SHP2016 - PSA Housing Need

8/15/2019 SHP2016 - PSA Housing Need

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STONE HILLPARK LIVE WORK PLAY

A brighter future forThanet and East Kent

SHP1-4.3

Planning StatementAddendum:Housing Need


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Stone Hill Park Contents

May 2016 gva.co.uk

Contents1. Introduction................................................................................................................................................... 1

2. Assessment of Housing Delivery ................................................................................................................ 4

3. Published Housing Need Evidence .......................................................................................................... 6 4. GVA Calculation of Objec tively Assessed Housing Need ................................................................. 23

5. Assessment of Land Supply ...................................................................................................................... 44

6. Alignment Between Need and Supply .................................................................................................. 55

7. Appropriateness of the Former Manston Airport Site .......................................................................... 58

8. Conc lusion .................................................................................................................................................. 59

AppendicesAppendix I Housing Evidence – Surrounding Districts (March 2015)

For and on behalf of GVA Grimley Limited


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Stone Hill Park Housing Evidence

May 2016 gva.co.uk 1

1. Introduction

1.1 GVA have been commissioned to prepare an evidence base to guide the preparation of a

masterplan for the redevelopment of the former Manston Airport site. The purpose of thisreport is to provide the necessary land use evidence to justify housing, as part of the

masterplan proposals.

1.2 This report initially comprises a c ritique of the Council’s housing evidence base, which focuses

on housing need and supply matters. Certain aspects of this evidence are then updated,

specifically the objectively assessed housing need, in order to calculate a more up-to-date

housing need figure and a more robust understanding of the alignment between housing

need and identified potential supply.

1.3 The outcome of this is an up to date evidence base position that identifies a higher level of

housing need (than identified in the Council’s existing evidence base) plus a need to identify

a grea ter supp ly of deliverable housing land (than currently proposed in the 2015 consultation

draft Local Plan) in order to satisfy the updated objectively assessed need figures and to

tac kle delivery risks assoc iated with existing identified land supply.

Housing Evidence Base Context

1.4 The following evidenc e base documents have been reviewed . These documents address

housing delivery, housing need and housing land supply:

Housing Delivery:

• Thanet Local Plan Monitoring Report (2014).

Housing Need:

• Strategic Housing Market Assessment (SHMA) for the East Kent Sub-region (2009);

• Thanet Strategic Housing Ma rket Assessment (SHMA) 2016;

• Kent County Council Economic and Demographic Forec asts (2013);

• Thanet District Council Housing Topic Paper (2013);

• Thanet’s New Local Plan – Options Consultation (2014);

• Draft Thanet Local Plan: Preferred Options (2015); and

• As an extension to the consideration of housing need, a brief review of the key evidence

bases for the neighbouring local authorities, defined as making up the East Kent Housing


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Market Area in the East Kent SHMA (Thanet, C anterbury, Dover, Shepway, Swale), is

provided In Appendix of this report.

Housing Land Supply:

• Strategic Housing Land Availability Assessment 2013 Update; and

• Thanet Local Plan Monitoring Report (2014).

1.5 Many of the above documents were prepared in the assumed context of the site continuing

to operate as an airport which is no longer the case. Changes to the use of the site will have

subsequent impacts on the population growth forecast scenarios, housing need and land

availability assessment. In several cases, documents were also produced within a pre-NPPF

context, so their continuing validity is an area for consideration.

Report Structure

1.6 The report is structured a s follows:

• Sec tion 2: Assessment of Housing Delivery – This sec tion reviews recent housing delivery

within Thanet, based on the Thanet Local Plan Monitoring Report (2014);

• Section 3: Housing Need Evidence – This sec tion provides a deta iled review and c ritique of

the existing housing need evidence (including the Thanet SHMA (2016));

• Section 4: GVA Objective Assessment of Housing Need – provides a re-calculatedobjectively assessed housing requirement for Thanet District that establishes an up-to-date

and robust need position, which is NPPF and NPPG compliant and draws on the latest

published da ta a vailable;

• Sec tion 5: Assessment of Land Supply – This section reviews the SHLAA 2013 Update and

where relevant the Local Plan Monitoring Report, to provide an assessment of the

identified land supp ly position. This considers the assessed potential delivery from different

site sources, the identified 5 year housing land supply, the role of windfall sites, and the

methodological compliance of the site assessment with the tests set out in the NPPG

(suitability, availability and achievability). Of key importance here is establishing an

understanding of the likelihood of identified potential sites coming forward, particularly in

relation to strategic sites within the 5 year deliverable period;

• Section 6: Alignment Between Need and Supply – This sec tion draws on Sec tions 2-5 to

understand how the identified need aligns with recent past housing delivery levels and

assessed supply potential (SHLAA, AMR);

• Sec tion 7: Appropriateness of the Former Manston Airport Site – This sec tion c onsiders thesuitability of the site to support housing (as part of a mixed use development); and


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• Section 7: Conclusion – The concluding section brings together the critique and

calculations produced throughout the report, to conclude that there is a well evidenced

case to justify residential development on the former Manston Airport site, as part of wider

mixed use development.


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2. Assessment of Housing Delivery

2.1 This sec tion reviews the latest Thanet Local Plan Monitoring Report (2014) in order to

understand the level of recent housing delivery within Thanet District. This provides important

context to housing p rovision in the District, and will identify trends in housing delivery which

could be likely to continue into the future.

Dwelling Completions

2.2 From 2006/07 - 2013/14 there were 4,227 net a dditiona l dwelling completions, which equates

to an annua l average net completions rate of 528 over the 8 year period . This is shown below

in the dwellings completions chart taken from Monitoring Report, see Figure 1.

Figure 1 – AMR Chart showing Dwelling Completions in Thanet, 2006/07 – 2013/14

Sou rce : Tha ne t Loc a l Pla n M on ito ring Rep ort 2013

2.3 We note that the dwelling requirement identified in the above figure against which new

completions are benc hmarked (7,500 over the period from 2006-26, which equates to 375

new dwellings per annum), is based on the South East Plan (2009), which was revoked in 2010.

As such, it is out-of-date.

2.4 Despite the out-dated nature of this South East Plan based benchmark, it is evident from

Figure 1 that there has been a declining trend in dwelling completions when comparing pre-

2010/11 and post 2010/11, with figures dropping to below the South East Plan requirement to


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just above 300 dwellings in 2011/12, and falling further to approximately 200 dwellings in

2012/13. The 2013 AMR predicted the delivery of 588 dwellings for the period 2013/14, however

the 2014 AMR reports that just 321 were completed (while rec ognising that this was an

increase on the 2012/13 low point).

Previously Developed Land Targets

2.5 The AMR also reports that 68.5% of homes in the reporting year (13-14) were completed on

previously developed land (below the stated target of 70%).


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3. Published Housing Need Evidence

3.1 The purpose of this sec tion is to set out a review of existing housing need evidence and

related publications, which comprises the following:

• Strategic Housing Market Assessment (SHMA) for the East Kent sub-region (2009);

• KCC (Thanet) Economic and Demographic Forecasts (2013);

• Thanet District Council Housing Topic Paper (2013);

• Thanet Local Plan Op tions Consultation (2014);

• Thanet Local Plan – Preferred Options Consultation (2015); and

• Thanet Strategic Housing Ma rket Assessment (SHMA) (2016).

3.2 It is worth noting that it is unclear what evidence underpins the level of housing provision

identified within Policy SP11 of the preferred option draft Thanet Local Plan (2015). This level

(12,000 additional homes) broadly aligns with scenarios within both the 2009 SHMA and the

2013 KCC Economic and Demographic Projections. Both of which were prepared p rior to the

publication of the NPPF and/or NPPG and therefore do not align with strategic guidance on

preparing Local Plan evidence or use the most up to date (and therefore reliable) data.

(i) East Kent SHMA, 20093.3 A historic a ssessment of need is found within the East Kent Strategic Housing Market

Assessment (SHMA) (2009) (which informed the draft Loc al Plan). This was prepared by

consultants ECO TEC in compliance with the CLG (2007) Strategic Housing Market Assessments

Practice Guidance, and in line with Planning Policy Statement 3 (PPS3) (both of which have

been superseded/are out-of-date).

