Planning for Housing in Metropolitan Areas - METREX
Transcription
Planning for Housing in Metropolitan Areas - METREX
PHIMA Planning for Housing in Metropolitan Areas METREX 125 West Regent Street Glasgow G2 2SA Phone/fax - +44 (0) 1292 317074 E-mail – secretariat@eurometrex.org Web site www.eurometrex.org PHIMA - Planning for Housing in Metropolitan Areas Introduction METREX is the Network of European Metropolitan Regions and Areas. It is a practitioner Network for those with a common interest in metropolitan spatial planning and development issues and related affairs. METREX has produced a Benchmark of effective spatial planning and development practice, which sets out planning processes for the development of a Metropolitan Strategy and related policies, programmes and projects. It can be downloaded from the METREX web site, www.eurometrex.org, in EN|FR|DE|ES|IT. As part of its services to Members, the METREX Secretariat is producing a series of strategic planning tools to enable key issues to be explored, on a reasoned and justified basis, at the metropolitan level. Current tools being developed included, • • • ReMA – Planning for Regenerative Energy in Metropolitan Areas (operational) PHIMA – Planning for Housing in Metropolitan Areas (under development) PRIMA – Planning for Retailing in Metropolitan Areas (under development) PHIMA – Planning for Housing in Metropolitan Areas PHIMA is a METREX strategic planning tool to enable practitioners to explore longer-term metropolitan housing demand and supply. Longer-term means the planning horizon of the metropolitan strategy, which is usually in the region of 10-20 years. Metropolitan strategies will also usually be rolled forward on a regular basis, perhaps every 2-5 years, to anticipate and respond to change. It is clear that housing futures will be a key component of any longer term metropolitan strategy for sustainable development. For example, future housing demand and its relationship to foreseeable housing supply will give a first indication of the need for urban extension (greenfield development) and/or urban renewal and regeneration (brownfield development) and the balance between these. It will give a first indication of the scope for sustainable metropolitan development. Purpose of this booklet This booklet explains how the Planning for Housing in Metropolitan Areas (PHIMA) tool works. It will be available on-line through the METREX web site at www.eurometrex.org by METREX Members or by nonmembers on a negotiated basis though the METREX Secretariat. Acknowledgement PRIMA has been devised by the METREX Secretariat with the support of colleagues in the GCVSDPA. James Parke and Maxwell Cowan, METREX Projects, have been the primary source of knowledge and expertise. Both worked at the metropolitan level for many years. If an Expert Group on Housing is established then both will be available to support its work. They will also be available to advise individual authorities on housing issues. PHIMA is being made available for METREX Member use, on line, by Tim Page, Head of CITC (Communications, Information Technology and Computing). Tim will similarly be available to support the work of an Expert Group on Housing and individual authorities on the use of PHIMA on-line. METREX/Glasgow/January/February 2012 2 Principles The Metropolitan Dimension - Functional Urban Areas/Regions The concept of Functional Urban Areas/Regions (FUA/FUR) is now well recognised within Europe. The Urban Audit has identified 127 Larger Urban Zones, with populations over 500k, which can be regarded as the "metropolitan" FUA/FUR of Europe in that they share common strategic problems and opportunities. Many key issues can only be addressed effectively at the metropolitan level and it is for this reason that METREX has advocated appropriate forms of governance to devise and implement appropriate strategic responses. Such responses should be made on an informed basis. Effective strategic planning for functional urban Areas/Regions Urban areas/regions function by providing services to support key aspects of civilised life, including provision for housing, economic activities (industry and commerce etc.), social support (health and education etc.) and transportation (public and private). Such services are provided to varying "client groups" over varying "catchment areas". For example, major shopping centres will serve a different clientele, drawn from a wider area, than local centres. In the strategic planning of metropolitan areas it is important to have an understanding of the area for which market or social services are being provided. These will not always accord with long standing administrative boundaries. In order to define the catchment areas for different market and social services it will be necessary to disaggregate data held at local authority levels within a metropolitan area. This will frequently be a major undertaking. Effective strategic planning on an informed basis METREX has produced a practice Benchmark to support informed and effective strategic planning decision-making at the metropolitan level. The Network has now taken the process a step further