15 Ideas for property developers to create social value
Reform of the planning system doesn’t have to end in disaster if developers get behind it. The commercial rewards for those who do are immense.
Last week the UK government published its much-awaited White Paper, ‘Planning for the Future’. A major shake-up to the planning system aimed at making it faster and easier to push the plan, approve and build new homes.
It was fairly heavily criticised; the Royal Institute of British Architects (RIBA) warned it would ‘create the next generation of slum housing’ and urged the government to reconsider; and the Town and Country Planning Association (TCPA), in partnership with 14 planning academics decreed it would “create a race to the bottom, lowering quality rather than improving standards”.
So what's happening?
Is the Government creating ‘a system that will benefit their donor mates at the expense of communities, as Labour Minister for Housing and Planning Mike Amesbury put it? Or are they trying to reform a planning system that desperately needs changing, solve Britain’s housing crisis and help kickstart the economy post-COVID?
Despite what you might think of them, policymakers are usually trying to answer the question, ‘How can we solve this problem and improve the lives of people?’ when they start out. It's certainly true that we are experiencing a significant housing shortage, and the planning system desperately needs reform. So it's probably safe to say that the Government didn't set out to lower standards and create slum housing. Unfortunately, despite their best intentions, policymakers often don’t have the necessary practical experience in their specialist areas and aren’t very good at consulting with those who do.
White Papers are consultation documents, not tablets set in stone. The private sector should use this as an opportunity to mobilise quickly and voluntarily commit to leading the way and designing legislation that works for everyone.
Developers should partner with planning experts, charities like shelters, industry bodies like RIBA and the TCPA, and academics to identify the problems and work together to find solutions that will benefit everyone. It's a bold idea with huge benefits for a developer brave enough to take it on.
Why should developers do anything?
According to the critics, the government’s planning reforms are a ‘developers’ charter’, so what incentive is there for developers to invest in social value and step up to help improve the legislation?
The incentive is that if you don't, the planning reforms will happen anyway, but they could result in unworkable legislation, which will be bad for everyone and present a huge risk to your business. We ALL need this problem solved. In 2020 what people think of you matters, and property developers are not coming out of this well. You can't afford to care about what this is doing to your reputation. It’s never been easier for disruptors to interrupt established markets when traditional providers aren’t providing what customers want – look at Purple Bricks, for example.
What can construction companies and property developers do?
Contrary to what many people think, the problem many businesses face is not that they don’t want to do the right thing; they don’t know what to do or how to do it.
At Samtaler, we help companies change how they operate so they can focus on creating genuine value for society and building economic value for their business. It sounds complicated, but it’s not.
The key is understanding what the people most important to you (your stakeholders) want. Once you know that, you can focus on where their priorities align with your own, and from there, it becomes clear what your business should do to facilitate their ambitions.
In this case, the Government wants to:
Speed up and simplify the planning system,
Facilitate a more diverse and competitive housing industry, in which smaller builders can thrive alongside the big players,
Ensure all developers pay a fair share of the costs of infrastructure and;
Create affordable housing.
Whilst other important groups such as home buyers, local communities, housing campaigners and professional bodies want:
Nice houses to live in - well-made, beautiful buildings with gardens and green outdoor space;
Cheaper homes; virtually everyone acknowledges the need to reduce the cost of housing;
To know there will be sufficient public infrastructure (doctors, hospitals, schools, public transport etc.) to support the increased population once development is built;
To protect the environment and mitigate the impacts of climate change.
What your company could do to deliver some of these aspirations very much depends on which ones align with your company’s purpose, vision and value, but we've put together some ideas to help you get started.
15 ways to create social value
1. Build homes, not houses
Is your business model about creating communities or selling houses to make money? Developers should be looking beyond the bricks and mortar and showing genuine interest in asking where children will go to school, how safe the streets are, how clean the air is, where children will play and teenagers hang out, and how much will resident’s energy bills be and are the homes sustainably built for the future? Put yourself in the buyer’s shoes. Ask yourself, ‘is this a house I want to live in?’
2. Build houses that people can afford to buy
Make it a home people want to live in. Make affordability a selling point. Photo By: James Feaver
Making money and doing the right thing aren’t mutually exclusive, and there’s no commercial reason why ‘affordable’ housing should be something to be avoided. The average family household income after tax in the financial year ending March 2020 was £30,800. Based on current mortgage lending levels, that family could borrow between £120,000 - £180,000. The average property in the UK is currently priced at £231,855. It’s easy to see why getting on the property ladder is so hard. Design a house that could be sold for less than £180,000 but still makes you a profit. Get innovative and imaginative with construction methods to keep costs down. Make it spacious, light, beautiful, high quality, sustainable and energy efficient. Make it a home people want to live in. Make affordability a selling point.