3.4 The assessment included the Canterbury, Dover, Shepwa y, Swale and Thanet districts, in their

entirety, and produced conclusions at a range of geographic levels from the East Kent sub-

region down to the local housing market a reas identified within the defined strategic housing

market a rea .

Findings & Recommendations

3.5 When assessing need, the SHMA initially calculates housing need figures based on the period

from 2006 – 10. For Thanet this determines gross backlog need of 6,004 dwellings, and annual

newly arising need over the five year period of 825 dwellings. Incorporating the 5 yearbacklog reduction Thanet’s net annual housing need is calculated at 1,544 dwellings.

Incorporating 10 year backlog reduction Thanet’s net annual housing need is calculated at


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690 dwellings. These housing need figures are shown below in Table 1 and Table 2,

contextualised against those for the other four East Kent authorities which make up the

defined housing market area (a brief review of housing need in these four authorities is

detailed in Appendix 1).

Table 1 – SHMA Table showing Housing Need CalculationCanterbu

ryDover Shepway Swale Thanet Total

Backlog need 3,248 5,968 5,671 5,739 6,004 26,630

Annual quota ofbacklog reductionover 5 years(Bac klog need/ 5)

650 1,194 1,134 1,148 1,201 5,326

Total newly arisinghousing need

1,276 578 585 884 825 4,149

Annual supply ofsocial sector re-lets

452 283 402 315 482 1,934

Net annual housingneed

1,473 1,489 1,318 1,717 1,544 7,541

Sou rce : Ea st Kent SHMA , 2009 (Ta b le 12.7 – Bring ing th e e vide nc e t o g et he r)

Table 2 – SHMA Table showing Housing Need Calculation (re-calculated with 10 year backlogreduction in line with South East Plan)

Canterbury

Dover Shepway Swale Thanet Total

Backlog need 3,248 5,968 5,671 5,739 6,004 26,630

Annual quota ofbacklog reductionover 10 years(Bac klog need/10)

325 597 567 574 600 2,663

Total newly arisinghousing need

1,276 578 585 884 825 4,149

Annual supply ofsocial sector re-lets(current +10%)

497 394 481 601 735 2,708

Net annual housingneed

1,104 781 671 857 690 4,103

Sou rce : Ea st Kent SHMA, 2009 (Ta ble 12.9 – Housing ne ed c a lc ulat ion re-c alc ulate d w ith a 10 yea r

b a c klog red uc tion in line w ith the Sou th Ea st plan )


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3.6 The SHMA projec ts forward these 2006-10 based need figures to cover the period from 2011-25

in three phases; 2011-15, 2016-20 and 2021-25. This is shown below in

3.7 Tab le 3. The main drawbac k of this forward projec tion is that it a ppears only to cover the

wider East Kent sub-region, without detailing the Local Authority specific housing need figures

as provided for the 2006-11 period.

Table 3 - Future Scenarios - Annual Need and Supply

Sou rce : Ea st Kent SHMA , 2009 (Ta b le 12.5 – Future Sc en a rios – a nnu a l nee d a nd sup p ly)

3.8 Tab le 4 shows the size specific ba lance between supply and need calculated within the

SHMA, identifying a shortfall in supp ly ac ross all size categories in Thanet.

Households in Housing Need

2011-15 2016-20 2021-25

Assuming no growth in affordable supply

High price scenario

Need 15,900 15,600 15,200

Re-let supply 10,500 10,500 10,500Balance -5,400 -5,100 -4,700

Mid price scenario

Need 14,300 14,600 14,800

Re-let supply 10,500 10,500 10,500

Balance -3,800 -4,100 -4,300

Low price scenario

Need 11,100 13,100 14,500

Re-let supply 10,500 10,500 10,500

Balance -600 -2,600 -4,000

Assuming high growth in affordable supply

High price scenario

Need 12,700 12,300 11,900

Re-let supply 12,300 12,300 12,300

Balance -400 0 400

Mid price scenario

Need 11,100 11,400 11,600

Re-let supply 12,300 12,300 12,300

Balance 1,200 900 700

Low price scenario

Need 7,800 9,900 11,300

Re-let supply 12,300 12,300 12,300

Balance 4,500 2,400 1,000


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Table 4 - Need and Affordable Supply by Dwelling SizeCanterbu

ryDover Shepway Swale Thanet East Kent

1 bedflat orhouse

Total

need

616 399 530 531 876 2,951

Availablesupply

176 124 145 91 294 831

Supp ly –need

-439 -274 -385 -439 -582 -2,120

Supply /need

29% 31% 27% 17% 34% 28%

2 bedflat orhouse

Total

need280 176 307 381 209 1,353

Availablesupply

199 51 80 47 39 416

Shortfall /

surplus-81 -125 -226 -334 -171 -937

Supply /need

71% 29% 26% 12% 18% 31%

2 bedhouse

Total

need234 245 279 325 333 1,417

Availablesupply

0 79 121 95 87 381

Supp ly –need

-234 -166 -159 -230 -247 -1,036

Supply /need

0% 32% 43% 29% 26% 27%

3 bed

house

Total

need656 788 489 648 487 3,068

Availablesupply

68 28 56 79 63 294

Supp ly –need

-588 -759 -433 -569 -425 -2,775

Supply /need

10% 4% 12% 12% 13% 10%

4+bed

house

Total

need 140 164 115 147 120 686


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Available

supply9 0 0 3 0 12

Shortfall /surplus

-131 -164 -115 -144 -120 -673

Supply /need

6% 0% 0% 2% 0% 2%

Alldwelling

types

Totalneed

1,926 1,772 1,720 2,032 2,026 9,475

Availablesupply

452 283 402 315 482 1,934

Supply –need

-1,473 -1,489 -1,318 -1,717 -1,544 7,541

Supply /need

23% 16% 23% 16% 24% 20%

So urc e : Ea st Ken t SHMA , 2009

Critique of Need Assessment

3.9 This c ritique focuses on the SHMA’s recommendations and analysis with rega rd to housing

need. .

3.10 The length of time that has passed since the publication of the East Kent SHMA in 2009 has a

number of implications for guidance complianc e, methodology and da ta sources.

Guidance Compliance

3.11 The SHMA report was published in J une 2009 prior to the publication of the NPPF and

subsequent NPPG. This has implications for the compliance of the SHMA methodology with

the latest policy and accompanying guidance, particularly the requirement for authorities to

calculate their own objectively assessed housing need and resulting market (and affordable)

housing requirements.

3.12 The SHMA was a lso undertaken at a time when the South East Plan 2009 (Regional Spatial

Strategy) identified a dwelling requirement target informing Local Plans, which wa s identified

as 6,500 dwellings for Thanet from 2006-2026. This level of reg ional policy has since been

abolished , with the South East Plan being revoked in March 2013. Aspec ts of the SHMA’s

recommendations and findings were based on the South East Plan, so now require revision in

light of the changed policy context. The 6,500 dwelling target is also likely to understate

housing need considering that it was adopted 6 years ago, therefore it does not take intoaccount more recent trends in population growth and household formation rates and as such


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does not represent an appropriate benchmark for newly calculated housing need or housing

supply.

Data Limitations

3.13 The 2009 SHMA is based on the 2006 ONS population and household estimates, 2007 KentCounty Counc il forec asts, and a range of data from the 2001 Census, including travel to work

data and certain starting point migration figures. This data is now out of date and reliance on

it reduces the validity and relevance of the SHMA’s need figures. Use of the latest mid-year

population and household estimates and sub-national population and household projections

is required to robustly calculate objec tively assessed housing need and identify the most up-

to-da te level of housing need possible.

3.14 Considering travel to work flows in particular, updated travel to work flow data from the 2011

Census is available, facilitating substantially more accurate assessments of housing market

areas. Whilst a full review of the SHMA’s housing ma rket area definition is not undertaken here,

it is suggested that the existing definition which does not incorporate 2011 Census travel to

work flows data, and is also contributed to by out-dated migration and house price levels

da ta, has reduced validity and robustness.

3.15 Considering the time that has pa ssed since the existing SHMA was produced, a review of the

housing market area would be beneficial, particularly considering the importance which is

currently being plac ed on their accurate definition by Inspectors. Ac curate housing market

areas are crucial in considering wider influences on housing need even when need is only

being calculated for a single d istrict.