by producing a suite of strategic planning tools to enable three key strategic planning functions to be fulfilled. • • • Exploration - of alternative responses to key issues. In effect, "what if" scenarios. Adoption - of preferred responses to key issues. In effect, the "reasoned justification" for a preferred strategy. Regular review - of a longer term planning strategy. Metropolitan key strategic issues An over arching key issue for most metropolitan areas is the balance to be struck between urban consolidation ("brownfield development") and urban extension ("greenfield development"). When urban extension is justified then the selection of the most sustainable locations for development will be an issue. Provision of land for housing will be key consideration when balancing urban consolidation and/or extension on the most sustainable basis. 3 Balancing housing demand and need with housing supply The balancing of housing demand/need and supply will need to be carried out over "housing market areas" that reflect the areas over which the local and incoming population will search for housing opportunities. The definition of such areas will be a first requirement. Housing market areas will function on a "tiered" basis, that is, the local housing market area for local demand and the metropolitan housing market area for more mobile housing demand, including incomers. In large metropolitan areas there may be intermediate market areas based on metropolitan sectors, such as on either side of a river. The concept of local and mobile housing demand is important because mobile demand at the sectoral or metropolitan level can be met by local surpluses or by the selection of the most sustainable new locations for development. The concept supports metropolitan sustainability. The future demand for "market" housing, for owner occupation or private rental, and the future need for "affordable", or social housing, will need to be assessed. These will then have to be considered against the "effective" housing supply, that is, the existing housing stock and the anticipated output from developable land over the plan period. The effective land supply will include planned and "windfall" sites (those that arise through unforeseen social and economic change over the planning period). Foresight and credibility Any approach to the assessment of future levels of demand/need and supply for housing development will have uncertainties associated with it. Demographic, household, economic and migration forecasts are inter-related and the data on which they are based may have varying degrees of confidence associated with it. The point of exercising foresight on an issue such as balancing housing demand/need with housing supply is to establish the broad direction, magnitude and pace of change as a basis for locational choices based on a reasoned justification. The data on which such a reasoned justification is based can be improved over time, as can the understanding of the relationships between data sets. A preferred housing strategy will be continuously tested by realty as it emerges. If metropolitan planning includes a process of regular updating (monitoring and review) then corrective action can be taken, as it is needed. The best safeguard to the credibility of any longer term housing strategy will be a process of regular updating and rolling forward. PHIMA - Planning for Housing in Metropolitan Areas PHIMA has been developed by METREX as a strategic planning tool to help metropolitan areas to develop and regularly review a longer term housing strategy based on the best available data and the best available understanding of the forces for change and the relationships between them. 4 Metropolitan Dimension to sustainable housing futures Metropolitan Areas and Housing Market Areas (HMA) The European Urban Audit (2008) has identified some 127 larger urban areas with populations over 500k. These are Europe’s Metropolitan Areas and they contain over 200m of Europe’s 500m population. Such major metropolitan areas will comprise localities with their own identity and social and economic needs, including housing. Localities will sit within wider metropolitan sectors, which supply higherlevel services and employment opportunities. The metropolitan area itself will attract mobile incomers as its economy changes and develops. The first step in the use of PHIMA is to define the Metropolitan Area in question and its component local and metropolitan sector Housing Market Areas. It may be that existing local authority areas (municipalities, communes, etc.) can be used initially to define local housing market areas and that groupings of such authorities can be used to define metropolitan sector market areas. The data that will inform these judgments will be information on housing moves within local authority areas, between local authorities and into the metropolitan area. Such data may be sourced from information on housing sales or rentals. Its availability will depend on the balance between home ownership and rental housing (public and private) in the metropolitan area concerned and the processes for recording sales and