordable housing in full, it highlights the potential need for an adjustment to the standard method figure. As such, the Housing Need figures set out at table 6.1 should be regarded
as a minimum.



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6.3 In respect of discount rates, it is considered that further local evidence should be used to justify rates going forward. Any future review of these rates on the basis of updated evidence for the BCP should continue to be realistic and reflect the nature of the urban capacity supply of the Black Country with its identified delivery difficulties.

6.4 In respect of densities, the assumptions are considered generally reasonable, albeit the uplift assumed from increased densities should be treated as a maximum. This is particularly important in relation to the necessary housing mix for the BCP going forward. Moreover, the Black Country Authorities will need to clearly demonstrate how they propose an increase in residential densities without compromising the required housing mix. As set out within the Black Country and South Staffordshire SHMA (2017), 66% of the preferred tenure is for 3 bed+ homes. Increasing the delivery of flats within the Black Country will not, therefore, provide much needed family housing.

6.5 The Black Country Authorities should provide further clarity on implementation assumptions for individual sites that have informed the housing trajectory to provide additional transparency. This is particularly important in the context of a number of problematic sites within the supply (e.g. with remediation or site assembly issues) being relied upon to meet future housing needs. The availability of funding going forward to secure such sites will need to be a key consideration.

6.6 With regards to additional sources of supply, including surplus employment land, the approach of the Black Country Authorities to reviewing existing housing allocations is welcomed. This provides a more up to date picture of the potential supply of housing from this source. The case study examples of Friar Park and the Rattlechain site illustrate the continued delivery challenges within the Black Country on former employment sites. These sites are included within the circa 4,000 dwellings expected to come forward on former employment sites as part of the overall Black Country housing supply, but they would not be achievable without public sector intervention. The existing assumed housing supply should therefore be treated with caution, which is particularly dependent upon sufficient public funds being available to bridge the funding gaps on difficult sites. The issue of competing land uses also needs to be borne in mind in the context of an employment land shortfall for the Black Country. It is, therefore, maintained that the current circa 4,000 dwellings identified from employment land within the supply should be treated as a maximum at this stage.


6.7 In terms of non-employment land sources of supply, it is considered that the SHLAA processes have sought to identify as far as possible a range of other sites e.g. vacant land, public sector disposal opportunities. However, such sources are unlikely to yield any
substantial additional supply relative to the overall housing supply shortfall identified to


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date, particularly as some of these sources of supply are already accounted for within the overall capacity. It is also noted that there is no available evidence at present to support the assumption that West Bromwich town centre can accommodate an additional 500-1,000 dwellings. This uplift from the Strategic Centres should therefore also be treated with caution and assumed as a maximum at this stage.

6.8 As set out in the Urban Capacity Report, there is understood to be a shortfall of 36,819 new homes over the Plan period from brownfield sites across the Black Country Authorities. However, based on the information available, this should in fact be considered to be approximately 38,469 new homes over the Plan period. This is also before matters of competing land uses, viability and affordability are taken into consideration. A shortfall of 38,469 dwellings should therefore be regarded as the ‘best case scenario’.

6.9 This is clearly a significant shortfall that needs to be addressed in full as part of the emerging Black Country Local Plan. Whilst continuing to promote the development of brownfield land will form part of addressing housing need, it is clearly apparent that further greenfield and Green Belt options will need to be included to ensure that housing need is met in full. In the event that the Black Country Authorities are unable to meet their full housing need, through the Duty to Cooperate, this will need to be accommodated elsewhere within the Greater Birmingham HMA.

6.10 The Urban Capacity Report (at Graphs 1 and 2 and paragraphs 2.1.40 – 2.1.41) notes that as a result of the findings housing land supply has fallen below that required to meet the housing targets set out in the BCCS up to 2026; an under-supply of around 10,347 homes representing 37% of the remaining BCCS housing target is demonstrated. The loss of supply on occupied employment land and the re-phasing of sites beyond 2026 has given rise to this shortfall. In respect of the BCP, the findings also serve to demonstrate that housing need outstrips supply from 2020/21 onwards, with the gap widening until there is a total shortfall of 38,595 homes (not taking into account the potential uplift in supply arising from density increases and the Strategic Centres) in 2038/39, representing
51% of the total housing need for 2020-39. In light of this significant under-supply and clear pressing need in the short term as well as over the plan period, there is a clear imperative for the Local Authorities within the Housing Market Area to address the
shortfall now.













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Black Count ry Ur ban C apacity Review Recommendations an d Nex t Steps


7.0 RECOMMENDATIONS AND NEXT STEPS



7.1 This critical review provides a basis for engagement with the Black Country Authorities as well as the wider Greater Birmingham HMA local authorities. It highlights areas of concern and those of indicative support in relation to the scale of the shortfall in housing land supply, which will need to be taken into consideration as the BCP progresses.


7.2 On behalf of the Consortium, Barton Willmore prepared a critical review of the 2019 Urban Capacity Report in April 2020. This review queried the robustness of the individual Strategic Housing Land Availability Assessments (SHLAAs) for each of the Black Country Authorities, as they largely remained silent on the involvement of development industry stakeholders and evidence related to viability. Whilst these previous areas of concern have been rectified within the latest SHLAA updates, some concerns remain in relation to the assumptions made on the overall robustness of the supply.


7.3 Several of the Greater Birmingham HMA authorities are currently considering the potential to accommodate unmet needs from Birmingham City and the Black Country through their respective Local Plan reviews, such as Cannock Chase, Lichfield and South Staffordshire. This critical review demonstrates that a significant housing supply shortfall within the Black Country area exists and these neighbouring authorities are therefore justified in considering the need to accommodate shortfalls arising, under the Duty to Cooperate. However, it should be emphasised that the findings of this Report remain a ‘best case scenario’. Whilst we have demonstrated within this Report that the shortfall should be considered as approximately 38,469 dwellings, this could increase even further as the supporting evidence base continues to be tested.

7.4 This update of the Urban Capacity Review has taken place during early 2021, to provide evidence to accompany the Draft Black Country Plan which was published for consultation on 16th August 2021. The next update of the Urban Capacity Review will take place in early 2022, to provide evidence to accompany the Publication (Reg. 19) Black Country Plan due to be published in summer 2022. This should be kept under review to ensure the issues outlined within this Report are suitably addressed.