3.16 The East Kent SHMA’s assumptions relating to household formation pa tterns are a key issue for

the robustness of the results and significantly undermine the continued relevance of the SHMA

projections and assessment of housing need and potentially its use in supporting the Local

Plan. Evidence suggests that household formation rates may have changed significantly since

the study was prepared as a result of intensifying affordability issues and recent levels ofunder-supply of stock.

3.17 Results from the 2011 Census indicate that, contrary to expec tation, average household size

remained c onstant between 2001 and 2011. Census 2011 showed that there was a grea ter

population level and lesser number of households than expec ted. The 2011 Census results,

and therefore the DCLG household projections, in this regard were impacted by long term

issues of affordability and the economic downturn, which could mean they can lead to

rec ommendations which c ould underprovide housing in certain areas.


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3.18 Consideration of the latest projec tions within the c ontext of longer term pre-recession trends is

crucial in light of the impact the recession has had on household formation rates (as

demonstrated by Census da ta).

3.19 Alan Holmans’ TCPA paper ‘New estimates of housing demand and need in England, 2011 to

2031’ (Tomorrow Series Paper 16) provides an analysis of the potential impacts and influences

of the recession on household formation. It compares pre a nd post rec ession da ta to identify

the impact and consider whether an economic rec overy will reverse recent trends. Overall it

considers how these impact both the afforda bility of housing and the ability to forec ast future

housing need.

3.20 The 2014 RTPI Research Report ‘Planning for housing in England: Understanding recent

changes in household formation rates and their implications for planning for housing in

England’ (Resea rch Report no.1 J an 2014) also c onsiders the planning implica tions of these

observed changes in household formation rates.

3.21 Both reports suggest that using the 2011 Census data alone is likely to result in an under-

estimate of projec tions of future household need . Therefore other data is required to

supplement ana lysis and arrive at an app ropriate level of future need.

3.22 The detailed methodologica l aspects of household formation trends are considered later in

this sec tion as part of the re-c alculation of ob jec tively assessed need. It is fair to a ssume here

that considering the influence of market and wider economic fac tors on household formation,

the SHMA’s adopted household formation assumptions were set in a different context which is

no longer an accurate reflection of current and future household formation trends, which

reduces the robustness of the SHMA’s projections and need outputs.

3.23 At a more general level, the SHMA projection period from 2006-10 is set within the context of

the credit crunch and economic downturn, yet we are now experiencing the transition

towards ec onomic rec overy. This will significantly affect the population and household

projections upon which the SHMA was based (2006 based household estimates), thepresence/level of any uplift applied to demographic driven need figures, and therefore the

ob jec tively assessed requirement for the District.

3.24 The relevance of the SHMA c alculated figures is also reduced by the out-da ted nature of the

Thanet specific need scenarios from 2006-10, and because the scenarios which go beyond

the current date to 2025 are only at the sub-regional East Kent level and do not provide district

level specific need figures.

Conclusions

3.25 The 2009 SHMA is out of date. The most specific issues with its outputs are as follows:


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• Pre NPPF and NPPG publication;

• Benchmarking of need against now abolished South East Plan requirement;

• Relianc e on out da ted 2001 Census travel to work flows affec ting HMA definition;

• Out da ted household formation rate a ssumptions; and

• No indication of Thanet specific need beyond the 2006-10 period .

(ii) Economic and Demographic Forecasts (2013)

3.26 An updated assessment of need is found in the Economic and Demographic Forecasts

document for Thanet District C ounc il, which was undertaken in February 2013 by Kent C ounty

Counc il’s Business Intelligenc e, Resea rch & Evaluation Team.

3.27 In relation to housing, the forecast outputs from this document provide more up to date

population and household growth scenarios for Thanet District than the 2009 SHMA, with

various scena rios for Thanet District’s need for housing and jobs based on future p rojections.

Forecasting Outputs

3.28 The document demonstrates a range of forecast dwelling growth figures over the plan period

from 2011-31, with dwelling figures for 2031 ranging from 66,800 dwellings (in the zero net

migration scenario) to 75,000 dwellings (in the policy on scena rio), having increased from the

2011 figure of 63,100 dwellings, see Table 5.

3.29 This range of dwelling growth figures translates to an additional dwelling requirement over the

plan period ranging from 3,700 new dwellings (zero net migration scenario) to 11,800 new

dwellings (policy on scenario), which is equated here to an annual requirement range from

185 to 5590 dwellings per annum.

3.30 However, the range of forecasting outputs from this document are not intended to provide a

single likely future housing need figure, as would result from an objectively assessed need

calculation in a SHMA, but instead to present estimated growth ranges from which Thanet

District C ouncil can interpret need.


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Table 5 - Table Showing Forecast of Dwelling Growth for Thanet District, 2011-31

Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5

ExperianBaseline

Risk BasedScenario

Policy-onScenario

Zero NetMigration

Short TermMigration Trend

2011 63,100 63,100 63,100 63,100 63,100

2012 64,400 63,600 64,500 63,300 63,600

2013 64,700 63,200 65,000 63,500 64,100

2014 65,100 63,200 65,400 63,700 64,600

2015 65,500 63,400 65,800 63,900 65,200

2016 65,900 63,900 66,400 64,200 65,8002017 66,600 64,600 67,200 64,500 66,500

2018 67,100 65,100 67,800 64,700 67,100

2019 67,700 65,700 68,500 64,900 67,700

2020 68,200 66,200 69,100 65,100 68,300

2021 68,700 66,700 69,800 65,300 68,900

2022 69,200 67,200 70,400 65,500 69,500

2023 69,700 67,600 71,000 65,600 70,100

2024 70,100 68,000 71,500 65,800 70,700

2025 70,600 68,500 72,100 66,000 71,300

2026 71,100 69,000 72,700 66,200 71,900

2027 71,600 69,500 73,300 66,300 72,600

2028 72,000 69,900 73,900 66,500 73,100

2029 72,400 70,300 74,400 66,600 73,700

2030 72,800 70,700 74,800 66,700 74,200

2031 72,800 70,800 75,000 66,800 74,800

Change2011-31

9,700 7,600 11,800 3,700 11,600

% Change 15.3 12.1 18.7 5.9 18.4

Sou rce : Ec on om ic an d De m og rap hic Forec a sts (2013) – Ta b le 10.


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Forecasting Critique

3.31 This document provides an update to the forecasting undertaken in the East Kent SHMA

(2009). It forec asts the population and dwelling requirements for Thanet District from 2011-31,

incorporating demographic population led-scenarios based on future population trends and

ec onomic job-led scena rios based on future levels of job growth. It considers five scena rios;

three Experian job led and two demographic led, reviewing the Thanet Economic and

Employment Assessment in November 2012 to understand the housing and labour supply

needed to meet/ support the growth options from the scena rios within this assessment.

3.32 The POPG ROUP and Delivered Forecast model is adopted, using 2011 base year and 2011

mid-year population estimates as the base variables (significantly more rec ent than the base

da ta in the East Kent SHMA). A cohort survival methodology is adopted and standard data

sets are used including ONS, CLG, Experian, Nomis, Kent C ounty Counc il and Thanet DistrictCouncil sources.

3.33 Whilst much of the data used in the forecasting scenarios is more up to date than in the 2009

East Kent SHMA, there are a number of data elements which reduce the continued relevance

and robustness of the forecasting and its outputs.

3.34 Economic activity rates are based on 2001 Census rates, rolled forward using ONS labour force

projec tions, now superseded by the availability of 2011 Census data. The 2008 based

household projections and the 2010 based sub na tional population projec tions are now out of

date and the 2011 based interim household projections and 2012 base sub national

population projections replace them as the latest household and population data.

3.35 The commuting ratio (residence to workplac e) is calculated as pa rt of the forec asting

proc ess, yet as for the existing SHMA when examining commuting patterns, this is based on

2001 Census results bec ause the 2011 Census was relea sed after the forec asts’ publication.

Experian evidence is also incorporated, however there is still significant uncertainty

surrounding the calculated commuting ratio which would be addressed by incorporating2011 Census based commuting da ta.