rentals. Alternatively, it could be obtained through appropriate surveys. Information on housing moves will indicate the degree of self-containment of a local housing market area. Highly self-contained areas might be excluded from the comparison of supply and demand at the metropolitan sector or metropolitan market areas. Those areas with high levels of movements to other parts of the metropolitan area will clearly need to be included in the PHIMA process, where the scale and significance of such moves can be considered at the metropolitan sector and metropolitan market area levels. Housing mobility Housing moves may take place at the local level for reasons of local household need (for example, growing families and/or an aging population), at the metropolitan sector level for reasons of employment (for example, to be closer to places of work and minimise commuting) or at the metropolitan level for reasons of economic change (for example, to accommodate incoming employees). The important point is to recognise that longer-term metropolitan housing demand has local and mobile components and that the mobile component can be met within wider metropolitan sectors or within the metropolitan area as a whole. This means that there will be a metropolitan dimension to the locational choices to be made about longer-term housing development and these choices should clearly be made on the most sustainable basis possible. It means that factors such as their relationship to the metropolitan transportation system and their environmental impact should be taken into account. PHIMA reflects these realities by recognising that metropolitan areas have local, metropolitan sectoral and metropolitan levels of housing demand. It offers a process for balancing longer-term housing demand and supply at these three levels. This is the Metropolitan Dimension to sustainable housing futures. 5 Core components of PHIMA The three core components of PHIMA are, • • • 1 Housing demand by Market Area Housing supply by Market Area Balancing housing demand and supply over Market Areas Housing demand by Market Area Housing demand within metropolitan areas will be generated by demographic change and household formation and by inward and outward migration. Household forecasts Demographic change may result in population decline but there may nevertheless be more households if household size is reducing. Conversely, demographic change may result in population increase but there may be fewer households if household size is increasing. In reality all these factors will be taken into consideration in the process of household forecasting over the longer-term. Household forecasts will also have regard to inward and outward migration. This will usually be driven by economic change and the relative attractiveness of the metropolitan economy over the longer term. Such an assessment will have regard to metropolitan economic trends and economic policy for the purpose of exploring housing futures. Local Housing Market Area demand forecasts Demographic change, household formation and inward and outward housing moves, at the local market area level (municipalities, communes etc.) will need to be forecast over the longer-term on a consistent basis over the metropolitan area. Such forecasts will give an overall figure for notional longer-term housing demand at the local level. However, a proportion of this demand will be mobile. An assessment of the scale and significance of the mobile element of local demand can be made either using local data on the origin and destination of house purchasers or those renting housing (in the private or public sectors). Moves to adjoining local market areas (municipalities or communes) may then be considered as moves within the relevant metropolitan sector. Moves beyond adjoining local housing market areas, or into the metropolitan area, can be considered as metropolitan moves for employment or retirement purposes. Metropolitan Sector Market Area forecasts This level of demand will comprise those housing moves that are between adjoining local housing market areas within a metropolitan sector. Metropolitan Market Area forecasts This level of demand will comprise those housing moves that are beyond adjoining local market areas or into the metropolitan area (inward migrants). 6 2 Housing Supply by Market Area Housing supply within metropolitan areas will be provided by the longer-term housing stock (existing stock less any demolitions), planned development opportunities (housing completions from zoned or allocated housing land) and “windfall” development opportunities. Windfall means development opportunities arising from unplanned sources such as redundant industrial, commercial or public sites. The important judgment will be the realistic output from such sources at the Local Market Area level over the planning period. This will comprise what can be considered as the “effective” housing supply. 