Keith Boyfield is a Research Fellow at the Centre for Policy Studies

The Centre for Policy Studies publishes a new report, Pink Planning, today which sets out a practical template to create new neighbourhoods to meet the soaring demand for housing in this country.

The crisis surrounding the lack of new homes in Britain is well publicised. It is generally accepted that we need to build at least 240,000 new homes a year to meet demand. Last year we managed to build a mere 138,000. Much of the problem is linked to bottlenecks in the planning process. As we argue in our CPS Pointmaker:  “The UK planning system is an unwieldly morass. Poorly understood and divorced from economic reality, it has proved highly successful in restricting housing supply and inflating house prices to unaffordable levels”.

Our new study lays out a practical way forward to tackle this chronic problem. Pink Zones – dubbed pink because they provide a diluted regulatory regime compared with the red tape that characterises the current paralysed planning system – are designed to kick-start a renewal in house construction. However, we want to see integrated neighbourhoods and towns built with support infrastructure, parks and squares and amenities – not just flats and houses.

Our Victorian and Edwardian forebears were adept at developing whole new suburbs and communities with attractive parks and amenities. They built places, not just houses. We need to retrace their steps in creating new places that people actually want to live in. Prior to the First World War, whole new towns were built that have stood the test of time – think of Bournville, built by the Cadbury brothers or Port Sunlight on Merseyside, built by the soap manufacturer, William Lever.

Since the Second World War, we seem to have lost the knack of creating attractive communities. Many of the new towns built in the 1960s and 1970s – such as Skelmersdale and Cumbernauld – quickly turned into modern slums, handicapped by poor building and a poverty of aspiration.

In Pink Planning, we call for the mobilisation of institutional capital – life insurance companies, pension funds and sovereign wealth funds – to help fund major new communities. Already, some companies, such as Legal & General, have indicated an interest in committing capital. Nigel Wilson, Legal & General’s CEO, says, “If we can bring communities with us and agree planning, we’d like to help build several new towns across the country”.

Pink Planning lays down a template for how investors, developers, builders and local authorities can co-operate with local residents to realise this vistion. The present outmoded planning system inadvertently encourages an adversarial “developers versus residents” approach. In particular, the current statutory consultation falls way short of what is required to engage stakeholders in a creative way and it tends to come much too late in the process.

By contrast, Pink Zones build on a genuinely consensual approach based on a mutuality of benefit.

How Pink Zones would work in practice

Initially, an opportunity is identified by a local authority, a third sector body or a consortium of developers – or indeed a combination of these parties. A site is then identified for development, and is subsequently scoped in terms of its needs including infrastructure, social facilities, transport links and employment opportunities. A delivery authority, known as a ‘Special Purpose Vehicle’ (SPV)in the jargon is established and appointments made with respect to who will manage this body.

A design code is agreed between stakeholders, including local residents. This is a crucial element since it will uphold the quality of amenities, support infrastructure and aesthetic quality. In due course, legal powers and support mechanism needs are identified and tenders issued for investment opportunities in the proposed development, with specific covenants to ensure high quality amenities
are delivered (our Victorian forefathers were skilled at creating covenants to ensure quality building).

The next step is to agree Memorandums of Understanding for public authority and public utilities. The legislative requirements are then identified, and compensation along with enhancement packages agreed. In contrast to France and the Netherlands, Britain tends to compensate local authorities through Section 106 agreements and the Community Infrastructure Levy, whereas households affected by new development are directly compensated on the continent. We believe the continental approach is better; it certainly has led to less nimbyism.

With Pink Zones, a single legislative instrument delivers the necessary powers to the SPV. Covenants, contracts and side agreements are negotiated by the SPV to sit alongside the agreed legislative instrument. Furthermore, penalties are detailed for breach of covenants.

The final stage is for investors to submit their bids while central, local and sector authorities and
stakeholders settle final terms of the overall package. The implementation phase then begins with investors appointing a number of developers for various parts of the site. We firmly believe competition enhances delivery and quality of construction. Progress is monitored by the SPV.

Once the new neighbourhood or town is built, the SPV surrenders residual ownerships and
powers to a permanent third sector institution which manages and oversees local amenities. When construction is completed the SPV is disbanded.

Pink Zones’ distinctive characteristic is that they will be designed to work from the bottom up – not the top down – bringing together local residents, developers and councils to achieve consensus over new development and accelerate the development process.

In doing so, they would create more and better homes for people throughout the country and tackle the poverty of aspiration which typifies much residential construction in this country. As a result, people would be happier and the country would be wealthier.