3.36 The other key issue to note is that the forecasts used represent low employment growth

scena rios which are not the most appropriate for Thanet. Scena rio 1 – Experian Baseline – only

adopts 0.5% growth in the first decade and 0.2% in the sec ond decade, equating to 3,100 net

additional jobs over the 2011-31 period. Scenario 2 – Risk based – only adopts 0.1% growth in

the first dec ade and 0.2% in the sec ond decade. Scenario 3 – Policy on – adopts the highest

level of employment growth in these forecasts, with 5,100 net additional jobs over the 2011-31

period, and Scenarios 4 and 5 are migration based so do not incorporate employment growth

into their scenarios.


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(iii) Thanet District Council Housing Topic Paper (2013)

3.37 The Thanet Housing Topic Paper was produced in May 2013, ac ting as a background

document to the preparation of the draft Thanet Loc al Plan. The doc ument is set within the

context of the NPPF, considering the need for a housing update to the Loc al Plan. It makesreference to the Kent and Medway Housing Strategy (2012-2015), the East Kent Sustainable

Community Strategy (2009) and Thanet District C ounc il’s 2012-16 Corporate Plan, and the

Thanet specific findings of the existing East Kent SHMA.

3.38 The Paper does not update the need assessment for Thanet in terms of providing outputs, but

it does support the case for an updated a ssessment of need. Its referenc e to the existing

assessment of need in the East Kent SHMA emphasises how the preparation of the SHMA in a

very different policy and guidance context renders it now out-dated, and considering the

current context suggests it is likely to underestimate the housing need identified for Thanet

District.

3.39 The Paper makes reference to the review of the SHMA and its findings. It supports one of the

SHMA’s conclusions, as shown below, which aligns with the notion of Thanet’s under-delivery

of the required level of housing, resulting in unmet need.

3.40 “The 2009 SHMA indicated that existing and arising need for affordable housing in the sub

region is so high that it is inconc eivable that it could be met. The validity of the conc lusionsand rec ommendations of the SHMA are currently being reviewed, but it is anticipated that this

conc lusion will be re-affirmed” (page 9.)

(iv) Thanet Local Plan Options Consultation (2014)

3.41 The Issues and Options C onsultation on Thanet’s new Local Plan was undertaken from 3rd

J une to 14th August 2013. The key O ptions paper relevant for review here is ‘Issue 8 – How

many homes do we need to provide?’

3.42 The Issue 8 paper details the abolition of the South East Plan and therefore, the need to move

beyond the housing targets which it contained, and base Local Plan housing targets on NPPF

compliant objec tively assessed need. As for the Housing Topic Paper, this document does not

update Thanet’s need assessment in terms of providing outputs, but again emphasises the

requirement for updated assessment.

3.43 In relation to considering the future number of households and resultant housing need the

paper refers to the existing East Kent SHMA (2009), supplemented by the updated

demographic and economic modelling (Economic and Demographic Forecasts 2013). In

referenc e to these forec asts it aligns with the understand ing that a lthough the basis of the


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updated forecasting brings the projected future households figures much more up to date

than those within the existing SHMA and provides a better indication of the range of future

household need in Thanet, in order to reach the most robust housing need figure within

Thanet’s new Local Plan further re-calculation of housing need using the newly released 2011

Census data is required.

(v) Thanet Local Plan – Preferred Options Consultation (2015)

3.44 The Draft Thanet Local Plan to 2031 (DTLP) (Preferred Option) was consulted on in early 2015.

Housing Strategy

3.45 The Housing Strategy sec tion of the DTLP “sets out how the Local Plan seeks to meet the

housing needs of Thanet alongside other partners, including the Council’s housing

regeneration, empty property and strategy functions” (pa ge 53).

3.46 In relation to the housing quantum to be provided over the plan period, the DTLP “reflects

forecasts based on recent migration trend based population projections and the labour

requirements supporting the Council’s aspirations for economic and employment growth”

(page 53). These forecasts are contained within the Economic and Demographic Forecasts

(2013) doc ument. As discussed ea rlier, this doc ument undertakes forecasting using a NPPF

and NPPG c ompliant methodology to consider three Experian job led a nd two demographic

led scenarios.

3.47 Although it represents a substantial update to the forecasting inputs to the housing need

figure identified in the existing East Kent SHMA (2009), it relies on 2008 based household

projections and 2010 based sub na tional population projec tions, both of which a re now out of

date 1. Economic activity rates and commuting data were sourced from the 2001 Census, and

both of these factors now have been updated by data published from the 2011 Census. The

forecasting also uses forecasts which show low employment growth which are also

significantly out of date.

3.48 As shown in Table 6, Policy SP11 of the Housing Strategy in the DTLP identifies a ta rget provision

of 12,000 new dwellings over the plan period from 2011-3, split evenly into the delivery of 3,000

new dwellings over eac h 5 year period. It is unclear which evidence doc ument is used to

justify this level as it does not direc tly align with either the 2009 SHMA or 2013 Demographic

forecast scena rios. A total of 12,000 homes equates to delivery of 600 new dwellings per

annum.

1 A detailed critique of these population and household projec tions is undertaken the following sub-section; Re-calculation of Objectively Assessed Housing Need


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Table 6 – Draft Policy SP11 - Housing Provision

S

S o Sou rce : Draft Tha ne t Loc a l Plan: Housing Strate g y sec tion (pa g e 53)

3.49 Reference is made to the land availability identified in the Strategic Housing Land Availability

Assessment, to demonstrate that the 12,000 housing target is deliverable in sites within the

District over the plan period.

3.50 The DTLP also relies substantially on the existing East Kent SHMA (2009), particularly in relation to

the type and size of dwellings (for market and affordable homes), Policy SP18 – Type and Size

of Dwellings, and the provision of affordable homes, Policy SP19 – Affordable Housing.

(vi) Thanet Strategic Housing Market Assessment (2016)

3.51 In J anuary 2016, Thanet District Counc il published a Strategic Housing Market Assessment

(SHMA) providing its latest position on the future need for housing in the district. The SHMA, the

first such update to the C ounc il’s evidence base since 2009, provides an assessment of the

quantum and type of housing needed in Thanet over the period 2011 to 2031.

3.52 The document is prepared in line with the stages set out in thePPG) and provides a steppedapproach to understanding full objectively assessed housing need (‘OAN’) starting with the

DCLG Household Projections and making a number of adjustments to take account of

variations in demographic trends, future economic growth and the effect of improvements to

affordability and housing supply on household formation. Whilst the SHMA largely follows the

correct approach, there are a number of concerns about the specific assumptions employed

in the SHMA’s demographic and economic model which means it will not meet the likely

future c hange in employment growth across the projec tion period.

3.53 The SHMA starts with an assessment of the latest housing projec tions; the DCLG 2012

Household Projec tions (HP). Over the period 2011 to 2031, the 2012 HP projec t a need for 749

dwellings per annum. The 2012 HP contain both population and household formation

projections which use trend-based data. The population projections use short term trends

(from the last 5 to 6 years) whereas the household formation projection utilise longer term

trend data, dating back to the 1971 Census. The SHMA assesses past population data to

understand if the last 5 to 6 years represents an appropriate basis for future population growth.

It identified that net migration from London fell following the recession and that this was likely

to be a short-term effect which would reverse over time as the wider economy of Kent

improved (relative to London). Furthermore, the Greater London Authority, in the recently

2011-16 2016-21 2021-26 2026-31 Total

Additionalhomes

3,000 3,000 3,000 3,000 12,000


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adopted Further Alternations London Plan, assumed that out migration from London would

increa se as the economy improves. With this in mind, the SHMA alters the 2012 HP to assume

an increase in migration from London takes place over the plan period, in line with the GLA’s

assumptions. This results in a 1% increase in population growth over the projection period and

a requirement to delivery 777 dwellings per annum (a 4% increase in housing need). Whilst anadjustment to migration rates to understand increased net migration from London is

appropriate, it would be instructive to understand the implications of long term migration

trends more widely as well as the impact of un-attributable population change (see below).

This is a shortcoming of the SHMA as currently drafted.