3 Balancing housing demand and supply over Market Areas The forecasts for housing demand at the Local Market Area level can be compared with the Local Housing Market Area effective housing supply. Where there are surpluses of supply over demand these can be carried upwards to the level of the metropolitan sector to meet the mobile demand at this level. Where there are surpluses at the level of the metropolitan sector these can be carried upwards to meet the mobile demand at the metropolitan level. There may be shortfalls within a Local Market Area. This will provide metropolitan guidance on the scale of additional supply that might be sought through local planning action. There may be shortfalls within Metropolitan Sector Market Areas. This will provide guidance on the scale of additional supply that might be sought though strategic metropolitan planning decisions at this level. There may also be an overall shortfall of supply at the Metropolitan Market Area level where strategic metropolitan planning decisions will similarly be required. Within this balanced strategic housing planning overview both local and metropolitan planning action can be taken over the longer-term. Most importantly the scale and significance of housing as a component of the metropolitan strategy will have been assessed on a reasoned and justified basis. Any strategic land release can then be made at the most sustainable longer-term locations. Metropolitan strategies Housing will be a primary component of any longer-term metropolitan strategy. It will generate the need for supporting transportation and other infrastructure and related public and private sector services and employment. It is, therefore, the first and most important strategic spatial planning and development assessment that will be made in any metropolitan planning process. It is for this reason that METREX has developed the Planning for Housing tool, PHIMA, to support a wider recognition of the significance of the Metropolitan Dimension to European urban affairs. PHIMA contributes to the effectiveness of metropolitan spatial planning and development practice at the metropolitan level. 7 Working example based on Glasgow and the Clyde Valley Metropolitan Area Introduction The PHIMA process, described and illustrated earlier, has been progressively developed over the period 1976-1996 by the former Strathclyde Regional Council and, thereafter, over the period 1996-2011 by the Glasgow and the Clyde Valley Strategic Development and Planning Authority (GCVSDPA – formerly the GCV Structure Plan Joint Committee – GCVSPJC). In Scotland the process of Structure Planning has now been superseded by the Strategic Development Plan process as part of which Strategic Development Planning Authorities, such as GCVSDPA, are required to produce supporting Housing Need and Demand Assessments (HNDA). The GCVSDPA has recently produced its 2011 Strategic Development Plan and Housing Need and Development Assessment. Both can be downloaded from the GCVSDPA web site at www.gcvsdpa.gov.uk This working example draws on published data from the GCVPDA in its Housing Demand and Needs Assessment (HNDA - 2011) and supporting Technical Appendices. However, it is very important to emphasise that in Scotland demand and supply for private sector (owner occupied/rented) housing and need and supply for public sector (social rented) housing are generally calculated separately. This is because owner occupation/rental is related to Housing Market Areas and the public rented housing is related to Local Authority administrative areas. Limitation In this working example, METREX has made some pro rata allocations of rented need and supply to housing market areas in order to provided notional all tenure figures at the housing market area levels. The purpose of this is to test the PHIMA model on an all tenure basis for use in all European metropolitan areas. The figures in this working example are not, therefore, appropriate for use in any housing policy discussions in the GCVSDPA. They are useful only for the purpose for which they were produced, which is to illustrate and pilot the PHIMA model for use in Europe. Working example based on the Glasgow and the Clyde Valley Metropolitan Area (GCVMA) In the GCVMA the Housing Market Area approach has been used as part of the Strategic Development Plan process to assess owner occupied housing demand and supply, which constitutes some 70% of total housing demand. Clearly, in other European metropolitan areas the socio-economic circumstances will be different. In particular, the housing tenure issues will be different. In the GCVMA a key issue is seen to be the land supply for future owner occupied housing development but in other European metropolitan areas, with different tenure balances (between owner occupation and public and or private rental or mixtures of ownership and rental) an overall view of total housing demand and supply may be more appropriate. The working example uses GCV data to produce an all tenure total households/total effective housing supply assessment. The GCVMA contains 8 Local Authorities with a forecast population of 1.8m in 2025 and forecast households of 918k. The GCVMA contains 11 inter related Local Housing Market Areas (HMA), based on the collation of Local Authority Sub Areas. There are 2 self contained HMA. Where Local Authority boundaries do not accord with Housing Market Areas the difficult process of subdividing Local Authority areas and then re-aggregating these into Housing Market Areas will have to be undertaken. 