3. Make needs-based decisions about where to build
Don’t just build where land is available. Talk to local anchor institutions and key stakeholders and use PropTech, and socio-economic studies to make evidence-based decisions on what kind of homes to build and where they are most needed.
4. Involve your company's marketing team in the planning application, architectural design, and layout
Don't leave the planning and design process to technical consultants. View the planning application process as early market engagement and involve your sales and marketing team. Be bold, positive and ambitious. Aim for your developments to create a ‘net gain’ for the places they are built in.
5. Give local people a meaningful say in the design process
Don’t start public consultation with robust plans already in place. Collaborate with your community and allow them to influence the process. Recruit a diverse group of potential residents to help you design the best homes and decide where each should be positioned. Don't view public consultation as a box you have to tick. Think of it as customer research. After all, if you are building the kinds of homes that people want, it will make selling them so much easier.
6. Make data and information about your proposal public and more accessible
Harness digital technology and tools like ‘Give My View’ to make your plans more accessible and help people understand them. Write them in plain English, avoid jargon and produce accessible summary documents alongside the technical studies. Even simple things like labelling your planning documents properly on the planning portal make a huge difference. Share links to the planning application summaries on your social media accounts so local people can find them.
7. Support flexible working and reduce transport requirements
Consider incorporating coworking spaces into the design of your housing developments and make them free for residents to use.
8. Don’t just protect the environment; enhance it
Prioritise construction on brownfield sites. Make green spaces a vital component. Plant lots of trees and make efforts to improve biodiversity. Follow the advice of the Land Trust and put in a long-term plan for stewardship at the commencement of development to maintain these areas for the community.
9. Focus on ‘good growth’
Don’t build massive housing estates. We need more homes at gentle densities in and around town centres and high streets, on brownfield land and near existing infrastructure.
10. Employ local people and use local suppliers
Help your suppliers to advertise all their jobs on your site. Don’t use recruitment agencies. Instead, set up a website where your suppliers can upload job opportunities and help promote them. Work with DWP and local economic development agencies, schools and colleges. Break your contracts into smaller lots so that SMEs and local companies can bid for them.
11. Prioritise energy efficiency standards – don’t just do the minimum
From 2025 all new homes will need to produce 75-80 per cent lower CO2 emissions compared to current levels and have the ability to become fully zero carbon without the need for further costly retrofitting work. Get ahead by designing homes that comply now.
12. Make sustainability a priority
Champion innovative British design using sustainable construction methods and recycled and sustainable materials.
13. Don’t try and avoid paying the Infrastructure levy
There are a lot of consultants out there who advise developers on how to avoid paying additional levies. Don’t employ them (just look at PLP's Westferry development if you want to know how that can backfire). Instead, incorporate the cost of the levies into your developments – as wind farm developers do with community benefit contributions.
14. Be clearer about whose responsibility it is to build schools and hospitals
Developers have paid hundreds of millions in levies to councils for additional infrastructure, which hasn’t materialised because cash-strapped local authorities have used the funds to top up their shortfalls. Developers shouldn’t allow themselves to be the ones who are criticised for that. There is also a huge opportunity for innovation; developers could potentially deliver better in-kind benefits directly to communities. Engage with Local Authorities and explore ways you could build the schools and social infrastructure that communities need instead of paying the cash.
15. Support the British Property Federation’s Redefining Real Estate campaign and follow their guidelines. Read the Law Commission’s recommendations about leasehold reform. Don’t wait for the government to legislate. Voluntarily adopt as many of them as you can.
Developers hold the key to two problems; helping reform a planning system that desperately needs it and providing enough housing to meet demand. It’s time to embrace the criticism, listen to the concerns and think about how the industry can mitigate them. Anyone brave enough to grab the mantel will gain a massive opportunity to get an edge over their competitors. In addition, not only will you be helping the government get one of its key policy agendas through, you will save a fortune on public affairs consultants by getting the policymakers to come to you. What’s more, by prioritising social and economic value, you will future-proof your business and become the company people want to work for and buy from. Planning for the Future is a public consultation. It’s time to share your thoughts and show the public sector that the private sector has the answers.
How we can help
At Samtaler, we understand the importance of your social value commitment. You’re here because you care about the impact your business has on society and want to be better. We want you to succeed, and we know from experience that achieving social value requires skill, strategy, and support.
To find out how we can help send an email to hello@samtaler.co.uk
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