3.54 The SHMA then assesses the likely change in job growth over the projec tion period which is

takes from the East of England Forecasting Model (Autumn 2014). This model forec asts that

4,800 jobs would be created over the projection period (2011 to 2031), which equates to

employment growth of around 0.5% per annum. The SHMA notes that this level of employment

growth is ‘notably below’ the 0.8% per annum achieved historically (1993 to 2010) however

this growth was supported by relatively a high level of public sector employment growth.

3.55 GVA’s ‘Employment – Land Use Evidence Base’ report which is submitted with the application

and explores ec onomic trends in Thanet shows that future employment growth is likely to be in

excess of 7,000 ac ross the p lan period (2011 to 2031) i.e. 47% higher than the East of England

Forecasting Model. The Future Employment Role report provides the justifica tion for this level of

employment growth however this report will consider the housing need implications of

delivering 7,000 jobs in Thanet up to 2031.

3.56 Translating employment growth into population growth is not straightforward and involves

making assumptions about unemployment, commuting, economic activity and double

jobbing and how these change over time. The SHMA makes a number of assumptions around

these issues which seem largely sensible however with regard to double jobbing it uses the

Annual Population Survey. The Annual Population Survey is not a survey of workers (as the

SHMA suggests) but a survey of residents. The double jobbing figure of 5.1% is therefore for a

different population. The East of England Forecasting Model provides some indication of

double jobb ing levels for workers in Thanet and c onc ludes that it lies around 1.2% (average of

2011 to 2031). This would seem an appropriate starting point for the analysis.

3.57 Section 6 of the SHMA looks at market signals which are designed to assess whether the

housing market is demonstrating market undersupply relative to demand. It looks at house

prices, rents, affordability, housing supply and overcrowding. It concludes that the whilst some

market signals show a housing market which is relatively affordable and accessible, a number

of indicators show pressure in the housing market inc luding increased levels of overcrowding

and c onc ealed households. Another issue which is identified in the SHMA is the fall in


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household formation amongst young adults (25 to 34 year olds). Overall the SHMA conc ludes

that an adjustment to past demographic trends is appropriate to understand the effect of

improvements to the housing market on household formation and to therefore ensure the

FOAN plans for it. The adjustment the SHMA makes is to increase household formation in 25 to

34 year olds so tha t they return to 2001 levels by 2025 where after projected rates are linked tothe trend within the 2012 HP. The justification for this is to project an improvement in

affordability and supp ly to that exhibited at the late 1990s / early 2000s.

3.58 Figure 2 shows rec orded household formation over time (1991 to 2011) with projec ted

household formation up to 2033. There are many things that have affec ted household

formation in this country over time including changes in family make-up, inter-generational

households, ethnicity and housing behaviour linked to constrained housing supply and

accessibility. The main age group affec ted by the lack of supp ly are 25 to 34 year olds, as this

age group is statistica lly the most likely to remain in the family home or live in larger shared

houses and this reduces their household representative rate (the chance of them being the

head of a household, HRR). It can be seen by Figure 2 that between 1991 and 2001 HRRs in 25

to 34 year olds increased , however between 2001 and 2011/12 they fell aga in. Between 2011

and 2031 (the SHMAs projection period) the 2012 HP project that household formation will

increase and fall again. This is the trend that the SHMA follows when it tracks the 2012 HP rate

after 2025.

3.59 Figure 2 shows the 2008 HP HRR projec tion alongside the 2012 HP projection. This projec tion

shows an overtly more positive trajectory for HRRs in this age group, which would be the

response to a significant increase in housing supply. The SHMA should therefore follow the 2008

HP projection following its HRR adjustment up to 2025.

Figure 2 - Household Representative Rates from 2012, 2011-interim and 2008 HP (DCLG)

15-24 25-34

35-44 45-54

0

0.05

0.1

0.15

0.2

1 9 9 1

1 9 9 3

1 9 9 5

1 9 9 7

1 9 9 9

2 0 0 1

2 0 0 3

2 0 0 5

2 0 0 7

2 0 0 9

2 0 1 1

2 0 1 3

2 0 1 5

2 0 1 7

2 0 1 9

2 0 2 1

2 0 2 3

2 0 2 5

2 0 2 7

2 0 2 9

2 0 3 1

2 0 3 3

2012 HP 2008 HP0.4

0.45

0.5

0.55

0.6

1 9 9 1

1 9 9 3

1 9 9 5

1 9 9 7

1 9 9 9

2 0 0 1

2 0 0 3

2 0 0 5

2 0 0 7

2 0 0 9

2 0 1 1

2 0 1 3

2 0 1 5

2 0 1 7

2 0 1 9

2 0 2 1

2 0 2 3

2 0 2 5

2 0 2 7

2 0 2 9

2 0 3 1

2 0 3 3

2012 HP 2008 HP


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55-59 60-64

65-74 75-84

3.60 In conclusion, the 2016 SHMA’s app roach broadly follows the correc t stages within national

planning guidanc e:

• It starts with the DC LG Household Projec tions (749 dpa).

• It then makes adjustments to the demographic assumptions (increase to 777 dpa).

• It assesses projec ted labour supp ly aga inst the likely change in job numbers and

concludes that no increase is justified. However, GVA considers that employment growth is

likely to be around 47% higher than the SHMA has concluded which suggests that an

increase would be justified.

• An assessment of market signals has concluded that there are indicators of pressure in the

housing market including overcrowding, concea led households and falls in HRRs inyounger demographics. An adjustment is made to HRRs to model an improvement in

market signals (increase to 783 dpa), albeit GVA does not consider this goes far enough as

0.45

0.5

0.55

0.6

0.65

1 9 9 1

1 9 9 3

1 9 9 5

1 9 9 7

1 9 9 9

2 0 0 1

2 0 0 3

2 0 0 5

2 0 0 7

2 0 0 9

2 0 1 1

2 0 1 3

2 0 1 5

2 0 1 7

2 0 1 9

2 0 2 1

2 0 2 3

2 0 2 5

2 0 2 7

2 0 2 9

2 0 3 1

2 0 3 3

2012 HP 2008 HP

0.5

0.55

0.6

0.65

0.7

1 9 9 1

1 9 9 3

1 9 9 5

1 9 9 7

1 9 9 9

2 0 0 1

2 0 0 3

2 0 0 5

2 0 0 7

2 0 0 9

2 0 1 1

2 0 1 3

2 0 1 5

2 0 1 7

2 0 1 9

2 0 2 1

2 0 2 3

2 0 2 5

2 0 2 7

2 0 2 9

2 0 3 1

2 0 3 3

2012 HP 2008 HP

0.5

0.55

0.6

0.65

0.7

1 9 9 1

1 9 9 3

1 9 9 5

1 9 9 7

1 9 9 9

2 0 0 1

2 0 0 3

2 0 0 5

2 0 0 7

2 0 0 9

2 0 1 1

2 0 1 3

2 0 1 5

2 0 1 7

2 0 1 9

2 0 2 1

2 0 2 3

2 0 2 5

2 0 2 7

2 0 2 9

2 0 3 1

2 0 3 3

2012 HP 2008 HP0.5

0.55

0.6

0.65

0.7

1 9 9 1

1 9 9 3

1 9 9 5

1 9 9 7

1 9 9 9

2 0 0 1

2 0 0 3

2 0 0 5

2 0 0 7

2 0 0 9

2 0 1 1

2 0 1 3

2 0 1 5

2 0 1 7

2 0 1 9

2 0 2 1

2 0 2 3

2 0 2 5

2 0 2 7

2 0 2 9

2 0 3 1

2 0 3 3

2012 HP 2008 HP

0.5

0.55

0.6

0.65

0.7

1 9 9 1

1 9 9 3

1 9 9 5

1 9 9 7

1 9 9 9

2 0 0 1

2 0 0 3

2 0 0 5

2 0 0 7

2 0 0 9

2 0 1 1

2 0 1 3

2 0 1 5

2 0 1 7

2 0 1 9

2 0 2 1

2 0 2 3

2 0 2 5

2 0 2 7

2 0 2 9

2 0 3 1

2 0 3 3

2012 HP 2008 HP0.63

0.68

0.73

0.78

0.83

1 9 9 1

1 9 9 3

1 9 9 5

1 9 9 7

1 9 9 9

2 0 0 1

2 0 0 3

2 0 0 5

2 0 0 7

2 0 0 9

2 0 1 1

2 0 1 3

2 0 1 5

2 0 1 7

2 0 1 9

2 0 2 1

2 0 2 3

2 0 2 5

2 0 2 7

2 0 2 9

2 0 3 1

2 0 3 3

2012 HP 2008 HP


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the 2012 HP HRRs whic h the SHMA tracks, shows a fall in HRRs in the end of the projec tion

period.