8 Table 1 and Diagram 1 below show how this has been achieved in the GCVMA. Diagram 2 on Balancing metropolitan housing demand and supply illustrates the PHIMA process in practice. • • • • • • • • Forecasting metropolitan households Identifying local housing demand Identifying mobile demand in Metropolitan Sectors (2 in the case of the GCVMA – the Central and Eastern Sectors) Identify mobile demand at the Metropolitan level Balancing Local demand with effective supply Balancing Metropolitan Sector mobile demand with local surplus supply Balancing Metropolitan mobile demand with Sector surplus supply Identifying the need for additional supply at the Local, Metropolitan Sector and Metropolitan Housing Market Area (HMA) levels The working example in Table 2 shows how housing demand and supply can be balanced in the period to 2025. Tenuring Where users of PHIMA wish to explore the future balance between various housing tenures (owner occupation, public or private rental etc.) then assumptions can be included in the process. For example, saturation point for home ownership could be explored. In the UK this is in the range 6070%, having regard to those households for which ownership is socially or economically impossible. Affordable housing Where users of PHIMA wish to explore the issue of housing affordability, in the owner occupied or rental sectors, then assumptions can be included in the process. For example, house purchase prices at the bottom 10-25% of the metropolitan price range can be compared with household mortgaging capability. In the UK this is generally considered as 3.0 times a single person household income or 3.5 a two person household income. Diagrams 3 and 4 show how tenuring and affordability can be included in the PHIMA process. 9 Table&1&(&Local&Housing&Market&Areas&in&the&Glasgow&and&the&Clyde&Valley&Metropolitan&Area&(GCVMA) 31 Local Authority Sub Areas in the GCVMA 1 Bearsden and Milngavie 8 Local Authorities in the GCVMA West Dunbartonshire 2 Strathkelvin 3 Eastwood Easat Dunbartonshire 4 Levern Valley 5 Ballieston, Shetteleston and Greater Easterhouse North Lanarkshire 11 Local Housing Market Areas in the GCVMA 1 30 Clydebank 1 1 31 Dumbarton and Vale of Leven 1 30 Clydebank 2 1 Bearsden and Milngavie 1 2 2 Strathkelvin 1 11 Maryhill/Kelvin and Canal 14 West 3 18 Airdrie and Coatbridge 1 6 Central and West 3 19 Cumbernauld 2 7 East Centre and Calton 3 20 Motherwell 2 6 Central and West 2 Strathkelvin 8 Govan and Craigton South Lanarkshire 4 26 Clydesdale 3 5 Ballieston, Shetteleston and Greater Easterhouse South Lanarkshire 4 27 East Kilbride 3 7 East Centre and Calton 10 Langside and Linn 4 28 Hamilton 4 11 Maryhill/Kelvin and Canal 4 29 Rutherglen and Cambuslang 5 12 North East East Renfrewshire 14 West Renfrewshire 19 Cumbernauld 3 Eastwood 5 3 Eastwood 5 8 Govan and Craigton 5 4 Levern Valley 5 9 Greater Pollok and Newlands/Auldburn 6 21 Johnston/Elderslie 5 10 Langside and Linn 15 Inverclyde East 6 22 North Renfrewshire 5 13 Pollokshielsd and Southside Central 16 Inverclyde West 6 23 Paisley/Linwood 5 29 Rutherglen and Cambuslang 17 Kilmacolm and Quarriers Village 6 24 Renfrew 6 18 Airdrie and Coatbridge 6 25 West Renfrewshire 6 21 Johnston/Elderslie 6 17 Kilmacolm and Quarriers Village 6 22 North Renfrewshire 7 15 Inverclyde East 6 23 Paisley/Linwood 7 16 Inverclyde West 6 24 Renfrew 6 25 West Renfrewshire 19 Cumbernauld 20 Motherwell Inversclyde 21 Johnston/Elderslie 22 North Renfrewshire Glasgow City 8 5 Ballieston, Shetteleston and Greater Easterhouse 4 Levern Valley 23 Paisley/Linwood 8 6 Central and West 6 17 Kilmacolm and Quarriers Village 24 Renfrew 8 7 East Centre and Calton 7 27 East Kilbride 25 West Renfrewshire 8 8 Govan and Craigton 8 18 Airdrie and Coatbridge 26 Clydesdale 8 27 East Kilbride 8 Strahkelvin and Springburn 12 North East 9 Greater Pollok and Newlands/Auldburn 13 Pollokshielsd and Southside Central Greater Glasgow North and West 1 Bearsden and Milngavie Glasgow Esat Cumbernauld Greater Glasgow South Renfrewshire East Kilbride 9 20 Motherwell Motherwell 10 Langside and Linn 10 26 Clydesdale Clydesdale 11 9 Greater Pollok and Newlands/Auldburn 28 Hamilton 8 11 Maryhill/Kelvin and Canal 28 Hamilton Hamilton 29 Rutherglen and Cambuslang 8 12 North East * 15 Inverclyde East Inverclyde East 30 Clydebank 8 13 Pollokshielsd and Southside Central * 16 Inverclyde West Inverclyde West 31 Dumbarton and Vale of Leven 8 14 West * 31 Dumbarton and Vale of Leven Dumbarton and Vale of Leven * Self contained HMA Diagram 17 Housing Market Areas Dumbarton / Vale of Leven Housing Market Area Inverclyde Housing Market Area 4 2 1 6 8 3 Eastern Conurbation Housing Market Area 9 5 Central Conurbation Housing Market Area 11 7 10 Housing Market Areas 1st Tier Housing Market Area Conurbation 2nd Tier Housing Market Area Central Conurbation 1 Greater Glasgow North and West 2 Strathkelvin and Springburn 3 Glasgow East 4 Cumbernauld 5 Greater Glasgow South 6 Renfrewshire 7 East Kilbride 2nd Tier Housing Market