Nature vs housing: a tale of two crises

Recent government communications and draft legislation have framed nature as the enemy of growth, particularly when it comes to housing development. But the real estate sector can ill-afford to think this way. With housing and nature in major crisis, and the solution centring on the use of space, how the property industry reacts will have a lasting impact on its reputation, customers and bottom line.

Two distinct crises, one shared solution

The first step in solving any crisis is defining it clearly and honestly. For housing, the worrying gap between demand and supply continues to increase. One in every 200 UK households is experiencing homelessness and councils are spending £2.29bn a year on temporary accommodation, impacting over 165,510 children (a 14% increase on the previous year, and a new record for the eighth straight year). For nature, the UK has the unenviable position of being one of the world’s most nature-depleted countries, ranked in the bottom 10% internationally for biodiversity.

The problem for the government and real estate sector is that whilst these are two very distinct crises, the primary solution to both is the same: more space. Developers need space that’s viable to build on, meets planning requirements and is preferably close to existing infrastructure. Nature needs space which is high in quality, larger in scale and more connected. Since the UK is a relatively small island with a moderate to high population density and limited available space, we need to find ways for nature and development to co-exist in a way that reverses their current trajectories.

A history of conflict

The expansion of urban areas is one of the largest causes of nature loss globally. As well as habitat clearing and the associated threats that new infrastructure brings (e.g. noise, artificial light, pollution, etc), a fragmented approach to planning has led to sub-optimal biogeography in the UK.

Natural environments have become unconnected islands in a sea of urban development and agricultural land. The net result is smaller, isolated habitats, making species more vulnerable to localised and then national extinction due to the inability to move away from or recolonise after adverse events.

This explains why, despite improved development control and increased environmental regulation, UK wildlife continues to decline. Conversely, the complex web of environmental protection regulations have been linked to delaying/preventing housebuilding. Whilst some small concessions can be permitted to achieve a greater good, everybody will lose if we entertain wholesale sacrifices of nature for housing.

Nature vs housing growth: a battle with no winners

The government’s ambition of building 1.5m homes this Parliament should be commended. Wholesale changes to the National Policy Planning Framework, nationwide devolution and returns to spatial planning indicate that the government had identified many of the critical levers needed to make this target achievable. Early indications showed they were equally committed to the restoration of nature.

However, more recent communications framing nature as a barrier to growth, and the drafting of Part III of the Planning and Infrastructure Bill (PIB), suggest otherwise. The PIB has been heavily criticised by many organisations, including the Office for Environmental Protection and CIEEM, for significantly eroding environmental protection, for example by scrapping the mitigation hierarchy in favour of an offsetting levy.

If the bill becomes law as drafted, it is expected to further damage UK biodiversity levels, lead to more frequent extinction events and reduce our urban green/blue spaces, particularly for those who live in deprived areas. It is now well established that the provision of quality habitats in urban areas make a significant contribution to physical and mental health and general habitation experiences, making the challenge of reconciling housing growth with nature restoration not just an environmental one, but a social one too.

Big responsibility, big opportunity

Despite difficulties in its implementation, many developers embraced biodiversity net gain (BNG), and in doing so took responsibility for overcoming the dual housing-nature crisis. This is evidenced by some exceptional projects, a pipeline of exciting developments and a number of partnerships with non-profits and community organisations like the Land Trust, formed to ensure green spaces are maintained to the highest standards for at least 30 years for the benefit of nature and local stakeholders.

The current nature vs housing narrative and the PIB threatens to put developers into a difficult position, undoing all the hard work of recent years. Doing a quick cost/benefit analysis of the PIB impact on developers demonstrates significant risk for little reward. The reputational damage, for example, will be substantial. The government may have created Part III of the PIB, but it will be developers who are most visible to local stakeholders when their nature/green spaces are built on.

Current PIB drafting also makes it nearly impossible for developers to show any nature positive impact, as there will be no evidential baseline to measure/demonstrate improvements and no control over where the required levy is spent. This may be circumvented if there was a demonstrable reward, but there isn’t. The government’s own impact assessment on the PIB confirms that there is little if any evidence that protections for nature are blocking developments, with Natural England confirming that 99% of the projects they are consulted on proceed to spades in the ground (with nature protected too).

Under the new regime, developers would still need to do extensive ecological surveys before buying/promoting land, but they won’t know when a relevant Environmental Delivery Plan (EDP) will drop, what the levy will be and how it will be used. The PIB, as drafted, also leaves it open for national/local conflict with developers potentially being subject to a levy via the PIB but also still having to go through the mitigation process via local plans.

This is a crucial time for both housing and nature, and how the real estate industry reacts from here will determine what the UK looks like over the next decade, as well as how businesses perform.

Christopher Kerr is head of ESG at Davitt Jones Bould

Learn more: Join Davitt Jones Bould at UKREiiF for a joint panel with the Land Trust on Environmental Net Gain: How BNG can unlock social value. 13:00-14:00 on Tuesday 20 May in the Barnton Suite.