3.61 It concludes with the identification of OAN for 785 homes per annum , equivalent to 15,700

homes over the 2011-31 period (the above figures are rounded to the nearest 5

dwellings/annum).


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4. GVA Calculation of Objectively Assessed Housing

Need

4.1 Overall this report concludes that the existing evidence base, including the 2016 Thanet

SHMA, does not fully and objec tively assess housing needs in Thanet.

4.2 In the absence of this, this section provides an objective assessment of housing needs for the

District. The NPPF and PPG requires housing needs to be met at the housing market area

(HMA) level, however this re-c alculation foc uses solely on the need for Thanet District Counc il.

It does however consider the housing stock and active market context of the East Kent

housing market area, ac knowledging the Manston site as a potential sub-regional housing site

which could meet the needs of the wider HMA as well as those solely for Thanet.

4.3 This assessment uses a fully PPG compliant methodology with G VA’s bespoke demographic

and ec onomic model. It uses the latest population and household projec tions and the latest

da ta which takes ac count of demographic, housing and ec onomic trends. The methodology

will apply the staged approach espoused by the NPPG which is explained in more detail

below but which commences with an assessment of DCLG household projections, and tests

these projections against the extent to which they support labour force growth, improve or

maintain affordability and meet the needs of households unable to access market housing.

The staged process results in an objectively assessed housing need for the district which

provides a ‘policy-off’ interpretation of housing needs.

4.4 As set out above, the NPPF and NPPG sets out a detailed methodology for undertaking an

assessment of housing need in an area. GVA has summarised some of the key requirements

and statements from the NPPG which provide some context as to the required app roach.

National Guidance

The primacy of the up to date SHMA

“Loc a l pla nning a utho rities sho uld […] a ssess the ir fu l l hous ing needs , working wi th

neighb our ing a u thor it ies w here ho using m a rket a rea s c ross a d m inist ra t ive b oun d a ries. The […]

Assessm en t sho uld id en tify the sca le … of housing … tha t the loc a l p op ula t ion is likely to ne ed

ove r the p la n pe riod which :

• meets househo ld and popu la t ion p ro jec t ions , t ak ing accoun t o f migra t ion and

d e m o g ra p h ic c h a n g e ;

• a d d resse s the n ee d for a ll typ es of ho using, inc lud ing a fford a b le ho using …; a nd


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• caters for housing demand and the scale of housing supply necessary to meet th is

d em a nd . (Pa ra g ra p h 159 NPPF)

“ The a sse ssme nt of ho using a n d e c o n o m ic d e v e lo p m e n t nee ds inc lude s the St ra teg ic

Housing M a rket Assessm en t req uirem ent a s set out in the Na t ion a l Pla nning Polic y Fra m ew ork”

(NPPG Re f. ID 2a -001-20140306)

What is housing need?

The p rim a ry ob jec t ive of a n a ssessm ent of ho using nee d s is to id ent i fy the future q ua nt ity of

ho using ne ed e d (NPPG Re f. ID 2a -002-20140306).

“Need fo r housing in the c on te x t o f the g u id anc e re fe rs to the sc a le a nd m ix o f housing … tha t

is likely to b e ne ed ed in the ho using m a rket a rea ove r the p la n p er iod – a nd sho uld c a ter for

the ho using d em a nd o f the a rea a nd id en t ify the sc a le o f housing supp ly nec essa ry to m ee ttha t d em a nd .” (NPPG Ref. ID 2a-003-20140306)

“The a ssessm ent of d eve lop m en t nee d s is a n ob j ec t i ve a sse ssme n t o f need ba sed on f ac t s

an d unb iased ev id enc e . Plan m ak ers should no t ap ply c ons tra in ts to the ove ra l l assessm ent of

n e e d , suc h a s lim ita t ions im p osed b y the sup p ly of la nd for ne w d eve lop m ent , h istor ic und er

p erform a nc e, viab ility, infrastruct ure, or environ m en ta l c on straints” (NPPG Re f. ID 2a -004-

20140306)

What should the assessment include?

4.5 The starting point for an assessment of housing need should be the Household Projections

(NPPG Ref. ID 2a-015-20140306). Adjustments should then be made to understand the impact

of future changes to demographic and migration trends (NPPG Ref. ID 2a-017-20140306)

employment growth (NPPG Ref. ID 2a-018-20140306) and market signals (NPPG Ref. ID 2a-019-

20140306). The a ssessment should also c onsider the implications for affordable housing (NPPG

Ref ID 2a-029-20140306) however, as this is foc ussed on overall need and does not c onstitute a

full strategic housing market assessment, affordable requirement calculations are not

undertaken.

How should historic undersupply be dealt with?

4.6 4.7 The NPPG ca utions that past trends – including undersupp ly and worsening

affordability - may have artificially suppressed household formation rates and therefore could

affec t future projec tions. The guidance states:

“The household projection-based estimate of housing need may require adjustment to reflect

fac tors affecting local demography and household formation rates which are not captured inpast trends. For example, formation rates may have been suppressed historically by under-

supply and worsening affordability of housing. The assessment will therefore need to reflect the


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consequences of past under delivery of housing. As household projections do not reflect

unmet housing need, local planning authorities should take a view based on available

evidence of the extent to which household formation rates are or have been constrained by

supply.” (NPPG Ref. ID 2a-015-20140306)

4.7 To conclude, an a ssessment of housing needs must be objec tive and must identify demand

and therefore housing need in full. It should not seek to include metrics or measures which

apply restraint. It should be realistic – that is to say identified supply should meet demand and

be ba sed on realistic assumptions about future population and housing c hange.

4.8 The methodology has the following steps:

• Assess the latest household projec tions and their assumptions to understand if they c ould

be an appropriate measure of future population and household growth in the subjectarea. This includes an assessment of issues which may have affected past trends such as

ec onomic rec ession, affordability and pa st housing supply / polic ies.

• Review past economic performance and employment forecasts to understand if

projected working age population can support economic growth in the subject area. If

there is projec ted to be a shortfall, this could p rovide a justifica tion for increasing housing

delivery.

• Assess housing market signals to understand the balance between housing demand and

supply. If indicators such as house prices, rents, affordability and overcrowding show that

demand for housing is outstripping supply relative to the surrounding area and nationally

this could provide a justification for increasing housing delivery.

ONS/DCLG Projections

4.9 The latest full population projections available from the Office of National Statistics (ONS) are

the 2010-based Sub-national Population Projections (SNPP) and the 2012-based SNPP. Both

projec tions use different assumptions of fertility, mortality and migration based on trends fromthe previous five/ six years and start from a different base population. The 2012 SNPP was

published in May 2014 and takes into account 2011 Census data making it a much more

reliable basis for projections – notwithstanding local factors which may have affected past

trends and therefore future projections.

4.10 The SNPPs are not forec asts and do not take any ac count of future government policies,

changing ec onomic circumstances or the capac ity of an area to ac commoda te the c hange

in population. They provide an indication of the future size and structure of the population if

recent demographic trends continue. Projections become increasingly uncertain the further

they are carried forward, and particularly so for smaller geographic areas such as districts.


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4.11 Population p rojec tions provide a ba sis through which to understand future population

change. As discussed above, household projections provide a basis through which to

understand how that population change affects household formation. This is because as a

population changes (both in terms of size and structure) the number of dwellings needed to

house that population also changes. For example, a population with a high proportion ofpeople in their late teens is likely to need less housing than a population with a high proportion

of 70 year olds. This is because the former demographic often lives with parents and/or in

shared houses, whereas the latter is more likely to live as a couple or alone. These probabilities

shift over time as a result of cultural changes in the population. For example, divorce amongst

30 and 40 year olds has been increasing over time which has increased the need for housing

in this demographic, as when a family or couple splits up you have two households to

ac commodate rather than one.