Area Eastern Conurbation 8 Airdrie and Coatbridge 9 Motherwell 10 Clydesdale 11 Hamilton Discrete Housing Market Areas Dumbarton and Vale of Leven Inverclyde © Crown copyright and database right 2011. All rights reserved. Ordnance Survey Licence number 100032510. GLASGOW AND THE CLYDE VALLEY STRATEGIC DEVELOPMENT PLAN PROPOSED PLAN June 2011 41 Table 2 - Working example - Balancing metropolitan housing demand and supply (all tenures) Metropolitan households Forecasts for planning period 2008-2025 Metropolitan Sector HMA Metropolitan HMA Local HMA Local HMA Metropolitan Sector HMA Metropolitan HMA Local demand Mobile demand Mobile demand Effective supply Local shortfall Mobile shortfall Mobile shortfall Need for additional supply at any HMA level 10.209 Metropolitan area 857.457 828.303 26 3 869.453 30.445 4.722 1.292 % (rounded) 100.00 96.60 3.00 0.40 3.50 0.54 0.15 Metropolitan Sector 646.357 624.381 19.391 100.00 1.33 656.260 21.175 1.784 1 2 3 4 5 6 7 Local HMA Local HMA Local HMA Local HMA Local HMA Local HMA Local HMA Metropolitan Sector 8 9 10 11 Local HMA 147.930 47.822 64.763 47.064 187.549 110.193 52.117 211.100 Local HMA Local HMA Local HMA Local HMA 142.900 46.196 62.561 45.464 181.172 106.446 50.345 203923 50.351 69.502 57.682 33.565 148.337 51.404 68.248 46.538 180.768 110.901 50.0642 6.333 48.639 67.139 55.721 32.424 213.193 5.437 5.208 5.687 1.074 -0.404 4.454 -0.281 9.270 50.913 73.318 56.129 32.833 2.937 2.274 6.179 0.408 0.409 Diagram 3 - Metropolitan tenured housing demand and supply assessment process Step 2 Step 3 Step 4 Step 5 Step 6 Metropolitan Sector surplus Need for additional mobile owner available to meet met- owner occupied occupied housing ropolitan mobile owner supply at the demand occupied demand metropolitan level Sector mobile Local surplus available Need for additional owner occupied to meet sector mobile owner occupied supply housing demand owner occupied supply at thee sector demand level Demographic forecasts Local owner occuoied Local effective Local surplus or Need for additional Migration assumptions housing demand owner occupied shortfall of owner owner occupied housing supply occupied housing supply at the local supply level Household forecasts Local and mobile demand Tenure Owner occupied Affordable maximum demand 70%? Rented (public/private) Affordable minimum need 30%? Diagram 4 -Metropolitan affordable housing demand and supply assessment process Step 2 Step 3 Step 4 Step 5 Step 6 Metropolitan Sector surplus Need for additional mobile affordable available to meet affordable supply at housing demand metropolitan mobile the metropolitan level demand Sector mobile Local surplus Need for additional affordable available to meet affordable supply housing demand sector mobile at the sector level affordable demand Demographic forecasts Local affordable Local effective Local surplus or Need for additional Migration assumptions housing demand affordable housing shortfall of affordable affordable supply supply housing supply at the local level Household forecasts Local and mobile demand Affordability Price Lowest 10-25% Household income 3.0 single - 3.5 double Using PHIMA on-line The detailed guidance below will be included on the web site to assist those using PHIMA on line at www.eurometrex.org Step 1 – Define the Housing Market Area The operation of a metropolitan housing market can be seen in the travel to work flows within the metropolitan area. In the classic single centre metropolitan area most of the employment opportunities are to be found around a central area, which acts as a focal point for the operation of the housing market system. Incomers taking up employment in this central area will have the opportunity to consider housing opportunities across the wider metropolitan area. The market areas for social rented housing tend to reflect the boundaries of the local administrative bodies with housing responsibilities, but the market areas for private rental and owner occupied housing do not respect administrative boundaries. The market area for upper-market or executive private housing usually operates across the wider metropolitan area. The strategic planning process needs to reflect the structure of the metropolitan housing market if it is to optimise the choice of sustainable development opportunities. The following steps are required to establish an appropriate housing market area structure. Metropolitan Housing Market Area (MHMA) • The outer boundary of the MHMA needs to be confirmed. In many cases it will approximate with the administrative boundaries of the metropolitan area, which tend to run through unpopulated areas. In some cases there may be an overlap with the area of an adjoining strategic planning authority and some form of joint planning arrangement may be required to ensure sustainable development opportunities are selected. Information on housing led migration and housing search patterns can be used, but commuting patterns can also shed light on the location of this boundary. Sectoral Housing Market Areas (SHMA) • Within the MHMA it is likely that the geography of an area will tend to sub-divide the MHMA. A river or an estuary