4.12 The household projec tions contain assumptions by age and sex about how household

formation will change over time. These assumptions are built up through analysis of the Census

and Labour Force Survey. As discussed above, there are three household projec tions

pub lished by DC LG to c onsider: the 2008-ba sed household projec tions, 2011-based interim

household projec tions and 2012-ba sed household projec tions. Further information on each of

the projec tions is outlined in Table 7 with the results for each illustrated in Figures 1-4 and Table

8.

4.13 The published 2011-based household projec tions were interim reflec ting known quality issues

and hence they only project to 2021. The House of Common Library (Soc ial Policy Sec tion)

states that:

4.14 “Interim household projec tions for 2011 to 2021 (based on the 2011 Census) indicate tha t the

number of households grew more slowly than anticipated by the 2008 projections – this is likely

to be a reflection of the severity and extent of the post-2008 economic downturn. The 2008-

based projections are still regarded as a solid indica tor of potential levels of housing demand

over coming yea rs.” (Standard Note SN06416)

4.15 The 2012-based Household Projections provide an upda te to the 2011-based interim

projections and project over a longer term period (2012 to 2037). As can be seen from Figure

2, they provide a different interpretation of household formation to the 2011-based

projections.

4.16 Tab le 7 provides an introduction to the different projections and the assumptions they use to

projec t population and household change.


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Population Projections

4.17 The latest official projec tions come from the ONS 2012-based SNPP. Figure 3 provides a

comparison between the 2010-based and 2012-based SNPP showing clearly that the 2010-

based projection (based on estimates about population growth built up from the 2001Census) significantly underestimates both the base population in 2012 (which has been

updated by the 2011 Census) and then projects that forward with a more depressed growth

trajectory over the years to 2035. The 2012-based SNPP (based on estimates about population

change built up from the more recent 2011 Census) shows that the population of Thanet is

projected to grow at a much faster rate than previously assumed - this is confirmed by Table 7

which shows annual growth rates inc rea sing 28% from the 2010 SNPP to the 2012 SNPP.

Figure 3 - Comparison of the 2010-based and 2012-based SNPP for Thanet

So urc e : O NS SNPP 2010 & 2012

4.18 Population projections are made up of two principal components, natural change (births

minus deaths) and migration. Natural change is accurately recorded and more easily

projec ted given the relative predictability of fertility and mortality rates in a given population.

Migration however is significantly more difficult to estimate (particularly at the sub-

regional/district level) and therefore to projec t. Table 8 provides a comparison between the

SNPP population projec tions and trends in migration estimates from the O NS mid-year

population estimates (MYE) which actually estimate the first year of the 2012 SNPP.


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4.19 It is clear from the mid-yea r estimates in Table 8 that the 2010 SNPP is likely to underestimate

migration and therefore population change going forward (as the population grows and

migration grows with it). The 2012 SNPP appears to be a much better reflection of past net

migration particularly once UPC 2 is fac tored in. Figure 4 sets out the mid-year estimates in

more detail and shows in combination with the migration data in Table 8 that due tosignificant fluc tuations in net migration (particularly pre/post-rec ession) the 2012 SNPP, on the

ba lance of evidenc e, provides a reasonable set of assumptions about future trends.

2 See previous foo tnote


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Table 8 - Comparison of Net Migration between revised Mid-Year Estimates (observedmigration), 2010-based and 2012-based SNPP (projected migration) for Thanet

2001 -2014

2007 -2014

2011 –

20 15

2016 -2020

2021 -2025

2026 -2030

2031 -2035

Mid-Year Estimates 1,073 1,120

MYE (plus Un-attributablechange (UPC) 3) 1,114 1,153

2010 SNPP 800 840 980 1000 1000

2012 SNPP 1,000 1,080 1,100 1,140 1,120Sou rce O NS Mid -Ye a r Po p ula tion Estima te s 2002 to 2013 a nd SNPP

Figure 4 - Components of Change 2001 to 2013

Sou rce : ONS Mid-Yea r Estima te s

Household Projections

4.20 The DCLG 2012-based household projec tions provide quantitative assumptions about how the

population of Thanet will form households over the 25 years from 2012. They are based on

Census da ta from 1971 onwards and include the slow-down in household formation observed

between 2001 and 2011. Figure 5 provides a comparison between the 2008, 2011 and 2012

household projec tions.

3 Un-attributable population change is population change that occurred between the 2001 and 2011 Censuses but which O NScannot a ttribute to either migration or natural c hange. When looking a t pa st trends this throws up a problem as c learly thischange occurred and so to not account for it in any way is to potentially misinterpret past population change. This scenarioseeks to include UPC (but only 50% of it) as net migration a s ONS has conc luded that due to the difficulties in recordinginternational migration at least part of UPC is likely to due to be this component of population change.

-1000

-500

0

500

1000

1500

2000

UPC International migration Domestic migrationNatural change Population change


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4.21 It should be noted that the underlying population projections that fed into the household

projection are different, with the 2008 household projections having greater levels of

household formation but lower levels of population growth. Despite this, and as shown in

Figure 5 , the 2008 HP show lower levels of overall household growth. This shows that when all

other factors are the same, the 2008 HP provide more buoyant assumptions about householdformation. Notwithstanding, the 2008 HP are still a useful basis on which to understand longer

terms household formation rates given the constrained nature of recent household formation

which have been overly influenced by the recession and associated economic constraints in

the housing market.

Figure 5 - Comparison between the 2008 and 2011 Household Projec tions from 2012 – 2033

Sou rce : DC LG Househ old Projec t ions

4.22 The published 2012 HP projec t annual growth of 689 households (equating to a dwelling

requirement of around 735 per annum) between 2011 and 2031 however since the

pub lication of the 2012 SNPP in 2014, two further sets of mid-yea r population estimates have

been published (2013 and 2014). The demographic model can be constrained so that it tracks

for the first 3 years of the projec tion (2011 to 2014) the mid-year population estimates. When

the model is re-ran, it produces an annual requirement of 749 dwellings per annum.

Alternative Migration Trends

4.23 As part of this assessment GVA has reviewed past migration trends on the basis of all data

since 2001/2. This is bec ause the 2012 SNPP uses loc al migration data from principa lly the last

5/6 years. Some caution has to be observed when challenging the migration assumptions

within the SNPP. This is bec ause the SNPP is multi-regional and considers not only past trends

but how those trends have and will be influenced by the changing demography insurrounding a reas. Notwithstanding this, it is useful to consider the implications of household

growth if past trends are to continue. Furthermore, GVA’s model takes into account the

60,000

62,000

64,000

66,000

68,000

70,000

72,000

74,000

76,000

2008 2011 2012


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changes demography and age structure of the UK and its relationship to migration into

Thanet. GVA model projects forward alternative migration trends using age specific migration

rates (i.e. the number of people of a given age and sex migrating in or out of an area per

1000 of the population at risk 4).). This method ensures that as the demographic make-up of

Thanet and the UK changes, so does its migration flows. The scenarios both include andexclude UPC which as discussed above, has positively contributed towards past population

growth.

Table 9 - Annual Housing Needs, Long Term Migration Trends, 2011-31 (2012 HP HRRs)

Annual Dwelling Needs 2011 to 2031

Without UPC With UPC Mid-Point

Long term (2001 to 2014) 776 791 784

Sou rce : GVA / ONS MYE

4.24 Tab le 9 shows that on the whole, long term migration (including recent migration trends post

2012) has exceeded the 2012 SNPP and even more so when UPC is included. The long term

scenario covers a period which includes both recession and growth and therefore provides a

longer term view of demographic trends through the ec onomic cycle. This is important given

the District’s proximity to and relationship with Greater London whose migration flows are

heavily affected by the economic cycle, as shown in Figure 6. Given the uncertainty around

how much of UPC is due to migration error and how much is due to the Census, it is

considered that it should be factored into future projections but that a mid-point between the

scenarios which include and exclude the UPC (i.e. between 776 and 791 dwellings per

annum). This would produce a demographic requirement of 784 dwellings per annum using

the 2012 Household Projec tions HRRs.

4 The Population at Risk is either the population of Thanet when considering out-migration or the UK whenconsidering domestic in-migration. International migration is calculated by a ssuming a constant level ofmigration with the profile of migrants taken from a verage migration between 2001 and 2014.


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Figure 6 - Net Internal Migration, London Since 1975

.

-140000

-120000

-100000

-80000

-60000

-40000

-20000

0

1975/76 1980/81 1985/86 1990/91 1995/96 2000/01 2005/06 2010/11

Source : Ca lc u la te d f rom NHSCR da ta fo r Lond on a s d ef ined a s GLA area : Tony C ham pion New c ast le

Unive rsity 2014

4.25 The NPPG states that the DCLG household projec tions should form the starting point for any

assessment of housing need. The published 2012 HP project a need for 712 dpa between 2011

and 2031. When these projections are updated with the latest mid-year population estimates

for Thanet they increase the annual dwellings need to 749 dpa over the projection period.

Taking ac count of longer term migration trends increases the annual housing need to

between 776 and 791 dpa depending on whether UPC is accounted for. A long term

migration scenarios is appropriate as it covers a full economic cycle and given the

uncertainty around UPC, it is considered that a mid-point should be a ssumed between UPC

included and excluded. Overall this results in demographic need for 784 dpa between 2011

and 2031. The next stage of this assessment will look at economic growth and whether there is

a case for increases to this figure further to achieve ec onomic growth.

Economic Growth

4.26 Economic growth and household growth are inextricably linked. This is because as an

ec onomy grows so does the requirement for labour force, and this requirement drives

migration and population growth. Furthermore, the PPG states that OAN should take into

account the likely change in employment and ensure that the projected labour force issufficient to meet this employment growth.


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4.27 GVA’s ‘The Future Employment Role of the Former Manston Airport’ report provides a detailed

assessment of future employment growth in Thanet and estimates past job growth and

forec ast how many jobs might be c reated in the future.

4.28 Future job growth is considered in Table 10. This sets out the anticipated level of job growth

that is forecast to occur in Thanet.

Table 10 – Thanet Forecasted Employment Growth 2013 to 2031 Experian Job Forecasts

Total job growthTotal

percentagechange

Annual jobgrowth

Average annualpercentage

growth

7,032 15.2% 352 0.72%Sou rce . GV A Em p loym ent Forec a sts

4.29 To understand the relationship between jobs, labour force a nd population growth, a number

of assumptions need to be made, for example, the level of unemployment and economic

activity in the local population, and the extent to which the working population is employed

locally (commuting rates).

Unemployment

4.30 The level of unemployment over time is important for understanding the link between

population growth and job growth. For example, if 100 jobs were created in an area, andunemployment rates were historically high, it is likely that a significant proportion of those jobs

would be taken by unemployed residents who are seeking employment. If on the other hand

unemployment were at a historic low, more of the 100 jobs would need to be filled by new

economically ac tive people moving/commuting into the area to work. If people move to a n

area for work, this creates a need for more housing.

4.31 The unemployment rate in 2011 was 9.9% according to the 2011 Census. The Annual

Population Survey rec orded a figure of 22.2% and there is therefore doubt about the

accuracy of this figure. Unemployment is assumed to fall over the period to 2020 to 7.5% (pre-

recession average) where it remains static.

Economic Activity

4.32 The same principle applies to ec onomically ac tive persons (which are the total number of

people in work or looking for work) as unemployment. As the economically active population

increases (due to a rising number of older persons supplementing their pension for example, or

an increasing number of women working instead of raising families full time) the pool of local

labour increases, reducing the need for in-migration to support increases in the number of jobs

in a loc al area. Reduced in-migration mea ns fewer migrants to house.


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4.33 Economic activity by age and sex is taken from the 2011 Census. This is projec ted forward

using trends from the 1981 Census, as well as assumptions from the 2012 Europea n Union

Ageing Report and 2006 Labour Force Projec tions. The results show continuing increases in

economic activity amongst older males (+55 year olds) and females (+20 year olds). The

largest increases are observed in those at the current Statutory Pension Age, as this is due toincrease in both males and females over the period to 2028. This be ing the case it is likely that

increasing number of males and females will work or seek to work for longer.

4.34 Figure 7 provides economic activity rates by age and sex for Thanet from the Census going

back to 1981 (the earliest point at which accurate data is available). As is apparent from the

da ta, economic activity in males under 50 has changed little over the past 30 years with the

exception of slight fall since 1981. In males over-50 economic activity has increased with the

most significant increases in 60 to 74 year olds. These trends in older men are continued in the

projec tion whereas under-50s remain static .

4.35 In females economic activity has changed significantly since 1981, principally showing two

phenomena . The first is the increasing number of females choosing to work during their most

fertile years (20 to 40) and the increasing age at which the family career break takes place.

The sec ond is the significant increase in ec onomic ac tivity for older women. This is likely to

continue given the changes to the SPA for women and the fact that women on the whole are

living longer with potentially fewer pension securities in the future. The purple line shows the

projec tion up to 2031.

Figure 7 - Economic Activity by Age and Sex Over Time (Males on left, females on right)

SSo urc e : 1981, 1991, 2001 a nd 2011 Ce nsus.

Commuting

4.36 A commuting rate is the ratio of employed persons to employment in a given area. If an area

has a high commuting rate (i.e. a ratio of more than 1 employed person for every job ) this


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means that the area is accommodating workers from the surrounding area. The converse if

true is the ratio is less than 1. If an area has a high and stable commuting rate (because it lies

adjacent to a large employment centre for example) then as the economy grows the area

will have to accommodate not only indigenous job growth but also the growing number of

commuters from the adjacent centre. This increases the level of housing growth needed toac commodate a given level of indigenous job growth.

4.37 In 2011 there were 55,589 employed persons living in the District and 47,878 peop le working in

the District. This equates to a commuting ratio of 1.16 working persons per unit of employment.

Commuting is dictated by where people can and want to work and where they can and

want to live. Economic opportunity drives commuting destinations whereas quality of life

(good quality housing or environment/affordability etc…) drives commuting origins.

Double jobbing

4.38 There are no official (i.e. ONS / DCLG) ‘workforce’ statistics for double jobbing. The Annual

Population Survey provides such statistics for residents but not those who are actually

employed in the area. The East of England Forecasting Mode does however provide an

estimate of double jobbing amongst Thanet’s workforce. It concludes that around 1.2% of

workers have two jobs. The employment forecast will therefore be reduced to by that amount

to take account of this.

Jobs Growth

4.39 The NPPG (Ref ID: 2a-018-20140306) states that employment forecasts should be included in

an assessment of housing needs to define the quantum and location of new housing. Table 11

shows that employment growth forecasted by Experian (15.3%) (see Table 10) demonstrates a

need for around 716 dwellings per annum up to 2031. Given this, there is no evidence to

demonstrate that an uplift to demographic needs is required to accommodate economic

growth in Thanet District.

Table 11 - Annual Dwellings Needs for High and Low Growth Scenario

Annual Dwelling Needs 2011 to 2031

GVA Forecast 716

So u r c e : Po p g r o u p / G VA

Market Signals

4.40 The NPPF mandates the integration of different strategies and land uses including, requiring

planning authorities to “ensure that their assessments of and strategies for housing,

employment and other uses are integrated and that they take full account of relevant market

and ec onomic signals” (paragraph 158).


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4.41 Paragraph 17, which sets out the Core Principles of the p lanning system states “Plans should

take account of market signals, such as land prices and housing affordability, and set out a

clear strategy for allocating sufficient land which is suitable for development in their area,

taking account of the needs of the residential and business communities.”

4.42 The NPPG provides further advice on what the NPPF means specifically by ‘relevant market

and economic signals’ with regard to the housing market. The guidance (Ref 019-20140306)

explicitly sets out six market signa ls (although it is recognised that these are non-exhaustive):

• land prices;

• house prices;

• rents;

• affordability;

• rate of development; and

• overcrowding.

4.43 The NPPG also sets out broadly how these market signals should be interpreted:

“The ho using ne ed num b er sug g ested b y house hold p rojec t ions ( the sta rt ing p oint) sho uld b e

a d justed to ref lec t a p p rop ria te m a rket sig na ls, a s we ll

Documents

SHP2016 - PSA Housing Need