can lead to the subdivision of the MHMA or the availability of transportation facilities can result in part of the MHMA operating as a sub-regional or sectoral part of the MHMA. As a result a certain proportion of the housing searches will extend beyond the immediate locality, but not cover the whole MHMA. Information on housing search patterns and housing led migration can be used to identify such Sectroral Housing Market Areas. Local Housing Market Areas (LHMA). • The great majority of housing led migration will take place within a locality in order to minimise travel to work journeys and to retain social and family linkages. Local Housing Market Areas often coincide with the boundaries of the social housing authority. LHMAs can be confirmed by information on housing led migration and housing search patterns. 10 Steps 2/3 – Setting Housing Demand Levels Demographic forecasts will provide population projections for each LHMA with migration assumptions harmonised with economic forecasts for the metropolitan area. Total household numbers for each LHMA are derived from the population projections and this requirement is subdivided to reflect the housing market structure as follows. Mobile housing demand at the Metropolitan level • A very small proportion of total housing demand relates to housing moves, which involve a search across the whole MHMA. Usually such moves area related to economic migration from outside the metropolitan area, but some of that migration will have a predetermined destination and will not be fully mobile. A judgement is therefore required on the proportion of total household demand, which should be assigned as mobile demand at the metropolitan level. This judgement can be derived from information on migration and housing search patterns. Mobile housing demand at the Sectoral level • The identification of Sectoral Housing Market Areas is an acknowledgement that a certain proportion of total household demand in each LHMA will be met by housing opportunities in adjoining LHMAs. The judgement on the proportion to be allocated to this Sectoral mobile demand can be derived from information on local migration and housing search patterns. Local housing demand • Locally targeted demand within each LHMA can be calculated as the residual after the Metropolitan and Sectoral mobile components have been subtracted from the total housing requirement in each LHMA. Step 4 – Effective Stock Supply The most significant component of the housing supply in each LHMA will be the existing housing stock less any demolitions planned during the plan period. In addition there will be a contribution from the approved land supply and planned development opportunities, which should be programmed in liaison with the house-building industry to reflect the likely output over the planned period. An Urban Capacity Study can identify further contributions from the likely output of existing "brownfield" (urban) sites, which are not yet formally allocated for housing. Some planning bodies also take into account the contribution expected from “windfall” development opportunities, which are opportunities that regularly arise through as yet unknown circumstances. The estimate of the windfall contribution is based on the expectation that further opportunities will arise from redundant industrial, commercial or public sites. Despite considerable evidence on the potential scale of this contribution, based on past experience, it is not always taken into account. Sometimes it is regarded as an element of flexibility. 11 Step 5/6 – Balancing Demand and Supply over Market Areas The information on the strategic demand patterns and the potential supply can be used to identify the scale of local and metropolitan planning action required over the plan period. The hierarchical expression of demand provides the opportunity to meet the housing needs of the metropolitan area in the most sustainable ways. The approach to the comparison of supply and demand is set out below. Local Housing Market Areas • Locally targeted demand is compared with the effective stock supply in each Local Housing Market Area. Any shortfalls emerging from this comparison provide the identification of the scale of local planning action in those LHMAs to meet local housing need. Where the comparison identifies a surplus of effective stock, the surpluses area accumulated for the appropriate Sector Market Area. Sectoral Housing Market Areas • For each Sectoral Housing Market Area the accumulated stock surpluses are compared with the Sectoral mobile demand. A shortfall indicates a need for the strategic planning process to identify the most sustainable housing development opportunities within that Sector. Any surpluses at a Sectoral level are accumulated to the Metropolitan Housing Market Area level. Metropolitan Housing Market Area • Any accumulated stock surpluses at the Metropolitan Housing Market Area level are compared with the metropolitan mobile demand. A shortfall indicates a need for the strategic planning process to identify the most sustainable additional housing development opportunities across the whole Metropolitan Housing Market Area 12